OFFICIAL STATEMENT DATED APRIL 12, 2016

NEW ISSUE RATINGS: Moody’s “Aaa”BOOK-ENTRY ONLY See “RATINGS” herein.

In the opinion of Bond Counsel, Peck Shaffer & Williams, a division of Dinsmore & Shohl LLP, under existing law, (i) interest on the Bonds will be excludible from gross income of the holders thereof for purposes of federal income taxation, (ii) interest on the Bonds will not be a specific item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, (iii) the Bonds, the interest thereon or transfer thereof, and the income therefrom, including any profit made on the sale thereof, will be exempt from Ohio personal income tax, the Ohio commercial activity tax, the Ohio corporate franchise tax, and municipal, school district and joint economic development district income taxes in Ohio, and (iv) the Bonds are “qualified tax-exempt obligations” under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, all subject to the qualifications described herein under the heading “TAX EXEMPTION.”

$8,575,000 CITY OF MASON

WARREN COUNTY, OHIO VARIOUS PURPOSE GENERAL OBLIGATION REFUNDING BONDS,

SERIES 2016 (BANK QUALIFIED)

Dated: April 26, 2016 Due: December 1, as shown below

The $8,575,000 Various Purpose General Obligation Refunding Bonds, Series 2016 (the “Bonds”), are general obligations of the City of Mason, Ohio (the “City”), and are issuable as serial bonds, as set forth below. The Bonds are being issued for the purpose of advance refunding a portion of bonds originally issued for the purposes of refunding bond anticipation notes originally issued for the purposes of (a) making road improvements to Western Row and Snider Roads in the City, (b) making park and recreation improvements in the City and (c) making downtown improvements in the City, and paying certain costs related to the issuance of the Bonds, together with other permissible costs under Chapter 133 of the Ohio Revised Code, as further described under “PURPOSE OF THE BONDS AND PLAN OF REFUNDING” herein.

The Bonds will bear interest at the respective rates set forth below, and interest will be payable from the date of issuance on each June 1 and December 1, commencing June 1, 2016. The Bonds will mature on December 1 in the years set forth below.

SERIAL BONDS

Year Amount Interest

Rate Yield CUSIP

Year Amount Interest

Rate Yield CUSIP*

2016 $160,000 2.00% 0.60% 575294 PR8 2022 $975,000 3.00% 1.25% 575294 PX5 2017 50,000 2.00 0.75 575294 PS6 2023 1,010,000 3.00 1.37 575294 PY3 2018 50,000 2.00 0.90 575294 PT4 2024 1,040,000 4.00 1.45 575294 PZ0 2019 50,000 2.00 1.00 575294 PU1 2025 1,075,000 4.00 1.56 575294 QA4 2020 920,000 3.00 1.05 575294 PV9 2026 1,120,000 4.00 1.66 575294 QB2 2021 955,000 3.00 1.15 575294 PW7 2027 1,170,000 4.00 1.76 575294 QC0

The Bonds will be issued only as fully registered Bonds, issuable under a book-entry system, and registered initially in the name of The Depository Trust Company, N.A., New York, New York (“DTC”), or in the name of its nominee, Cede & Co.

Principal of and premium (if any) on the Bonds will be payable at maturity or upon redemption, upon presentation and surrender at the designated corporate trust office of U.S. Bank National Association, Cincinnati, Ohio, as paying agent and registrar for the Bonds (the “Paying Agent and Registrar”). The Bonds will be issued in the denominations of $5,000 or any integral multiple thereof as provided in the Authorizing Legislation (as defined herein). The Bonds are subject to optional redemption as described under “THE BONDS – Redemption Provisions” herein.

The Bonds are offered when, as and if issued by the City and accepted by RBC Capital Markets, LLC, Cincinnati, Ohio (the “Underwriter”), subject to the approving legal opinion on matters related to their issuance by Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, as Bond Counsel. It is expected that delivery of the Bonds will be made in New York, New York, or in the case of a FAST closing, delivery of the Bonds may be made locally to the Paying Agent and Registrar through DTC on or about April 26, 2016.

See note inside front cover.

CUSIP data herein are provided by Standard & Poor’s. CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. CUSIP numbers have been assigned by an independent company not affiliated with the City and are included solely for the convenience of the holders of the Bonds. The City is not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions.

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TABLE OF CONTENTS Page

INTRODUCTION ...........................................................................................................................1 The Issuer ...................................................................................................................................1 Sources of Payment for the Bonds .............................................................................................1 Purpose of the Bonds .................................................................................................................1 Description of the Bonds ...........................................................................................................2 Book-Entry Only ........................................................................................................................3 Tax Exemption ...........................................................................................................................3 Parties to the Issuance of the Bonds ..........................................................................................3 Authority for Issuance ................................................................................................................4 Offering and Delivery of the Bonds ...........................................................................................4 Disclosure Information ..............................................................................................................4 Additional Information ..............................................................................................................4 

THE BONDS ...................................................................................................................................5 Redemption Provisions ..............................................................................................................5 Notice of Redemption ................................................................................................................5 Security and Source of Payment for the Bonds .........................................................................6 Debt Service Requirements ........................................................................................................7 Sources and Uses of Funds ........................................................................................................7 

PURPOSE OF THE BONDS AND PLAN OF REFUNDING .......................................................8 Advance Refunding of a Portion of the Series 2008 Bonds ......................................................8 Refunded Bonds .........................................................................................................................8 Original Project Description for the Refunded Bonds ...............................................................9 Original Project Costs for the Refunded Bonds .......................................................................10 

INVESTMENT CONSIDERATIONS ..........................................................................................10 Local Fiscal Emergency Legislation ........................................................................................11 

BOOK-ENTRY SYSTEM .............................................................................................................12 

PROFILE OF THE CITY OF MASON ........................................................................................15 Overlapping Governing Entities ..............................................................................................15 City Government ......................................................................................................................15 Financial Management .............................................................................................................18 Income Tax and Other Major Fees and Charges .....................................................................18 Management of City Facilities .................................................................................................18 Personnel Administration.........................................................................................................18 Employee Relations .................................................................................................................18 City Services and Responsibilities ...........................................................................................20 Demographic Information ........................................................................................................21 

ECONOMIC INFORMATION .....................................................................................................21 Business and Industry ..............................................................................................................21 

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Transportation ..........................................................................................................................25 Utilities .....................................................................................................................................26 Fire and Police Services ...........................................................................................................27 Print and Broadcast Media .......................................................................................................27 Culture, Recreation and Education ..........................................................................................27 Employment Statistics .............................................................................................................30 Largest Employers in Mason ...................................................................................................31 Largest Employers in Warren County .....................................................................................31 Income and Housing Data ........................................................................................................32 Building Permits, Home Construction and Housing Valuation ...............................................33 

FINANCIAL MATTERS ..............................................................................................................33 Budgeting, Tax Levy and Appropriations Procedures .............................................................33 Financial Reports and Examinations of Accounts ...................................................................34 Insurance ..................................................................................................................................35 

INVESTMENT POLICIES OF THE CITY OF MASON AND THE COUNTY OF WARREN ......................................................................................................36 

City Policy ...............................................................................................................................36 County Policy...........................................................................................................................39 

AD VALOREM TAXES ...............................................................................................................40 Assessed Valuation ..................................................................................................................40 Largest Taxpayers ....................................................................................................................41 Ad Valorem Tax Rates .............................................................................................................42 Changes to Ad Valorem Taxation ............................................................................................44 Collection of Ad Valorem Property Taxes and Special Assessments .....................................47 Revenues from Affected Tax Increment Properties .................................................................48 Delinquency Procedures ..........................................................................................................50 

OTHER MAJOR CITY GENERAL FUND REVENUE SOURCES ...........................................51 Income Tax ..............................................................................................................................51 Local Government Fund ..........................................................................................................52 City General Fund ....................................................................................................................52 

CITY DEBT AND OTHER LONG-TERM OBLIGATIONS ......................................................53 Direct Debt Limitations ...........................................................................................................53 Indirect Debt Limitations .........................................................................................................54 Overlapping Debt .....................................................................................................................55 Bond Anticipation Notes ..........................................................................................................56 Debt Currently Outstanding .....................................................................................................56 Grant Anticipation Obligations ................................................................................................57 Future Financings.....................................................................................................................57 Long Term Obligations Other Than Bonds and Notes ............................................................57 Leases and Contracts ................................................................................................................58 Pension Obligations .................................................................................................................58 

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LEGAL MATTERS .......................................................................................................................59 General Information .................................................................................................................59 Transcript and Closing Certificates .........................................................................................60 Litigation ..................................................................................................................................60 Tax Matters ..............................................................................................................................60 Premium ...................................................................................................................................62 

RATINGS ......................................................................................................................................62 

UNDERWRITING ........................................................................................................................63 

CONTINUING DISCLOSURE .....................................................................................................63 Continuing Disclosure Compliance .........................................................................................65 

CONCLUDING STATEMENT ....................................................................................................67 

APPENDICES

APPENDIX A – Audited Financial Reports for the Fiscal Year 2014 .............................. A-1 APPENDIX B – Fiscal Year 2016 Budget ..........................................................................B-1 APPENDIX C – Form of Bond Counsel Opinion ...............................................................C-1 APPENDIX D – Financial Statement (Direct Debt Limitations) ....................................... D-1 APPENDIX E – Ten-Mill Certificate (Indirect Debt Limitations) ..................................... E-1

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THIS PAGE INTENTIONALLY LEFT BLANK

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REGARDING THIS OFFICIAL STATEMENT

This Official Statement does not constitute an offering of any security other than the original offering of the Bonds identified on the cover page of this Official Statement. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representation, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale.

The information and expressions of opinion herein are subject to change without notice. Neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof.

Upon issuance, the Bonds will not be registered by the City under any Federal or state securities law, and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other Federal, state, municipal or other governmental entity or agency except the City will have, at the request of the City, passed upon the accuracy or adequacy of this Official Statement or approved the Bonds for sale.

All financial and other information presented in this Official Statement has been provided by the City from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as is shown by that financial and other information, will necessarily continue or be repeated in the future.

Insofar as the statements contained in this Official Statement involve matters of opinion or estimates, even if not expressly stated as such, such statements are made as such and not as representations of fact or certainty, no representation is made that any of such statements have been or will be realized, and such statements should be regarded as suggesting independent investigation or consultation of other sources prior to the making of investment decisions. Certain information may not be current; however, attempts were made to date and document sources of information. Neither this Official Statement nor any oral or written representations by or on behalf of the City preliminary to sale of the Bonds should be regarded as part of the City’s contract with the successful bidder or the holders from time to time of the Bonds.

The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement pursuant to its responsibilities to investors under the federal securities laws, but the underwriter does not guarantee the accuracy or completeness of such information.

IN CONNECTION WITH THIS INITIAL OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE

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MARKET PRICE OF THE BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE BONDS TO CERTAIN DEALERS AND BANKS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

References herein to provisions of Ohio law, whether codified in the Ohio Revised Code or uncodified, or to the provisions of the Ohio Constitution or the City’s Ordinances, are references to such provisions as they presently exist. Any of these provisions may from time to time be amended, repealed or supplemented.

As used in this Official Statement, “debt service” means principal of, interest and any premium on, the Bonds identified on the cover page of this Official Statement; “City” means City of Mason, Ohio; and “State” or “Ohio” means the State of Ohio.

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INTRODUCTION

The purpose of this Official Statement (the “Official Statement”), which includes the cover page and appendices hereto, is to provide certain information with respect to the issuance of $8,575,000 aggregate principal amount of Various Purpose General Obligation Refunding Bonds, Series 2016 (the “Bonds”) of the City of Mason, Warren County, Ohio (the “City”).

This Introduction is not a summary of this Official Statement; it is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. The offering of Bonds to potential investors is made only by means of, and a full review should be made of, the entire Official Statement.

This Official Statement, which includes the cover page, table of contents, and Appendices A through E, has been prepared and compiled by the administration of the City in connection with the sale by the City of the $8,575,000 Various Purpose General Obligation Refunding Bonds, Series 2016, as authorized by an ordinance of the City passed on September 14, 2015 (the “Authorizing Legislation”). Insofar as such information embodies statements of opinion, or estimates, even if not so labeled, it should be regarded as suggesting independent, investigation or consultation of other sources prior to making investment decisions. Certain information may not be the most current that is available; however, attempts have been made to date and document sources of information.

Neither this Official Statement nor any verbal or written representations by or on behalf of the City before sale of the Bonds should be regarded as part of the contract with the holders from time to time of the Bonds.

The Issuer

The Bonds are being issued by the City, a political subdivision of the State of Ohio located in the southwestern portion of Warren County in southwestern Ohio.

Sources of Payment for the Bonds

The Bonds are an unvoted general obligation debt of the City. The basic security for the Bonds is the City’s ability to levy an ad valorem tax on all real and personal property in the City subject to ad valorem taxation by the City, within the ten-mill limitation imposed by Ohio law. See “THE BONDS – Security and Source of Payment for Bonds” herein.

Purpose of the Bonds

The Bonds are being issued to (1) advance refund a portion of the City’s Various Purpose Limited Tax General Obligation Bonds, Series 2008, dated June 1, 2008 (the “Series 2008 Bonds”), originally issued in the aggregate principal amount of $17,570,000 for the purposes of (a) permanently financing bond anticipation notes the original proceeds of which were used for the purpose of paying the costs of road improvements to Western Row and Snider Roads in the City; (b) refunding bond anticipation notes, the original proceeds of which were used to pay the costs of park and recreation improvements in the City; (c) refunding bond anticipation notes, the

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proceeds of which were used for the purpose of paying the costs of downtown improvements in the City; and paying certain costs related to the issuance of the Series 2008 Bonds; and (2) pay certain costs related to the issuance of the Bonds, including the cost of printing the Bonds, expense in delivery of the Bonds, service charges of the Paying Agent and Registrar, legal services and obtaining an approving legal opinion and all necessary costs in connection therewith. See “PURPOSE OF THE BONDS AND PLAN OF REFUNDING” herein.

Description of the Bonds

General. The Bonds are dated, mature and bear interest as set forth on the cover page hereof.

Denominations. The Bonds shall be issued in the denomination(s) of $5,000 or any integral multiple thereof.

Redemption. The Bonds maturing on and after December 1, 2024, are subject to optional redemption prior to maturity on or after December 1, 2023. See “THE BONDS – Optional Redemption” herein.

Registration and Payment. The Bonds will be issuable only as fully registered bonds in the authorized denominations set forth above. Principal of the Bonds will be payable to the record owner thereof at the designated corporate trust office of the Paying Agent and Registrar. Interest on the Bonds will be payable by check or wire transfer by the Paying Agent and Registrar to the registered owner as shown on the registration records maintained by the Paying Agent and Registrar. Interest is payable on each June 1 and December 1, commencing June 1, 2016.

Transfer and Exchange. The Bonds are exchangeable for Bonds of any authorized denomination or denominations in equal aggregate principal amounts at the designated corporate trust office of the Paying Agent and Registrar specified on the cover page hereof, but only in the manner and subject to the limitations provided in the Authorizing Legislation. The Bonds are transferable at the designated corporate trust offices of the Paying Agent and Registrar, by the bondholder in person or by his attorney, duly authorized in writing, upon presentation and surrender hereof to the Paying Agent and Registrar. The Paying Agent and Registrar is not required to transfer or exchange (i) any Bond during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice of redemption of Bonds and ending at the close of business on the date of such mailing, (ii) any Bonds or Bond so selected for redemption in whole or in part, or (iii) any Bond during the period from the day after the fifteenth (15th) day preceding the next ensuing payment of interest through the date of such interest payment.

Bonds are exchangeable as provided in the Authorizing Legislation. The Paying Agent and Registrar may charge a bondholder an amount equal to any tax, fee, or other governmental charge required to be paid in connection with any such exchange, and an amount sufficient to reimburse the Paying Agent and Registrar for all costs and expenses incurred in connection with such exchange or transfer.

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Notices. In the event any Bonds are called for redemption, notice shall be given by mailing a copy of the redemption notice by registered or certified mail not less than thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed.

Book-Entry Only

The Bonds will be prepared as fully registered Bonds and, when delivered, all Bonds will be registered in the name of The Depository Trust Company, New York, New York (“DTC”), or in the name of its nominee, Cede & Co. DTC will act as securities depository of the Bonds. Individual purchases will be made in book-entry form only in authorized denominations. Beneficial owners of the Bonds will not receive physical certificates representing Bonds purchased by such owners, but will receive a credit balance on the books of the nominees of such owners. Principal and interest payment obligations represented by the Bonds will be paid by the Paying Agent and Registrar to DTC, which is obligated in turn to remit such principal and interest to the participants of DTC for subsequent disbursement to the beneficial owners of the Bonds, as described herein. See “BOOK-ENTRY SYSTEM” herein.

Tax Exemption

In the opinion of Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP (“Bond Counsel”), under the laws, regulations, rulings and judicial decisions in effect as of the date hereof, (a) interest, including original issue discount, if any, on the Bonds is excludible from gross income for Federal income tax purposes, pursuant to the Internal Revenue Code of 1986, as amended (the “Code”); (b) interest on the Bonds will not be treated as a specific item of tax preference, under Section 57(a)(5) of the Code, in computing the alternative minimum tax for individuals and corporations; and (c) the Bonds, the transfer thereof, and the income therefrom, including any profit made on the sale thereof, will be exempt from taxation within the State of Ohio. In rendering the opinions in the paragraph, Bond Counsel has assumed continuing compliance with certain covenants designed to meet the requirements of Section 103 of the Code. Bond Counsel expresses no other opinion as to the federal or state tax consequences of purchasing, holding or disposing of the Bonds.

The City has designated the Bonds as “qualified tax-exempt obligations” with respect to certain financial institutions under Section 265 of the Internal Revenue Code of 1986, as amended.

See Appendix C hereto for the form of the opinion Bond Counsel proposes to deliver in connection with the Bonds.

Parties to the Issuance of the Bonds

The authenticating agent, bond registrar, transfer agent, and paying agent for the Bonds is U.S. Bank National Association, Cincinnati, Ohio. The underwriter for the Bonds is RBC Capital Markets, LLC, Cincinnati, Ohio. Legal matters incident to the issuance of the Bonds and with regard to the tax-exempt status of the interest thereon are subject to the approving legal opinion of Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, Cincinnati, Ohio, as bond counsel.

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Authority for Issuance

Authority for the issuance of the Bonds is provided by Chapter 133 of the Ohio Revised Code and the Authorizing Legislation.

Offering and Delivery of the Bonds

The Bonds are offered when, as and if issued by the City. The Bonds will be delivered through DTC in New York, New York, or in the case of a FAST closing, delivery of the Bonds may be made locally to the Paying Agent and Registrar through DTC on or about April 26, 2016.

Disclosure Information

This Official Statement speaks only as of its date, and the information contained herein is subject to change. This Official Statement and continuing disclosure documents of the City are intended to be made available through one or more repositories. Copies of the basic documentation relating to the Bonds, including the Authorizing Legislation and forms of the Bonds, are available from the City.

The City deems this Official Statement to be final for the purposes of Securities and Exchange Commission Rule 15c2-12(b)(3).

Certain information contained in this Official Statement is attributed to the Ohio Municipal Advisory Council (OMAC). OMAC compiles information from official and other sources. OMAC believes the information it compiles is accurate and reliable, but it has not independently confirmed or verified such information and does not guaranty its accuracy. OMAC has not reviewed this Official Statement to confirm that the information attributed to it is information provided by OMAC or for any other purpose.

Addresses of or links to web sites contained herein, if any, are given for the convenience of the reader only. The City has not participated in the preparation, compilation or selection of information on such websites, and therefore presents no warranties or representations of, and assumes no responsibility or liability for, the material contained therein.

Additional Information

Additional information concerning this Official Statement, including copies of the basic documentation relating to the Bonds, is available from Joseph Reigelsperger, the Finance Director of the City, by writing to 6000 Mason-Montgomery Road, Mason, Ohio 45040, or by telephone at (513) 229-8510.

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THE BONDS

The Bonds are issued in fully registered form in authorized denominations of $5,000 or any integral multiple thereof. The Bonds will bear interest at the rates and mature in the amounts and on the dates set forth on the cover page of this Official Statement. Principal on the Bonds is payable upon presentation and surrender by the registered owner thereof at the designated corporate trust office of the Paying Agent and Registrar. Interest on the Bonds is payable each June 1 and December 1, commencing June 1, 2016, by check or draft to be mailed, or under certain conditions, by wire transfer, from the Paying Agent and Registrar to the registered owner as shown in the registration records maintained by the Paying Agent and Registrar as bond registrar on the applicable record date (May 15 and November 15 for June 1 and December 1 interest, respectively).

If authenticated prior to the first interest payment date of the Bonds, the Bonds shall be dated April 26, 2016, and, otherwise, the Bonds will be dated as of the interest payment date next preceding the date the Bonds are authenticated, except that if the Bonds are authenticated on an interest payment date, they will be dated as of such date of authentication; provided, that if, at the time of authentication, interest thereon is in default, the Bonds will be dated as of the date to which interest has been paid.

Redemption Provisions

Optional Redemption. The Bonds maturing on or after December 1, 2024, are subject to redemption at the option of the City on or after December 1, 2023, in whole or in part, but in authorized denominations, at a redemption price of par, plus accrued interest to the date fixed for redemption.

If fewer than all of the outstanding Bonds of a single maturity are called for redemption, the selection of Bonds to be redeemed, or portions thereof in amounts of $5,000 or any integral multiple thereof, shall be made by lot by the Paying Agent and Registrar in any manner which the Paying Agent and Registrar may determine.

Notice of Redemption

The notice of the call for redemption of Bonds shall identify, with respect to the Bonds or portions thereof to be redeemed (the “redeemed bonds”), (i) the redeemed bonds, by designation, letters, numbers or other distinguishing marks thereof, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or places where the amounts due upon redemption are payable. The notice shall be given by the Paying Agent and Registrar on behalf of the City by mailing a copy of the redemption notice by first class mail, postage prepaid, at least thirty (30) days prior to the date fixed for redemption, to the registered owner’s address shown on the registration records of the Bonds as of the fifteenth (15th) day preceding that mailing. Failure to receive notice by mailing or any defect in the proceedings regarding the Bonds, however, shall not affect the validity of the proceedings for the redemption of the Bonds. Notice having been mailed in the manner provided above, the redeemed bonds or portions thereof called for redemption shall become due and payable on the redemption date, upon which interest on such redeemed bonds or portions thereof shall cease to accrue. Upon presentation to

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the Paying Agent and Registrar, the redeemed bonds or portions thereof shall be paid for at the redemption price set forth in the notice, including interest accrued to redemption date.

Security and Source of Payment for the Bonds

The Bonds are unvoted general obligation debt of the City, the basic security for which is the City’s ability and pledge to levy an ad valorem tax on all the taxable property in the City, within the ten-mill limitation imposed by the Ohio Constitution and the Ohio Revised Code (see “CITY DEBT AND OTHER LONG-TERM OBLIGATIONS – Indirect Debt Limitations” herein). The tax will be levied in an amount sufficient to pay, as the same become due, the principal of and interest on the Bonds, as well as the principal of and interest on other outstanding unvoted general obligation bonds and bond anticipation notes of the City. The Ohio Revised Code provides that, within said ten-mill limitation, a levy of such taxes for debt service has priority over any such levy for current expenses.

Chapter 9 of the Federal Bankruptcy Code (11 U.S.C. § 901, et seq., referred to herein as the “Bankruptcy Code”) contains provisions relating to the adjustment of debts of a State’s political subdivisions, public agencies and instrumentalities (each, an “eligible entity”); the City is such an eligible entity. Under the Bankruptcy Code, in certain circumstances described therein, an eligible entity may be authorized to initiate bankruptcy proceedings without prior notice to or consent of its creditors, which proceedings may result in material and adverse modification or alteration of the rights of its secured and unsecured creditors, including holders of its bonds and notes. These provisions are applicable to the Bonds.

The Bankruptcy Code protects holders of municipal revenue bonds by providing that special revenues acquired by the eligible entity after the commencement of bankruptcy proceedings remain subject to any lien resulting from any security agreement entered into by the eligible entity before commencement of the proceedings. These provisions are not applicable to the Bonds, which are not revenue bonds.

Section 133.36 of the Ohio Revised Code permits a political subdivision, such as the City, for the purpose of enabling such subdivision to take advantage of the provisions of the Bankruptcy Code, and for that purpose only, and upon approval of the State Tax Commissioner, to file a petition stating that the subdivision is insolvent or unable to meet its debts as they mature, and that it desires to effect a plan for the composition or readjustment of its debts, and to take such further proceedings as are set forth in the Bankruptcy Code as they relate to such subdivision. The taxing authority of such subdivision may, upon like approval of the State Tax Commissioner, refund its outstanding securities, whether matured or unmatured, and exchange refunding bonds for the securities being refunded. In its order approving such refunding, the State Tax Commissioner shall fix the maturities of the refunding bonds to be issued, which shall not exceed thirty (30) years. No taxing subdivision is permitted, in availing itself of the provisions of the Bankruptcy Code, to reduce the principal sum of its securities except that interest thereon may be reduced in whole or in part.

The Authorizing Legislation provides further security for repayment of the Bonds by making a general pledge of the full faith and credit of the City to such repayment. The Bonds are not secured by funds which are specifically prohibited for such use by law (examples being tax levies voted for specific purposes and taxes levied on voted bond issues) or a trust indenture.

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Debt Service Requirements

The following table presents, for each year ending December 1, the amount required for the payment of the principal due on the Bonds for the payment of interest on said Bonds, and for the total debt service on said Bonds.

December 1 Principal Interest Total 2016 $160,000 $178,091.67 $338,091.67 2017 50,000 295,000.00 345,000.00 2018 50,000 294,000.00 344,000.00 2019 50,000 293,000.00 343,000.00 2020 920,000 292,000.00 1,212,000.00 2021 955,000 264,400.00 1,219,400.00 2022 975,000 235,750.00 1,210,750.00 2023 1,010,000 206,500.00 1,216,500.00 2024 1,040,000 176,200.00 1,216,200.00 2025 1,075,000 134,600.00 1,209,600.00 2026 1,120,000 91,600.00 1,211,600.00 2027 1,170,000 46,800.00 1,216,800.00

Total $8,575,000 $2,507,941.67 $11,082,941.67

Sources and Uses of Funds

Sources of Funds Par Amount of Bonds $8,575,000.00 Acquisition Premium 1,156,622.85

Total Sources of Funds $9,731,622.85 Uses of Funds

Deposit to 2008 Bonds Escrow Account (Escrow Securities) 9,600,367.06 Costs of Issuance(1) 70,280.00 Underwriter’s Discount 58,207.50 Miscellaneous 2,768.29

Total Uses of Funds $9,731,622.85 ___ (1) Includes bond counsel fees, rating agency fees, paying agent and registrar fees, escrow agent fees and miscellaneous costs of issuance.

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PURPOSE OF THE BONDS AND PLAN OF REFUNDING

The Bonds are being issued for the purposes of (i) advance refunding a portion of the Series 2008 Bonds, and (ii) paying certain costs under Chapter 133 of the Ohio Revised Code including, without limitation, the cost of printing the Bonds, expense in delivery of the Bonds, service charges of the Paying Agent and Registrar, legal services, costs associated with the verification agent, and obtaining an approving legal opinion and all necessary costs in connection therewith.

Advance Refunding of a Portion of the Series 2008 Bonds

The Bonds are being issued for the purpose of advance refunding a portion of the Series 2008 Bonds, which were originally issued for the purpose of refunding bond anticipation notes previously issued by the City for the purposes of paying the costs of (1) road improvements to Western Row and Snider Roads in the City, (2) park and recreation improvements in the City, and (3) downtown improvements in the City.

The moneys required to advance refund a portion of the Series 2008 Bonds will be obtained from the proceeds of the sale of the Bonds. Moneys necessary to advance refund a portion of the Series 2008 Bonds will be paid over and simultaneously therewith irrevocably deposited with U.S. Bank National Association, as escrow trustee (the “Escrow Trustee”) into an escrow account (the “Escrow Account”), pursuant to the provisions of an Escrow Deposit Agreement (the “Escrow Agreement”) entered into by and between the City and the Escrow Trustee. Such moneys will be applied by the Escrow Trustee to pay the principal of and interest on a portion of the Series 2008 Bonds maturing as set forth below in the “Refunded Bonds” table until June 1, 2018 (the “Refunded Bonds”), upon which date the Refunded Bonds will be redeemed at a redemption price of 100% of the principal amount thereof.

Refunded Bonds

Bond Series

Maturity Date (Dec. 1)

Interest Rate

Outstanding Principal Amount

Redemption Date

(Dec. 1)

Redemption

Price2008 2020 4.000% $950,000 06/01/2018 100%2008 2021 4.000 1,000,000 06/01/2018 100%2008 2022 4.000 1,030,000 06/01/2018 100%2008 2023 4.125 1,075,000 06/01/2018 100%2008 2024 4.350 1,120,000 06/01/2018 100%2008 2025 4.250 1,165,000 06/01/2018 100%2008 2026 4.250 1,215,000 06/01/2018 100%2008 2027 4.250 1,270,000 06/01/2018 100%

TOTAL $8,825,000

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Verification of the Escrow Amount

The arithmetical accuracy of the mathematical computations supporting the conclusion that the maturing principal amounts of, and interest earned on, the permitted investments deposited pursuant to the Escrow Agreement are sufficient to pay the principal of and premium and interest portion of the Refunded Bonds being advance refunded upon redemption, and the arithmetical accuracy of the mathematical computations supporting the conclusion that such use of a portion of the proceeds of the Bonds will not cause the Bonds to be “arbitrage bonds” under Section 103(b)(2) and 149 of the Internal Revenue Code, will be verified by Grant Thornton LLP, certified public accountants, as a condition to the delivery of the Bonds. Grant Thornton LLP will express no opinion on the data used, reasonableness of the assumptions or the achievability of the projected outcome.

Original Project Description for the Refunded Bonds

The Western Row and Snider Road Improvement Project included widening lanes; adding left turn lanes and traffic signal; improvements to the existing bridge on Snider Road and storm drainage improvements. This project was completed in 2005.

The 54-acre Mason Sports Park project included youth baseball and football/soccer fields. Staff developed the park design with assistance from Park Board and Mason youth athletic organizations. The project included five (5) natural turf baseball fields for little league play. Two of the fields to the north are used for little league and adult level baseball. Each field is complete with equipment, lighting, irrigation, scoreboards, and fencing. The four main fields are cloverleaf configured with automatic irrigation and include an officials building, in the center of the fields; restrooms, concessions, storage and an official’s area on the 2nd floor. The park includes a basic security system with the ability to expand as the need arises. Also included is a baseball themed playground with pour-in-place rubber safety surfacing, park benches, water fountains, concrete sidewalks, asphalt bike trails, nine (9) hole Disc Golf Course, two (2) football fields, a pedestrian bridge fifty feet long and ten feet wide, asphalt roads, storm water detention basins and landscaping. This project was completed in 2008.

The Downtown Streetscape project included burying the utilities along West Main Street, realignment of the intersection of West Main Street and Reading Road (U.S. 42), new sidewalks, lighting, on-street parking and a community plaza. In order to accommodate for this, staff included a 35’-0” diameter green space in the community plaza and extended the necessary utilities to this area. The project was combined with the Mason-Montgomery Road Widening project and was completed in 2008.

The Western Row Road Widening project consisted of approximately 9,200 feet of widening from Cherokee Drive to Tylersville Road. The new roadway geometrics consists of at least four 11-foot wide lanes, curb and gutter, sidewalk and a bike path. Landscaping, street trees and irrigation of the islands are also included in the project. Approximately, $1.5 million of the $6.5 million project was paid by a state grant and Warren County Engineer’s motor vehicle license fee funds. This project was completed in 2009.

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Original Project Costs for the Refunded Bonds

Project Amount 2004 Western Row Road/Snider Road Improvements $2,850,000 2006 Mason Sports Park Construction 5,600,000 2007 Downtown Improvements 4,000,000 2008 Western Row Rd Widening Improvements 5,000,000

TOTAL $17,450,000

INVESTMENT CONSIDERATIONS

The Bonds, like all obligations of state and local governments, are subject to changes in value due to changes in the condition of the tax-exempt bond market and/or changes in the financial condition of the City and/or the property owners residing in the City. It is possible under certain market conditions, or if the financial condition of the City should change, that the market price of the Bonds could be adversely affected.

Prospective purchasers of the Bonds may need to consult their own tax advisors prior to any purchase of the Bonds as to the impact of the Internal Revenue Code of 1986, as amended, upon their acquisition, holding or disposition of the Bonds.

With regard to the rights of creditors of the City, see “THE BONDS – Security and Source of Payment for Bonds” herein.

All financial and other information presented herein has been provided by the City from its records, except for information expressly attributed to other sources. The presentation of such information, including tables of receipts from rates, charges, taxes, and other sources, is intended to show recent historical information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the City, except as indicated otherwise herein. No representation is made that past experience, as might be shown by such financial and other information, will necessarily continue or be repeated.

In recent years, the U.S. Internal Revenue Service (“IRS”) has increased the frequency and scope of its examination and other enforcement activities regarding tax-exempt bonds. Currently, the primary penalty available to the IRS under the Code is the determination that interest on tax-exempt bonds is subject to federal income taxation. In addition, although the IRS has only infrequently taxed the interest received by holders of bonds that were represented to be tax-exempt, the IRS has examined a number of bond issues and concluded that such bond issues did not comply with applicable provisions of the Code and related regulations. No assurance can be given that the IRS will not examine the Underwriter, any holder of the Bonds, the City or the Bonds. If the Bonds are examined, it may have an adverse impact on their price and marketability. Based on the stated use of proceeds from the sale of the Bonds as described herein, and on representations, warranties and covenants of the City, Bond Counsel will deliver its opinion as to the exemption from taxation of interest on the Bonds in the form set forth as Appendix C hereto.

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Local Fiscal Emergency Legislation

Chapter 118 of the Ohio Revised Code (referred to in this section of this Official Statement as “Chapter 118”) provides methods for dealing with fiscal emergencies of certain political subdivisions in Ohio, including the City. Chapter 118 applies only to those subdivisions which are determined to have circumstances that constitute a fiscal watch or a fiscal emergency pursuant to the provisions thereof.

Section 118.022 of the Ohio Revised Code sets forth a series of conditions that constitute grounds for a fiscal watch. If a fiscal watch is determined to exist, the subdivision is provided technical and support services by the State Auditor’s Office to restore financial stability. If the fiscal watch conditions are not remedied, the subdivision will remain under fiscal watch or be reclassified to a fiscal emergency.

Section 118.03 of the Ohio Revised Code sets forth a series of conditions that constitute fiscal emergency conditions. If a fiscal emergency condition is determined to exist, the subdivision is subjected to State oversight through a seven-member Financial Planning and Supervision Commission (referred to in this section of this Official Statement as the “Commission”). The Commission is assisted by certified public accountants designated by the State Auditor to be engaged by the Commission. The State Auditor may also be required to assist the Commission.

A subdivision subject to Chapter 118 because of the existence of a fiscal emergency must develop and submit a detailed financial plan for the approval or rejection of the Commission. Among other matters, the financial plan must show the actions to be taken by such subdivision to eliminate existing fiscal emergency conditions, avoid future fiscal emergency conditions, and to restore such subdivision’s ability to market long-term debt obligations under the laws of the State.

The Commission must approve the amount and purpose of any issue of debt obligations. The Commission, or when authorized by the Commission, the State Auditor, among other powers, shall require the subdivision to establish monthly levels of expenditures and encumbrances consistent with the financial plan and shall monitor such monthly levels and require justification to substantiate any departure from such approved levels. The Commission must disapprove the issuance of debt obligations if (a) the issuance would impede the purposes of the financial plan or be inconsistent with the financial plan or Chapter 118, (b) debt limits would be exceeded, (c) the ability of overlapping subdivisions to issue unvoted general obligation debt would be impaired, and (d) their issuance would be likely to lead to the reallocation of minimum levies of other subdivisions. Expenditures may not be made contrary to an approved financial plan, and expenditures may not be made contrary to a proposed financial plan after it is submitted to the Commission and before it is approved or disapproved. If the proposed financial plan is disapproved, no expenditures may be made which are inconsistent with the reasons given for disapproval.

Among other requirements and provisions, Chapter 118 provides (a) that a subdivision subject thereto must develop an effective financial accounting and reporting system; (b) that budgets, appropriations and expenditures are to be consistent with the purposes of the financial

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plan; (c) for the issuance of Local Government Fund Bonds, subject to the restrictions of Chapter 118 and payable solely from a subdivision’s share of the local government fund payments made to such subdivision pursuant to other provisions of the Ohio Revised Code; (d) that such a subdivision may include certain covenants in its debt obligations, including a State pledge not to repeal Chapter 118; and (e) permits the subdivision to issue current revenue notes and advanced tax payment notes pursuant to the authorization and subject to the restrictions of Chapter 118.

The Finance Director has reviewed applicable portions of Chapter 118 and has reviewed records pertaining to the City’s circumstances with respect thereto. The Finance Director, based upon his understanding of the Act, is of the opinion that, with respect to the City, no circumstances or conditions exist that constitute a fiscal emergency condition under Chapter 118.

BOOK-ENTRY SYSTEM

The following information concerning DTC and DTC’s book-entry system has been obtained from DTC and contains statements believed to describe accurately DTC, the method of effecting book-entry transfers of securities distributed through DTC and certain related matters, but neither the City nor the Paying Agent and Registrar takes any responsibility for the accuracy of such statements.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each issue 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 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, corporate and municipal debt issues, and money market instrument 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, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as both U.S. and non-U.S. securities brokers and dealers, banks, and trust companies, and clearing corporations that clear through or maintain a custodial

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relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has received a rating of AA+ from Standard & Poor’s. The rules of DTC 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, but Beneficial Owners are 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 Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all of the Bonds deposited by Direct or Indirect Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co., or such other nominee, do not affect 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 Participants, either Direct or Indirect, 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 the 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 security 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, or , 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 an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an omnibus proxy to the issuer of securities deposited with DTC

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(referred to in this section of this Official Statement as an “issuer”) as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the omnibus proxy).

Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the applicable issuer, or its agent for such purposes, on the payable date in accordance with the respective holdings of such Direct Participants, as shown on DTC’s records. Payments by Direct or Indirect 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, an issuer, or its agent for such purposes, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the applicable issuer, or its agent for such purposes. Disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

A Beneficial Owner of the Bonds shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Paying Agent and Registrar, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Paying Agent and Registrar. Any requirement for physical delivery of the Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by any Direct Participant on DTC’s records and followed by a book-entry credit of the tendered Bonds to the Paying Agent and Registrar’s account with DTC.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Paying Agent and Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. As well, the City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In the event that a successor securities depository is not obtained or the City decides to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository), Bond certificates will be printed and delivered.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.

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PROFILE OF THE CITY OF MASON

Overlapping Governing Entities

The major governmental entities covering the territory of the City are:

(a) The City, which performs the traditional functions of a municipality;

(b) A portion of Warren County (the “County”), which performs the traditional functions allocated to counties by the laws of the State;

(c) The Mason City School District (the “School District”), which is charged with educational responsibilities for children from kindergarten through the twelfth grade; and

(d) The Warren County Career Center Joint Vocational School District (the “JVSD”), which JVSD operates a vocational education program pursuant to state statutes.

Each of these government entities, including the City, operates independently of the others with its own budget, income, tax rates, and sources of revenue.

The City, located 22 miles northeast of Cincinnati and 30 miles south of Dayton, is one of the fastest growing cities in the State of Ohio. Platted as the Village of Palmyra in 1815, the City of Mason incorporated in 1971, and as of July 1, 2013, had an estimated population of 31,282 with a community able to provide a full range of services to its citizens, businesses and industries. The City is comprised of 18 square miles. The City is approximately 82% developed and expects to continue the path of progress and development occurring in southwestern Ohio. The City has over 3,000 acres zoned for high technical and industrial use or slated within the Comprehensive Plan for development. Of those 3,000 acres, more than 2,000 acres are currently developed with approximately 850 acres available for future development in Mason.

City Government

The City has operated under its Charter since December 1, 1969, but is also subject to the general statutes of the State of Ohio, which are applicable to all municipalities in the State. In addition, the City may exercise all powers of local self-government permitted under Article XVIII, Section 3, of the Ohio Constitution.

The legislative power of the City is vested in a Council of seven members, all of whom are elected from the City at large. All members of Council are elected for terms of four years commencing on the first day of December following their election.

The Mayor is elected to a two-year term and is the presiding officer of the Council. In addition to duties as the presiding officer of the Council, the Mayor acts as ceremonial head of the City, and appoints members of committees created by Council.

The City Council appoints the City Manager, the Law Director and the Clerk of Council.

The City Manager is the chief executive, administrative and law enforcement officer of the City and is charged with the responsibility of enforcing the laws and ordinances of the City. The City Manager also appoints and removes all heads of departments and all-subordinate

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officers and employees of the City, except the City Law Director and the Clerk of Council. The City Manager also exercises control over all departments created by the City Council.

The current elected and appointed City Officials are:

Legislative Term

Commenced

Present Term

Expires Mayor Victor Kidd 12/01/11 11/30/19 Vice Mayor Barbara Berry-Spaeth 12/01/11 11/30/19 Council Member Ashley Chance* 09/28/15 11/30/17 Council Member Kathy Grossman 12/01/15 11/30/19 Council Member Diana Nelson** 01/14/16 11/30/17 Council Member Charlene Pelfrey 12/01/09 11/30/17 Council Member Don Prince 12/01/09 11/30/17 * Appointed to fill the vacant seat of a former Council Member who resigned from City Council, effective August 10, 2015. The term initially commenced December 1, 2013. ** Appointed to fill the vacant seat of a former Council Member who resigned from City Council, effective December 15, 2015. The term initially commenced December 1, 2013.

Executive Employment Date City Manager Eric Hansen 04/08/96 Assistant City Manager Jennifer Heft 09/23/96 City Law Director Jeff Forbes 08/11/08 Clerk of Council Nancy Hickey 08/08/10 Economic Development Director Michele Blair 08/28/00 Director of Finance Joe Reigelsperger 08/09/04 Police Chief Ron Ferrell 05/12/97 Service Director Richard Fair 08/21/89 Director of Public Utilities Michael Hunter 08/31/15 Director of Public Works David Riggs 05/27/97 Parks and Recreation Director Chrissy Avery 06/05/06 City Engineer Kurt Seiler 11/17/97

General Government. Of the offices which can be grouped under the category of general government, in addition to the Council and the City Manager, five officials are of particular pertinence.

The Assistant City Manager is appointed by the City Manager and is responsible for all personnel functions. The Assistant City Manager is the principal assistant to the City Manager and performs the City Manager’s duties in the event of the City Manager’s absence.

The Director of Finance is appointed by the City Manager and performs the functions of establishing accounting systems, financial records and reports used by the offices, departments, divisions, bureaus, boards and commissions of the City; assisting the City Manager in the preparation and submission of appropriation measures, estimates, budgets, capital programs and other financial matters; providing complete information concerning the financial affairs and status of the City as required by the City Manager or the Council; and providing full and

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complete information and assistance concerning the finances or accounting systems or records of any office, department, division, bureau, board or commission of the City as requested by the City Manager.

The Service Director is appointed by the City Manager and is responsible for all departments that provide services including Engineering and Building, Parks and Recreation, Public Utilities, Public Works, Facility Management and Planning.

The City Engineer is appointed by the City Manager and has the following powers, duties and functions: responsible for the Engineering and Building departments of the City; advise the City Manager on matters affecting the development, redevelopment and renewal of the City; coordinate the work of and advise the Council, the City Manager, the Planning Commission, and other departments, boards and commissions of the City in the development and modification of comprehensive plans for the City; advise, by way of review and recommendation, the Council, the City Manager, and the City’s departments, boards and commissions concerning programs and activities to implement the comprehensive plans of the City; and advise and assist the Planning Commission in the exercise of its powers, duties and functions.

The Director of Public Works oversees the Public Works Department, which is responsible for the upkeep and maintenance of the public right of ways, roadways and all City vehicles, equipment and facilities.

Administration of Justice System. The Law Director is designated by Ohio law and the City Charter as the chief legal counsel for all City officers, boards and commissions (including the Council), the Director of Finance and the City Manager. The City has a municipal court which is the responsibility of the City to maintain and fund under the law. The Clerk of Courts keeps all official records of the Municipal Court. The office of Clerk of Courts operates on a system of fees charged for services and is essentially self-supporting. Warren County operates the Court of Common Pleas and Ohio’s 12th District Court of Appeals. The United States District Court for the Southern District of Ohio and the U.S. Sixth Circuit Court of Appeals are located in Cincinnati.

The Chief of Police is the chief administrative officer of the Police Department and the final departmental authority in all matters of policy, operations and discipline. As such, the Chief of Police exercises all lawful powers of the office and issues such lawful orders as are necessary to assure the effective performance of the department. Through the Chief of Police, the department is responsible for the enforcement of all laws and ordinances coming within its legal jurisdiction. The Chief of Police is responsible for planning, directing, coordinating, controlling and staffing all activities of the department for its continued and efficient operation, for the enforcement of rules and regulations within the department, for the completion and forwarding of such reports as may be required by competent authority, and for the department’s relations with local citizens, City government and other related agencies.

City Owned Utilities. The City’s Department of Utilities provides sewage treatment on a City-wide basis. The Wastewater Division employs 13 full-time employees and had a 2015 annual gross payroll of $990,293. The water system consists of one water plant with a production capacity of 7,000,000 gallons per day. The water plant is currently in a stand-by

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mode. The City has entered into a contract with Greater Cincinnati Waterworks (“GCWW”) allowing it to operate and maintain the City’s Water System. The entire water needs of the City are supplied by GCWW from their water system. All sewage in the City is treated by the City’s treatment plant, which has a capacity of 8.67 million gallons and a current average daily flow of 6.1 million gallons per day. The City maintains approximately 210 miles of sewer lines. The City also provides weekly trash collection to the residents through a contract with Rumpke, a private waste collection firm.

Financial Management

The Council is responsible for providing and managing the funds used to support the various City activities. The Council exercises its legislative powers in budgeting, appropriating, levying taxes, issuing bonds and notes and letting contracts for public works and services to provide this financial management.

Income Tax and Other Major Fees and Charges

The largest source of revenue for the City in 2015 was the City’s one and twelve hundredths percent (1.12%) municipal income tax. The second largest source of revenue was charges for services. Ad valorem property taxes, which are collected by Warren County and returned in part to the City (see “AD VALOREM TAXES” herein) and state-shared taxes was the third largest source of revenue for the City.

Management of City Facilities

The Council has certain responsibilities for the management of most City facilities, including the Municipal Court, administrative and general City government facilities.

Personnel Administration

Personnel wages and benefits accounted for 56.3% of the City’s total general fund operating expenditures (excluding transfers, capital outlay, and debt service) in 2015. Council has the power to approve or disapprove salary and wage appropriations submitted in the operating budgets for all City employees.

Employee Relations

As of December 31, 2015, the City employed approximately 189 full-time and 211 part-time temporary employees in various job classifications. In 2015, the City’s annual payroll was $16,468,759.

Am. Sub. S.B. 133, which enacted Chapter 4117 of the Ohio Revised Code (the “Collective Bargaining Law”), became fully effective on April 1, 1984. Under the Collective Bargaining Law, public employees of the State and many local subdivisions (including the City) have the right to organize, bargain collectively and have union representation. The Collective Bargaining Law establishes procedures for and regulates public employer-employee collective bargaining and labor relations for state and local governmental units in Ohio. The Collective Bargaining Law creates the SERB, a three-member board. The SERB administers and enforces

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the Collective Bargaining Law. Among other things, the Collective Bargaining Law: (i) creates rights and obligations of public employers, public employees and employee organizations with respect to labor relations; (ii) defines which employees are covered by the Collective Bargaining Law; (iii) establishes methods for (a) the recognition of employee organizations as exclusive representatives for collective bargaining and (b) the determination of bargaining units; (iv) establishes matters for which collective bargaining is (a) required, (b) prohibited and (c) optional with the public employer; (v) establishes procedures for bargaining and the resolution of disputes, including negotiations, mediation and fact finding; and (vi) permits all employees covered under the Collective Bargaining Law to strike, except certain enumerated classes of employees including police and fire personnel. Disputes with employees who are not permitted to strike (including police and fire personnel) are to be resolved by binding arbitration on a best offer, issue by issue basis. If a strike by employees who are permitted to strike presents a clear and present danger to the public health or safety, the Warren County Common Pleas Court may issue a temporary restraining order enjoining the strike for no more than 72 hours, and in such a case the employer may request authorization of the SERB to enjoin the strike beyond the period of the temporary restraining order. The SERB determines if a clear and present danger to the public health or safety exists, and if it so determines, the Court issuing the temporary restraining order has jurisdiction to further enjoin the strike for a period of 60 days after the end of the temporary restraining order or when agreement is reached, whichever occurs first. Thereafter, no court has jurisdiction to issue injunctive relief or other orders and a strike may be resumed at the end of such 60 day period. The employer must recognize and grant exclusive representation rights to a representative approved by the State Employment Relations Board (“SERB”). SERB approval may be granted either after fulfillment of the requirements promulgated in its regulations or by majority approval of the employees at a SERB-supervised election. The employer has the right to insist on an election. Any agreements under the Collective Bargaining Law must be in writing, must specify a grievance procedure and cannot exceed three years in duration.

The Collective Bargaining Law also designates those actions which constitute unfair labor practices and prescribes procedures for their remedy. It also sets forth dispute resolution procedures for contract negotiation impasses, including arbitration or other mutually agreeable methods. If the impasse persists after conciliation procedures, then police, fire, correctional officers and other public safety employees must take the dispute to binding arbitration and do not have the right to strike. All other employees have the right to strike after 10 days written notice.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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The City has labor agreements with the following employee unions:

Union

Type of Personnel Covered

Number of Employees

Covered

Date Contract

Commenced

Date Contract Expires

Fraternal Order of Police Patrol Officers 30 08/01/14 07/31/17 Sergeants/Lieutenants 9 08/01/14 07/31/17

International Association of Fire Fighters Fire Fighter/Paramedic 34 10/01/13 09/30/16 Inspector/Lieutenant 1 10/01/13 09/30/16

Teamsters Public Works and Utilities Maintenance Workers

26 01/01/14 12/31/17

The City knows of no other union organization seeking recognition at this time.

City Services and Responsibilities

Welfare and Public Assistance. The Warren County Human Services Department administers the public welfare functions within the County, including services to residents of the City.

Warren County also provides public assistance via the Board of Mental Health and Mental Retardation, the Soldiers’ Relief Commission and the County Children’s Services Board.

Health. There are a total of 39 hospitals in the surrounding Cincinnati-Middletown Metropolitan Statistical Area (the “Metropolitan Area”) including 21 acute care facilities, among them the nationally recognized Cincinnati Children’s Hospital, and 1 critical access hospital. There are several urgent care facilities in the City and surrounding areas operated by the areas major medical providers. Located in the City, the Lindner Center of HOPE is a national leader for the treatment of mental health problems. The UC Health West Chester Hospital was completed in 2009 and is four miles from the City. Cincinnati Children’s Hospital Medical Center’s Liberty Campus is six miles from the City and recently completed an expansion of its clinical operations, and is expected to open a new $118 million proton therapy center by early 2017. The Atrium Medical Center was completed in 2007 and is located approximately a quarter mile east of Interstate 75 at the Middletown exit.

The Warren County Health Department provides various health related services throughout the County, including the City, such as home nursing and food service and sanitary inspections.

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Demographic Information

Population. The 2014 estimated population of the City was measured at 31,289, according to the U.S. Census Bureau. Statistics from the last three decennial censuses of population and the latest American Community Survey are indicated below.

1990 2000 2010 2014

City of Mason 11,452 22,016 30,712 31,289 Warren County 113,909 158,383 212,693 217,623 Cincinnati MSA 1,817,571 1,979,202 2,130,151 2,131,793

Source: U.S. Census Bureau; American Community Survey 2014.

ECONOMIC INFORMATION

Business and Industry

The City’s business community employs an estimated 30,000 people. Four of the top ten largest full-time employers in Warren County are located in the City. Of those, Mason is home to the second largest employer, Procter and Gamble, as well as the fourth largest employer, Luxottica Retail. More than 27% of Mason’s corporate portfolio is made up of global and US headquarters operations. The City’s ten largest employers provided work for more than 10,000 employees and generated more than $9.7 million in income tax revenue for 2015. Overall, it is estimated that there are more than 800 businesses that operate within the City’s 18.6 square miles.

Mason continues to attract quality companies that are relocating or expanding. In choosing the City, companies cite prime location along the interstates, availability of land for development within established business parks, rising property values, the established core of high-tech businesses, available talent and workforce, and an exceptional level of support and services with a favorable business environment widely promoted in the region. Tax incentives targeting high-tech research and development-sector businesses and light industry are strong inducements as well. Over the past decade, Mason has also nurtured the marriage between tourism, Warren County’s top industry, and business development. Additionally, the City’s economic strategy encourages the growth of early and mid-stage entrepreneurial companies within the target sectors of bio-health, bio-health IT, and digital IT.

In the last fifteen years, Mason has become home to numerous domestic and foreign companies and has one of the region’s largest complements of international businesses. As of 2014, the Metropolitan Area ranks fourteenth in total exports among U.S. cities. The City contributes to the region’s worldwide impact, being home to a number of the region’s more than 1,000 firms engaged in international trade that generate annual export sales of over $20 billion. More than 300 firms from Japan, Western Europe and Canada have established facilities in the Metropolitan Area.

In an effort to further enhance the city’s foreign investment strategy, Mason works closely with the Regional Economic Development Initiative Cincinnati (REDI) on business attraction initiatives. REDI replaced the Cincinnati USA Partnership’s Regional Economic

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Development Council as the region’s primary business attraction entity. This regional partnership has lent strength and leverage to Mason’s work on both national and international recruitment projects. This partnership facilitates extended contact with national and international corporate site selectors and brokers and has leveraged partnerships with news organizations in major metropolitan areas. To complement Mason’s international strength, the City’s economic development department also plays an active leadership role with the European American Chamber of Commerce (EACC), the Japanese American Society (JASGC) and the Greater Cincinnati Chinese Chamber (GCCC). As a result of these alliances, the City’s active role and engagement with corporate partners has gained national exposure and future new investment interests in targeted industries.

REDI and the Cincinnati Chamber of Commerce also strengthens a methodology of continued relationship maintenance with valuable contacts in Europe and Asia, giving Mason the opportunity to tell the unique stories of its corporate investors to companies outside the U.S. that are looking to start new U.S. operations. The REDI partnership helps the city reach emerging markets, entrepreneurs and the information technology, biosciences and advanced manufacturing business sectors in order to bring significant value, exposure and return on the city’s investment in business recruitment marketing.

Beginning in 2007, the City negotiated a partnership agreement with CincyTech to leverage key growth sectors. This agreement provides the City with membership at key levels with the CincyTech management team and set the stage for public private partnerships within the entrepreneurial business community resulting in record growth in this sector in recent years. Specifically, the target business sectors that the CincyTech partnership helped Mason reach included emerging markets, entrepreneurs, information technology, biosciences, and digital IT. These partnerships have helped give the City a high profile among investment prospects and have set the City apart from the efforts of competing communities. Under the agreement, the City continues to reach these markets that are so important to its overall economic development goals.

Mason is one of only two cities in the region that are CincyTech partners. Over 13% (five companies) of the total CincyTech company portfolio have chosen a location in Mason. Mason has also nurtured growth companies through the Mason Tech Elevator business model, which includes both the Mason Municipal Campus and the Mason Tech Center Campus located at the Top Gun Sales Performance headquarters. On both campuses, approximately 16 targeted growth companies have generated more than $75 million in venture and private equity investment and over 350 new jobs in the City. Overall, CincyTech has raised over $500 million for 38 startup companies and 750 jobs in the region since 2007. The year 2015 set the stage for record activity within the entrepreneur and technology company ecosystem in the City, capturing approximately 30% of the jobs created in the CincyTech portfolio. As a result, job growth and new investment are expected to increase in the coming years.

The year 2015 marked the city’s tenth year of operating with the Mason Port Authority. This economic development tool has already provided advantageous flexibility with financial recruitment options. Since its inception, the Port has helped retain over 1,400 jobs and allowed the city to attract nearly $125 million in new capital investment, with a total of over 2,565 new jobs created. The Mason Port Authority makes regular proposals to major prospects, often in

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combination with the marketing of the city’s industrial property on State Route 741 and the Interstate 71 corridor. The Port was instrumental in its competitive positioning for the Procter and Gamble, General Electric Global Service Center, and Festo Regional Campus projects and continues to facilitate opportunities for Mason that would not be possible without this important economic development tool.

Mason’s reputation as a serious business environment is confirmed by corporate decisions to consolidate and move jobs and investment to the city. New investments reported in 2015 were over $472 million as 1,205,000 square feet of new corporate and industrial space were added, bringing over 2,400 announced new jobs to the community. The growth in 2015 set record levels in every category and reiterates Mason’s trend of performing at or near the top in the region for new investment in the industrial and corporate sector.

The pipeline of increased new investment began to rebound at the close of 2010, with figures reaching significant levels in 2011 and continuing into 2014. The year 2015 culminated with the completion of significant recruitment projects managed over several years, representing near equal levels of expansion of existing companies and attraction of new companies. Projections for the 2016 investment figures based on current 2015 pipeline are expected to achieve continued steady growth.

The diversified tax base in Mason provides for steady investment across industry sectors from automotive to science and research headquarters. In 2015, projects were a combination of new jobs, new square footage, and new investments. The year 2015 kicked off several large developments, most with expected completion dates throughout 2016 and 2017. New investment in 2014 and 2015 continued to grow with the expansion of existing Mason businesses. Activity in the City included large-scale expansion, new added locations via acquisition and renovation, and full company relocation.

Several large developments have been announced or completed since the beginning of 2014. Atricure, Inc. a medical device maker based in West Chester, completed the relocation of its company headquarters and 200 workers to Mason’s Oak Park District, near Interstate 71 in the City, which is envisioned as a 250-acre walkable mixed-use development. The Mason Tech Center also saw the relocation of several new tenants to its class A office space, the result of a public-private partnership between Mason and Top Gun Sales Performance. Companies in residence at the tech center now include ADB Companies, ZeroDay Technologies, Trayak, ConnXus, Cloud Takeoff, and Riverbend Worldwide. Intelligrated Inc., one of the region’s largest private companies, is also expanding its Mason headquarters at a cost of $10 million and hiring 238 new employees. Further, Mitsubishi Electric Automotive America, Inc., a leading global automotive supplier, completed its eighth expansion in the City at a cost of $80 million, representing 145,000 additional square feet and 100 new jobs over the next few years.

The health industry has also provided new development in Mason. Premier Health, a Dayton-based health system, opened the Atrium Health Center in Mason in early 2015. The company invested about $11.5 million and created 40 jobs with the renovation of a 44,000 square foot facility in the City, and is working to hire over 500 more people at the new location. Also in early 2015, Assurex Health announced plans to build a new headquarters and clinical laboratory in the City, citing the area’s access to top talent and strong science partnerships with

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regional hospitals and universities. Construction on the new 60,000-80,000 square foot facility could be completed in 2016. Additionally, the Lindner Center of Hope, the 22nd largest hospital in Greater Cincinnati, announced plans to open a second facility, an outpatient clinic, in Mason, adding 20 jobs to the City.

In 2015, Proctor & Gamble Co. revealed that it will spend $300 million to build a large research and development center at its Mason campus, which will be one of the largest private investments in the region in recent years. The company will move 1,150 employees to the Beauty Innovation Center from its operations in Blue Ash, Ohio. Construction began in the summer of 2015 on a 500,000 square foot facility, adding to the company’s current 1.5 million square foot presence in the City. The center will include laboratories, pilot plants and space to conduct focus groups with consumers.

Residential growth is also a part of the City’s upward economic trend. The former Kings Island Resort and Conference Center is being transformed into a luxury apartment development with 316 high-end, market rate units. The 21-acre property just north of the Kings Island amusement part is being redeveloped by a partnership of Cincinnati-based Towne Properties, Inc. and Oxford-based Hotel Development Services LLC. In early 2015, developer Bayer Becker announced that it will redevelop the 168-acre former Crooked Tree Golf Course into a $150 million upscale residential development. Preliminary plans call for 212 single-family homes ranging in price from $500,000 to more than $1 million and 50 acres set aside as green space with hiking trails and a nature preserve.

As each new investment is announced, job creation and payroll are projected for the next three to five years. Many of the jobs announced have already been realized by the City and many others will be realized in the next two years. The following projects were the largest new developments announced in the City for 2015:

2015 Corporate Investment Announcements

New Capital New Payroll Procter & Gamble $420,000,000 $160,000,000 Mitsubishi Electric 25,000,000 3,000,000 Masters Pharma 17,000,000 9,213,000 Intelligrated 10,200,000 16,660,000 Cincinnati Fan 3,500,000 1,950,000

Source: City of Mason Economic Development.

Growth and development in the City are expected to continue to be strong through 2016. Efforts to focus on growth sectors and emerging markets that bring high rates of return to the City are the key focus of the City’s economic strategy. In 2015, Mason saw a surge in the interest of land sales and new construction in the industrial, manufacturing, and specialty healthcare and pharmaceutical sectors. Recognizing that the regional market outlook is seeing continued signs of recovering activity into the next several years, Mason has positioned itself to be at the forefront of positive commercial activity. Mason has put significant effort into partnerships and creativity in economic development resulting in successful attention within the business community and the creation of investment and jobs. In addition, its physical location,

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municipal facilities, developable terrain, services and utilities, and the progressive attitude and actions of City Council, administration, and citizens are strong assets and support company decisions to build and grow in the City.

Focal areas for future growth are the North Mason Technology District, an area of City-and privately-owned land in the northeast quadrant of the City totaling over 1,000 acres, and the I-71 corridor, which has approximately 600 acres of undeveloped land that has attracted the attention of the development community. Mason is also well attuned to the benefit of destination construction such as the Great Wolf Lodge, new investments at the Kings Island amusement park and the expansion of high-profile events such as the Tennis Masters Series and related sports events, which are expected to drive more interest in tourism development and national exposure of the City. The City’s economic development efforts fully recognize a positive relationship between destination tourism and the business community’s interest in conference, technology, and office development.

The City’s physical location, developable terrain, municipal facilities, services and utilities and the progressive attitude and actions of City Council, administration and citizens are strong assets.

Distance from Mason to Major Urban Markets:

City Highway Miles

Chicago, Illinois 305 Cincinnati, Ohio 22 Cleveland, Ohio 228 Columbus Ohio 85 Dayton, Ohio 30 Detroit, Michigan 242 Indianapolis, Indiana 119 Lexington, Kentucky 106 Louisville, Kentucky 123 Nashville, Tennessee 296 Pittsburgh, Pennsylvania 267 Toledo, Ohio 183

Transportation

A system of five interstate highway routes (71, 74, 75, 275 and 471) and seven U.S. routes (22, 25, 27, 42, 50, 52 and 127) serve the Metropolitan Area. There are also approximately 267 miles of county roads, including 395 bridges, facilitating transportation in Warren County. Ohio Route 42 also provides a major transportation artery through the City. More than 380 motor freight carriers and 44 freight forwarders serve the City of Mason and the Metropolitan Area.

In addition to being served by interstate highways, the City is connected to the region via other easily accessible transportation modes. The Metropolitan Area is an important rail freight center fed by three major trunk line railroads, operating twelve divisions with total mileage of

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64,000 in 27 states. The area is also served by the Amtrak passenger network. The City’s eight business parks have direct access to the Indiana & Ohio Railway.

The Metropolitan Area is also on the 15,000-mile Great Mississippi River Inland Waterway and Intracoastal Canal System. With the recently expanded statistical boundaries of the Port of Cincinnati, it is now the second largest U.S. inland port with about 48 million tons of cargo passing through Cincinnati onto the Ohio River every year. The expanded port is now known as the Ports of Cincinnati & Northern Kentucky.

Four airports serve the City’s residents. The Greater Cincinnati and Northern Kentucky International Airport (CVG) is located in Northern Kentucky, about forty-five minutes from the City, via two interstate routes. During 2015, CVG provided services to over 6.3 million air passengers with approximately 170 daily departures to 57 airports, serving 38 of 40 U.S. markets with daily non-stop service.

In addition, the Dayton airport is within fifty minutes driving time and is served by all major Midwest carriers. Lunken Airport, municipally-owned and located in Cincinnati is 25 minutes driving time southeast of the City. Cincinnati West Airport in Harrison has a 3,050 foot paved runway and also accommodates private and corporate aircraft.

The City has partnered with the Southwest Ohio Regional Transit Authority’s Metro bus service for eight years to bring public transportation from Cincinnati to southern Warren County. Residents of the City can ride the I-71/75 Peak Commute system into Cincinnati Monday through Friday during rush hours.

Utilities

Duke Energy provides the City with gas and electricity. The Metropolitan Area is near the center of one of the nation’s largest concentrations of electrical power. Duke’s plants are connected to other utility company plants in the Ohio River Valley and also to a regional network of high voltage lines, thus providing substantial reserve capacity.

The municipally-owned water treatment plant of the City is operated by Greater Cincinnati Water Works (or “GCWW”) pursuant to an agreement entered into by and between the City and GCWW. The City Sewer Department is governed and financed by the City. Operation is substantially citywide. Storm water management has been undertaken by the City with the creation of a new city-operated storm water utility.

Rumpke, a private solid waste collection firm, serves the City, with weekly collection of solid waste from residential dwellings, schools and public institutions.

Sprint, AT&T, Cincinnati Bell, Inc., TDS Telecom, Verizon and Century Link all provide telephone service to Warren County. In addition, Cincinnati Bell has copper and fiber available to all of the City’s business parks.

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Fire and Police Services

The City Fire Department is currently made up of more than 60 fire and emergency medical personnel. The department consists of 40 full-time employees. In addition to the fire chief, full-time staff consists of 4 deputy fire chiefs, 5 lieutenants, 1 fire inspector, 29 firefighter/paramedics and a full-time secretary. The remainder of the Fire Department membership is currently made up of part-time paid firefighter/EMT-B and paramedics who staff the fire and EMS vehicles.

The Fire Department has 17 vehicles, which includes one front line rescue pumper, one front line quint, two reserve pumpers, one 100-foot tower ladder, one heavy rescue/hazardous materials truck, four life squad vehicles (two front line, two reserve), one paramedic response vehicle, two fire safety inspector cars and additional staff vehicles. These vehicles respond from one of the City’s two fire stations or the administrative office. The City Fire Department handles over 3,000 fire and medical emergency responses each year. Dispatching is through the Warren County Emergency Communications and 9-1-1 Center located in Lebanon, 10 miles north of the City. The Fire Department’s 2015 budget, including emergency medical services, was approximately $7.5 million.

The City’s Police Department is internationally accredited by the Commission on Accreditation for Law Enforcement (“CALEA”) and provides general patrol, traffic enforcement and investigative services to the City on a 24-hour a day basis. Additional services offered by the department are geared toward the community and include, but are not limited to: Neighborhood Watch, 3rd Grade Seatbelt Safety Program, Law Class at the local high school, business and vacation check services, the Drug Abuse Resistance Education program (“DARE”), crime prevention and the School Resource Officer Program. The department operates 4 community patrol districts and a fleet of 17 fully equipped and marked police cruisers, 8 unmarked police cars and one DARE car.

The City’s police department consists of 40 full-time officers, including the chief of police, 2 assistant chiefs of police, 4 lieutenants and 5 sergeants. There are also 7 non-sworn full-time positions including 3 clerks, 2 court security officers and 1 secretary. The City Police Department’s 2015 operating budget was approximately $6.2 million.

Print and Broadcast Media

The City is served by one daily newspaper of general circulation, and three local weekly papers. Seven television stations from Cincinnati, six from Dayton and one from Oxford, the nation’s oldest educational station, are available in addition to cable and satellite television. Fifty-three (53) AM and FM radio stations serve the area, including one station based in the City.

Culture, Recreation and Education

Places of historic interest in the County include the Glendower State Memorial, a Greek revival mansion which was constructed in the early nineteenth century and is a showplace of elegant Empire and Victorian furnishings; the Warren County Historical Society Museum, acclaimed as one of the nation’s outstanding county museums with displays of early life of the area, a Shaker exhibit and a library with an unusually fine collection of genealogical information;

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and lastly, the Golden Lamb Inn, Ohio’s oldest inn, dating from 1803 and boasting an extraordinary guest list of many famous Americans, including ten U.S. Presidents, Henry Clay, Mark Twain and Charles Dickens.

The City’s Parks & Recreation Department is responsible for over 300 acres of parks/grounds, with an additional 300 acres of open space recently acquired for future development. The current parks are home to athletic fields, basketball and tennis courts, picnic shelter areas, fishing lakes, hiking trails, playgrounds and the Lou Eves Municipal Pool. The Department offers over 2,000 programs annually for all ages and interests that include adult enrichment, athletics, cultural, aquatics, camps and special events.

The City’s 158,300 sq. ft. community center is one of the largest public recreation facilities in Ohio, featuring extensive aquatic features including a competition pool, which includes a state-of-the-art moveable floor for depth adjustment, and several leisure facilities. The community center also includes a senior center area, classrooms, fitness area, weight room, gymnasium, field house, toddler play area and track. The field house, competition pool, gymnasium and auditorium are shared areas, which is structured to allow Mason City Schools access during normal hours and the City access during after school hours for programs and recreational activities. The community center is a unique partnership between the Mason City School District and the City; the school district owns the facility and the City owns the land and operates the facility.

In 2010, the City completed a $10.9 million expansion and renovation project of the community center, which introduced 35,000 sq. ft. of new construction for a larger fitness area, gymnasium for gymnastic instruction, expanded senior activity area, children’s outdoor water play area and a new main entrance and reception area. The City also renovated 45,000 sq. ft. of existing community center space for additional dance and aerobic space, a rock-climbing wall, a warm water therapy pool, expansion of the café and member amenity space.

The Warren County Park District owns and operates park, recreation and fishing facilities covering over 1,600 acres throughout Warren County.

Approximately thirteen (13) miles from the City on the east bank of the Little Miami River is Fort Ancient Archaeological Park, a state memorial park operated by the Ohio Historical Society. Fort Ancient Archaeological Park is a renowned North American archaeological site and features evidence of two outstanding prehistoric American Indian cultures. The Hopewell Indians built earthworks here, including burial mounds and more than 3.5 miles of earth-and-stone walls. The Fort Ancient Indians later occupied the site. The 100 acre enclosure, which is one of the nation’s finest examples of a Hopewell hilltop enclosure, has been designated a National Historic Landmark. The 764-acre memorial park offers a museum, hiking, picnic areas, scenic vistas and shelter houses.

The 50 mile area along the Little Miami River, which is mostly in Warren County, has been designated a Scenic River Area by the federal government. The river area is being developed for boating, hiking and other recreational purposes.

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Kings Island, owned by Cedar Fair Corporation (“Cedar Fair”), a publically traded company, is located in the City and features over 30 rides and attractions, including nine world-class roller coasters, and is the largest seasonal theme park in the Midwest. In 2011, Cedar Fair invested approximately $10 million in the water park, the Soak City, which re-opened in the spring of 2012. Kings Island is located close to The Beach Waterpark, the largest water park in the Midwest. The Great Wolf Lodge, also a publically traded company, constructed a $100 million indoor water park adjacent to Kings Island. The indoor water park facility is 79,000 sq. ft. with 84 degree temperature year round, featuring six pools, 12 waterslides, and a four-story tree house water fort, all located under a 90 foot high, sky-lit roof.

The Great Wolf Lodge added a 40,000 sq. ft. full service conference facility designed as the ideal space for business and social needs of the community for groups from 10 to 1,100. The conference facility includes a 10,000 square-foot Grand Ballroom, seven breakout and meeting rooms, complimentary wireless high-speed internet access and pre-function space including an outdoor patio. The conference facility is successful at attracting additional corporate attention to the City.

The Golf Center at Kings Island, which is also located in the City on Interstate 71, offers 18 holes of golf.

The Western & Southern Financial Open is located in Mason at The Lindner Family Tennis Center. The USTA tournament is the largest professional summer tennis tournament in the United States outside of the US Open. The grounds boast 16 hard surface, outdoor courts, including four permanent stadiums: Center Court (capacity: 11,435) and Grandstand Court (capacity: 5,000), along with the new Court #3 (capacity 4,000) and Court #4 (capacity: 2,500). In August 2011, the Tennis Center completed a 5.4 acre, $10 million expansion that included the addition of six new courts, a 2,750-square foot enclosed ticket office, and a 10,000-square-foot entry plaza with nine gates. The new footprint of the Tennis Center spans 19.0 acres, up from 13.6 acres in 2010. 2011 was the first year that the tournament was played as a combined men’s and women’s event, increasing the size, recognition, and popularity of the event.

Few areas in the country can offer the stimulating cultural life of the Metropolitan Area. The Cincinnati Symphony Orchestra calls home a century-old Music Hall, as do the Cincinnati Opera and the Cincinnati Ballet. The Aronoff Center for the Arts hosts a wide range of productions including the Broadway Series. Also available are the National Underground Railroad Freedom Center, the Taft Theater, the Playhouse in the Park, the College Conservatory of Music and the Corbett Center for the Performing Arts. Museums include the Cincinnati Art Museum, the new Contemporary Arts Center, Taft Museum, the Museum of Natural History, the Children’s Museum, the Krohn Conservatory, the Cincinnati Fire Museum and the John Hauck House. All these activities are located just 25 miles south of the City. The Metropolitan Area supports the Cincinnati Reds of Major League Baseball, the first professional baseball team, as well as the Cincinnati Bengals of the National Football League. Horse racing takes place at nearby Turfway Park, Belterra, and the Miami Valley Gaming Racino.

The City of Mason encompasses portions of three school districts: Mason City School District, King Local School District and Lebanon City School District. The high quality of the Mason school system is known throughout the region. Mason City Schools earned a 92.1% on

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the Performance Index (measures the tests results of every student) and met 24 out of 24 Proficiency Indicators (measures how many students have passed the state tests at a minimum level or higher) on the State’s 2013-2014 Report Card. Western Row Elementary and Mason Middle School have both received recognition as National Blue Ribbon Schools of Excellence. Both Mason Middle School and Mason Heights Elementary have received the Ohio Blue Ribbon School of Excellence award multiple times. Kings Local School District is also distinguished and the Kings Preschool and Latchkey programs have become models for similar programs throughout the State of Ohio. On the State’s 2013-2014 Report Card, Kings Local Schools earned a 88.5% on the Performance Index and met 24 out of 24 Proficiency Indicators. Similarly, Lebanon City Schools earned a 85.4% on the Performance Index and met 23 out of 24 Proficiency Indicators on the State’s 2013-2014 Report Card.

Mason City School District’s enrollment is approximately 10,773. There are approximately 656 certified teachers in Mason City School District. Mason teachers with up to 5 years of experience account for 16.16% of the staff; those with 6-10 years account for 27.18%; those with 11-20 years account for 48.34%; and those with 21-35 years of experience account for 8.24%. Of the 656 teachers, 4% have only a Baccalaureate degree; 10.78% have a Baccalaureate degree plus graduate courses; 84.94% have a Master’s degree; and less than 1% have a doctorate degree. Kings Local School District’s enrollment is approximately 4,148. There are approximately 288 certified teachers in Kings Local School District. Kings Local Schools teachers with up to 5 years of experience account for 21.86% of the staff; those with 6-10 years account for 13.33%; those with 11-20 years of experience account for 37.03%; and those with 21-35 years of experience account for 27.78%. Of the 288 teachers, 11.11% have a Baccalaureate degree; 16.67% have a Baccalaureate degree plus graduate courses; and 72.22% have a Master’s Degree. Finally, Lebanon City School District’s enrollment is approximately 5,447. There are approximately 317 certified teachers in Lebanon City School District. Of the 313 teachers, 100% of the teachers have at least a Baccalaureate degree and 65% have at least a Master’s degree.

The educational environment is set by 25 institutions of higher education, including 5 universities and 4 colleges in the Metropolitan Area with a combined enrollment of over 112,000.

Employment Statistics

The following table lists the unemployment rates for the United States, the State of Ohio, Warren County and the City for the past five years. The figures, which are not seasonally adjusted, are expressed in percentages and represent the ratio of the total unemployed to the total labor force.

Year City of Mason Warren County State of Ohio United States

2011 6.8% 7.9% 8.8% 8.9% 2012 5.9 6.5 7.4 8.1 2013 6.0 6.4 7.5 7.4 2014 4.2 4.8 5.7 6.2 2015 3.6 4.0 4.9 5.3

Source: Ohio Department of Job and Family Services.

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Largest Employers in Mason

Name of Employer Nature of Business Employees

1. Procter & Gamble Company Healthcare Research 1,943 2. Luxottica (Lenscrafters) Eyewear and Lens 1,913 3. Cintas Corporation Professional Uniforms 1,512 4. Mason City School District Education 1,200 5. L3 Cincinnati Electronics Aerospace and Defense Industry Electronics 618 6. Portion Pac, Inc. Food Services 438 7. Mitsubishi Electric Automotive Electrical Components 395 8. Lindner Center of Hope Mental Health Treatment Center 300 9. Cedar Village Elderly and Disabled Healthcare 243 10. Great Wolf Lodge Resort/Indoor Waterpark 218

Source: City of Mason Economic Development.

Largest Employers in Warren County

Name of Employer Nature of Business Employees

1 Macy’s Credit and Customer Service Financial Transactions Processing 2,154 2. Procter & Gamble Company Healthcare Research 1,943 3. Luxottica (Lenscrafters) Optical Goods 1,913 4. WellPoint Health Insurance 1,748 5. Atrium Medical Center Healthcare Services 1,526 6. Cintas Corporation Business Services 1,512 7. Cincinnati Premium Outlets Retail 1,000 8. Otterbein Retirement Community 933 9. Countryside YMCA Recreation Facility 777 10. Express Scripts Medical Prescriptions 700 11. Advics Manufacturing, Inc. Automotive Parts Mfg. 673

Source: Warren County Office of Economic Development.

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Nonagricultural Employment and Average Weekly Earnings 2014/2015 Cincinnati Primary Metropolitan Statistical Area

(Includes the County)

Employment Wage and Salary

Employment* Average Weekly

Earnings**

Goods-Producing Industry 156,500 N/A Construction 42,000 $958.65 Manufacturing 114,500 867.20

Durable Goods 64,000 910.22 Nondurable Goods 50,500 768.83

Service-Producing Industry 792,500 N/A Trade, Transportation and Utilities 221,900 N/A

Wholesale Trade 60,400 865.58 Retail Trade 114,100 396.00 Transportation, Warehousing and Utilities 47,400 N/A

Information 13,800 N/A Financial Activities 68,400 849.21 Professional and Business Services 179,400 N/A Educational and Health Services 160,500 612.41 Leisure and Hospitality 107,600 N/A Other Services 40,900 N/A Government 126,600 N/A

* Source: Ohio Department of Job & Family Services, Labor Market Review, December 2015. ** Source: Ohio Department of Job & Family Services, Average Weekly Earnings, 2014 (released April 21, 2015).

Income and Housing Data

The following shows the Median Household, Per Capita and Median Family Income, as well as the Median Home Value for the City, according to the U.S. Census 2014 American Community Survey, in comparison to Warren County, the State of Ohio and the United States:

City of Mason Warren County State of Ohio United States Median Household Income $83,466 $73,177 $48,849 $53,482

Per Capita Income 37,459 33,421 26,520 28,555 Median Family Income 103,493 85,762 62,104 65,443

Median Home Value 214,600 187,800 129,600 175,700

Source: U.S. Census Bureau, American Community Survey 2014.

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Building Permits, Home Construction and Housing Valuation

The City issues non-residential and residential building permits. The following details the number of permits issued by category and the estimated valuation for those construction projects for the past 5 years:

Year Single Family

Multi-Family

Non- Residential

Combined Total Est. Value

2011 43 0 6 $17,276,088 2012 46 1 7 21,523,612 2013 83 1 8 39,717,664 2014 142 43 6 79,312,009 2015 135 1 16 79,439,750

Source: City of Mason Building Department.

FINANCIAL MATTERS

Introduction

The City’s fiscal year corresponds with the calendar year.

The administrative functions of the City are performed by or under the supervision of the following:

1. Overall planning and development, the City Council.

2. Assessment of real and personal property, the Warren County Auditor.

3. Financial control functions, the Director of Finance.

4. Inspection and supervision of the accounts and reports of the City as required by law, by the Office of the Auditor of the State of Ohio and by independent certified public accountants.

5. Public utility property assessment, by the State of Ohio.

Budgeting, Tax Levy and Appropriations Procedures

Detailed provisions for City budgeting, tax levies and appropriations are made in the Revised Code. The procedures involve collective review by County officials at several stages.

City budgeting for a fiscal year formally begins in July of the prior year with the preparation and adoption, by July 15 of a tax budget for the fiscal year, after a public hearing. With respect to payment of debt service in the fiscal year, the tax budget must show the amounts required, the estimated receipts from sources other than property taxes for payment, the net amount for which a property tax levy must be made and the portions of that levy to be inside and outside the ten-mill tax rate limitation (see “Indirect Debt Limitations” herein). The tax budget

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is then presented for review by the County Budget Commission comprised of the County Auditor, Treasurer and Prosecuting Attorney.

The County Budget Commission reviews the budget, and with respect to debt service, determines and approves levies for debt service inside and outside the ten-mill rate limitation. The law expressly provides that “if any debt charge is omitted from the budget, the commission shall include it therein.” Upon approval of the tax budget, the County Budget Commission certifies its action to the City together with the estimate by the County Auditor of the tax rates inside and outside the ten-mill tax limitation. Thereafter and before the end of the then calendar year, the Commissioner approves the tax levies and certifies them to the proper officials. The tax rates are then reflected in the tax bills sent to property owners. Real property taxes are payable in two installments, the first usually in February and the second in June.

By statute, no later than each January the City Council must adopt a temporary appropriation measure and by April 1, a permanent appropriation measure for that fiscal year. On December 14, 2015, the City adopted a final budget for 2016. Annual appropriations should not exceed the County Budget Commission’s official estimates of resources and appropriation measures are to be certified by the County Auditor as not appropriating more moneys than set forth in those latest official estimates.

Financial Reports and Examinations of Accounts

The City maintains its accounts and other fiscal records on an appropriation and cash basis in accordance with the procedures established and prescribed by the Department of Audit in the office of the Auditor of State. The Department of Audit is charged by Ohio law with the responsibility for inspecting and supervising the accounts and reports of the City. An examination by the Department of Audit of the accounts of the Director of Finance may be made every two years, but this examination may be waived by the Department of Audit. In 2014, the City and Auditor of State signed a 5-year contract with Plattenburg Certified Public Accountants for the annual audit of the City’s financial records, beginning with the annual audit for the fiscal year ending December 31, 2013.

The City prepared a Comprehensive Annual Financial Report for the fiscal year ended December 31, 2014, and intends to prepare one for the fiscal year December 31, 2015. The City submitted their 2014 report to the Government Financial Officer’s Association for consideration of a Certificate of Achievement for Excellence in Financial Reporting, which the City has been awarded 17 times in previous years.

The most recent examination of the Director of Finance’s accounts and records by an independent public accountant was completed through December 31, 2014.

Financial reports are prepared annually by the City and filed with the Department of Audit pursuant to Ohio law. Such reports are required to be submitted to the Department of Audit within 90 days after the close of each year. The City’s financial reports have been filed by the required time.

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Appendix A contains portions of the City’s Comprehensive Annual Financial Report for the fiscal year ended December 31, 2014. Appendix B presents a summary of the City’s 2016 Budget.

Insurance

The City carries insurance coverage against the following areas of risk: general liability, commercial property, boiler and machinery exposure, automobile liability, automobile physical damage, police professional liability, crime, employment practices liability, scheduled positions bonds, public officials liability, EMT, Ohio Stop Gap Employers liability, EMT and paramedic professional liability and fire fighter liability. The City is a member of the Miami Valley Risk Management Association (“MVRMA”). Founded in 1988, MVRMA has grown into a pool of twenty southwest Ohio municipalities, which, originally formed under Section 2744.081 of the Revised Code. The MVRMA acts collectively in addressing its members’ risk management and risk financing needs. This member-owned association provides: a combination of self-insurance and commercial insurance and/or reinsurance for its members’ property/casualty exposures; claims/litigation management services; safety/loss control consulting and training; and acts as a clearing house for risk related information and financial reporting services for member cities.

Pursuant to the Revised Code, the liability of political subdivisions, including cities in Ohio, has been significantly reduced. As a general rule, Ohio law provides that political subdivisions, such as the City, have immunity from liability in damages for injury, death, or loss to persons or property allegedly caused by an act or omission of such political subdivisions or their employees in connection with governmental and proprietary functions, as defined in the Revised Code. This statute has no effect on actions based on contract and any liability imposed by federal law or other federal causes of action. Pursuant to Ohio law, there are, however, five areas in which a political subdivision may be held liable for such loss. These areas include: (1) the negligent operation of a motor vehicle on public roads, highways or streets; (2) negligent performance of proprietary functions; (3) negligent failure to remove obstructions from public roads or to keep public roads, highways, streets, sidewalks, bridges or public grounds open, in repair and free from nuisance; (4) negligence of employees within or upon the grounds of buildings used in the performance of governmental functions which buildings have physical defects within or upon the grounds thereof, but, excluding jails, juvenile detention workhouses and other detention facilities; and (5) liability specifically imposed by law. Ohio law imposes a two-year statute of limitations, prohibits the garnishment or judicial sale of assets and funds of political subdivisions and puts limits on the damages that may be recovered from such political subdivisions. The political subdivision is also required to indemnify and defend its officers and employees when the officer or employee was acting in good faith and within the scope of their duties. No punitive or exemplary damages can be recovered, and any insurance benefits are deducted from any award against a political subdivision. Although there is no limitation with respect to compensatory damages representing a person’s economic loss, there is a $250,000 per person ceiling on the compensatory damage that represents a person’s non-economic loss in cases other than wrongful death, in which case there is no maximum limitation.

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INVESTMENT POLICIES OF THE CITY OF MASON AND THE COUNTY OF WARREN

City Policy

Chapter 135 of the Ohio Revised Code sets forth the requirements and limitations for investments of the state’s political subdivisions, including the City. Under Section 135.14 of the Revised Code, the City may invest its funds provided that such investments must mature or be redeemable within five years from the date of purchase. The only classifications of obligations which are eligible for such investment by the City are as follows:

(A) United States Treasury bills, notes, bonds, or any other obligation or security issued by the United States Treasury or any other obligation guaranteed as to principal and interest by the United States;

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

(C) Interim deposits in the eligible institutions applying for interim moneys as provided in Section 135.08 of the Revised Code. The award of interim deposits shall be made in accordance with Section 135.09 of the Revised Code and the treasurer or the governing board shall determine the periods for which such interim deposits are to be made and shall award such interim deposits for such periods, provided that any eligible institution receiving an interim deposit award may, upon notification that the award has been made, decline to accept the interim deposit in which event the award shall be made as though such institution had not applied for such interim deposit;

(D) Bonds and other obligations of the State or the political subdivisions of the State, provided that, with respect to bonds or other obligations of political subdivisions all of the following apply:

(1) The bonds or other obligations are payable from general revenues of the political subdivision and backed by the full faith and credit of the political subdivision.

(2) The bonds or other obligations are rated at the time of purchase in the three highest classifications established by at least one nationally recognized standard rating service and purchased through a registered securities broker or dealer.

(3) The aggregate value of the bonds or other obligations does not exceed twenty percent of interim moneys available for investment at the time of purchase.

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(4) The treasurer or governing board is not the sole purchaser of the bonds or other obligations at original issuance.

No investment shall be made under division (D) of this section unless the treasurer or governing board has completed additional training for making the investments authorized by such division. The type and amount of additional training shall be approved by the treasurer of the State and may be conducted by or provided under the supervision of the treasurer of the State.

(E) No-load money market mutual funds consisting exclusively of obligations described in division (A) or (B) of this section and repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions mentioned in Section 135.03 of the Revised Code; and

(F) The Ohio Subdivision’s Fund as provided in Section 135.45 of the Revised Code.

(G) Up to forty percent of interim moneys available for investment in either of the following:

(1) Commercial paper notes issued by an entity that is defined in division (D) of Section 1705.01 of the Revised Code and that has assets exceeding five hundred million dollars, to which notes all of the following apply:

(a) The notes are rated at the time of purchase in the highest classification established by at least two nationally recognized standard rating services.

(b) The aggregate value of the notes does not exceed ten per cent of the aggregate value of the outstanding commercial paper of the issuing corporation.

(c) The notes mature not later than two hundred seventy days after purchase.

(d) The investment in commercial paper notes of a single issuer shall not exceed in aggregate five percent of interim moneys available for investment at the time of purchase.

(2) Bankers acceptances of banks that are insured by the federal deposit insurance corporation and that mature not later than one hundred eighty days after purchase.

No investment shall be made pursuant to division (G) of this section unless the treasurer or governing board has completed additional training for making the investments authorized by such division. The type and amount of additional

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training shall be approved by the treasurer of the State and may be conducted by or provided under the supervision of the treasurer of the State.

Nothing in the classification of eligible obligations set forth in division (A) to (G) of this section shall be construed to authorize any investment in a derivative. “Derivative” means a financial instrument or contract or obligation whose value or return is based upon or linked to another asset or index, or both, separate from the financial instrument, contract, or obligation itself. Any security, obligation, trust account, or other instrument that is created from an issue of the United States treasury or is created from an obligation of a federal agency or instrumentality or is created from both is considered a derivative instrument. An eligible investment described in this section with a variable interest rate payment, based upon a single interest payment or single index comprised of other eligible investments provided for in division (A) or (B) of this section, is not a derivative, provided that such variable rate investment has a maximum maturity of two years.

The treasurer or governing board may also enter into a written repurchase agreement with any eligible institution mentioned in Section 135.03 of the Revised Code or any eligible dealer pursuant to division (M) of Section 135.14 of the Ohio Revised Code, under the terms of which agreement the treasurer or governing board purchases, and such institution or dealer agrees unconditionally to repurchase any of the securities listed in division (A) or (B) of this section.

In addition to the parameters set forth in Section 135.14 of the Revised Code, the City Council of the City may, pursuant to Section 731.56 of the Revised Code, pass an ordinance providing that whenever there are moneys in the treasury of the City which will not be required to be used by the City for a period of six months or more, such moneys may be invested in obligations of the City, eligible obligations under Section 135.14 of the Revised Code, bonds of the State and bonds of any other municipal corporation, county, township or other political subdivision of the State. These investments must not be made at a price in excess of the current market value of such bonds or other interest-bearing obligations, which bonds or obligations may be liquidated or sold for cash and for a sum not less than their current market price, in the manner described in Sections 731.57 through 731.59 of the Revised Code.

The City invests in United States Treasury obligations and eligible guaranteed obligations of the United States, municipal bonds, commercial paper, bankers acceptances, the State Treasurer’s investment pool (“Star Ohio”) certificates of deposit, repurchase agreements and mutual funds which are invested exclusively in United States Treasury obligations. All investments comply with the limitations with respect to length of maturities contained in Chapter 135 of the Ohio Revised Code (the Uniform Depository Act). The City interprets the limits on federal guaranteed investments, bankers acceptances, commercial paper and all other legal investments very conservatively. The City has never owned any derivative type investments, interest only investments or reverse repurchase agreements. The Finance Director has attended special training in all of the investment areas to assure compliance with the strictly conservative philosophy of the City. All investments are transacted with banks which the City believes to be reputable or other financial institutions operating in the State of Ohio that are well versed in the statutory restrictions that Ohio political subdivisions operate under and which have an understanding of the City investments requirements.

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The City values safety, liquidity and return, in that order. Interest earned by the City in 2015 totaled $398,220.

All brokers, dealers, and financial institutions, who give advice or make investment recommendations to the City shall sign the City’s Investment Policy thereby acknowledging their agreement to abide by the Policy’s contents; those who execute transactions for the City shall read and sign the Policy thereby acknowledging their comprehension and receipt of the Policy.

County Policy

Warren County (the “County”) invests in United States Treasury obligations and eligible guaranteed obligations of the United States, the State Treasurer’s investment pool (“Star Ohio”), certificates of deposit, repurchase agreements and mutual funds which are invested exclusively in United States obligations. All investments comply with the limitations with respect to length of maturities contained in Chapter 135 of the Ohio Revised Code (The Uniform Depository Act). The maximum maturity of any investment of the County will be three years. The County interprets the limit on federal guaranteed investments, and all legal investments, very conservatively.

The County has never owned, and does not plan to own, any derivative investments, interest only investments, collateralized mortgage obligations, or reverse repurchase agreements. The County Treasurer has attended special training in all of the investment areas to assure compliance with the strictly conservative philosophy of the County. All investments are transacted with banks the County believes to be reputable or other financial institutions operating in the State of Ohio that are well versed in the statutory restrictions that Ohio political subdivisions operate under and also have an understanding of the County investment requirements.

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AD VALOREM TAXES

Assessed Valuation

The following is the assessed valuation, for the most recent five years, of property in the City subject to ad valorem property taxes levied by Warren County.

Tax Duplicate

Year Collection

Year Real Estate(a) Public Utility

Personal Property(b) Total %

Change 2011 2012 $1,016,440,490 $12,955,190 $1,029,395,680 1.66% 2012 2013 961,184,410 16,621,830 977,806,240 (5.01) 2013 2014 969,297,620 18,094,150 987,391,770 0.98 2014 2015 980,478,870 19,495,730 999,974,600 1.27 2015 2016 1,067,993,410 20,299,970 1,088,293,380 8.83

Source: Warren County Auditor. (a) Real property taxes collected in a calendar year are levied in the preceding calendar year on assessed values as of January 1 of that preceding year. (b) Public utility property taxes collected in a calendar year are levied in the preceding calendar year on assessed values determined as of December 31 of the second year preceding the tax collection year.

All property taxes in Warren County, including taxes upon property in the City, are levied and collected by the County. A portion of those funds are returned to the City with remaining property taxes going to the County, the schools and the township. (See Tax Table B herein.)

The Tax Year 2015 (Collection Year 2016) assessed valuation of $1,088,293,380 is comprised of the following types of property in the indicated amounts:

Type Assessed Valuation Percent of Total Residential/Agriculture $857,823,280 78.82% Commercial/Industrial 210,170,130 19.31 Public Utility - Real & Personal 20,299,970 1.87

TOTAL $1,088,293,380 100.00%

Source: Warren County Auditor.

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Largest Taxpayers

The following table shows property total assessed valuation, taxes payable, and the percentage owned of the City’s total assessed valuation for the top ten taxpayers within the City for tax collection year 2016 (tax year 2015):

Tax Table A Largest Taxpayers

Taxpayer Assessed Valuation Taxes Payable

% of Assessed Valuation

1. Kings Island Park, LLC $20,517,180 $1,243,790 1.89% 2. Duke Energy Ohio, Inc. 20,070,900 2,051,826 1.84 3. Twin fountains of Mason 8,044,720 526,798 0.74 4. Mason Christian Village 6,506,830 357,615 0.60 5. Cintas Sales Corporation 5,920,370 387,688 0.54 6. LM Development Co. Ltd. 4,734,730 143,388 0.44 7. Mitsubishi Electric Manufacturing 4,179,790 273,708 0.38 8. Crooked Tree, Ltd. 3,083,310 169,456 0.28 9. H.J. Heinz Co., Ltd 2,772,390 181,546 0.25 10. Optimus Mason II, LLC 2,588,750 168,790 0.24 TOTAL $78,418,970 $5,504,605 7.21%

Source: Warren County Auditor.

During 2012, Warren County experienced the statutory sexennial, on-site reappraisal of real property, whereby the true value of real property is adjusted to reflect current market values as of January 1, 2012. The laws of the State of Ohio presently require that the County Auditor reassess real property at any time the County Auditor finds that the true or taxable value thereof has changed, and in the third calendar year following the year in which a sexennial reappraisal is completed if ordered by the State Commissioner of Tax Equalization (the “Commissioner”). Such a triennial update, which is not accomplished by on-site inspection, was completed in 2015.

Taxable value of real property may not exceed thirty-five per cent (35%) of its true value. The County Auditor must determine the true value of real property and improvements thereon, or the current agricultural use value of agricultural land, and reduce that value by the percentage established by the Tax Commissioner. Certain real property declared by the property owner and deemed to qualify as “forest land” under Section 5713.22 of the Revised Code is taxed at fifty percent (50%) of the local tax rate.

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Ad Valorem Tax Rates

Tax Table B sets forth the rates, in mills per $1.00 of assessed valuation, of the levies in the County for ad valorem property taxes for the general categories of purposes with proper Reduction Factors.

Tax Table B (Tax Year 2015, Collection Year 2016 – Full Rates)

Inside

10-Mill Outside

10-Mill

Total City of Mason

General Fund 0.58 -- 0.58 Fire Levy -- 4.40* 4.40 Bond Levy 1.74 -- 1.74

City Total 2.32 4.40 6.72

Board of Education General Fund 4.68 69.78 74.46 Permanent Improvement 0.43 -- 0.43 Bond Retirement -- 8.22 8.22 Joint Vocational School -- 2.70 2.70

Board Total 5.11 80.70 85.81

Warren County General Fund 2.57 -- 2.57 Comprehensive Mental Health -- 4.00 4.00 Health/Senior Citizens -- 1.21 1.21

County Total 2.57 5.21 7.78

Special Districts Warren-Clinton Comm. Mental Health -- 1.00 1.00 Health Levy -- 0.50 0.50 Library -- 0.75 0.75

Special Districts Total -- 2.25 2.25 TOTAL TAX RATES 10.00 92.56 102.56

Source: Ohio Municipal Advisory Council. * Charter millage; not subject to reduction factor.

Tax Table C Full Rates of Taxation (Mills) for City of Mason, Ohio

Duplicate Year

Collection Year

City Rate

County Rate

Mason CSD JVSD

Special Districts Total

2011 2012 7.32 7.78 83.45 2.70 2.25 103.50 2012 2013 7.32 7.78 83.97 2.70 2.25 104.02 2013 2014 6.72 7.78 83.97 2.70 2.25 103.42 2014 2015 6.72 7.78 83.97 2.70 2.25 103.42 2015 2016 6.72 7.78 83.11 2.70 2.25 102.56

Source: Warren County Auditor.

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Current law requires that taxable real property be assessed at not more than 35% of its true value, except that taxable real property devoted exclusively to agricultural use is to be assessed at not more than 35% of its current agricultural use value as determined by the County Auditor in accordance with rules adopted by the Ohio Commissioner of Tax Equalization (the “Commissioner”) for such purpose. The assessment ratio has been fixed at 35% under existing rules of the Commissioner. The County Auditor is required to adjust (but without individual appraisal of properties, except in the sexennial reappraisal) taxable real property values triennial to reflect true values. Any taxable real property which the owner thereof, under rules and regulations promulgated by the Chief of the Ohio Division of Forestry, declares is devoted exclusively to forestry or timber growing is taxed at 50% of the local tax rate upon its true value.

Given the standard assessment base determined under the provisions noted above, Ohio law provides for the following two-phase tax reduction of real property taxes, with respect to taxes other than taxes levied at a rate required to produce a specified amount of tax money (such as taxes for the payment of debt service charges), taxes levied inside the ten-mill limitation, or taxes authorized by a municipal charter:

(1) The County Auditor must annually classify all real property into two classes: (a) residential/ agricultural real property, and (b) nonresidential/agricultural real property. The Tax Commissioner then determines the amount of carryover property in each such case for each taxing district, “carryover property” being defined as all real property on the current year’s tax list except: (a) land and improvements that were not taxed by the district in both the preceding year and the current year, and (b) land and improvements that were not in the same class in both the preceding year and the current year. The Tax Commissioner must determine annually by what percent (the “Tax Reduction Factor”), if any, the sums that would otherwise be levied by each tax against the carryover property in each class would have to be reduced to equal the amount that would be levied if the full rate thereof were imposed against the total taxable value of such property in the preceding tax year. Thereafter, the County Auditor must reduce the sum to be levied by such tax against each parcel of real property in the district by the Tax Reduction Factor certified by the Tax Commissioner for its class. However, if said reduction for either class of property could cause the total taxes charged and payable for current expenses of a school district, other than a joint vocational school district, prior to the statutory ten percent reduction discussed hereinafter, to be less than two percent of the taxable value of all real property in that class that is subject to taxation, the Tax Commissioner, upon notification thereof by the County Auditor, must adjust the Tax Reduction Factor so that such two percent limit will not be exceeded.

(2) The County Auditor must reduce the sums remaining thereafter to be levied against parcels of real property by ten percent; such reduction is reimbursed by the State to the County for distribution to the affected subdivisions. The taxes remaining after such reduction constitute the real and public utility property tax chargeable and payable on such property.

In addition, Ohio law provides real property tax reductions for certain owner-occupied properties and to certain elderly or disabled property owners. Any such reductions are reimbursed by the State to the County for distribution to the affected subdivisions.

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In each Ohio county there is a board of tax appeals. According to a schedule established by that board, any property owner, if he or she feels the property is over assessed for tax purposes, can file for a reduction in assessed value. If the evidence which the property owner submits justifies the decrease, the board of tax appeals will grant all or part of the reduction requested.

While the aforesaid tax reductions may not affect the determination of the principal amount of notes that may be issued in anticipation of any tax levies or the amount of notes or bonds for any planned improvements, if funds for the payment of debt service charges on notes or bonds payable from taxes so reduced are insufficient for such purpose, then the reduction of taxes is adjusted to the extent necessary to provide sufficient funds from real property taxes for the payment of such debt charges.

Failure of the County Auditor to supply to the Tax Commissioner the information required to determine the Tax Reduction Factor may result in substantial withholding of State revenues to the local government until such time as the County Auditor supplies such information.

Changes to Ad Valorem Taxation

As part of the various law changes that accompanied the deregulation of electric utility and natural gas companies in 1999-2000, property tax assessed value for electric generating equipment and natural gas property were reduced. Due to the reduction of public utility tangible property (“PUTP”) tax revenues to school districts and other local taxing units, such as the Township, the Ohio General Assembly enacted a program whereby school districts and other local taxing units were compensated for these losses, although the payments were to be phased out over time. Further, in 2005, the 126th General Assembly enacted Am. Sub. H.B. 66, which gradually repealed the business tangible personal property tax (“TPP”) on (i) manufacturing equipment, (ii) furniture and fixtures and (iii) inventory over a four-year period ending in 2009, causing schools and other local taxing units to face more reductions in property tax revenues. TPP taxes on a fourth category, telephone, telegraph and interexchange communication companies, was phased out over the period from 2007-2011. A subsequent reimbursement program similar to the one developed for lost PUTP revenues was implemented to replace the lost TPP revenues, which was also scheduled to be phased out. This program was funded, among other things, by the application of revenues derived by the State from the imposition of a new commercial activities tax (the “CAT”). The reimbursement payments for loss of the PUTP and TPP tax revenues are collectively referred to as “replacement payments.”

The application of the CAT to certain types of business receipts has been the subject of litigation. In 2009, the Ohio Supreme Court held that the CAT does not violate the State’s constitutional prohibitions against a sales or excise tax “upon the sale or purchase of food.”1 Later, in 2012, the Ohio Supreme Court held that the application of revenues derived from imposition of the CAT on gross receipts from motor vehicle fuel sales towards replacement payments violates the State’s constitutional limitation on the use of revenues resulting from taxes

1 Ohio Grocers Association v. Levin, 123 Ohio St.3d 303 (2009).

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related to motor vehicle fuel.1 In 2013, the Ohio General Assembly remedied the situation by creating a separate fund into which such tax proceeds are deposited, separate from other proceeds of the CAT. As is the case with many state-based gross receipts taxes, the CAT continues to be the subject of ongoing litigation, facing challenges regarding its general constitutionality.

With the election of a new State-level administration in 2010, the Ohio General Assembly took a different approach to accomplishing the reimbursement of lost revenues to school districts and other local taxing units as a result of the repeal of PUTP and TPP taxes. Effective June 30, 2011, Am. Sub. H.B. 153 was adopted to modify the reimbursement methodology. Though the application of the proceeds of the CAT to the replacement payments was scheduled to be phased-out in 2018, with the State’s general fund receiving 100% of the CAT tax revenues thereafter, H.B. 153 accelerated that schedule and reduced the reimbursement payments. Am. Sub. H.B. 64, effective June 30, 2015, increases the amount of CAT tax revenues allocated to the State’s general fund from 50% to 75% of such revenues; the percentage allocated to replacement payments dropped from 35% to 20% for school districts and from 15% to 5% for other local taxing units. A basic concept behind these changes is that fixed-rate levy replacement payments should be based on the relative need for school districts and other local taxing units (each, a “unit”), the primary beneficiaries of the tangible personal property taxes that have been phased out. However, as explained below, Sub. S.B. 208, effective February 16, 2016, further modifies the replacement payments framework for school districts. Rather than relative need, which is measured by calculating a unit’s replacement payment as a percentage of total revenue sources available to the applicable unit for current operating purposes, starting with fiscal year 2018, S.B. 208 mandates that replacement payments be calculated solely on the basis of a fixed portion of each school district’s taxable property valuation. H.B. 153 also made distinctions among types of levies in implementing the phase-out. Maintaining those distinctions, H.B. 64, and S.B. 208 with respect to school districts, slightly modified the phase-out of replacement payments with certain changes as described below.

Fixed Rate, Current Expense Levies. Under H.B. 153, replacement payments made to school districts for current expense levies were based on certain thresholds. For fiscal years 2012 and thereafter, school districts received payments only if the amount of current expenses received from such levies exceeded 2% of total resources of the school district. For fiscal years 2013 and thereafter, this threshold percentage was set at 4%. Replacement payments were made to other local taxing units in the same manner, but the threshold percentages were set at 4% and 6% for fiscal years 2012 and 2013, respectively. Any amounts over the established thresholds were reimbursed at 50% for school districts and 100% for all other local taxing units. H.B. 64 maintains a similar structure, but generally accelerates the phase-out of replacement payments for units whose existing replacement payments are a relatively small percentage of total resources. S.B. 208 maintains the existing payment schedules for school districts through fiscal year 2017, and beginning in fiscal year 2018, calls for reduced replacement payments by 1/16 of 1% (0.0625%) of a school district’s valuation (averaged over the fiscal years 2014-2016) each year until the payment amount reaches zero.

1 Beaver Excavating Co. v. Testa, 134 Ohio St.3d 565 (2012).

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For school districts, H.B. 64 incorporates a tax-raising capacity factor, where districts are placed in one of five quintiles based on such capacity and each quintile is assigned a threshold percentage from 1% to 2% in 0.25 % increments. While these are lower than the previously established thresholds, H.B. 64 requires that they increase by 1% annually until all replacement payments are phased out for these levies. For other local taxing units, H.B. 64 calls for replacement payments to be made under a similar structure as H.B. 153, except the threshold percentage is reset at 2% for fiscal year 2016, and increases an additional 2% annually until all replacement payments are phased out for these levies.

Further, S.B. 208 provides for fiscal year 2017 a supplemental payment to school districts guaranteeing that the combined amount of state foundation funding and replacement payments for fixed rate, current expense levies will equal at least 96% of such amount received in fiscal year 2015.

Fixed Rate, Non-Current Expense Levies. Under H.B. 153, replacement payments for these levies were subjected to a simpler reduction schedule, beginning in calendar year 2012 and reducing such payments by 25% each year until they would have ceased in fiscal year 2015. However, the reductions were not continued in the next biennial budget legislation and, as a result, for fiscal years 2014 and 2015, school districts received 50% of such levies in replacement payments. Because local taxing units other than school districts utilize the calendar year as their fiscal year, a third reduction for those local taxing units had already taken place when the phase-out was halted, resulting in the receipt of only 25% of such levies for those years.

For school districts, H.B. 64 completes the phase-out by providing for a final replacement payment with respect to these levies in fiscal year 2016 equal to 50% of the amount it received in fiscal year 2015. For other local taxing units, H.B. 64 completes the phase-out by eliminating replacement payments with respect to these levies.

Fixed Sum Levies. These include bond and emergency levies and were not affected by H.B. 153 or H.B. 64. For school districts, replacement payments for emergency levies are phased out in one-fifth increments over five years, starting in fiscal year 2017 for utility property-based replacement payments and in fiscal year 2018 for business property-based payments. For school district voter-approved debt levies, replacement payments will be maintained at the amount paid in 2014 until the levy is no longer imposed. Unvoted school district debt levies that qualified for reimbursement in fiscal year 2015 will be reimbursed through fiscal year 2016 for utility property-based replacements payments and through fiscal year 2018 for business property-based replacement payments. For other local taxing units, unvoted debt levies that qualified for reimbursement in 2015 will be reimbursed through 2016 for utility property-based replacements payments and through 2017 for business property-based replacement payments.

For additional information regarding expected changes to reimbursement amounts, please reference the following website: http://www.tax.ohio.gov/personal_property/phaseout.aspx.

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The Ohio General Assembly has exercised from time to time its power to revise the Ohio statutes applicable to the determination of assessed valuation of property subject to ad valorem taxation and the amount of tax proceeds produced by ad valorem taxation against such property. It is anticipated that the General Assembly will continue to make similar provisions.

Collection of Ad Valorem Property Taxes and Special Assessments

The following are the amounts billed and collected by Warren County as ad valorem taxes on the tax duplicates of the County for property in the City, and the special assessments billed and collected, for the indicated tax collection years. The “Billed” amounts include the current charges, plus current and delinquent additions, less current and delinquent abatements. The “Collected” amounts include current “Billed” amounts that are collected and delinquencies collected.

Real Estate and Public Utility

Collection Current Delinquent Year Billed Collected % Collected

2011 $6,680,693 $6,431,397 96.27% $142,457 2012 6,846,621 6,707,544 97.97 414,651* 2013 6,714,798 6,606,807 98.39 188,875 2014 6,623,235 6,530,015 98.59 128,004 2015 6,711,730 6,543,116 97.49 105,306

* In 2012, the City received additional delinquent property tax revenue due to a revised valuation of certain public utility property owned by Duke Energy. The additional revenue is the result of the retroactive application of such revised valuation to previous tax years.

Special Assessments

Collection Current Year Billed Collected %

2011 $71,513 $69,069 96.58% 2012 10,833 10,833 100.00 2013 14,852 14,011 94.34 2014 7,544 6,160 81.65 2015 3,298 3,207 97.24

Source: Warren County Auditor.

Pursuant to Ohio law, the current and delinquent taxes and special assessments are billed and collected by County officials for the County and other taxing or assessing subdivisions in the County.

Included in the above figures for ad valorem property taxes “Billed,” “Collected,” and “% Collected” are certain real property tax relief payments made by Ohio from State revenue sources; such payments are not made with respect to special assessments. The “Homestead

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Exemption” is made available for people over 65; people who are permanently disabled; or are the surviving spouse of a qualified homeowner who is at least 59. All must prove they earn less than $30,000 a year beginning tax year 2014. Ohio law provides for the payment to taxing subdivisions from State funds of an amount equaling approximately 10% (12½% with respect to owner-occupied non-business residential property) of ad valorem real property taxes levied, thereby reducing the tax obligation of any real property owner in any given year by an equivalent percentage. As an indication of the extent of such State assistance as applied to the City’s share of the County’s tax collections, the “Homestead Exemption” and the “rollback” payment made by Ohio to the City in 2015 was $716,045. Recent legislation eliminated the 12.5% “rollback” for all new and replacement levies approved at the November 5, 2013 election and thereafter.

Revenues from Affected Tax Increment Properties

The City has issued bonds (“Tax Increment Revenue Bonds”) secured by certain statutory and minimum service payments in lieu of taxes (“Service Payments”) imposed on certain properties, which properties are exempt from real property taxes pursuant to the City’s tax increment financing program. Statutory service payments are owed in the amount of property taxes that would be due on the incremental value increase of such properties. To the extent such payments are insufficient for debt service on the applicable Tax Increment Revenue Bonds, a minimum service payment is imposed on such properties owners to ensure adequate payment of such bonds. All outstanding Tax Increment Revenue Bonds are required to be held by the developers of the properties that are subject to Service Payment obligations, with the exception of the Tax Increment Revenue Bonds issued for the Everybody’s Farm project, which are held by a single sophisticated investor.

Central Park Project

Collection Year Acres

Assessed Valuation

Req’d Minimum Service Payment

Total Service Payments Received

2011* 23 $3,881,190 $236,328* $411,935* 2012 23 3,438,980 146,184 189,714 2013 23 2,688,196 128,984 134,009 2014 23 2,684,731 67,333 178,793 2015 23 2,684,731 67,800 179,431

* Adjustment for previous tax years.

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J.W. Harris Project

Collection Year Acres

Assessed Valuation

Req’d Minimum Service Payment

Total Service Payments Received*

2011 65 $3,568,300 $83,885 $214,174 2012 65 3,568,300 97,704 224,389 2013 65 2,690,990 127,085 177,976 2014 65 2,690,986 67,490 179,209 2015 65 2,690,990 67,957 179,849

* This property has been granted a 75% abatement for the first ten years; Service Payments were based on only 25% of Assessed Valuation until the abatement ended in 2010.

Mason Enterprise Park Project

Collection Year Acres

Assessed Valuation

Req’d Minimum Service Payment

Total Service Payments Received

2011 20 $1,338,200 $113,916 $112,535 2012 20 1,338,200 56,767* 62,422* 2013 20 1,310,498 119,275 112,839 2014 20 1,310,498 116,220 82,393 2015 20 1,310,498 86,391 87,587

* In 2012, the City refunded the Tax Increment Revenue Bonds associated with the Mason Enterprise Park Project, eliminating the principal payment in that year. The required Minimum Service Payment, which is calculated based on the total debt service due on such bonds, was correspondingly decreased for that year, resulting in an overall decrease in Service Payments received by the City.

I-71 Corridor Project

Collection Year Acres

Assessed Valuation

Req’d Minimum Service Payment

Total Service Payments Received

2011 20 $1,338,200 $113,916 $112,535 2012 20 1,338,200 56,767* 62,422* 2013 20 1,310,498 119,275 112,839 2014 20 1,310,498 116,220 82,393 2015 20 611,485 12,980 37,085

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Tylersville Crossing Project

Collection Year Acres

Assessed Valuation

Req’d Minimum Service Payment

Total Service Payments Received

2011 12 $3,745,039 $160,471 $304,144 2012 12 3,745,039 161,499 294,898 2013 12 3,252,655 157,654 233,028 2014 12 3,412,500 155,303 203,983 2015 12 3,412,500 131,967 202,851

Everybody’s Farm Project*

Collection Year Acres

Assessed Valuation

Req’d Minimum Service Payment

Total Service Payments Received

2012** 52 $6,453,619 $1,198,255 $1,544,851 2013 52 6,453,619 393,123 405,732 2014 52 7,345,191 475,029 478,332 2015 52 7,345,191 520,675 477,912

* The developer of the Everybody’s Farm project provided an organizational and personal guarantee in order to cover deficiencies in the amounts required to pay the Minimum Service Payments, as defined in a Service Agreement dated as of October 25, 2011.

** Received large adjustment for previous tax years that was distributed when exemption was approved. This correction also increased compensation payment to school district.

Delinquency Procedures

Taxes for real and utility property for fiscal year 2015 became a lien on January 1, 2016.

The following is a general description of delinquency procedures under Ohio law. The implementation of these procedures may vary in practice among Ohio counties.

If real estate taxes and special assessments are not paid in the year in which they are due, they are certified by the County Auditor’s office as delinquent. A list of delinquent properties is then to be published in a newspaper of general circulation in the County. If the delinquent taxes and special assessments are not paid within one year after such certification, the properties are then to be certified as delinquent to the County Prosecuting Attorney. If the property owner so requests, a payment plan is arranged with the County Treasurer. If such payment plan is not adhered to or if none is arranged, foreclosure proceedings may be initiated by the County. Ohio law also provides for notice by publication and mass foreclosure proceedings and sales after three years’ delinquency.

Proceeds from the foreclosure sales of delinquent property become part of the current collection and are distributed as current collections to the taxing subdivisions in the County, or, if applicable to special assessments, are remitted to the subdivisions that levied such assessments.

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OTHER MAJOR CITY GENERAL FUND REVENUE SOURCES

Described under this caption are major sources of revenue to the City’s general fund in addition to ad valorem taxes. See Appendices A and B for further information regarding other sources of revenue for the general fund and other funds.

The City collects revenues from a number of fees, permits and licenses issued by the City’s various departments and agencies. The City also collects revenue from the operations of the Mason Municipal Court for fines, court costs and bond forfeitures. In 2015, the total amount collected from these sources amounted to $1,886,696.

Income Tax

The City’s income tax was levied in 1970 to provide funds for the purposes of general municipal operations, maintenance, equipment, extensions and enlargement of municipal services and facilities and capital improvements.

The 1.12% locally levied tax applies to gross salaries, wages and other compensation earned by residents, on all salaries, wages, commissions and other compensation earned by non-residents for work done or services performed in the City; the net profits of all unincorporated businesses, professions or other entities from sales made, work done and services performed by business or other activities conducted in the City, whether or not such unincorporated businesses, professions or other entities have an office or place of business in the City; on a resident’s share of the net profits of an unincorporated business, profession, or other entity, whether located in or outside of the City, not attributable to the City; and on the net profits of all corporations from sales made, work done and service performed or business or other activities conducted in the City, whether or not such corporation has an office or place of business in the City.

In November 2007, voters in the City approved an amendment to the City’s Charter that changed the City’s Income Tax Ordinance. The change gradually increases the credit for taxes paid to other cities. In prior years, residents employed in another City that had an income tax received a maximum credit of up to fifty percent (50%) of the tax due on the portion of their income taxed by the City where they were employed. For tax year 2007, residents employed in another City that has an earnings tax received a maximum credit of up to sixty-five percent (65%). The maximum credit increased to 80% for 2008 and 90% for 2009. For tax year 2010 and beyond, the maximum credit is 100%. The decrease in income tax revenue as a result of this credit is projected to be offset by an increase in revenue from non-residents working within the City.

In November 2012, voters in the City approved an amendment to the City’s Charter to provide funding of safety services, including fire and emergency services, through a combination of income and property taxes. The amendment allows for an increase of the income tax rate of up to 0.15%, with an initial rate increase of 0.12%, and up to 5 mills of property tax. The amendment also allows a credit of the additional income tax for residents who pay property tax.

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City Of Mason, Ohio – City Income Tax (Gross Receipts)

Year Tax Rate Tax Collections

2011 1.00% $20,205,871 2012 1.00 22,383,868 2013 1.12 25,712,525 2014 1.12 26,571,523 2015 1.12 29,400,096

Local Government Fund*

The Ohio Local Government Fund was created by statute and is composed of designated State revenues which are distributed to each county and then allocated among the county and cities, villages and townships located in that county. As of January 1, 2008, the State’s funding formula was changed to consolidate the Local Government Revenue Assistance Fund, an additional unrestricted fund created by the State legislature, into the Local Government Fund. The County retains approximately 41.5% of the total funds received. The following table shows the receipts and amounts received by the City under these programs:

Year Amount Distributed

From State Amount Distributed

From County

2011 $164,182 $1,001,914 2012 114,191 680,874 2013 93,065 505,727 2014 91,938 479,621 2015 72,245 497,868

*The State Biennial Budget for Fiscal Years 2012 and 2013 reduced the monthly allocations made to the Local Government Fund beginning August 1, 2011. Between August 2011 and June 2012, the allocation equaled 75% of the fiscal year 2011 allocation, and between July 2012 and June 2013, such allocation equaled 50% of the 2011 allocation, with additional amounts allocated to ensure a minimum distribution to each County of $750,000 per fiscal year.

City General Fund

The following table shows the City’s General Fund year-end unencumbered for the last five years:

Year General Fund Balance

2011 $13,562,194 2012 17,715,156 2013 25,967,977 2014 18,049,444 2015 25,462,398

Source: Finance Director’s Office.

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CITY DEBT AND OTHER LONG-TERM OBLIGATIONS

The following describes statutory and constitutional debt and ad valorem property tax limitations applying to the City and presently outstanding and projected bond and note indebtedness and certain other long-term financial obligations of the City.

The City has a number of industrial revenue bonds outstanding. No schedule for these bonds is provided because such bonds do not represent an obligation of the City. These bonds are payable solely from rentals and other revenues derived from the lease, sale or other disposition of the projects financed thereby.

No bonds have been authorized by the electors that have not yet been issued.

The City is not and has never been in default on any of its debt obligations.

Direct Debt Limitations

The Revised Code provides that the aggregate principal amount of voted and unvoted “net indebtedness” of a municipal corporation, such as the City, may not exceed 10½% of the total value of all property in such municipal corporation as listed and assessed for taxation, and that the aggregate principal amount of unvoted “net indebtedness” of such municipal corporation may not exceed 5½% of such value.

In calculating “net indebtedness,” the Revised Code provides that certain obligations of a municipality are not to be considered in the calculation, including self-supporting obligations, revenue bonds and special assessment debt. For a complete list of exempt debt see the Financial Statement attached as Appendix D.

Other infrequently-issued types of obligations are also excluded from the calculation of net indebtedness; the City has no such obligations outstanding. Notes issued in anticipation of bonds excluded from the calculation of net indebtedness are also excluded from such calculation. In calculating net indebtedness, amounts in a county’s bond retirement fund allocable to the principal amount of bonds otherwise included in the amount of net indebtedness are deducted from the total net indebtedness of such municipality.

Appendix D of this Official Statement is a Financial Statement for the City, certified by the Finance Director, calculating the amount of the outstanding obligations of the City which are subject to the total direct debt limit (10½% limit) and the unvoted direct debt limit (5½% limit). The total principal amount of voted and unvoted general obligation debt that could be issued by the City, subject to the 10½% total direct debt limitation is $114,270,805. The City’s net debt subject to such limitation presently outstanding is $29,360,620 leaving a balance of approximately $84,910,185 borrowing capacity issuable within such limitation on combined voted and unvoted non-exempt debt. The City has no voted debt outstanding that is subject to such limitation.

The total unvoted City general obligation debt that could be issued subject to the 5½% unvoted direct debt limitation is $59,856,136. The net City debt subject to such limitation

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presently outstanding is $29,360,620 leaving a balance of approximately $30,495,516 of additional unvoted non-exempt debt that could be issued by the City under such 5½% limitation.

However, as described below, the City’s ability to incur debt in these amounts is restricted by the indirect debt limitation. In the case of unvoted general obligation debt, both the direct and the indirect debt limitations must be met.

Indirect Debt Limitations

Although the Ohio Constitution does not impose any direct restraint on the amount of debt that may be incurred by a municipality, it does indirectly impose a debt limitation on unvoted bonds because of the ten-mill tax limitations (Article XII, Section 2 of the Ohio Constitution), and a mandatory duty to provide for the levy of taxes to pay bonded debt (Article XII, Section 11 of the Ohio Constitution). The two constitutional provisions operate as a debt limit on unvoted bonds.

In determining whether or not unvoted bonds may be issued within the constitutional or indirect debt limit the outstanding unvoted bonded indebtedness of all overlapping political subdivisions and not only the debt of the issuing municipality must be considered. Since the constitutional debt limit results from tax limitations and the requirement to levy taxes to pay bonds, it has application only to debts which are payable from taxes either initially or in the event other non-tax revenues pledged prove to be insufficient. It does not have any application where the types of bonds being issued do not pledge the credit of the municipality or when bonds are payable solely out of the revenues of non-tax sources, such as utility income; nor does this limitation apply to mortgage revenue bonds.

Unlike the statutory debt limitations, the test for applying the indirect or constitutional limitations may not be expressed in terms of a percentage of tax valuation. The amount of bonds that may be issued under the indirect limitations is determined by whether the aggregate combined amount required for principal and interest on the proposed bonds in a given year is greater than the number of dollars that will be produced by a tax levy equal to the millage available. The millage available is determined by subtracting from ten (10) mills the number of mills required for unvoted outstanding general obligation bonds issued by the issuing municipality and all other political subdivisions that overlap the municipality. It is important to understand that in arriving at the available millage as far as the indirect debt limitation is concerned, it is not the millage that is actually being used to pay debt requirements; rather it is the millage that could be required to pay all existing debt subject to the constitutional or indirect limitations and the millage that could be required to retire the proposed issue.

The Mason City School District, the Lebanon City School District, the Kings Local School District, Deerfield Township, the Great Oaks Institute of Technology and Career Development, the Warren County Career Center and Warren County, which overlap the City, are separate political subdivisions with operating and debt service funding separate from that of the City.

The boards of education of the school districts listed above cannot incur more than one-tenth of one percent of their assessed valuations as general obligation debt without majority

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approval of the voters. A board of education may request voter approval of general obligation debt not in excess of nine per centum (9%) of the assessed valuation of the school district. Under Ohio law, before seeking voter approval, a board of education is required under certain circumstances to receive the consent of the Ohio Department of Taxation and the State Superintendent of Public Instruction in accordance with policies adopted by the State Board of Education.

The Board of County Commissioners of the County of Warren, Ohio, cannot incur unvoted general obligation debt in excess of one percent of its assessed valuation, which debt must be included with voted county debt against an overall county debt limitation of three per centum (3%) of the first one hundred million dollars ($100,000,000) of its assessed valuation, plus one and one-half per centum (1½%) of the next two hundred million dollars ($200,000,000), plus two and one-half per centum (2½%) of all in excess of three hundred million dollars ($300,000,000). However, the board of county commissioners may authorize general obligation revenue or special assessment supported bonds for utilities and certain other purposes, which are exempt from unvoted debt limitations to the extent net revenues or assessments service such general obligation bonds. Such obligations are subject to the indirect tax or ten-mill limitation described above.

Appendix E of this Official Statement is the most recent Ten-Mill Certificate, certified by the Warren County Auditor as of January 29, 2016, calculating the required tax rate, in mills, required to pay debt service for unvoted general obligation debt of the City and its overlapping political subdivisions for the fiscal year in which the debt service will be the highest. The Ten-Mill Certificate indicates all unvoted general obligation debt of the City and its overlapping subdivisions, require 8.0823 mills to be levied (of which 5.4269 mills are attributable to the City), if the debt is not paid from other revenues, leaving 1.9177 mills of unused debt capacity under the indirect debt limitation to the City and its overlapping political subdivisions for the issuance of additional unvoted general obligation debt.

Overlapping Debt

The net overall debt for the City and its overlapping subdivisions is set forth in Debt Table A.

Debt Table A Mason Debt and Overlapping Debt

April 5, 2016*

Net Debt of City $32,740,000Per Capita City Debt $1,046City Debt as a percentage of Tax Valuation 3.27%Net Overlapping Debt (all political subdivisions) $93,781,439Per Capita Overlapping Debt $2,997Overlapping Debt as a percentage of Tax Valuation 9.38%

Source: Ohio Municipal Advisory Council. * OMAC data is approximately three weeks ahead of actual date.

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Bond Anticipation Notes

Under Ohio law applicable to the City, notes, including renewal notes, issued in anticipation of the issuance of general obligation bonds may be issued from time to time up to a maximum maturity of 20 years from the date of issuance of the original notes (except for notes issued in anticipation of special assessments, for which the maximum maturity is five years). Any period in excess of five years must be deducted from the permitted maximum maturity of the bonds anticipated, and portions of the principal amount of such notes must be retired in amounts at least equal to and payable not later than principal maturities that would have been required if the bonds had been issued at the expiration of the initial five year period.

As of February 1, 2016, $2,000,000 of the debt of the City is in the form of general obligation bond anticipation notes (listed in Debt Table B). Such bond anticipation notes may be retired at maturity from one or a combination of: available funds of the City, the proceeds of the sale of the bonds anticipated by such notes, or the proceeds of the sale of renewal notes.

The ability of the City to retire its outstanding bond anticipation notes from the proceeds of the sale of either renewal notes or bonds will be dependent upon the marketability of such renewal notes or bonds under market conditions then prevailing. Under Ohio law, the greater of ten and one-half percent or one percent below the base rate for advances and discounts to member banks in effect at the Federal Reserve Bank in the Second Federal Reserve District on its third business day preceding the day of adoption of the ordinances or resolution providing for the issuance of the bonds, notes or other obligations, is the highest annual interest rate permitted on general obligation bonds and notes of the City.

Debt Currently Outstanding

Debt Table B lists the current outstanding indebtedness of the City in the form of bonds and notes:

Debt Table B Principal Amount of Debt Outstanding as of February 1, 2016

General Obligation Bonds

Date of Issue Purpose

Original Amount of

Issue Interest

Rate Coupon Maturity

Final Bond

Amount Outstanding

06/01/08 Various Purpose, ‘08 $17,570,000 3.00-4.75% J1-D1 12/01/27 $12,275,000*

06/15/11 Various Purpose, ‘11 6,960,000 0.40-4.00 J1-D1 12/01/30 4,550,000 06/28/11 Golf Course, ‘11 7,300,000 0.60-4.00 J1-D1 12/01/22 6,040,000 02/02/12 Sewer Refunding 22,740,000 1.50-5.00 J1-D1 12/01/28 18,545,000 12/01/15 Various Purpose, ‘15 9,000,000 1.00-4.00 J1-D1 12/01/35 9,000,000

$63,570,000 $50,410,000 * A portion in the amount of $8,825,000 is to be refunded with the proceeds of the Bonds.

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Tax Increment Revenue Bonds

Date of Issue Purpose

Original Amount of

Issue Interest

Rate Coupon Maturity

Final Bond

Amount Outstanding

10/01/10 Tylersville Crossing Ref. $850,000 4.50 J1-D1 12/01/23 $120,000 11/23/11 Everybody’s Farm 1,750,000 5.75 J1-D1 12/01/31 1,645,000 12/01/12 Enterprise Park Ref. 450,000 3.50% J1-D1 12/01/22 340,000

$3,050,000 $2,105,000

Certificates of Participation

These obligations are subject to annual appropriation and therefore are not considered to be debt under state law; therefore, these obligations do not count towards direct or indirect debt limitations.

Original Date of Issue Purpose

Original Amount of

Issue Interest

Rate Maturity

Date Amount

Outstanding 11/18/09 Community Center Exp. $11,335,000 2.00-5.00% 12/01/34 $9,515,000 11/17/10 Municipal Building Ref 18,325,000 1.50-4.25 12/01/26 11,230,000*

$29,660,000 $20,745,000

* Excludes $2,510,000 of defeased remaining maturities, subject to an Escrow Deposit Agreement, dated November 20, 2015, between the City and U.S. Bank National Association.

Bond Anticipation Notes

Original Date of Issue

Date of Issue Purpose

Original Amount of

Issue Interest

Rate Maturity

Date Amount

Outstanding 07/06/06 06/25/15 Real Estate Acquisition $4,500,000 1.25% 06/23/16 $2,000,000

Grant Anticipation Obligations

The City presently has no grant anticipation obligations outstanding or planned.

Future Financings

The City plans to refinance its outstanding bond anticipation note as it matures in the same or reduced principal amount. The City periodically reviews its outstanding bonds to determine if market conditions are economically advantageous to undertake a refunding of any of such bonds.

Long Term Obligations Other Than Bonds and Notes

The City has no other significant long-term obligations other than its pension and lease obligations discussed below.

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Leases and Contracts

The City has no significant leases except an annual rental of a nine-hole golf course/driving range that is adjacent to the City’s golf course. The lease of this ground is mutually beneficial to the nonprofit that owns the tennis stadium that hosts the Western and Southern ATP Open.

Pension Obligations

Employer’s Contribution to Public Employees Retirement System

Employer’s Year Contribution Contribution

2011 14.00% $1,165,840 2012 14.00 1,139,911 2013 14.00 1,165,581 2014 14.00 1,193,268 2015 14.00 1,201,763

City employees, other than employees of the Police and Fire Departments, are covered by the Ohio Public Employees Retirement System (“OPERS”). This system includes both employee and employer payments. The City’s contributions are current and fully met as required by law. Annual contributions include provision for reserves to properly fund pension and other benefits payable on account for creditable service. The system is annually evaluated by nationally recognized actuarial consultants.

OPERS provides coverage for approximately 300 present full and part-time employees of the City. Currently, employees contribute at a statutory rate of 10% of earnable salary or compensation. As indicated above, the City currently contributes at a rate of 14% of the same base, the rate statutorily established for OPERS.

The OPERS Board has the authority to increase the employee contribution rate up to 10% and the employer rate up to 14%. Benefits for members of OPERS are established under state laws.

The City’s annual contribution, which totaled $1,201,763 for 2015, is treated as a current expense and is included in its operating expenditures.

Ohio Police and Fire Pension Fund (“OP&F”) provides coverage for approximately 40 full-time employees of the City’s police department, who contributed at a statutory rate of 10% of gross earnings until July 2013 when, the rate became 10.75%. The rate increased again to 11.50% as of July 2014. As of July 2015, the rate increased to 12.25%, which is the current contribution rate. The City currently contributes at a rate of 19.5% for police employees. This rate is fixed by the Board of Trustees of the OP&F on the basis of actuarial evaluations required by law to be made each year.

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Ohio Police and Fire Pension Fund (“OP&F”) provides coverage for approximately 40 full-time employees of the City’s fire department, who currently contribute a statutory rate of 10% of gross earnings until July 2013 when, the rate became 10.75%. The rate increased again to 11.50% as of July 2014. As of July 2015, the rate increased to 12.25%, which is the current contribution rate. The City currently contributes at a rate of 24% for fire employees. This rate is fixed by the Board of Trustees of the OP&F on the basis of actuarial evaluations required by law to be made each year.

The City made the following contributions to OP&F during the last five years:

Year Amount

2011 $1,245,976 2012 1,208,896 2013 1,351,549 2014 1,450,591 2015 1,488,396

OP&F and OPERS are not presently subject to the funding and vesting requirements of the Federal Employee Retirement Income Security Act of 1974, however, such pension funds are complying with review legislation regulating pension funds for public bodies and governments.

The City provided FICA (Social Security) coverage for approximately 25 part-time employees of the City’s fire department who contributed at a statutory rate of 6.2% of gross earnings. In 2015, the City’s contribution to FICA for part-time personnel was $12,844.

The City is current in all of its OPERS and OP&F contributions and has no unfunded pension obligations.

Additional financial information for OPERS and OP&F can be found in their respective comprehensive Annual Financial reports available on their respective websites, or from the State Auditor’s website.

LEGAL MATTERS

General Information

Legal matters incident to the issuance of the Bonds and with regard to the excludability of interest thereon from gross income for Federal Income Tax purposes are subject to the approving legal opinion of Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, as Bond Counsel. Upon delivery of the Bonds to the successful bidder therefor, the Bonds will be accompanied by an approving opinion dated the date of such delivery, rendered by Bond Counsel. A draft of such legal opinion for the Bonds is attached as Appendix C.

Said firm as Bond Counsel has performed certain functions to assist the City in the preparation by the City of this Official Statement. However, Bond Counsel assumes no responsibility for, and will express no opinion regarding the accuracy or completeness of this

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Official Statement or any other information relating to the City or the Bonds that may be made available by the City or others to the bidders or holders of the Bonds or others.

The engagement of said firm as Bond Counsel is limited to the preparation of certain of the documents contained in the transcript of proceedings with regard to the Bonds, and an examination of such transcript proceedings incident to rendering its legal opinion. In its capacity as Bond Counsel, said firm has reviewed the information in this Official Statement under Sections entitled “General Information” as to legal matters, “Authority for Issuance,” “Security and Source of Payment for Bonds,” “Collection of Ad Valorem Taxes,” “Direct Debt Limitations,” and “Indirect Debt Limitations,” which review did not include any independent verification of financial statements and statistical data included therein, if any.

Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, also serves and has served in a bond counsel capacity for one or more of the political subdivisions that territorially overlap the City.

Transcript and Closing Certificates

A complete transcript of proceedings, a no-litigation certificate and other appropriate closing documents will be delivered by the City when the Bonds are delivered to the original purchaser. The City will also provide to the original purchaser, at the time of such delivery, a certificate from the City Manager addressed to such purchaser relating to the accuracy and completeness of this Official Statement.

Litigation

To the knowledge of the appropriate City officials, no litigation or administrative action or proceeding is pending or threatened, restraining or enjoining, or seeking to restrain or enjoin, the issuance and delivery of the Bonds or the levy and collection of taxes, assessments or any revenues of any system anticipated to pay the debt service on the Bonds, or contesting or questioning the proceedings and authority under which the Bonds have been authorized and are to be issued, sold, executed or delivered, or the validity of the Bonds. A no-litigation certificate to such effect will be delivered to the original purchasers of the Bonds at the time of original delivery of the Bonds.

From time to time, the City is a party to various legal proceedings seeking damages or injunctive relief and generally incidental to its operations. These proceedings are unrelated to the Bonds, the security therefor, or the improvements to be financed with the proceeds thereof. The ultimate disposition(s) of any such proceedings are not presently determinable, but will not, in the opinion of the Law Director of the City (the legal advisor to the City), have a material adverse effect on the Bonds, the security therefor, or the improvements to be financed with the proceeds thereof.

Tax Matters

In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming continued compliance of the City with certain covenants designed to meet the requirements of Section 103 of the Internal Revenue Code of

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1986, as amended (the “Code”), interest on the Bonds is excludible from gross income for Federal income tax purposes. Bond Counsel is also of the opinion that interest on the Bonds is not a specific item of tax preference under Section 57 of the Internal Revenue Code of 1986 (the “Code”) for purposes of the federal individual or corporate alternative minimum taxes. Furthermore, Bond Counsel is of the opinion that the Bonds, the interest thereon or transfer thereof, and the income therefrom, including any profit made on the sale thereof, will be exempt from taxation within the State of Ohio, except for certain taxes (i) on the value of the capital and surplus of a domestic insurance company, (ii) on the shares of and capital employed by dealers in intangibles and (iii) levied on the basis of the total equity capital of financial institutions.

A copy of the opinion of Bond Counsel is set forth in Appendix C, attached hereto.

The Code imposes various restrictions, conditions, and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The City has covenanted to comply with certain restrictions designed to ensure that interest on the Bonds will not be includable in gross income for Federal income tax purposes. Failure to comply with these covenants could result in interest on the Bonds being includable in income for Federal income tax purposes, and such inclusion could be applied retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel assumes compliance with these covenants. However, Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the tax status of the interest on the Bonds.

Certain requirements and procedures contained or referred to in the Authorizing Legislation and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to any Bonds or the interest thereon if any such change occurs or action is taken or omitted upon the advice or approval of counsel other than Bond Counsel.

Although Bond Counsel is of the opinion that interest on the Bonds will be excludible from gross income for Federal and State income tax purposes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect a holder’s federal, state or local tax liabilities. The nature and extent of these other tax consequences may depend upon the particular tax status of the holder or the holder’s other items of income or deduction. Bond Counsel expresses no opinions regarding any tax consequences other than what is set forth in its opinion. Prospective purchasers of the Bonds are advised to consult their own tax advisors prior to any purchase of the Bonds as to the impact of the Internal Revenue Code of 1986, as amended and state tax statutes, upon their acquisition, holding or disposition of the Bonds.

The City has designated the Bonds as “qualified tax-exempt obligations” under Section 265 of the Code.

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Premium

“Acquisition Premium” is the excess of the cost of a bond over the stated redemption price of such bond at maturity or, for bonds that have one or more earlier call dates, the amount payable at the next earliest call date. The Bonds (“Premium Bonds”) were initially offered and sold to the public with Acquisition Premium. Certain Premium Bonds are not callable prior to their maturity date. For federal income tax purposes, the amount of Acquisition Premium on each bond the interest on which is excludible from gross income for federal income tax purposes (“tax-exempt bonds”) must be amortized and will reduce the bondholder’s adjusted basis in that bond. However, no amount of amortized Acquisition Premium on tax-exempt bonds may be deducted in determining bondholder’s taxable income for federal income tax purposes. The amount of any Acquisition Premium paid on the Premium Bonds, or on any of the Bonds, that must be amortized during any period will be based on the “constant yield” method, using the original bondholder’s basis in such bonds and compounding semiannually. This amount is amortized ratably over that semiannual period on a daily basis.

Please note that because certain Premium Bonds are callable with redemption premiums, both the amount of, and the amortization period for, the Acquisition Premium with depend both upon when the Premium Bonds can be redeemed and if in fact they are redeemed. Holders of any Premium Bonds, both original purchasers and any subsequent purchasers, should consult their own tax advisors as to the actual effect of such Acquisition Premium with respect to their own tax situation and as to the treatment of the Acquisition Premium for state tax purposes.

PROSPECTIVE PURCHASERS OF THE BONDS, INCLUDING DISCOUNT AND PREMIUM BONDS, ARE ADVISED TO CONSULT THEIR OWN ADVISORS PRIOR TO ANY PURCHASE OF THE BONDS AS TO THE IMPACT OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND STATE TAX STATUTES, UPON THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS INCLUDING THE TREATMENT OF OID OR ACQUISITION PREMIUM.

RATINGS

The City has received a rating of “Aaa” for the Bonds from Moody’s Investors Service, Inc. No application has been made to any other rating agency.

Such ratings reflect only the view of the rating agency. Any explanation of the significance of such ratings may only be obtained from the applicable rating agency at: Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007.

The City presently expects to furnish the rating agency with information and material that it may request on future general obligation bond and note issues. However, the City assumes no obligation to furnish requested information and materials, and may issue debt for which a rating is not requested. Failure to furnish requested information and materials, or the issuance of debt for which a rating is not requested, may result in the suspension or withdrawal of any rating assigned by the rating agency.

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UNDERWRITING

RBC Capital Markets, LLC (the “Underwriter”), has agreed to purchase the Bonds at an aggregate purchase price of $9,673,415.35 (112.809508%), which is par of $8,575,000, plus premium of $1,156,622.85, less Underwriter’s discount of $58,207.50, pursuant to an agreement entered into by and between the City and the Underwriter (the “Bond Purchase Agreement”). The aggregate initial public offering price is $9,731,622.85, which includes certain fees and expenses related to the issuance of the Bonds ($70,280), in addition to the Underwriter’s spread. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealer banks and dealers depositing Bonds into investment trusts) and others at prices lower than the public offering prices stated on the cover of this Official Statement. Such initial public offering prices may be changed from time to time by the Underwriter.

The Underwriter may receive a fee for conducting a competitive bidding process regarding the investment of certain proceeds of the Bonds.

RBC Capital Markets, LLC, has provided the following information for inclusion in this Official Statement: The Underwriter and its respective affiliates are full-service financial institutions engaged in various activities, that may include securities trading, commercial and investment banking, municipal advisory, brokerage, and asset management. In the ordinary course of business, the Underwriter and its respective affiliates may actively trade debt and, if applicable, equity securities (or related derivative securities) and provide financial instruments (which may include bank loans, credit support or interest rate swaps). The Underwriter and its respective affiliates may engage in transactions for their own accounts involving the securities and instruments made the subject of this securities offering or other offering of the Issuer. The Underwriter and its respective affiliates may also communicate independent investment recommendations, market color or trading ideas and publish independent research views in respect of this securities offering or other offerings of the Issuer. The Underwriter and its respective affiliates may make a market in credit default swaps with respect to municipal securities in the future.

CONTINUING DISCLOSURE

In accordance with the Securities and Exchange Commission Rule 15c2-12 (the “Rule”) and so long as the Bonds are outstanding, the City (the “Obligated Person”) will agree pursuant to a Continuing Disclosure Certificate to be dated as of April 26, 2016, to be delivered on the date of delivery of the Bonds, to cause the following information to be provided:

(i) to the Municipal Securities Rulemaking Board (“MSRB”), certain annual information and operating data, including audited financial statements when available, generally consistent with the information contained under the heading(s) “AD VALOREM TAXES,” “OTHER MAJOR CITY GENERAL FUND REVENUE SOURCES,” and “CITY DEBT AND OTHER LONG-TERM OBLIGATIONS,” as well as Appendix A hereof (“annual financial information”); such information shall be provided on or before September 1 of each year for the fiscal year ending on the preceding December 31;

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(ii) to the MSRB, in a timely manner, not in excess of ten business days after the occurrence of the event, notice of the occurrence of the following events with respect to the Bonds:

(a) Principal and interest payment delinquencies;

(b) Non-payment related defaults, if material;

(c) Unscheduled draws on debt service reserves reflecting financial difficulties;

(d) Unscheduled draws on credit enhancements reflecting financial difficulties;

(e) Substitution of credit or liquidity providers, or their failure to perform;

(f) 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-exempt status of the security;

(g) Modifications to rights of security holders, if material;

(h) Bond calls, if material, and tender offers (except for mandatory scheduled redemptions not otherwise contingent upon the occurrence of an event);

(i) Defeasances;

(j) Release, substitution or sale of property securing repayment of the securities, if material;

(k) Rating changes;

(l) Bankruptcy, insolvency, receivership or similar event of the obligated person (Note: For the purposes of this event, the event is considered to occur when any of the following occur: The appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person);

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(m) 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; and

(n) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(iii) to the MSRB, notice of a failure (of which the Obligated Person has knowledge) of an Obligated Person to provide the required annual financial information on or before the date specified in its written continuing disclosure undertaking.

As required by the Rule, the Continuing Disclosure Certificate provides that the information to be filed with the MSRB described in the preceding paragraph is to be filed in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB. An MSRB rule change approved by the Securities and Exchange Commission established the MSRB’s Electronic Municipal Market Access system (“EMMA”) for the receipt of, and for making available to the public, continuing disclosure documents and related information to be submitted pursuant to continuing disclosure undertakings (such as the Continuing Disclosure Certificate) consistent with the Rule. After July 1, 2009, all such continuing disclosure documents and related information are to be submitted to the MSRB’s continuing disclosure service through an Internet-based electronic submitter interface (EMMA Dataport) or electronic computer-to-computer data connection, accompanied by certain identification information, in portable document format (PDF) files configured to permit document to be saved, viewed, printed and retransmitted by electronic means and must be word-searchable.

The Continuing Disclosure Certificate provides holders of the Bonds with certain enforcement rights in the event of a failure by the Obligated Person to comply with the terms thereof; however, a default under the Continuing Disclosure Certificate does not constitute a default under the Authorizing Legislation. The Continuing Disclosure Certificate may be amended or terminated under certain circumstances in accordance with the Rule as more fully described therein. Holders of the Bonds are advised that the Continuing Disclosure Certificate, copies of which are available at the office of the City, should be read in its entirety for more complete information regarding its contents.

For purposes of this transaction with respect to events as set forth in the Rule: (a) there are no debt service reserve funds applicable to the Bonds, (b) there is no property securing the repayment of the Bonds, and (c) there are no liquidity providers securing the repayment of the Bonds.

Continuing Disclosure Compliance

Rule 15c2-12 (the “Rule’), promulgated by the Securities and Exchange Commission, requires continuing disclosure with respect to new offerings of municipal securities of

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$1,000,000 or more. The City is obligated to provide such continuing disclosure with respect to one or more previously issued and currently outstanding issues of securities. However, the City failed to file notices of certain credit rating changes with respect to its previously outstanding Sewer System Revenue Refunding and Improvement Bonds, Series 2004, dated March 1, 2004 (the “2004 Sewer Bonds”). The 2004 Sewer Bonds were insured by a municipal bond insurance policy issued by MBIA Insurance Corporation (“MBIA”), which policy was subsequently transferred to National Public Finance Guarantee Corporation (“NPFG”), as a subsidiary of MBIA. The City failed to file notices of material event with respect to the downgrade of NPFG’s credit rating from Baa1 to Baa2, as of December 19, 2011, and the upgrades of NPFG’s credit rating from Baa2 to Baa1, as of May 21, 2013, and from Baa1 to A3, as of May 21, 2014. Other than as set forth in this paragraph, during the past five years, the City has substantially complied with its existing continuing disclosure obligations regarding annual financial information and operating data in accordance with the Rule.

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CONCLUDING STATEMENT

To the extent any statements made in this Official Statement involve matters of opinion or estimates, whether or not expressly stated to be such, such statements are made as such and not as representations of fact or certainty, and no representation is made that any of such statements will be realized. Information herein has been derived by the City from official and other sources and is believed by the City to be reliable, but such information other than that obtained from official records of the City has not been independently confirmed or verified by the City and its accuracy is not guaranteed. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the holders of the Bonds.

This Official Statement has been duly executed and delivered for and on behalf of the City of Mason, Ohio, by its City Manager and its Finance Director.

CITY OF MASON, OHIO

By: City Manager By: Finance Director

Dated: April 12, 2016

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A-1

APPENDIX A

2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT

For audited financial statements of the City relating to prior fiscal years, please visit www.ohioauditor.gov.

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Comprehensive Annual Financial Report

City of Mason

Mason, Ohio 45040 Year Ended December 31, 2014

88EastBroadStreet,FifthFloor,Columbus,Ohio43215‐3506Phone:614‐466‐4514or800‐282‐0370Fax:614‐466‐4490

www.ohioauditor.gov

City Council City of Mason 6000 Mason‐Montgomery Road Mason, Ohio 45040 We have reviewed the Independent Auditor’s Report of the City of Mason, Warren County, prepared by Plattenburg & Associates, Inc., for the audit period July 1, 2014 through December 31, 2014. Based upon this review, we have accepted these reports in lieu of the audit required by Section 117.11, Revised Code. The Auditor of State did not audit the accompanying financial statements and, accordingly, we are unable to express, and do not express an opinion on them. Our review was made in reference to the applicable sections of legislative criteria, as reflected by the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of State, regulations and grant requirements. The City of Mason is responsible for compliance with these laws and regulations. Dave Yost Auditor of State October 5, 2015

                  

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City of Mason, Ohio  

Comprehensive Annual Financial Report  

Year Ended December 31, 2014  

                 

Prepared by:   Finance Department  

Joseph Reigelsperger  Finance Director 

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City of Mason, Ohio

Table of Contents

For the Year Ended December 31, 2014

Page

INTRODUCTORY SECTION

Letter of Transmittal vii

List of Principal Officials xv

City Organizational Chart xvi

Certificate of Achievement for Excellence in Financial Reporting xvii

FINANCIAL SECTION

Independent Auditor's Report  1

Management's Discussion and Analysis 3

Basic Financial Statements:

Government‐wide Financial Statements:

Statement of Net Position 15

Statement of Activities 16

Fund Financial Statements:

Balance Sheet ‐ Governmental Funds 18

Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities 19

Statement of Revenues, Expenditures and Changes in Fund Balance ‐ Governmental Funds 20

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance

   of Governmental Funds to the Statement of Activities 21

Statement of Net Position ‐ Proprietary Funds 22

Statement of Revenues, Expenses and Changes in Fund Net Position ‐ Proprietary Funds 24

Statement of Cash Flows ‐ Proprietary Funds 26

Statement of Fiduciary Assets and Liabilities ‐ Fiduciary Fund 28

Notes to the Basic Financial Statements 29

Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual

(Non‐GAAP Budgetary Basis) ‐ General Fund 62

Schedule of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual

(Non‐GAAP Budgetary Basis) ‐ Fire and Emergency Medical Service Fund 64

Notes to the Required Supplementary Information 65

Combining Statements and Individual Fund Schedules:

Nonmajor Governmental Funds:

Fund Descriptions  69

Combining Balance Sheet 70

Combining Statement of Revenues, Expenditures and Changes in Fund Balance 71

Nonmajor Special Revenue Funds:

Fund Descriptions  72

Combining Balance Sheet 74

Combining Statement of Revenues, Expenditures and Changes in Fund Balance 78

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City of Mason, Ohio

Table of Contents

For the Year Ended December 31, 2014

Table Page

Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance ‐

  Budget and Actual (Non‐GAAP Budgetary Basis):

Street Construction, Maintenance and Repair Fund 82

State Highway Improvement Fund 83

Street Subdivision Fund 84

Police Officer Training Fund 85

Parks and Recreation Fund 86

Police Crime Prevention Fund 87

Drug Law Enforcement Fund 88

Law Enforcement and Education Fund 89

Indigent Driver Fund 90

Municipal Court Computer Costs Fund 91

Municipal Court Computer Education Fund 92

Municipal Court Improvement Fund 93

Vehicle Immobilization Fee Fund 94

Municipal Court Probation Services Fund 95

Municipal Court Indigent Driver IDAM Fund 96

Subdivision Inspection Fund 97

Central Parke TIF Fund 98

Mason Enterprise Parke TIF Fund 99

Tylersville Road TIF Fund 100

I‐71 Corridor TIF Fund 101

Everybody's Farm TIF Fund 102

JW Harris TIF Fund 103

Nonmajor Debt Service Funds:

Fund Descriptions  105

Combining Balance Sheet 106

Combining Statement of Revenues, Expenditures and Changes in Fund Balance 107

Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance ‐

  Budget and Actual (Non‐GAAP Budgetary Basis):

General Obligation Bond Retirement Fund 108

Special Assessment Bond Retirement Fund 109

Government Center Bond Retirement Fund 110

Other General Funds

Fund Descriptions 111

Schedule of Revenues, Expenditures and Changes in Fund Balance

 Budget and Actual (Non‐GAAP Budgetary Basis):

General Capital Improvement Fund 112

Employee Medical Insurance Fund 113

City Contributions Fund 114

Unclaimed Monies Fund 115

Nonmajor Funds:

Agency Funds

Fund Descriptions  116

Statement of Changes in Assets and Liabilities 117

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City of Mason, Ohio

Table of Contents

For the Year Ended December 31, 2014

Table Page

STATISTICAL SECTION

Statistical Section Description Page 119

Net Position by Component 1 120

Changes in Net Position 2 121

Governmental Activities Tax Revenues by Source 3 124

Fund Balances of Governmental Funds 4 125

Changes in Fund Balances of Governmental Funds 5 126

Income Tax Revenue by Payer Type 6 128

Assessed and Estimated Actual Value of Taxable Property 7 129

Property Tax Rates ‐ Direct and Overlapping Governments 8 130

Principal Property Taxpayers 9 131

Property Tax Levies and Collections ‐ Real, Public Utility and Tangible Personal Property 10 132

Special Assessment Billings and Collections 11 133

Ratios of Outstanding Debt by Type 12 134

Ratios of Net General Bonded Debt Outstanding To Assessed Value and Net Bonded 

Debt Per Capita 13 135

Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt To Total 

General Government Expenditures 14 136

Direct and Overlapping Governmental Activities General Obligation Debt 15 137

Legal Debt Margin Information 16 138

Demographic and Economic Statistics 17 139

Principal Employers 18 140

Full‐time City of Mason Employee by Function 19 141

Operating Indicators and Capital Position Statistics 20 142

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INTRODUCTORY SECTION

June 23, 2015  Honorable Mayor, Members of Council, and Citizens of Mason:   We  are  pleased  to  present  the  City  of  Mason Comprehensive Annual Financial Report  (CAFR)  for the  fiscal  year  ended  December  31,  2014.  While there are no legal requirements for the preparation of  this  report,  it  represents  a  commitment  by  the City of Mason  to  conform  to nationally  recognized standards of excellence in financial reporting.   State  law  requires  that  each  public  office  file  an annual  financial  report  with  the  Auditor  of  State. The financial report must also be in conformity with generally  accepted  accounting  principles  (GAAP).  The  City’s  charter  requires  the  City Manager  and Finance  Director  to  submit  to  Council  and  make available  to  the  public  a  complete  report  on  the finances of  the municipality  as of  the  end of each fiscal year.   The management of the City of Mason, particularly the  Finance  Director’s  Office,  assumes  full responsibility  for  both  the  completeness  and reliability  of  the  information  contained  in  this report. The accuracy of the presented data and the completeness  and  fairness  of  presentation  is assured  through  a  comprehensive  framework  of internal control that is established for this purpose. Because  the  cost  of  internal  control  should  not exceed  anticipated  benefits,  the  objective  is  to provide reasonable, rather than absolute, assurance that  the  financial  statements  are  free  of  any material misstatements.  Plattenburg  &  Associates,  Inc.  has  issued  an unmodified (“clean”) opinion on the City of Mason’s 

financial  statements  for  the year ended December 31, 2014. Their report  is  located at the front of the financial  section  of  this  report.  Management’s discussion  and  analysis  (MD&A)  immediately follows the auditor’s report and provides a narrative introduction,  overview,  and  analysis  of  the  basic financial statements. MD&A complement this letter of  transmittal  and  should  be  read  in  conjunction with it.   

 The Oak Park District, a growing 250‐acre mixed use  research and  technology  park  on  the Western  Row  Road/I‐71  corridor continues  to  attract  the  interest  of  many  high‐profile corporations. 

 PROFILE OF THE CITY  

 Mason  is  considered  one  of  the  most  desirable communities  in  the  Cincinnati  region  and  has earned  a  reputation  as  a  progressive,  innovative community.  Centrally  located  in  southwest  Ohio, 

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the City  is a destination  for corporations  seeking a thriving  business  environment  and  for  families desiring  attractive  neighborhoods  and  nationally ranked schools.   Mason with a population of about 31,000,  is  in the southwest quadrant of Warren County. More  than 36 miles of interstate highways give businesses and residents easy access to the metropolitan centers of both  Cincinnati  and  Dayton  and  fuel  the  area's residential  growth  as  well  as  business  expansion.  Mason  is  strategically  located  between  the Cincinnati  region's  two  most  vital  commerce corridors, Interstates 71 and 75, just north of the I‐275  beltway.  The  City  is  served  by  four  direct interchanges tow on I‐71 and two on I‐75.  Several  groups  continue  to  recognize Mason  as  a great  place  to  live,  work,  and  play.    For multiple years, Money magazine  named  the  City  of Mason one  of  the  top  small  towns  to  live  in  the  nation.  SafeWise  Security  Systems  named  it  one  of  the safest  cities  in  Ohio.    Consumer  website, Nerdwallet.com,  ranked  Mason  high  for  job opportunities.    Warren  County  is  “Ohio’s  Largest Playground”  and  Mason  is  the  anchor.  Mason  is home  to  some of  the biggest  attractions  including Kings  Island  amusement  park,  Great  Wolf  Lodge, the  Beach  Waterpark  and  the  annual Western  & Southern Open.     

 The  annual Western &  Southern Open  brings  the world’s  top professional  tennis  players  to  the  nation’s  oldest  professional tennis tournament played in its city of origin.   

 

HISTORY AND ORGANIZATION   Originally  settled as  the village of Palmyra  in 1815 by Major William Mason,  the village was  renamed in  his  honor  20  years  later.  With  its  population exceeding 5,000  in 1971, Mason became a city and its charter establishes guidelines  for  its operations. Mason is a home‐rule city with a council/manager   

 Then and Now, a  look at downtown Mason  that  continues  to keep  the  small  town  environment  despite  the  City’s  rapid growth.   form of government. The  legislative body of Mason consists of  a mayor  and  six  council members who are responsible for the legislative affairs of the City. Council  also  makes  appointments  to  various statutory and advisory boards and appoints the City Manager, Law Director, and Clerk of Council.  As  chief  executive  officer,  the  City  Manager  is responsible  for  enforcement  of  all  laws  and ordinances  and  the  efficient  delivery  of  all  city services.  The  City  provides many  of  the municipal services  normally  associated  with  a  municipality, including  emergency  services;  street  construction and  maintenance;  full  engineering,  building,  and planning  services;  recreation  space  and  activities; and business recruitment and retention.  Sanitary  sewer,  storm  water,  and  solid  waste collection and disposal services are provided under an  enterprise  fund  concept, with  user  charges  set by  City  Council  to  ensure  adequate  coverage  of operating  expenses  and  payments  on  outstanding debt.    The  City  also  operates  a  community  center 

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and golf course through enterprise funds.  The annual budget  for  the City of Mason serves as the foundation for the City’s  financial planning and control.  As  required  by  the  charter,  the  City Manager prepares  and  submits  the  annual budget and  capital program  to  the  council. After a  review and  final  recommendation  from  Council’s  Finance Committee,  the  budget  is  legally  enacted  through passage  of  the  annual  appropriation  ordinance. Department Heads, with approval from the Finance Director,  may  transfer  resources  below  the object/fund  level  that  was  approved  by  Council. However,  only  Council,  using  a  supplemental appropriation  or  re‐appropriation  ordinance,  may approve  any  increase  in  appropriation or  transfers between  levels  identified  in  the  annual appropriation ordinance before the end of the fiscal year. 

  LOCAL ECONOMY 

 Mason  businesses  employ  an  estimated  30,000 persons,  roughly equivalent  to  the City’s nighttime population  of  about  31,000.  Six  of  the  top  fifteen largest employers  in Warren County are  located  in Mason.  The  City’s  ten  largest  employers  provide work  for more  than 10,000 persons and generated more  than  $9.8 million  in  income  tax  revenue  in 2014. Overall,  it  is  estimated  that  there  are more than  800  businesses  that  operate  within Mason’s eighteen square miles.  Mason continues  to attract quality companies  that are  relocating  or  expanding.  In  choosing  Mason, companies cite prime location along the interstates, land availability for development within established business  parks,  rising  property  values,  the established  core  of  high‐tech  businesses,  available workforce,  and  an  exceptional  level  of  support services  that  contribute  to  a  favorable  business environment  widely  promoted  in  the  region.  Tax incentives  targeting  high‐tech  businesses  and  light industry  are  strong  inducements  as well. Over  the past decade, Mason has also nurtured the marriage between  tourism,  Warren  County’s  top  industry, and  business  development.  Additionally,  the  city’s economic  strategy encourages  the growth of early 

and mid‐stage  entrepreneurial  companies  within the  target  sectors of bio‐health, bio‐health  IT, and digital IT.  Over the last decade and a half, Mason has become home  to  increasing  numbers  of  domestic  and foreign  companies  and  has  one  of  the  region’s largest  complements  of  international  businesses. The Greater  Cincinnati Ohio  region  ranks  fifteenth in  total  exports  among  U.S.  cities  with  over  $21 billion  in  total merchandise exports  in most  recent data. Export growth has seen a 5.1% increase or $1 billion, between 2012 and 2013. Mason contributes to the region’s worldwide  impact, being home to a number  of  the  region’s  more  than  1,000  firms engaged in international trade that generate annual export sales of over $6 billion.  More than 300 firms from  Japan,  Western  Europe,  and  Canada  have established facilities in the Greater Cincinnati, Ohio, region.  In  an  effort  to  further  enhance  Mason’s  foreign direct  investment  strategy,  the city  invested  in  the Regional  Economic  Partnership  as  a  founding partner  in 2001. This  regional partnership has  lent notable strength and  leverage  to Mason’s work on both  national  and  international  recruitment projects.   Over  the  past  15  years,  Mason  has  renewed  its commitment  to  the  regional  strategy  placing  a priority on our partnership  to make marketing and recruitment  decisions  for  the  Greater  Cincinnati USA  region.  Through  the  City’s  efforts  to  master plan  and make  infrastructure  investments, Mason continues  to  be  a  regular  portfolio  development area within  the  region,  attracting  the  attention  of prospective companies.  The  partnership,  recently  renamed  Regional Economic  Development  Initiative  (REDI  Cincinnati) strengthens  a  methodology  of  continued relationship maintenance with valuable contacts  in Europe and Asia.  This gives Mason the opportunity to  tell  unique  stories  of  corporate  investments  to companies outside the U.S. that are looking to start  new  U.S.  operations.  Over  the  years,  Mason’s annual participation has produced  a  valuable  local 

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return  on  investment  through  transatlantic relationship  leverage  and  exposure  to  local, domestic,  and  international  decision  makers.  The City participates actively on the Board of Directors.  Beginning  in  2007,  the  City  negotiated  a membership  partnership  that  combined  two organizations: Regional Economic Development and CincyTech.  This  agreement  provides  Mason  with access  to  leadership boards of both organizations. Mason’s  keen  level  of  engagement  with  CincyTech, an entrepreneur clearing house to scale and  grow  companies  that  are  in  the  innovation sector, has helped the City reach emerging markets, entrepreneurs,  information  technology, biosciences, and digital  IT. These partnerships help give Mason  a  high  profile  among  investment  and venture  oriented  prospects  that  set  the  city  apart from  the  efforts  of  competing  communities. Mason’s  continuing  agreement  provides  the  City with  leverage  to  reach  these markets  that  are  so important  to  the  city’s  overall  economic development goals.  

 Mason  is one of only  two cities  in  the Region  that are CincyTech partners. Over 13%  (five companies) of  the  total  CincyTech  company  portfolio  have chosen  a  Mason  location.  These  companies  have generated  more  than  $40  million  in  venture  and private equity  investment and  the creation of over 260 new jobs in Mason. The year 2014 set the stage for  record  activity  within  the  entrepreneur  and technology  company  ecosystem  in  Mason.  As  a result,  job  growth  and  new  investment  are expected to increase in the coming years.  The  year  2014  marked  the  City’s  tenth  year  of operating with  the Mason Port Authority,  the  first port  authority  in  Warren  County.  This  economic development  tool  has  provided  advantageous flexibility for financial recruitment options. Since its inception,  the  Port  has  helped  retain  over  1,400 jobs  and  allowed  the  city  to  attract  nearly  $50 million  in  new  capital  investment, with  a  total  of over 1,430 new jobs to be created. The Mason Port Authority  makes  regular  proposals  to  major prospects, often in combination with marketing the City’s  industrial  property  on  State  Route  741  and 

the  I‐71  Corridor.  The  Port  has  facilitated opportunities for Mason that would not have been possible  without  this  important  economic development tool.   

 AtriCure Global  Corporate Headquarters  is  a  publically  traded medical  device  manufacturing  with  corporate  and  R&D functions,  announced  plans  to  develop  a  10‐acre  campus  and 

invest over $15 million in a state‐of‐the‐art building.    Mason’s  reputation  as  a  serious  business environment is confirmed by corporate decisions to move  jobs  and  investment  to  the  City.  New investments reported in 2014 were over $42 million with  560,000  square  feet  of  new  or  renovated corporate and industrial space added, bringing over 560  announced  new  jobs  to  the  community.  The growth  in  2014  mirrored  the  2013  growth  and reiterates Mason’s trend of performing near the top regionally  for new  investment  in  the  industrial and corporate sectors.  

 The pipeline of  increased new  investment began to rebound at the close of 2010, with figures reaching significant  levels  in 2011 and continuing  into 2014. Projections  for  the  2015  investment  figures  based on  current  2014  pipeline  are  expected  to  achieve record levels.   Mason’s  diversified  tax  base  allows  the  continued reporting  of  annual  growth  in  2014  with  fifteen projects actively tracked that were a combination of new  jobs,  new  square  footage,  and  new investments. The year 2014 kicked off several  large developments, most  with  expected  completion  in 2015‐2016.  New  investment  in  2013  and  2014 

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continue to grow with expansion of existing Mason businesses.  Activity  included  large‐scale  expansion and new added locations via acquisition, renovation of  buildings  within  the  City,  and  full  company relocation.   The  following  projects  were  the  largest  new developments announced in the City of Mason:     

2014 Corporate Investment Announcements   

New Capital 

New Payroll 

AtriCure  $ 13.0 M $ 13.0 M

Premier Health  $ 11.5 M $ 2.2 M

Mason Christian Group  $   5.0 M $ 1.0 M

Cedar Village  $   1.0 M $ 1.2 M

Makino        $   600 K $ 4.2 M

Mason Growth Companies      *$   850 K     *$ 6.7 M*other combined capital investment and payroll

  As each new investment is announced, job creation and payroll are projected  for the next three to five years. Many  of  the  jobs  announced  have  already been  created  in  the  City  and many  others will  be realized in the next two years.   In 2014, Mason saw continued interest in land sales and  new  construction  in  the  industrial, manufacturing,  and  specialty  healthcare  and pharmaceutical  sectors.  Recognizing  that  the regional market outlook is seeing continued signs of recovery,  Mason  will  position  itself  to  be  at  the forefront  of  positive  commercial  activity.  The  City has  put  significant  effort  into  partnerships  and creativity  in  economic  development,  resulting  in successful attention within the business community and the creation of investment and jobs.   The City’s approach to focus on key areas for future growth continues  to be  the city‐owned  land North Mason Technology District and  the  I‐71  Innovation corridor.    The  North  Mason  Technology  District recently  expanded  over  1,100  acres  which continues  to  offer  competitive  options  for  new investors.  The  I‐71  Innovation  corridor  has approximately 600 acres of undeveloped land.  This 

has  attracted  the  attention  of  the  development community  and  expanding  biohealth  cluster  in Mason and the Region.   Mason  is  also  well  attuned  to  the  benefit  of destination  developments  such  as  Great  Wolf Lodge, new investments by Kings Island amusement park, and the expansion of high‐profile events such as the Tennis Masters Series.  These attractions and sporting events are expected to drive more interest in  tourism  development.  The  City’s  economic development  efforts  fully  recognize  a  positive relationship  between  destination  tourism  and  the business  community’s  interest  in  conference, technology, and office development.   Growth  and development  in  the  city  are  expected to continue to be strong  into 2015. Efforts to focus on growth sectors and emerging markets that bring high rates of return to the city are the key focus of the  city’s  economic  strategy.  The  City’s  efforts  to attract biohealth sector companies  is  strong and  is expected  to  continue  to  deliver  results  from  the economic  strategy  that  leverages  key  partnerships with  private  sector  companies,  institutional, academic,  research  organizations  and  investment centers  that  fund  innovation.    A  major announcement  in  2015  includes  a  $300  million, 500,000  square  foot  expansion  at  the  Procter  & Gamble research and development center  that will bring an estimated 1,100 employees to Mason.   

 Assurex  Health  continues  rapid  innovation,  investment  and employee  growth  within  the  City.  It  is  a  precision  medicine company  that  uses  genomics  and  informatics  to  predict diagnostic outcomes.   

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LONG‐TERM FINANCIAL PLANNING  As  part  of  the  annual  budgeting  process,  city administration prepares a capital improvement plan for  the  next  five  years.  City  Council  then  reviews and  prioritizes  projects.  In  addition  to  the  capital improvement  plan,  the  City  of  Mason  uses  a financial  forecast  of  both  operating  and  capital expenditures.  Using  these  tools,  Council  makes policy decisions and allocates financial resources for long‐term financial planning. 

 RELEVANT FINANCIAL POLICIES 

 In 2012, Mason  voters  approved  a unique  funding mechanism  for  the  city’s  emergency  services. Beginning  in  2013,  fire  and  EMS  services  are supported  by  a  combination  of  property  and income  taxes.  Rates  for  each  can  be  adjusted annually  as  the  need  rises  and  falls,  but  cannot exceed the approved maximum amount of five mills for  the property  tax  and  .15%  for  the  income  tax. The  new method  of  funding  replaced  an  expiring property  tax  levy  and  distributes  the  cost  of  the services  to both  the property owners and business employees  served  by  Mason’s  emergency responders.  The City of Mason continues its policy of using only reliable  financial  resources  when  budgeting  for operating costs. One‐time  resources and  resources at  risk  of  being  eliminated  are  used  for  one‐time expenditures,  capital  improvements,  or  debt reduction.  In  consideration,  the  City  of  Mason continues  to decrease  its  reliance upon decreasing revenue  sources  for  operating  expenses.  This  has minimized  the  operational  impact  of  the  state’s further  reduction  of  support  to  local  governments including the elimination of the estate tax.  

MAJOR INITIATIVES  Mason’s  citizens  are  the  City’s  greatest  asset. Therefore,  in  preparing  each  year’s  budget,  our customers’ needs for services and the safeguarding of  their environment  in conformity with applicable federal  and  state  standards  are  the  government’s greatest  concern.  Mason’s  success  has  been  its 

ability to equitably balance the needs of residents and businesses.    Major projects  that occurred  in 2014  that position the  City  for  future  economic  growth  and improvement include:   

 The Bethany Road roundabout was completed in 2014  Bethany Road Roundabout The  City  of  Mason  continued  its  investment  into infrastructure  in 2014 with  the construction of  the City’s  second  roundabout.  Improvements  to  the intersection  of  Bethany  Road  and  Mason‐Montgomery  Road were  completed  in  2014.    This intersection  was  the  site  of  frequent  extensive traffic  backups  during  the  morning  and  evening peak hours. The existing four‐way stop  intersection was  widened  in  all  directions  to  allow  two‐lane approaches  to  the roundabout. Also  included were over  2,500  feet  of  sanitary  sewer  extension  to  an area  not  serviced  by  existing  sewer  lines,  culvert replacement,  curb and gutter,  sidewalk, bike path, storm  sewers,  landscaping,  and  street  trees.  The total cost was $3.5 million including design, right‐of‐way acquisition, and construction. Over $2.1 million of the cost was paid through a federal grant.    New Mason Service Center Mason’s  Public  Works  Department  currently operates out of a 40‐year old facility with  less than 7,000  square  feet.  As  the  need  for  services increased  along  with  population  growth  over  the last 25 years, the garage has become too small and lacks the equipment necessary to properly maintain the  city’s growing  fleet. Because only 4 out of  the 

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19  dump  trucks  the  city  uses  for  snow  and  ice control can be parked  inside the building, response time for snow and ice management is hampered. In 2013,  an  existing  120,000  square  foot  building  at 3900 State Route 741 was purchased by Council for $2.3 million with  the  intention  of  renovating  it  to meet  the  needs  of  the  Public Works  Department. Renovations began in 2014 and will be completed in 2015.  

  A  former warehouse  just a  few hundred  feet up the road  from the  current  municipal  garage,  the  new  service  center  was utilized  in  2015  to  keep  city  plows  ready  to  go  during  bad weather. 

 Willow Brooke Regional Lift Station The  Willow  Brooke  Regional  Lift  Station  was completed  in  2014.    The  City  worked  with  the developer  of  Willow  Brooke  subdivision  to strategically  locate this station to best serve  future growth of  the City.    Instead of  a  single,  and  likely permanent,  lift station serving a single  subdivision, the  regional  lift  station  provides  ability  to  cost‐effectively  serve  current  development  and anticipated future development without redundant infrastructure  and  corresponding  maintenance /operating  expenses.    This  lift  station was  already beneficial  to a developer who wants  to annex  into the City and property purchased by the City in 2014 for future development.   Looking Ahead to the Future The City continues  to see  income  tax  revenue  that has  returned and exceeded  levels  realized prior  to the  2008  recession.    However,  the  City  of Mason 

seeks opportunity to maintain its scope of services while cautiously evaluating where additional service are needed.   A core principal of  the City’s  financial policies  is  reinvesting  into  capital  assets  while maintaining  balances  to  stabilize  future  economic downturns.    The  ongoing  national  economic uncertainty and changes at the state level will place pressure on the City budget in 2015 and subsequent years. 

 Accomplishments  to  look  forward  to  in  2015 include: 

The  final  steps  to  prepare  for  construction  on the  I‐71/  Western  Row  Road  Interchange Project, including right‐of‐way acquisition.   The first  phase  includes  the  Columbia  Road relocation which is anticipated to start in 2016.  

Kings  Island  Drive  improvements were  started in  2015  and  will  be  complete  in  2016.    The project is a key component to the I‐71/Western Row Road  Interchange and a major gateway to the City. 

Completion of the Service Center   

Replacement  of  the  Supervisory  Control  and Data Acquisition (SCADA) system at the sanitary sewer water reclamation plant   

AWARDS AND ACKNOWLEDGEMENTS 

 The  Government  Finance  Officers  Association (GFOA)  awarded  a  Certificate  of  Achievement  for Excellence  in  Financial  Reporting  to  the  City  of Mason  for  its  comprehensive  annual  financial report  (CAFR)  for  the  fiscal  year  ended December 31, 2013. Mason has been awarded  the Certificate of  Achievement  each  year  beginning  in  1997.  In order  to be awarded a Certificate of Achievement, the  City  had  to  publish  an  easily  readable  and efficiently  organized  CAFR  that  satisfies  both generally  accepted  accounting  principles  and applicable legal requirements.  A Certificate of Achievement is valid for a period of one  year  only.  We  believe  our  current  report conforms  to  the  Certificate  of  Achievement Program  requirements.  It  is  being  submitted  to 

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GFOA  to  determine  its  eligibility  for  an  award  for another certificate.  Our  most  sincere  appreciation  is  extended  to  all members of the staff whose efforts have made this 

report possible, to Assistant Finance Director Mary Mueller,  and  to  the  staff  of  Plattenburg  & Associates,  Inc.,  for  their  dedicated  service  in  the preparation of  this comprehensive annual  financial report. 

   Sincerely,   

   Eric Hansen  Joseph J. Reigelsperger City Manager  Finance Director   

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Mayor David F. Nichols

Vice Mayor Victor Kidd

Council Member Barbara Berry‐Spaeth

Council Member Richard Cox

Council Member Tom Grossmann

Council Member Charlene Pelfrey

Council Member Don Prince

City Manager Eric Hansen

Law Director Jeff Forbes

Clerk of Council Nancy Hickey

Parks & Recreation Director Chrissy Avery

Economic Development Director Michele Blair

Public Utilities Director Keith Collins

Service Director Richard Fair

Chief of Police Ron Ferrell

Assistant City Manager Jennifer Heft

Fire Chief/Safety Director John Moore

Finance Director Joe Reigelsperger

Public Works Director David Riggs

City Engineer Kurt Seiler

DEPARTMENT HEADS

December 31, 2014

LIST OF PRINCIPAL OFFICIALS

THE CITY OF MASON, OHIO

COUNCIL MEMBERS

COUNCIL APPOINTED OFFICIALS

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xvi

xvii

FINANCIAL SECTION

PLATTENBURG Certified Public Accountants

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

www.plattenburg.com

  

INDEPENDENT AUDITOR'S REPORT   City Council City of Mason Warren County 6000 Mason‐Montgomery Road Mason, Ohio  45040  Report on the Financial Statements  We have audited the accompanying financial statements of the governmental activities, the business‐type activities, each major  fund, and the aggregate remaining fund  information of the City of Mason, Ohio  (the City) as of and  for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.  Management's Responsibility for the Financial Statements  Management  is  responsible  for  the preparation and  fair presentation of  these  financial statements  in accordance with accounting principles generally accepted  in the United States of America; this  includes the design,  implementation, and maintenance of  internal control  relevant  to  the preparation and  fair presentation of  financial statements  that are  free from material misstatement, whether due to fraud or error.  Auditor's Responsibility  Our  responsibility  is  to express opinions on  these  financial statements based on our audit. We conducted our audit  in accordance with auditing standards generally accepted  in the United States of America and the standards applicable to financial audits  contained  in Government Auditing Standards,  issued by  the Comptroller General of  the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.  An audit  involves performing procedures  to obtain audit evidence about  the amounts and disclosures  in  the  financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.  In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate  in the circumstances, but not for the purpose of expressing an opinion on the  effectiveness  of  the  entity's  internal  control.  Accordingly,  we  express  no  such  opinion.  An  audit  also  includes evaluating  the appropriateness of accounting policies used and  the  reasonableness of  significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.  We  believe  that  the  audit  evidence we  have  obtained  is  sufficient  and  appropriate  to  provide  a  basis  for  our  audit opinions.  Opinions  In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the City, as of December 31, 2014, and the respective changes in financial position, and, where applicable, cash  flows  thereof  for  the year  then ended  in accordance with accounting principles generally accepted  in  the United States of America.   1

PLATTENBURG Certified Public Accountants

  Other Matters  Required Supplementary Information  Accounting principles generally accepted  in the United States of America require that the management's discussion and analysis and  required budgetary comparison schedules  listed  in  the  table of contents be presented  to supplement  the basic  financial  statements.  Such  information, although not a part of  the basic  financial  statements,  is  required by  the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.  We have applied certain limited procedures to the required supplementary  information  in accordance with auditing standards generally accepted  in the United States of America, which consisted of  inquiries of management about the methods of preparing the  information and  comparing  the  information  for  consistency  with  management's  responses  to  our  inquiries,  the  basic  financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on  the  information because  the  limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.  Supplementary and Other Information  Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.   The combining and  individual nonmajor fund financial statements and schedules   are the responsibility of management and were derived  from  and  relate directly  to  the underlying  accounting  and other  records used  to prepare  the basic financial statements. Such  information has been subjected  to  the auditing procedures applied  in  the audit of  the basic financial statements and certain additional procedures,  including comparing and reconciling such information directly to the  underlying  accounting  and  other  records  used  to  prepare  the  basic  financial  statements  or  to  the  basic  financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.  The  introductory and statistical sections have not been subjected to the auditing procedures applied  in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.  Other Reporting Required by Government Auditing Standards  In  accordance  with  Government  Auditing  Standards,  we  have  also  issued  our  report  dated  June  23,  2015,  on  our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions of  laws, regulations, contracts, and grant agreements and other matters. The purpose of  that report  is  to describe  the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed  in accordance with Government Auditing  Standards  in  considering  the City’s  internal  control over  financial reporting and compliance.    Cincinnati, Ohio  June 23, 2015 

2

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    As management of the City of Mason, we offer readers of the City of Mason’s financial statement this narrative overview and analysis of the financial activities of the City of Mason for the fiscal year ended December 31, 2014. We encourage  readers  to consider  the  information presented here  in conjunction with additional  information  that we have  furnished  in our  letter of  transmittal, which can be found in the introductory section of this report.    

Financial Highlights   The assets and deferred outflows of the City of Mason exceeded its liabilities and deferred inflows at the  close  of  2014  by  $309,375,218  (net  position).  Of  this  amount,  $65,474,111  is  considered unrestricted  and  may  be  used  to  meet  the  government’s  ongoing  obligations  to  citizens  and creditors. The unrestricted balance is 122 percent of the 2014 expenses of $53,834,166.   

The city’s total net position increased by $13,392,052.  

Net  position  of  the  governmental  activities  (defined  below)  increased  $8,814,760.    Net position of the business‐type activities (also defined below) increased $4,577,292.  

The total cost of the city’s programs increased $1,797,669, which is 3.5 percent more than in 2013. The  cost of  governmental  activities  increased $1,552,536 or 4.5 percent, while  the cost of business‐type activities increased $245,133 or 1.4 percent.  

As of  the  close of  the 2014  fiscal year,  the  city’s governmental  funds  reported  combined ending  fund  balances  of  $54,763,545,  an  increase  of  $3,158,433  in  comparison with  the prior year.  

   

Overview of the Financial Statements   This  discussion  and  analysis  is  intended  to  serve  as  an  introduction  to  the  city’s  basic  financial statements, which are comprised of three components: 1) government‐wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.   1)  Government‐wide financial statements.  

The  government‐wide  financial  statements  are  designed  to  provide  readers  with  a  broad overview of the city’s finances in a manner similar to private‐sector business.  The  statement  of  net  position  presents  information  on  all  of  the  city’s  assets,  and  deferred outflows and  liabilities, and deferred  inflows with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the city is improving or deteriorating.   The statement of activities presents  information showing how  the City’s net position changed during  the most  recent  fiscal  year.  All  changes  in  net  position  are  reported  as  soon  as  the underlying event giving  rise  to  the  change occurs,  regardless of  the  timing of  the  cash  flows. Thus, revenue and expenses reported in this statement for some items may result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both  of  the  government‐wide  financial  statements  distinguish  governmental  activities  from business‐type  activities.  Governmental  activities  are  principally  supported  by  taxes  and 

3

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014   

intergovernmental  revenues.  These  include  general  government,  public  safety,  leisure  time activities,  community  development,  and  transportation/street  repair.  Business‐type  activities are  intended to recover all or a significant portion of their costs through user fees or charges. The  city  includes  five  enterprise  activities  under  business‐type  activities:  a  sanitary  sewer system, a storm water system, waste collection system, golf course, and the community center activities. 

  2)  Fund financial statements.  

A  fund  is a grouping of  related accounts  that  is used  to maintain  control over  resources  that have  been  segregated  for  specific  activities  or  objectives.  The  city,  like  other  state  and  local governments, uses fund accounting to ensure and demonstrate compliance with finance‐related legal  requirements.  All  of  the  funds  of  the  city  can  be  divided  into  three  categories: governmental funds, proprietary funds, and fiduciary funds.   Governmental  funds.  Governmental  funds  are  used  to  account  for  essentially  the  same functions  reported  as  governmental  activities  in  the  government‐wide  financial  statements. However,  unlike  the  government‐wide  financial  statements,  governmental  fund  financial statements  focus on the near‐term  inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.   Because  the  focus  of  governmental  funds  is  narrower  than  that  of  the  government‐wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government‐wide financial statements.  By  doing  so,  readers  may  better  understand  the  long‐term  impact  of  the government’s near‐term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation  to  facilitate  this  comparison  between  governmental  funds  and  governmental activities.   The city maintains 27 individual governmental funds. Information is presented separately in the governmental  fund  balance  sheet  and  in  the  governmental  fund  statement  of  revenues, expenditures, and changes  in fund balances for the two major funds: the general fund and the fire  and  emergency  medical  services  fund.  Data  for  the  other  25  governmental  funds  are combined  into  a  single,  aggregated  presentation.  Individual  fund  data  for  each  of  these nonmajor governmental  funds  is provided  in  the  form of  combining  statements elsewhere  in this report.  Proprietary  funds. The  city maintains only one  type of proprietary  fund. Enterprise  funds are used to report the same functions presented as business‐type activities in the government‐wide financial  statements.  The  city  uses  enterprise  funds  to  account  for  its  sanitary  sewer, stormwater, waste collection, golf course, and community center operations.  Proprietary  funds  provide  the  same  type  of  information  as  the  government‐wide  financial statements,  only  in more  detail.  The  proprietary  fund  financial  statements  provide  separate information  for  the  sanitary  sewer, waste collection,  stormwater, community center, and golf course funds. Statements for these funds are provided elsewhere in this document. 

4

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014   

  Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government, such as fines collected by Mason Municipal Court. Fiduciary funds are not reflected in the government‐wide financial statement because the resources of those funds are not available to support the city’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. 

  3)  Notes to the financial statements.  

The notes provide additional  information  that  is essential  to a  full understanding of  the data provided in the government‐wide and fund financial statements.  

  Other  information.  In  addition  to  the  basic  financial  statements  and  accompanying  notes,  this report also presents certain required supplementary information concerning the city’s general fund budget  and  the  fire  and  emergency  medical  service  fund  budget.  The  city  adopts  an  annual appropriation budget for each fund. A budgetary comparison statement has been provided for each fund to demonstrate compliance with this budget.   The combining statements referred to earlier in connection with non‐major governmental funds are presented immediately following the required supplemental information   

Government‐Wide Financial Analysis    As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.  The  city’s  assets  and  deferred  outflows  exceeded  liabilities  and  deferred  inflows  by $309,375,218 at the close of the most recent fiscal year.   The  largest portion of the city’s net position (73.4 percent) reflects  its  investment  in capital assets (e.g.,  land,  buildings,  improvements  other  than  buildings,  machinery  and  equipment,  and infrastructure)  less any related outstanding debt used to acquire those assets. The city used these capital  assets  to  provide  services  to  citizens;  therefore  these  assets  are  not  available  for  future spending. Although the city’s  investment  in capital assets  is reported net of related debt,  it should be  noted  that  the  resources  needed  to  repay  debt must  be  provided  from  other  sources,  since capital assets themselves cannot be used to liquidate these liabilities.   An additional portion of the city’s net position (5.4 percent) represents resources that are subject to restrictions  as  to  how  they  may  be  used.  The  remaining  balance  of  unrestricted  net  position ($65,474,111) may be used  to meet  the  city’s on‐going obligations  to  citizens  and  creditors.  It  is important  to  note  that  the  unrestricted  net  position  of  the  city’s  business‐type  activities ($15,094,142) may not be used to fund governmental activities.   At  the  end  of  the  current  fiscal  year,  the  city was  able  to  report  positive  balances  in  all  three categories of net position:  for  the government as a whole and  for  its  separate governmental and business‐type activities.  Overall  net  position  of  the  city  increased  $13,392,052  in  2014.  Net  position  for  governmental activities increased $8,814,760, while net position for business‐type activities increased $4,577,292. 

5

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    The  increase  in net position  for 2014  ($13,392,052) was $401,369 more  than  the  increase  in net position  for 2013  ($12,990,683). This  increase  is primarily  the result of receiving additional capital grants for capital projects and offset by increased program expenses.   

    

2014 2013 2014 2013 2014 2013

Assets

Current and other assets $77,401 $77,222 $17,030 $13,572 $94,431 $90,794

Capital  assets 179,902 176,003 126,893 127,386 306,795 303,389

Total assets 257,303 253,225 143,923 140,958 401,226 394,183

Total deferred outflows of resources 977 1,058 2,470 2,646 3,447 3,703

Liabilities

Long‐term l iabil ities  outstanding 36,191 38,649 40,101 42,139 76,292 80,788

Other l iabil ities 11,333 13,560 904 655 12,237 14,215

Total liabilities 47,524 52,209 41,005 42,794 88,529 95,003

Total deferred inflows of resources 6,768 6,901 0 0 6,768 6,901

Net Position

137,676 128,860 89,505 88,127 227,181 216,987

Restricted 15,932 14,943 788 787 16,720 15,730

Unrestricted 50,380 51,370 15,094 11,896 65,474 63,266

Total Net Position $203,988 $195,173 $105,387 $100,810 $309,375 $295,983

Net Position

City of Mason

Governmental  Activities Business‐type Activities Total

(amounts  expressed in thousands)

Net investment in capital  assets

6

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014   

      

2014 2013 2014 2013 2014 2013

Revenues

Program revenues:

Charges  for services $6,231 $4,652 $18,170 $17,142 $24,401 $21,794

Operating grants  and           

contributions 2,369 3,562 0 0 2,369 3,562

Capital  grants  and 

contributions 2,502 1,712 2,787 780 5,289 2,492

General  revenues:

Income tax 25,868 26,315 0 0 25,868 26,315

Property tax 5,851 6,102 0 0 5,851 6,102

Revenue in Lieu of Taxes 1,193 1,007 0 0 1,193 1,007

Grants  and entitlements 1,337 2,609 0 0 1,337 2,609

Investment earnings 318 106 83 30 401 136

Other revenue 456 985 61 26 517 1,011

Total Revenues 46,125 47,050 21,101 17,977 67,226 65,027

Expenses:

General  Government 8,253 6,894 0 0 8,253 6,894

Public Safety 13,513 12,986 0 0 13,513 12,986

Leisure Time Activities 2,426 2,198 0 0 2,426 2,198

Community Development 2,883 2,508 0 0 2,883 2,508

Basic Utility Services 283 282 0 0 283 282

Transportation 7,325 8,184 0 0 7,325 8,184

Interest and fiscal  charges 1,581 1,660 0 0 1,581 1,660

Sewer util ity 0 0 5,744 6,249 5,744 6,249

Waste Collection 0 0 1,413 1,384 1,413 1,384

Stormwater util ity 0 0 1,117 1,142 1,117 1,142

Community Center 0 0 6,484 5,899 6,484 5,899

Golf Course 0 0 2,812 2,651 2,812 2,651

Total Expenses 36,264 34,712 17,570 17,325 53,834 52,037

9,861 12,338 3,531 652 13,392 12,990

Transfers  ‐ internal  activities (1,046) (1,054) 1,046 1,054 0 0

Increase (decrease) in Net Position 8,815       11,284     4,577           1,706      13,392     12,990     

Net Position beginning of year 195,173 183,889 100,810 99,104 295,983 282,993

Net Position end of year $203,988 $195,173 $105,387 $100,810 $309,375 $295,983

City of Mason

Changes in Net Position

(amounts expressed in thousands)

Governmental  

Activities

Business‐type 

Activities Total

Increase (decrease) in net  position 

before transfers

7

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    Governmental activities. Governmental activities increased the city’s net position by $8,814,760. This was a $2,469,676 (22 percent) decrease from the previous year change in net position. Key elements of the changes in net position are as follows:   

Total revenue decreased $925,140 (2.0 percent). 

General grants and entitlements decreased $1,271,693 (48.7 percent) with the elimination of the estate tax. 

Capital grants and contributions increased $789,458 (46.1 percent) over the previous year as the  construction  of  the  Bethany/Mason‐Montgomery  Road  roundabout  increased  grant reimbursements. 

Program  revenue  and  related  expenses  increased medical  claims  and  offsetting  stop‐loss payments. 

Operating  grants  decreased  as  the  federal  grant  to  hire  additional  full‐time  firefighters ended in 2014. 

 

  

Charges for services13%

Operating grants and contributions

5%

Capital grants and contributions

5%

Income tax56%

Property tax13%

Revenue in Lieu of Taxes

3%

Grants and entitlements

3% Investment earnings1%

Other revenue1%

Revenues by Source - Governmental Activities

8

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    Business‐type activities. Business‐type activities increased the city’s net position by $4,577,292. Key elements of the changes in net position are as follows:   

Charges  for  services  increased  $1,028,178  (6  percent).   Most  of  the  increase  was  from scheduled utility rate increases. 

Capital  grants  and  contribution  increased  $2,007,196  (257%) with  substantial  increase  in utility taps and economic development activity.  

Expenses  for business‐type activities  increased $245,133  (1.4%).   This was generally  from increase operating cost to provide the services in the business‐type activity. 

      

 

  

Charges for services86%

Capital grants and contributions

13%

Investment earnings1% Other revenue

0% Operating grants and contributions

0%

Revenues by Source - Business-type Activities

9

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    Financial Analysis of the Government’s Funds    As noted earlier,  the City of Mason uses  fund accounting  to ensure and demonstrate compliance with finance‐related legal requirements.   Governmental funds. The focus of the City of Mason’s governmental funds is to provide information on near‐term  inflows, outflows, and balances of spendable resources. Such  information  is useful  in assessing  the City of Mason’s  financing  requirements.  In particular,  the  unassigned  fund  balance may serve as a useful measure of the government’s net resources that are available for spending at the end of the fiscal year.  As of the end of the fiscal year, the City of Mason’s governmental funds reported combined ending  fund balances of $54,763,545 an  increase of $3,201,144  in comparison with the prior year.    The general fund is the chief operating fund of the city. At December 31, 2014, the unassigned fund balance of the general  fund was $17,623,466, while the total  fund balance was $38,512,004.   The city’s general fund balance increased by $2,558,264 during the current fiscal year.  This is $2,990,033 decrease over 2013.   All revenue  increased  in the general fund except  intergovernmental revenue declined  $1,514,861  because  the  estate  tax was  eliminated.    Expenditures  increased  $4,440,000 which is a 19.3% increase.  Capital outlay increased $2,006,654.  General government increased with additional  income  tax  refunds  and medical  insurance  claims.    Transfers  to other  funds  increased $340,000  as  income  tax  revenue  increase  to  provide  funds  to  the  fire  and  emergency medical service safety fund.    The  fire and emergency medical  service  safety  fund provides public  safety  services  to  the City of Mason using  revenue  from a charter amendment.    In November 2012, a charter amendment was approved by the voters authorizing up to five‐mill property tax  levy and up to an additional 0.15% income tax to provide funding for safety, fire, and emergency medical services.   Council authorized 4.4 mills for 2014 and the total income tax rate of 1.12% including 0.12% that would be transferred for safety services.  The fund balance increased by $805,561.  Revenue decreased by $112,163  (2%) with  the  federal  grant  to  assist with  hiring  full‐time  firefighters  and  reduced  payments  for  EMS services.   Expenditures  increased $105,184  (1.6%).   $2,020,000 was  transferred  from  the General Fund for the additional 0.12% income tax percent.     Proprietary funds. The proprietary fund financial statements provide the same information found in the government‐wide financial statements, but in more detail.   Unrestricted net position for the sewer fund at the end of the year amounted to $11,850,299, with a total increase in net position of $3,418,042.  Unrestricted net position for the waste collection fund at  the  end  of  the  year  amounted  to  $665,374, with  a  total  growth  in  net  position  of  $185,801. Unrestricted  net  position  for  the  storm water  utility  fund  at  the  end  of  the  year  amounted  to $2,310,774.    Unrestricted  net  position  for  the  community  center  fund  at  the  end  of  the  year amounted to a negative $72,274, but with a total growth  in net position of $220,060. Unrestricted net position  for  the golf course  fund at  the end of  the year amounted  to $339,969. Other  factors concerning the finances of these funds have already been addressed  in the discussion of the city’s business‐type activities.  

10

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    Budgetary Highlights    The schedule comparing the City’s original and final budgets and actual results are  included  in the required supplementary information.  The original revenue budgets are very conservative estimates and are adjusted  if needed  for additional appropriation near  the end of  the year based on actual revenue.    During  the  year,  City  Council  will  re‐appropriate  funds  or  provide  supplemental appropriations  based  on  the  changes  that  occurred  since  the  adoption  of  the  original  budget. Significant differences between the original and final budgets are as follows:  

General fund.  During the year 2014, there was an $11,088,435 increase in appropriations between the  original  and  final  amended  budget.  The  total  original  appropriations,  including  those  for transfers out, were $32,067,818, while  the  final appropriations were $43,156,253.   An additional $10,000,000 was  transferred  to  the General Capital  Improvement Fund  for  future capital projects and  debt  reductions.    $523,435 was  used  to  purchase  additional  salt  for  snow  and  ice  control.  $340,000 was  transferred  to  the Mason  Port Authority  for  economic  development  activities  and $225,000  for  additional  income  tax  refunds.    $6,215,000  was  increased  in  the  general  capital improvement fund for capital outlay approved by council.  Other operational corrections were made during  the  re‐appropriation  process. The  increase  in  appropriations  was  possible  because  of additional revenues collected which exceeded the conservative estimated revenues.  The estimated revenue was $28,067,600.  The actual revenue received was $32,208,054.  This increase was mainly due to increased income tax collections and intergovernmental revenue. 

  Capital Asset and Debt Administration   Capital  assets.  The  City’s  investment  in  capital  assets  for  its  governmental  and  business‐type activities as of December 31, 2014, amounted to $306,795,059  (net of accumulated depreciation). This  investment  in  capital  assets  includes  land,  construction  in  progress,  buildings,  system improvements, machinery  and  equipment,  park  facilities,  roads,  streets,  and  traffic  signals.  The increase in the city’s investment in capital assets for 2014 over 2013 was 1.1 percent (a 2.2 percent increase for governmental activities and a 0.4 percent decrease for business type activities.) 

  Major capital events during the current fiscal year included the following: 

2014 2013 2014 2013 2014 2013

Land $68,912 $66,107 $10,694 $10,609 $79,606 $76,716

Construction in Progress 3,819 6,750 165 616 3,984 7,366

Buildings  and Improvements 45,327 45,148 54,336 54,304 99,663 99,452

Machinery and Equipment 17,782 15,958 8,564 8,594 26,346 24,552

Infrastructure 87,673 82,675 91,013 87,658 178,686 170,333

Accumulated Depreciation (43,611) (40,635) (37,879) (34,396) (81,490) (75,031)

Total $179,902 $176,003 $126,893 $127,385 $306,795 $303,388

Business‐type Activities Total

City of Mason

Capital Assets

(amounts  expressed in thousands)

Governmental  Activities

11

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014      

Construction  of  the  Bethany  Road  and  Mason  Montgomery  Road  roundabout  was completed in 2014.  

Service Center improvements continued with a completion expected in 2015. 

Willow Brooke Regional Lift Station was completed. 

Land purchased for future economic development opportunities 

Several projects continue the design and planning stage for future capital improvements.  

Additional  information on the city’s capital assets can be found  in note 7 of the notes to the basic financial statements.   Long‐term debt. At December 31, 2014,  the  city had $71,097,500 of  long‐term debt outstanding (bonds and capital leases). Of this amount, $44,180,000 comprises debt backed by the full faith and credit  of  the  government.  Capital  leases  outstanding  ($24,572,500)  at  December  31,  2014,  are certificates of participation for the municipal center, the community center and an x‐ray machine.  Revenue  bonds  in  the  governmental  activity  of  $2,345,000  are  funded  through  tax  increment financing.  All figures above and table below do not include premiums and discounts.   The city has notes outstanding of $8,500,000 for governmental activities with a maturity of less than one  year.    The  notes  are  expected  to  be  re‐issued  as  the  City  of Mason  plans  to  reduce  the outstanding principal.    The  city  continues  to maintain  the  highest  rating,  “Aaa”  from Moody’s  Investors  Service  for  its general obligation bonds.  

  The city  is within all of  its  legal debt  limitations. The Ohio Revised code provides that the net debt (as defined  in the Ohio Revised code) of a municipal corporation, whether or not approved by the electors, shall not exceed 10.5% of  the  total value of all property  in  the municipal corporation as listed and assessed for taxation. In addition, the unvoted net debt of municipal corporations cannot exceed 5.5% of the total assessed value for taxation. The statutory limitations on debt are measured by the ratio of debt to tax valuation and expressed in terms of a percentage. At December 31, 2014, the city’s total net debt of 2.46% of the total assessed value of all property within the city is within 

2014 2013 2014 2013 2014 2013

General  obligation bonds $16,915 $18,090 $27,265 $28,780 $44,180 $46,870

0 0 0 7 0 7

Capital  Leases 14,733 15,679 9,840 10,155 24,573 25,834

Revenue Bonds 2,345 2,595 0 0 2,345 2,595

Total $33,993 $36,364 $37,105 $38,942 $71,098 $75,306

Special  assessment debt with 

governmental  commitment

City of Mason's Outstanding Debt

General Obligation and Revenue Bonds Outstanding

(amounts  expressed in thousands)

Governmental  Activities Business‐type Activities Total

12

City of Mason, Ohio Management’s Discussion and Analysis (Unaudited) For the Year Ended December 31, 2014    the 10.5% and 5.5% debt limitation for voted and unvoted debt, respectively. The aggregate amount of  the  city’s  unvoted  debt  is  also  subject  to  overlapping  debt  restrictions  with  other  political subdivisions of ten mills. This millage  is measured against the property values  in each overlapping district. At December 31, 2014,  the millage amount was 7.5396 mills, of which 4.7941 mills were restricted by the City of Mason for unvoted debt.   Additional  information regarding the city’s  long‐term debt can be found  in note 10 of the notes to the basic financial statements.  Economic Factors and Next Year’s Budgets   The City of Mason  is  located  in Warren County, which currently has an unemployment rate of 3.7 percent. This is lower than the current Ohio rate of 4.6 percent and the national rate of 5.1 percent (not seasonally adjusted).   By promoting economic growth  in Mason,  the city continues  to attract desirable commercial enterprises.  Intense competition continues to force the city to be aggressive in  its  economic  development  objectives  of  increasing  investment,  creating  employment opportunities, and retaining businesses that have already been established in Mason.   The  2015  budget was  prepared  in  a manner  similar  to  prior  years  by  conservatively  estimating revenue while seeking opportunities for cost savings.   Based on continued concerns about the  loss of state support, every effort  is made  to  reduce expenditures with minimal  impact  to  the current level of  services. As part of  the budget process,  a  capital  improvement plan was  completed  and evaluated for 2015 and future years. The total appropriations budgeted for 2015 including transfers and  capital  outlay  ($90,121,809)  is  three  percent  more  than  the  2014  original  appropriations ($87,438,297).    The  increase  was  for  operational  increase  to  improve  services  after  continued evaluation  to  realize  operational  cost‐savings.    Stable  capital  improvements  and  continued  debt reduction were also important elements to the budget.      Request for Information   This financial report is designed to provide a general overview of the City of Mason’s finances for all those with an  interest  in  the government’s  finances. Questions concerning any of  the  information provided  in this report or requests for additional financial  information should be addressed to Joe Reigelsperger,  Finance  Director,  City  of  Mason,  6000  Mason‐Montgomery  Road,  Mason,  Ohio 45040, or by e‐mail to finance@masonoh.org. 

    

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City of Mason, Ohio

Statement of Net PositionDecember 31, 2014

Governmental Business‐Type

Activities Activities Total

Assets:

Equity in Pooled Cash and Investments $54,837,252 $19,266,116 $74,103,368

Restricted Cash 1,632,763 788,035 2,420,798

Receivables (Net): 

  Taxes 11,534,914 0 11,534,914

  Accounts 731,722 1,413,473 2,145,195

  Interest 84,565 23,228 107,793

  Intergovernmental 3,033,711 0 3,033,711

  Special Assessments 4,534 0 4,534

Internal Balances 5,250,000 (5,250,000) 0

Inventory 291,948 253,504 545,452

Prepaid Items 0 535,593 535,593

Nondepreciable Capital Assets 72,731,508 10,859,213 83,590,721

Depreciable Capital Assets, Net 107,170,688 116,033,650 223,204,338

Total Assets 257,303,605 143,922,812 401,226,417

Deferred Outflows of Resources:

Deferred Charge on Refunding 976,834 2,469,747 3,446,581

Total Deferred Outflows of Resources 976,834 2,469,747 3,446,581

Liabilities:

Accounts Payable 591,820 228,476 820,296

Accrued Wages and Benefits 1,135,636 267,166 1,402,802

Contracts Payable 525,770 262,767 788,537

Retainage Payable 77,815 20,900 98,715

Accrued Interest Payable 135,100 125,128 260,228

Claims Payable 366,875 0 366,875

General Obligation Notes Payable 8,500,000 0 8,500,000

Long‐Term Liabilities:

  Due Within One Year 3,129,589 2,002,204 5,131,793

  Due In More Than One Year 33,061,463 38,098,761 71,160,224

Total Liabilities     47,524,068 41,005,402 88,529,470

Deferred Inflows of Resources:

Property Taxes 6,186,891 0 6,186,891

Revenue in Lieu of Taxes 581,419 0 581,419

Total Deferred Inflows of Resources     6,768,310 0 6,768,310

Net Position:

Net Investment in Capital Assets 137,675,713 89,504,980 227,180,693

Restricted for:

  Debt Service 925,728 788,035 1,713,763

  Street Improvements 5,802,119 0 5,802,119

  Public Safety 7,905,683 0 7,905,683

  Parks and Recreation 209,452 0 209,452

  Tax Increment Financing Projects 1,086,197 0 1,086,197

  Other Purposes 3,200 0 3,200

Unrestricted 50,379,969 15,094,142 65,474,111

Total Net Position $203,988,061 $105,387,157 $309,375,218

See accompanying notes to the basic financial statements.

15

City of Mason, Ohio

Statement of ActivitiesFor the Fiscal Year Ended December 31, 2014

Charges for  Operating Grants Capital Grants

Expenses Services and Sales and Contributions and Contributions

Governmental Activities:

General Government $8,253,186 $2,793,861 $0 $0

Public Safety 13,513,159 1,410,863 1,147,250 0

Community Development 2,882,829 1,047,156 0 0

Leisure Time Activities 2,425,668 589,526 0 0

Transportation and Street Repair 7,324,935 73,791 1,221,552 2,501,501

Basic Utility Service 283,225 316,009 0 0

Interest and Other Charges 1,581,121 0 0 0

Total Governmental Activities 36,264,123 6,231,206 2,368,802 2,501,501

Business‐Type Activities:

Sewer 5,743,995 6,511,953 0 2,569,957

Waste Collection 1,413,025 1,595,826 0 0

Stormwater Utility 1,117,558 1,472,169 0 206,883

Community Center 6,483,630 6,653,029 0 0

Golf Course 2,811,835 1,936,890 0 10,000

Total Business‐Type Activities 17,570,043 18,169,867 0 2,786,840

Totals $53,834,166 $24,401,073 $2,368,802 $5,288,341

General Revenues:

Income Taxes

Property Taxes Levied for:

   General Purposes

   Special Revenue Purposes

   Debt Service Purposes

Grants and Entitlements, Not Restricted

Revenue in Lieu of Taxes

Investment Earnings

Other Revenues

Transfers‐Internal Activities

Total General Revenues and Transfers

Change in Net Position

Net Position ‐ Beginning of Year

Net Position ‐ End of Year

See accompanying notes to the basic financial statements.

Program Revenues

16

Governmental Business‐Type

Activities Activities Total

($5,459,325) $0 ($5,459,325)

(10,955,046) 0 (10,955,046)

(1,835,673) 0 (1,835,673)

(1,836,142) 0 (1,836,142)

(3,528,091) 0 (3,528,091)

32,784 0 32,784

(1,581,121) 0 (1,581,121)

(25,162,614) 0 (25,162,614)

0 3,337,915 3,337,915

0 182,801 182,801

0 561,494 561,494

0 169,399 169,399

0 (864,945) (864,945)

0 3,386,664 3,386,664

(25,162,614) 3,386,664 (21,775,950)

25,867,801 0 25,867,801

423,801 0 423,801

3,886,757 0 3,886,757

1,541,012 0 1,541,012

1,337,037 0 1,337,037

1,192,962 0 1,192,962

318,366 83,495 401,861

455,638 61,133 516,771

(1,046,000) 1,046,000 0

33,977,374 1,190,628 35,168,002

8,814,760 4,577,292 13,392,052

195,173,301 100,809,865 295,983,166

$203,988,061 $105,387,157 $309,375,218

Net (Expense) Revenue

and Changes in Net Position

17

City of Mason, Ohio

Balance Sheet

Governmental FundsDecember 31, 2014

Fire and Other Total

Emergency Medical Governmental Governmental

General Service Safety Funds Funds

Assets:

Equity in Pooled Cash and Investments $39,603,858 $7,302,930 $7,930,464 $54,837,252

Restricted Cash 0 0 1,632,763 1,632,763

Receivables (Net): 

  Taxes 5,786,383 4,127,027 1,621,504 11,534,914

  Accounts 430,544 163,456 137,722 731,722

  Interest 62,246 12,101 10,218 84,565

  Intergovernmental 371,666 234,498 2,427,547 3,033,711

  Special Assessments 4,534 0 0 4,534  Interfund 5,600,000 0 0 5,600,000Inventory 272,951 18,997 0 291,948

Total Assets 52,132,182 11,859,009 13,760,218 77,751,409

Liabilities:

Accounts Payable 544,265 39,842 7,713 591,820

Accrued Wages and Benefits 762,538 349,172 23,926 1,135,636

Contracts Payable 227,359 42,510 255,901 525,770

Retainage Payable 7,698 0 70,117 77,815

Accrued Interest Payable 15,959 0 0 15,959Interfund Payable 0 0 350,000 350,000Claims Payable 366,875 0 0 366,875

General Obligation Notes Payable 8,500,000 0 0 8,500,000

Total Liabilities     10,424,694 431,524 707,657 11,563,875

Deferred Inflows of Resources:

Property Taxes 531,580 4,127,027 1,621,504 6,280,111

Income Taxes 2,346,089 0 0 2,346,089

Grants and Other Taxes 265,440 234,498 2,115,170 2,615,108

Special Assessments 4,534 0 0 4,534

Accounts 9,515 90,854 24,605 124,974

Investment Earnings 38,326 7,451 7,396 53,173

Total Deferred Inflows of Resources     3,195,484 4,459,830 3,768,675 11,423,989

Fund Balances:

  Nonspendable 344,898 18,997 0 363,895

  Restricted 0 6,948,658 7,335,218 14,283,876  Committed 0 0 686 686  Assigned 20,543,640 0 2,120,201 22,663,841  Unassigned 17,623,466 0 (172,219) 17,451,247

Total Fund Balances    38,512,004 6,967,655 9,283,886 54,763,545

Total Liabilities, Deferred Inflows and Fund Balances  $52,132,182 $11,859,009 $13,760,218 $77,751,409

See accompanying notes to the basic financial statements.

18

City of Mason, Ohio

Reconciliation of Total Governmental Fund Balance to

Net Position of Governmental Activities

Total Governmental Fund Balance $54,763,545

Amounts reported for governmental activities in the

statement of net position are different because:

Capital assets used in governmental activities are not financial

resources and, therefore, are not reported in the funds.

Capital assets used in the operation of Governmental Funds 179,902,196

Other long‐term assets are not available to pay for current‐

period expenditures and, therefore, are deferred in the funds.

Income Taxes $2,346,309

Delinquent Property Taxes 93,220

Interest 53,173

Intergovernmental 1,945,583

Other Receivables 217,394

4,655,679

In the statement of net position interest payable is accrued when

incurred; whereas, in the governmental funds interest is

reported as a liability only when it will require the use of

current financial resources. (119,141)

Some liabilities reported in the statement of net position do not

require the use of current financial resources and, therefore,

are not reported as liabilities in governmental funds.

Compensated Absences (1,487,735)

Deferred outflow of resources associated with long‐term liabilities

  are not reported in the funds. 976,834

Long‐term liabilities are not due and payable in the current 

  period and, therefore, are not reported in the funds. (34,703,317)

Net Position of Governmental Activities $203,988,061

See accompanying notes to the basic financial statements.

December 31, 2014

19

City of Mason, Ohio

Statement of Revenues, Expenditures 

and Changes in Fund Balance

Governmental FundsFor the Fiscal Year Ended December 31, 2014

Fire and Other Total

Emergency Medical Governmental Governmental

General Service Safety Funds Funds

Revenues:

Property and Other Taxes $1,436,806 $3,895,426 $1,538,376 $6,870,608

Income Taxes 26,841,190 0 0 26,841,190

Charges for Services 1,601,895 533,516 0 2,135,411

Investment Earnings 224,305 42,651 40,748 307,704

Intergovernmental 344,981 1,062,729 3,205,193 4,612,903

Special Assessments 0 0 6,477 6,477

Fines, Licenses & Permits 2,110,292 0 893,307 3,003,599

Revenue in Lieu of Taxes 0 0 1,193,794 1,193,794

Other Revenues 2,021,752 97,114 74,319 2,193,185

Total Revenues 34,581,221 5,631,436 6,952,214 47,164,871

Expenditures:

Current:

General Government 7,139,966 0 458,507 7,598,473

Public Safety 6,955,085 6,062,247 0 13,017,332

Community Development 2,249,985 0 655,009 2,904,994

Leisure Time Activities 1,959,721 0 0 1,959,721

Transportation and Street Repair 3,747,061 0 1,251,013 4,998,074

Basic Utility Service 283,225 0 0 283,225

Capital Outlay 5,002,940 775,786 2,470,228 8,248,954

Debt Service:

Principal 0 0 2,371,250 2,371,250

Interest and Other Charges 61,527 0 1,516,888 1,578,415

Total Expenditures 27,399,510 6,838,033 8,722,895 42,960,438

Excess of Revenues Over (Under) Expenditures 7,181,711 (1,206,597) (1,770,681) 4,204,433

Other Financing Sources (Uses):

Transfers In 0 2,020,000 2,094,144 4,114,144

Transfers (Out)  (4,674,000) 0 (486,144) (5,160,144)

Total Other Financing Sources (Uses) (4,674,000) 2,020,000 1,608,000 (1,046,000)

Net Change in Fund Balance 2,507,711 813,403 (162,681) 3,158,433

Fund Balance ‐ Beginning of Year 35,953,740 6,162,094 9,446,567 51,562,401

Change in Nonspendable for Inventory 50,553 (7,842) 0 42,711

Fund Balance ‐ End of Year $38,512,004 $6,967,655 $9,283,886 $54,763,545

See accompanying notes to the basic financial statements.

20

City of Mason, Ohio

Reconciliation of the Statement of Revenues, Expenditures, and Changes

in Fund Balance of Governmental Funds to the Statement of ActivitiesFor the Fiscal Year Ended December 31, 2014

Net Change in Fund Balance ‐ Total Governmental Funds $3,158,433

Amounts reported for governmental activities in the

statement of activities are different because:

Governmental funds report capital asset additions as expenditures. 

However, in the statement of activities, the cost of those assets is 

allocated over their estimated useful lives as depreciation 

expense. This is the amount of the difference between capital 

asset additions and depreciation in the current period.

Capital assets used in governmental activities $8,025,243

Depreciation Expense (3,446,488)

4,578,755

Governmental funds only report the disposal of assets to the

extent proceeds are received from the sale. In the statement

of activities, a gain or loss is reported for each disposal. The

amount of the proceeds must be removed and the gain or loss

on the disposal of capital assets must be recognized. This is the

amount of the difference between the proceeds and the gain or loss. (679,812)

Revenues in the statement of activities that do not provide

current financial resources are not reported as revenues in

the funds.

Income Taxes ($973,169)

Delinquent Property Taxes (98,602)

Interest 10,662

Intergovernmental 339,917

Other 52,452

(668,740)

Repayment of bond principal is an expenditure in the

governmental funds, but the repayment reduces long‐term

liabilities in the statement of net position. 2,371,250

In the statement of activities interest expense is accrued when incurred;

whereas, in governmental funds an interest expenditure is reported

when due. 7,162

Some expenses reported in the statement of activities do not require the

use of current financial resources and, therefore, are not reported as

expenditures in governmental funds.

Compensated Absences 14,869

Amortization of Bond Premium 71,535

Amortization of Deferred Charge on Refunding (81,403)

Change in Inventory 42,711

47,712

Change in Net Position of Governmental Activities $8,814,760

See accompanying notes to the basic financial statements.

21

City of Mason, Ohio

Statement of Net Position

Proprietary Funds

Waste Stormwater Community

Sewer Collection Utility Center

Current Assets:

Equity in Pooled Cash and Investments $11,247,599 $575,599 $2,194,543 $4,942,759

Restricted Cash 0 0 0 788,035

Receivables (Net): 

  Accounts 993,864 207,526 166,413 36,330

  Interest 18,638 954 3,636 0

Inventory 56,309 0 0 84,415

Prepaid Items 0 0 0 535,593

Total Current Assets 12,316,410 784,079 2,364,592 6,387,132

Noncurrent Assets:

Capital Assets:

Nondepreciable Capital Assets 4,751,817 0 355,628 1,781

Depreciable Capital Assets, Net 61,801,239 0 34,152,158 17,599,513

Total Noncurrent Assets 66,553,056 0 34,507,786 17,601,294

Total Assets 78,869,466 784,079 36,872,378 23,988,426

Deferred Outflows of Resources:

Deferred Charge on Refunding 2,469,747 0 0 0

Total Deferred Outflows of Resources 2,469,747 0 0 0

Liabilities:

Current Liabilities:

Accounts Payable 71,934 0 6,479 81,799

Accrued Wages and Benefits 80,765 1,228 9,959 175,214

Compensated Absences 79,406 367 11,844 30,587Contracts Payable 50,797 116,610 18,695 76,665

Retainage Payable 20,900 0 0 0

Accrued Interest Payable 64,598 0 3,862 37,165

Interfund Payable 0 0 0 5,250,000

Long‐Term Liabilities Due Within One Year 1,135,000 0 100,000 325,000

Total Current Liabilities 1,503,400 118,205 150,839 5,976,430

Long‐Term Liabilities:

Compensated Absences 97,711 500 2,979 19,941

Bonds, Notes & Loans Payable 21,178,750 0 1,191,072 9,399,266

Total Noncurrent Liabilities 21,276,461 500 1,194,051 9,419,207

Total Liabilities     22,779,861 118,705 1,344,890 15,395,637

Net Position:

Net Investment in Capital Assets 46,709,053 0 33,216,714 7,877,028

Restricted for:

  Debt Service 0 0 0 788,035

Unrestricted 11,850,299 665,374 2,310,774 (72,274)

Total Net Position $58,559,352 $665,374 $35,527,488 $8,592,789

See accompanying notes to the basic financial statements.

December 31, 2014

22

Total

Golf Business‐Type

Course Activities

$305,616 $19,266,116

0 788,035

9,340 1,413,473

0 23,228

112,780 253,504

0 535,593

427,736 22,279,949

5,749,987 10,859,213

2,480,740 116,033,650

8,230,727 126,892,863

8,658,463 149,172,812

0 2,469,747

0 2,469,747

68,264 228,476

0 267,166

0 122,2040 262,767

0 20,900

19,503 125,128

0 5,250,000

320,000 1,880,000

407,767 8,156,641

0 121,131

6,208,542 37,977,630

6,208,542 38,098,761

6,616,309 46,255,402

1,702,185 89,504,980

0 788,035

339,969 15,094,142

$2,042,154 105,387,157

23

City of Mason, Ohio

Statement of Revenues, Expenses 

  and Changes in Fund Net Position

Proprietary FundsFor the Fiscal Year Ended December 31, 2014

Waste Stormwater Community

Sewer Collection Utility Center

Operating Revenues:Charges for Services $6,511,953 $1,595,826 $1,472,169 $6,653,029

Other Revenues 6,154 64 473 49,543

Total Operating Revenues 6,518,107 1,595,890 1,472,642 6,702,572

Operating Expenses:

Personal Services 1,338,214 22,185 147,126 2,602,149

Contractual Services 867,931 1,390,840 158,478 2,110,805

Materials and Supplies 435,650 0 33,325 774,084

Depreciation 2,308,524 0 736,142 536,887

Total Operating Expenses 4,950,319 1,413,025 1,075,071 6,023,925

Operating Income (Loss) 1,567,788 182,865 397,571 678,647

Non‐Operating Revenues (Expenses):

Investment Earnings 66,973 2,936 12,468 1,118

Interest (Expense) (793,676) 0 (42,487) (459,705)

Total Non‐Operating Revenues (Expenses) (726,703) 2,936 (30,019) (458,587)

Income (Loss) Before Contributions and Transfers 841,085 185,801 367,552 220,060

Capital Grants and Contributions 2,569,957 0 206,883 0

Transfers In 7,000 0 0 0

Change in Net Position 3,418,042 185,801 574,435 220,060

Net Position ‐ Beginning of Year 55,141,310 479,573 34,953,053 8,372,729

Net Position ‐ End of Year $58,559,352 $665,374 $35,527,488 $8,592,789

See accompanying notes to the basic financial statements.

24

Total

Golf Business‐Type

Course Activities

$1,936,890 $18,169,867

4,899 61,133

1,941,789 18,231,000

3,760 4,113,434

1,864,079 6,392,133

615,052 1,858,111

111,645 3,693,198

2,594,536 16,056,876

(652,747) 2,174,124

0 83,495

(217,299) (1,513,167)

(217,299) (1,429,672)

(870,046) 744,452

10,000 2,786,840

1,039,000 1,046,000

178,954 4,577,292

1,863,200 100,809,865

$2,042,154 $105,387,157

25

City of Mason, Ohio

Statement of Cash Flows

Proprietary FundsFor the Fiscal Year Ended December 31, 2014

Waste Stormwater Community

Sewer Collection Utility Center

Cash Flows from Operating Activities:

Cash Received from Customers $6,486,735 $1,622,325 $1,466,604 $6,717,067

Cash Payments to Employees (1,320,690) (21,914) (157,786) (2,569,966)

Cash Payments to Suppliers (1,309,342) (1,280,860) (194,771) (2,944,536)

Net Cash Provided (Used) by Operating Activities 3,856,703 319,551 1,114,047 1,202,565

Cash Flows from Noncapital Financing Activities:

Payments from Other Funds 0 0 0 0

Capital Grants Received 2,432,603 0 0 0

Net Cash Provided (Used) by Noncapital 

Financing Activities 2,432,603 0 0 0

Cash Flows from Capital and Related Financing 

Activities:

Payments for Capital Acquisitions (2,136,475) 0 (253,357) (10,478)

Debt Principal Payments (1,100,000) 0 (100,000) (315,000)Debt Interest Payments (808,175) 0 (49,344) (399,393)

Net Cash Provided (Used) by Capital and

 Related Financing Activities (4,044,650) 0 (402,701) (724,871)

Cash Flows from Investing Activities:

Earnings on Investments 61,156 2,346 10,943 1,449

Net Cash Provided (Used) by Cash Flows from 

Investing Activities 61,156 2,346 10,943 1,449

Net Increase (Decrease) in Cash  and Cash Equivalent 2,305,812 321,897 722,289 479,143

Cash and Cash Equivalents ‐ Beginning of Year 8,941,787 253,702 1,472,254 5,251,651

Cash and Cash Equivalents ‐ End of Year 11,247,599 575,599 2,194,543 5,730,794

Reconciliation of Operating Income (Loss) to

 Net Cash Provided (Used) by Operating Activities

Operating Income (Loss) 1,567,788 182,865 397,571 678,647

Adjustments:

  Depreciation 2,308,524 0 736,142 536,887

Changes in Assets & Liabilities:

  (Increase) Decrease in Receivables (31,372) 26,435 (6,038) 5,563

  (Increase) Decrease in Inventory 16,900 0 0 (35,986)

  (Increase) Decrease in Prepaid Items 0 0 0 (115,973)

  Increase (Decrease) in Retainage Payable (21,154) 0 (8,497) 0

  Increase (Decrease) in Payables (1,567) 109,980 5,529 100,274

  Increase (Decrease) in Accrued Liabilities 17,584 271 (10,660) 33,153

Net Cash Provided (Used) by Operating Activities     $3,856,703 $319,551 $1,114,047 $1,202,565

Schedule of Noncash Capital Activities:

During the fiscal year, these amounts were received 

representing noncash contributions of:     Capital Assets $285,336 $0 $464,883 $0

See accompanying notes to the basic financial statements.

26

Total

Golf Business‐Type

Course Activities

$1,936,890 $18,229,621

(3,704) (4,074,060)

(2,422,203) (8,151,712)

(489,017) 6,003,849

1,039,000 1,039,000

10,000 2,442,603

1,049,000 3,481,603

(105,402) (2,505,712)

(315,000) (1,830,000)(238,763) (1,495,675)

(659,165) (5,831,387)

0 75,894

0 75,894

(99,182) 3,729,959

404,798 16,324,192

305,616 20,054,151

(652,747) 2,174,124

111,645 3,693,198

(4,899) (10,311)

19,141 55

0 (115,973)

0 (29,651)

37,843 252,059

0 40,348

($489,017) $6,003,849

$0 $750,219

27

City of Mason, Ohio

Statement of Fiduciary Net Position

Fiduciary FundDecember 31, 2014

AgencyAssets:Equity in Pooled Cash and Investments $1,288,885

Total Assets 1,288,885

Liabilities:

Accounts Payable 654

Due to Others 1,288,231

Total Liabilities     $1,288,885

See accompanying notes to the basic financial statements.

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Note 1 – Description of the City and Reporting Entity                The City of Mason, Ohio (the “City”) was incorporated in 1815, adopted its Charter in 1969 and became a city  in 1971.   The City  is a home‐rule municipal corporation created under  the  laws of  the State of Ohio.  The City operates under a Council‐Manager form of government.  Reporting Entity  A  reporting entity  is comprised of  the primary government, component units and other organizations that are included to ensure that financial statements are not misleading. The primary government of the City consists of all funds, departments, boards and agencies that are not legally separate from the City. For  the  City,  this  includes;  police  and  fire,  parks  and  recreation,  planning,  zoning,  community development,  street maintenance,  sewer,  stormwater  waste  collection,  community  center  and  golf center.  Council and the City Manager have direct responsibility for these activities.  Component units are  legally  separate organizations  for which  the City  is  financially accountable.   The City  is  financially  accountable  for  an  organization  if  the  City  appoints  a  voting  majority  of  the organization’s governing board; and (1) the City is able to significantly influence the programs or services performed or provided by the organization; or (2) the City is legally entitled to or can otherwise access the organization’s resources; the City is legally obligated or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to, the organization; or the City  is obligated for the debt of the organizations.  Component units may also include organizations for which the City authorizes the  issuance of debt or the  levying of taxes, or determines the budget.   There are no component units included as part of this report.  The  Miami  Valley  Risk  Management  Association,  Inc.  (MVRMA)  is  a  risk  sharing  insurance  pool established for the purpose of enabling the subscribing political subdivisions to obtain liability insurance and  providing  a  formalized,  jointly  administered  self‐insurance  fund  for  its members.    The members formed a not‐for‐profit corporation known as Miami Valley Risk Management Association,  Inc.  for the purpose  of  administering  the  pool.    The  subscribing members  of  the  self‐insurance  pool  include  the Cities  of  Beavercreek,  Bellbrook,  Blue  Ash,  Centerville,  Englewood,  Kettering,  Madeira,  Mason, Miamisburg,  Montgomery,  Piqua,  Sidney,  Springdale,  Tipp  City,  Troy,  Vandalia,  West  Carrollton, Wilmington, and Wyoming, and the Village of Indian Hill.  The City has no explicit and measurable equity interest in MVRMA and no ongoing financial responsibility for MVRMA.  More information on MVRMA is presented in Note 5.  The City participates in a joint venture called the Liberty Township Joint Economic Development District (JEDD).  This joint venture is presented in Note 17.  Note 2 – Summary of Significant Accounting Policies                The  financial  statements  of  the  City  have  been  prepared  in  conformity  with  generally  accepted accounting  principles  (GAAP)  as  applied  to  local  governmental  units.    The Governmental Accounting Standards Board (GASB) is the accepted standard‐setting body for establishing governmental accounting and financial principles.  The most significant of the City’s accounting policies are described below.     

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Measurement Focus  

Government‐Wide Financial Statements  The  government‐wide  financial  statements  are  prepared  using  the  economic  resources measurement  focus.    All  assets,  deferred  outflows  of  resources,  and  all  liabilities  and  deferred inflows of resources associated with the operation of the City are included on the Statement of Net Position.  Fund Financial Statements  All governmental funds are accounted for using a flow of current financial resources measurement focus.    With  this  measurement  focus,  only  current  assets  and  current  liabilities  generally  are included  on  the  balance  sheet. The  statement  of  revenues,  expenditures  and  changes  in  fund balances  reports  on  the  sources  (i.e.,  revenues  and  other  financing  sources)  and  uses  (i.e., expenditures and other  financing uses) of current  financial  resources.   This approach differs  from the manner  in which the governmental activities of the government‐wide financial statements are prepared.    Governmental  fund  financial  statements  therefore  include  a  reconciliation with  brief explanations to better  identify the relationship between the government‐wide statements and the statements for governmental funds.  Like the government‐wide statements, all proprietary funds are accounted for on a flow of economic resources measurement focus.  All assets,  liabilities, and deferred outflows/inflows associated with the  operation  of  these  funds  are  included  on  the  statement  of  net  position.   The  statement  of revenues,  expenses  and  changes  in  fund  net  position  presents  increases  (i.e.,  revenues)  and decreases  (i.e., expenses)  in  total net position.   The statement of cash  flows provides  information about how the City finances and meets the cash flow needs of its proprietary activities.  

 Basis of Presentation  The City’s basic  financial statements consist of government‐wide statements,  including a statement of net position and a statement of activities, and fund financial statements which provide a more detailed level of financial information. 

 Government‐Wide Financial Statements  The statement of net position and the statement of activities display information about the City as a whole.    These  statements  include  the  financial  activities  of  the  primary  government,  except  for fiduciary  funds.    The  statements  distinguish  between  those  activities  of  the  City  that  are governmental and those that are considered business‐type activities.  The statement of net position presents  the  financial condition of  the governmental and business‐type activities of the City at year‐end.   The statement of activities presents a comparison between direct  expenses  and  program  revenues  for  each  program  or  function  of  the  City’s  governmental activities  and  for  the  business‐type  activities  of  the  City.    Direct  expenses  are  those  that  are specifically associated with a service, program or department and therefore clearly identifiable to a particular function.  Program revenues include charges paid by the recipient of the goods or services 

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

offered by  the program,  cash and  contributions  that are  restricted  to meeting  the operational or capital  requirements of a particular program and  interest earned on grants  that  is  required  to be used to support a particular program.   Revenues which are not classified as program revenues are presented as general revenues of the City, with certain limited exceptions.  The comparison of direct expenses  with  program  revenues  identifies  the  extent  to  which  each  business  segment  or governmental function is self‐financing or draws from the general revenues of the City.  Fund Financial Statements    During  the  year,  the City  segregates  transactions  related  to  certain City  functions or  activities  in separate  funds  in order  to aid  financial management and  to demonstrate  legal compliance.   Fund financial statements are designed to present financial  information of the City at this more detailed level.  The focus of governmental and enterprise fund financial statements is on major funds.  Each major fund is presented in a separate column.  Non‐major funds are aggregated and presented in a single column.  Fiduciary funds are reported by type. 

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

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

 General Fund ‐ The general fund accounts for all financial resources except those required to be accounted for in another fund.  The general fund balance is available to the City for any purpose provided  it  is expended or  transferred according  to  the charter of  the City and/or  the general laws of Ohio.  Fire and Emergency Medical Service Safety Special Revenue Fund – This  special  revenue  fund accounts for expenditures of property tax revenues and other resources in the operation of the City’s Fire Department.  

The other governmental funds of the City account for grants and other resources that are generally restricted to use for a particular purpose.  

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Proprietary Funds  Proprietary  fund  reporting  focuses  on  changes  in  net  position,  financial  position  and  cash  flows.  Proprietary funds are classified as either enterprise or  internal service.   The City does not have an internal service fund.  

Enterprise Funds  ‐ Enterprise  funds may be used  to account  for any activity  for which a  fee  is charged  to external users  for goods or services.   The  following are  the City’s major enterprise funds: 

 Sewer Fund  ‐ The  sewer  fund accounts  for  the provision of  sanitary  sewer  service  to  the residents and commercial users located within the City.  Waste  Collection  Fund  –  This  fund  accounts  for  the  waste  collection  provided  to  the residents of the City.   Stormwater Utility Fund – This fund accounts for provision of stormwater systems within the City.  Community Center Fund – This fund accounts for the community center services provided to the residents of the City and the expansion of the Center.   Golf Course Fund – This fund accounts for the golf course provided to residents within and outside of the City. 

 Fiduciary Funds    Fiduciary  fund  reporting  focuses on net position and  changes  in net position.   The  fiduciary  fund category  is split  into four classifications: agency funds, pension trust funds,  investment trust funds and private‐purpose trust funds.   The City has three Agency funds.   The City has a Municipal Court Agency Fund  (to account  for amounts held on behalf of other governments and bonds deposited with the court pending final disposition of various causes), a Mason Port Authority Agency Fund (to enhance  future  development  opportunities  in  the  City,  to  support  the  economic  development strategies of the City and  to promote participation  in activities that will have a positive  impact on the general economic wealth of Mason), and a Community Improvement Corporation Agency Fund (to  account  for  custodial  transactions  related  to  community  improvement).  Agency  funds  are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Trust  funds  are  used  to  account  for  assets  held  under  a  trust  agreement  for  individuals,  private organizations,  or  other  governments  and  are  therefore  not  available  to  support  the  City’s  own programs.  The City currently has no trust funds.   

       

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

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

 Revenues ‐ Exchange and Non‐exchange Transactions    Revenue  resulting  from exchange  transactions,  in which each party gives and  receives essentially equal value, is recorded on the accrual basis when the exchange takes place.  On a modified accrual basis,  revenue  is  recorded  in  the  fiscal  year  in which  the  resources  are measurable  and become available.  Available means that the resources will be collected within the current fiscal year or are expected  to be collected  soon enough  thereafter  to be used  to pay  liabilities of  the current  fiscal year.  For the City, available means expected to be received within sixty days of year‐end.  Nonexchange  transactions,  in which  the City  receives value without directly giving equal value  in return,  include  income  taxes, property  taxes,  grants, entitlements  and donations.   On  an  accrual basis,  revenue  from  income  taxes  is  recognized  in  the  period  in  which  the  income  is  earned.  Revenue from property taxes is recognized in the year for which the taxes are levied.  Revenue from grants,  entitlements  and  donations  is  recognized  in  the  year  in which  all  eligibility  requirements have been  satisfied.   Eligibility  requirements  include  timing  requirements, which  specify  the  year when  the  resources  are  required  to  be  used  or  the  year when  use  is  first  permitted; matching requirements, in which the City must provide local resources to be used for a specified purpose; and expenditure  requirements,  in which  the  resources  are  provided  to  the  City  on  a  reimbursement basis.   On a modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized.  Under  the  modified  accrual  basis,  the  following  revenue  sources  are  considered  to  be  both measurable  and  available  at  year‐end:   income  tax,  state‐levied  locally  shared  taxes  (including gasoline tax), fines and forfeitures, interest, grants and fees.   Deferred Outflows/Inflows of Resources  Deferred Outflows/Inflows of Resources – In addition to assets, the statements of financial position will sometimes report a separate section for deferred outflows of resources.   Deferred outflows of resources, represents a consumption of net position that applies to a future period and will not be recognized  as  an  outflow  of  resources  (expense/expenditure)  until  then.    For  the  City,  deferred outflows of resources  include a deferral on refunding reported  in the government‐wide statement of net position.  A deferral on refunding results from the difference in the carrying value of refunded debt and its reacquisition price.  This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.  In addition to  liabilities, the statements of financial position report a separate section for deferred inflows of  resources.   Deferred  inflows of  resources  represent an acquisition of net position  that 

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

applies to a future period and will not be recognized as an  inflow of resources (revenue) until that time.   For the City, deferred  inflows of resources  include  income taxes, property taxes, grants and other  taxes,  special  assessments,  accounts  and  investment  revenue.    Property  taxes  represent amounts  for which  there  is an enforceable  legal  claim as of December 31, 2014, but which were levied  to  finance year 2015 operations.   Revenue  in  lieu of  taxes are deferred and  recognized as inflows  of  resources  in  the  period  the  amounts  become  available.    These  amounts  have  been recorded  as  deferred  inflows  on  both  the  government‐wide  statement  of  net  position  and  the governmental fund financial statements.  Expenses/Expenditures  On the accrual basis of accounting, expenses are recognized at the time they are incurred.   The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures)  rather  than  expenses.    Expenditures  are  generally  recognized  in  the  accounting period  in which  the  related  fund  liability  is  incurred,  if measurable.  Allocations  of  cost,  such  as depreciation and amortization, are not recognized in governmental funds. 

 Equity in Pooled Cash and Investments  To improve cash management the City’s cash and investments are pooled.  Monies for all funds, except cash and investments held in segregated accounts, are maintained in this pool.  Individual fund integrity is maintained through City records.   Each  fund’s  interest  in the pool  is presented as “Equity  in Pooled Cash and Investments” on the balance sheet.  Investments are reported at  fair value which  is based on quoted market prices, with  the exception of nonparticipating  repurchase  agreements, which  are  reported  at  cost.    For  investments  in  open‐end mutual funds, fair value is determined by the fund’s share price.    For  purposes  of  the  statement  of  cash  flows  and  for  presentation  on  the  statement  of  net position/balance sheet,  investments with an original maturity of three months or  less and  investments of the cash management pool are considered to be cash equivalents.  Following the Ohio Revised Code and City Ordinance, the City has specified certain funds to receive an allocation  of  interest  earnings.    Interest  revenues  during  2014  amounted  to  $307,704  (on  the  fund financial statements).  The general fund interest revenue was $224,305.  Inventory  On government‐wide financial statements, inventories are presented at the lower of cost or market on a first‐in, first‐out basis and are expensed when used.   On fund financial statements, inventories of governmental funds are stated at cost while inventories of proprietary  funds  are  stated  at  the  lower  of  cost  or market.   For  all  funds,  cost  is  determined  on  a first‐in,  first‐out  basis. Inventory  in  governmental  funds  consists  of  expendable  supplies  held  for consumption.  The cost of inventory items is recorded as an expenditure in the governmental fund types when purchased. Inventories of the proprietary funds are expensed when used.  

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Prepaid Items  

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

Capital Assets  

General capital assets are those assets not specifically related  to activities reported  in  the proprietary funds.   These assets generally  result  from expenditures  in  the governmental  funds.   These assets are reported  in the governmental activities column of the government‐wide statement of net position but are not reported  in  the  fund  financial statements.   Capital assets utilized by  the proprietary  funds are reported both in the business‐type activities column of the government‐wide statement of net position and in the respective proprietary funds.  All  capital  assets  are  capitalized  at  cost  (or  estimated  historical  cost)  and  updated  for  additions  and retirements during the year.  Donated capital assets are recorded at their  fair market values as of the date  received.   The City’s  infrastructure  consists of bridges,  culverts,  curbs,  sidewalks,  storm  sewers, streets, and water and sewer lines.  Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s  life are not.    Interest incurred during the construction of proprietary fund capital assets are also capitalized. The City uses a $5,000 capitalization threshold.     All  reported  capital  assets  are  depreciated  except  for  land  and  construction  in  progress.    The  Land classification includes the City’s right‐of‐way easements (intangible assets, per GASB 51). Improvements are  depreciated  over  the  remaining  useful  lives  of  the  related  capital  assets.    Useful  lives  for infrastructure were  estimated  based  on  the  City’s  historical  records  of  necessary  improvements  and replacement.  Depreciation is computed using the straight‐line method over the following useful lives: 

   Description  Estimated Lives   Buildings and Improvements  15‐50 years   Equipment  5‐20 years   Infrastructure  25‐60 years   

 Compensated Absences  

The City reports compensated absences in accordance with the provisions of GASB No. 16, "Accounting for Compensated Absences.”  Vacation benefits are accrued as a liability as the benefits are earned if the employees'  rights  to  receive  compensation  are  attributable  to  services  already  rendered  and  it  is probable  that  the employer will compensate  the employees  for  the benefits  through paid  time off or some other means.    Sick leave benefits are accrued as a liability using the vesting method.  The entire compensated absence liability  is  reported  on  the  government‐wide  financial  statements.    For  governmental  fund  financial statements,  a  liability  is  recorded  only  for  the  portion  of  unpaid  compensated  absences  that  have matured,  for example, as a result of employee resignations and retirements.  In proprietary  funds,  the entire amount of compensated absences is reported as a fund liability. 

35

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Accrued Liabilities and Long‐Term Obligations  All payables, accrued liabilities and long‐term obligations are reported in the government‐wide financial statements,  and  all  payables,  accrued  liabilities  and  long‐term  obligations  payable  from  proprietary funds are reported on the proprietary fund financial statements.  In general, governmental fund payables and accrued  liabilities that, once  incurred, are paid  in a timely manner and in full from current financial resources, are reported as obligations of the funds.  However, claims  and  judgments,  and  compensated  absences  that  will  be  paid  from  governmental  funds  are reported as a liability in the fund financial statements only to the extent that they are due for payment during the current year.   Bonds, capital  leases and  long‐term  loans are recognized as a  liability on the fund financial statements when due.  Fund Balance  In  accordance  with  Governmental  Accounting  Standards  Board  Statement  No.  54,  Fund  Balance Reporting  and Governmental  Fund  Type Definitions,  the  City  classifies  its  fund  balance  based  on  the purpose for which the resources were received and the level of constraint placed on the resources.  The following categories are used:  

Nonspendable  –  resources  that  are  not  in  spendable  form  (inventory)  or  have  legal  or contractual requirements to maintain the balance intact.  Restricted  –  spendable  resources  that  have  external  purpose  restraints  imposed  on  them  by providers, such as creditors, grantors, or other regulators.  Committed – spendable resources that are constrained for specific purposes that are internally imposed by the government at its highest level of decision making authority, City Council. This is done by ordinance by City Council.  Assigned – resources that are intended to be used for specific purposes as approved through the City’s formal purchasing procedure by the City Manager and Finance Director. 

 Unassigned – residual fund balance within the General Fund that is not restricted, committed, or assigned.   In other governmental  funds,  the unassigned  classification  is used only  to  report a deficit balance resulting from incurred expenses for specific purposes exceeding amounts which had been restricted, committed or assigned for said purposes. 

 The City considers committed, assigned, and unassigned fund balances, respectively, to be spent when expenditures are  incurred  for purposes  for which any of  the unrestricted  fund balance  classifications could be used.  Restricted Assets  Restricted assets consist of resources whose use is restricted by bond covenant agreements.   

36

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Net Position   Net position represent the difference between assets and deferred outflow of resources, and  liabilities and deferred  inflow of resources.   Net assets  invested  in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used  for  the  acquisition,  construction  or  improvement  of  those  assets.   Net  position  is  reported  as restricted  when  there  are  limitations  imposed  on  their  use  either  through  the  enabling  legislation adopted  by  the  City  or  through  external  restrictions  imposed  by  creditors,  grantors  or  laws  or regulations of other governments.    The City applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available.  The City’s Governmental Activities and Community Center fund have restricted net position relative to those  resources  necessary  to  comply with  various  covenants  of  bond  financing  agreements.   Of  the City’s $16,720,414 in restricted net position, none were restricted by enabling legislation.    Operating Revenues and Expenses  The  City,  in  its  proprietary  funds,  distinguishes  operating  revenues  and  expenses  from  nonoperating items.   Operating revenues and expenses generally result from providing services and delivering goods in connection with a proprietary fund’s principal ongoing operations.  The principal operating revenues of the City’s enterprise fund are charges to customers for sales and services.  Operating expenses for the enterprise  fund  includes  the  cost of  sales and  services, administrative expenses, and depreciation on capital  assets.   All  revenues  and  expenses  not meeting  this  definition  are  reported  as  nonoperating revenues and expenses.  Contributions of Capital  Contributions  of  capital  in  proprietary  fund  financial  statements  arise  from  outside  contributions  of capital assets, tap‐in fees to the extent they exceed the cost of the connection to the system, or from grants or outside contributions of resources restricted to capital acquisition and construction.  Interfund Activity  Transfers between governmental and business‐type activities on the government‐wide statements are reported in the same manner as general revenues.  Exchange  transactions  between  funds  are  reported  as  revenues  in  the  seller  funds  and  as expenditures/expenses  in  the  purchaser  funds.    Flows  of  cash  or  goods  from  one  fund  to  another without  a  requirement  for  repayment  are  reported  as  interfund  transfers.    Interfund  transfers  are reported  as  other  financing  sources/uses  in  governmental  funds  and  after  nonoperating revenues/expenses  in  proprietary  funds.    Repayments  from  funds  responsible  for  particular expenditures/expenses  to  the  funds  that  initially  paid  for  them  are  not  presented  on  the  financial statements.     

37

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

As a general rule, the effect of  interfund (internal) activity has been eliminated from the government‐wide statement of activities.  The interfund services provided and used are not eliminated through the process of consolidation.    Gain/Loss on Refunding  On the fund level and government‐wide financial statements, the difference between the reacquisition price (funds required to refund the old debt) and the net carrying amount of the old debt (the gain/loss on refunding)  is being amortized as a component of  interest expense. This deferred amount (deferred charge on refunding) is amortized over the life of the old debt or the life of the new debt, whichever is shorter, using the effective interest method.  Estimates  The preparation of the financial statements in conformity with generally accepted accounting principles requires management  to make  estimates  and  assumptions  that  affect  the  amounts  reported  in  the financial statements and accompanying notes.  Actual results may differ from those estimates.  Note 3 – Equity in Pooled Cash and Investments                Cash resources of several individual funds are combined to form a pool of cash and investments.  Each fund type’s portion of this pool  is displayed on the financial statements as “Equity  in Pooled Cash and Investments.”  State statute requires the classification of monies held by the City into three categories:    Active  Monies  ‐  Those  monies  required  to  be  kept  in  a  "cash"  or  "near  cash"  status  for 

immediate use by the City.   Such monies must by  law be maintained either as cash  in the City treasury, in depository accounts payable or withdrawable on demand. 

   Inactive Monies  –  Those monies  not  required  for  use within  the  current  two  year  period  of 

designated  depositories.    Ohio  law  permits  inactive monies  to  be  deposited  or  invested  as certificates of deposit maturing not  later  than  the  end of  the  current period of designated depositories,  or  as  savings  or  deposit  accounts,  including,  but  not  limited  to  passbook accounts. 

   Interim Monies  –  Those monies which  are  not  needed  for  immediate  use  but which will  be 

needed  before  the  end  of  the  current  period  of  designation  of  depositories.    The  City’s investment policy as approved by Council Ordinance permits  interim monies to be  invested or deposited in the following securities in Chapter 135 of the Ohio Revised Code: 

 (1)  Bonds,  notes,  or  other  obligations  of  or  guaranteed  by  the United  States,  or 

those  for which  the  faith of  the United  States  is pledged  for  the payment of principal and interest. 

   (2)  Bonds,  notes,  debentures,  or  other  obligations  or  securities  issued  by  any                                 federal governmental agency. 

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

(3)  No‐load  money  market  mutual  funds  consisting  exclusively  of  obligations 

described  in  (1)  or  (2)  above  and  repurchase  agreements  secured  by  such obligations, provided that investments in securities described in this division are made only through eligible institutions. 

 (4)  Interim  deposits  in  the  eligible  institutions  applying  for  interim monies  to  be 

evidenced by time certificates of deposit maturing not more than one year from date  of  deposit,  or  by  savings  or  deposit  accounts,  including,  but  limited  to, passbook accounts.                   

     (5)  Bonds and other obligations of the State of Ohio. 

     (6)  The Ohio State Treasurer's investment pool (STAR Ohio). 

   (7)  Commercial  paper  and  banker’s  acceptances  which  meet  the  requirements 

established by Ohio Revised Code, Chapter 135.  

(8)  Under  limited  circumstances,  corporate  debt  interests  in  either  of  the  two highest  rating  classifications  by  at  least  two  nationally  recognized  rating agencies. 

 Protection of  the City's deposits  is provided by  the Federal Deposit  Insurance Corporation, by eligible  securities  pledged  by  the  financial  institution  as  security  for  repayment,  by  surety company bonds deposited with the treasurer by the financial institution or by a single collateral pool  established  by  the  financial  institution  to  secure  the  repayment  of  all  public  moneys deposited with the institution.  Investments  in  stripped  principal  or  interest  obligations,  reverse  repurchase  agreements  and derivatives are prohibited.  The issuance of taxable notes for the purpose of arbitrage, the use of leverage  and  short  selling  are  also prohibited.   An  investment must mature within  five  years from the date of purchase unless matched to a specific obligation or debt of the City, and must be purchased with  the expectation  that  it will be held  to maturity.    Investments may only be made  through specified dealers and  institutions.   Payment  for  investments may be made only upon delivery of the securities representing the investments to the treasurer or, if the securities are  not  represented  by  a  certificate,  upon  receipt  of  confirmation  of  transfer  from  the custodian. 

 Deposits  Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City’s policy for deposits is any balance not covered by depository insurance will be  collateralized by  the  financial  institutions with pledged  securities. As of December 31, 2014,  $12,436,124  of  the  City’s  bank  balance  of  $12,686,124 was  exposed  to  custodial  risk because  it  was  uninsured  and  collateralized  with  securities  held  by  the  pledging  financial institution’s trust department or agent, but not in the City’s name.   

39

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Ohio  Revised  Code  Chapter  135,  Uniform  Depository  Act,  authorizes  pledging  of  pooled securities in lieu of specific securities.  Specifically, a designated public depository may pledge a single  pool  of  eligible  securities  to  secure  repayment  of  all  public monies  deposited  in  the financial institution, provided that all times the total value of the securities so pledged is at least equal  to  105%  of  the  total  amount  of  all  public  deposits  secured  by  the  pool,  including  the portion of such deposits covered by any federal deposit insurance. 

 Investments  As of December 31, 2014, the City had the following investments:  

Weighted Average

Fair Value Maturity (Years)

US Treasury Bills $22,323,126 1.91

Federal National Mortgage Association 12,872,621 1.65

Federal Home Loan Mortgage 12,111,491 1.79

Federal Home Loan Bank 9,679,026 1.53

Municipal Bonds 5,050,218 2.55

Federal Farm Credit Bank 3,317,416 1.64

Money Market Funds 1,387,299 0.00

$66,741,197

Portfolio Weighted Average Maturity 1.78    Interest Rate Risk ‐ In accordance with the  investment policy, the City manages  its exposure to declines  in  fair values by  limiting  the weighted average maturity of  its  investment portfolio  to two years, unless matched to a specified obligation or debt of the City.  Credit Risk –  It  is  the City’s policy  to  limit  its  investments  that are not obligations of  the U.S. Government or obligations explicitly guaranteed by the U.S. Government to investments which have  the  highest  credit  quality  rating  issued  by  nationally  recognized  statistical  rating organizations.  The City’s investments in Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, and Federal Farm Credit Bank were rated AA+ by Standard and Poor’s and Fitch ratings and Aaa by Moody’s Investors Service. Municipal Bonds were rated Aaa, Aa1, Aa2, Aa3, and A2 by Moody’s  Investors service and AAA, AA+, AA‐ and A+ by Standard and Poor’s and Fitch  ratings. US Treasury Bills and Money Market Funds were not rated.  Concentration  of  Credit  Risk  –  The  City’s  investment  policy  allows  investments  in  Federal Government Securities or Instrumentalities. The City has invested 33% of the City’s investments in US Treasury Bills, 19%  in Federal National Mortgage Association, 18%  in Federal Home Loan Mortgage, 15%  in Federal Home Loan Bank, 8%  in Municipal Bonds, 5%  in Federal Farm Credit Bank and 2% in Money Market Funds.    

40

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Custodial credit risk  is the risk that  in the event of the failure of the counterparty, the City will not  be  able  to  recover  the  value  of  its  investments  or  collateral  securities  that  are  in  the possession of an outside party. All of the City’s securities are insured and registered in the name of the City, or at least registered in the name of the City. 

 Note 4 – Receivables                        Receivables  at  year  end,  consisted  primarily  of municipal  income  taxes,  property  and  other  taxes, intergovernmental receivables arising from entitlements, shared revenues, special assessments, accrued interest on investments, interfund and accounts receivable.  No allowances for doubtful accounts have been recorded because uncollectible amounts are expected to be insignificant.  Special assessments expected to be collected in more than one year amounts to $4,534 in the General Fund.  Property Taxes  Property  taxes  include amounts  levied against all  real estate and public utility property, and  tangible personal property used in business and located in the City. Real property taxes (other than public utility) collected during 2014 were  levied after October 1, 2013 on assessed values as of January 1, 2013, the lien date. Assessed values were established by the County Auditor at 35% of appraised market value. All property  is required  to be revalued every six years. Real property  taxes are payable annually or semi‐annually.  If paid  annually, payment  is due  January  31;  if paid  semiannually,  the  first payment  is due February and  the  remainder payable  in  July. Under  certain  circumstances,  state  statute permits  later payment dates to be established.  Public utility real property taxes collected in one calendar year are levied in the preceding calendar year on assessed values determined as of December 31 of the second year preceding the tax collection year, the  lien date. Certain public utility tangible personal property  is currently assessed at 100% of  its true value. Public utility property taxes are payable on the same dates as real property described previously.  The  assessed  values  of  real  and  tangible  personal  property  upon  which  current  year  property  tax receipts were based are as follows:  

Real Property $980,478,870

Public Utility 19,495,730

Total Valuation $999,974,600

 Real  property  taxes  are  payable  annually  or  semi‐annually.  If  paid  annually,  the  payment  is  due December 31; if paid semi‐annually, the first payment is due December 31 with the remainder payable by June 20. Under certain circumstances, State statute permits later payment dates to be established.  The City receives property taxes from Warren County. The County Treasurer collects property taxes on behalf of all taxing districts in the counties, including the City. The County Auditor periodically remits to the City  its portion of the taxes collected. Property taxes receivable represents real, public utility taxes 

41

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

and outstanding delinquencies which are measurable as of December 31, 2014, and for which there  is an enforceable legal claim. In the funds, the entire receivable has been offset by deferred inflows since the  current  taxes were not  levied  to  finance  2014 operations  and  the  collection of delinquent  taxes during  the  available  period  is  not  subject  to  reasonable  estimation. On  an  accrual  basis,  collectible delinquent  property  taxes  have  been  recorded  as  revenue while  the  remainder  of  the  receivable  is deferred.  Income Taxes  In November 2006, Mason voters approved an amendment to the City’s charter that changed the City’s Tax Ordinance.    In prior years, residents employed  in another city  that has an earnings  tax received a maximum credit of up to fifty percent (50%) of the tax due on the portion of their earnings taxes by the City where employed.  The change gradually increased the credit for taxes paid to other cities for 2007 through 2010. In tax year 2011 and beyond, the maximum tax credit is 100%.  In November 2012, Mason voters approved an amendment to the City’s charter to provide funding of safety services,  including  fire and emergency services,  through a combination of  income and property taxes. The amendment allows for an  increase of the  income tax of up to 0.15%, with an  initial rate for 2013  of  0.12%,  and  up  to  5 mills  of  property  tax.  The  amendment  also  allows  for  a  credit  of  the additional income tax for residents who pay property tax.   Employers within the City withhold income tax on employee compensation and remit at least quarterly.  Corporations  and  other  individual  taxpayers  pay  estimated  taxes  quarterly  based  on  an  annual declaration and file an annual tax return.  Economic Development Agreements  Economic development efforts  include occasional  incentive agreements and  forgivable  loans  that are based  upon  the  expansion/retention  of  existing  businesses  and  attracting  new/relocating businesses.  These agreements include agreements to provide services that further the City’s economic development  efforts.   Repayment  of  these  agreements may  be  required  if  a  business  fails  to meet performance  requirements  or  relocated  to  another  location  outside  the  City.   Despite  the  possible receivable,  it  is  generally  believed  nothing  will  be  owed  or  repaid  and  nothing  is  recognized  as  a receivable.   Note 5 ‐ Risk Management                      The City  is one of twenty members of a joint  insurance pool, Miami Valley Risk Management Association, Inc. (MVRMA), with the cities of Englewood, Bellbrook and Centerville added  in 2004.   The pool has been operational since December 1, 1988, and was formed according to Section 2744.081 of the Ohio Revised Code.  This joint venture covers all property, crime, liability, boiler and machinery, and public official liability up to the limits stated below.  It is intended to provide broad‐based coverage up to the various limits with increased emphasis on safety and loss prevention.       

42

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

MVRMA  is a corporation governed by a twenty member board of trustees, consisting of a representative appointed by each of the member cities.  The board of trustees elects the officers of the corporation, with each  trustee  having  a  single  vote.      The  board  is  responsible  for  its  own  financial  matters  and  the corporation maintains  its  own  book  of  accounts.      Budget  and  financing  of MVRMA  is  subject  to  the approval of the board.    Excess insurance coverage will cover additional claims up to the limits listed below:  

Liability: 

  Personal Injury Liability 

  Property Damage Liability 

  Public Officials Errors and Omissions 

  Employment Practices Liability 

  Employee Benefits Liability 

Limits:    $10,000,000 per occurrence.    $10,000,000  annual  aggregate per member  for 

Employment  Practices  Liability;  Public  Officials  Errors  and  Omissions  and  Employee 

benefits Liability combined; and Products/Completed Operations. 

 

MVRMA  self‐insured  $500,000  per  occurrence  and  obtained  reinsurance  from 

Government Entities Mutual  Inc.  (GEM)  for $2.5 million excess of $500,000, and  from 

Genesis for $7 million excess of $3 million. 

 

Property: 

  $1,000,000,000/occurrence 

  MVRMA Self‐Insured Retention (SIR):  $250,000/occurrence 

 

Coverage  excess  of  SIR  provided  by  PEPIP  USA.    List  of  carriers  underwriting  the  coverage 

provided upon request. 

 

Flood – included in Property Policy 

  $25 million/occurrence and annual aggregate 

  Sublimit:  Flood zone A & V ‐ $5 million/occurrence and annual aggregate 

  MVRMA SIR:  $100,000/occurrence excluding Flood Zones A & V 

  MVRMA SIR:  $250,000/occurrence Flood Zones A &  V 

 

Earthquake – included in Property Policy 

  $25 million/occurrence and annual aggregate 

  MVRMA SIR:  $100,000/occurrence 

   

Boiler & Machinery – included in Property Policy 

  $100,000,000/occurrence 

  MVRMA SIR:  $10,000‐$350,000/occurrence 

 

 

 

43

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Cyber Liability – included in Property Policy 

  MVRMA SIR:  $100,000/occurrence 

  Coverage excess of SIR provided by Lloyd’s of London – Beazley Syndicate 

 

  Third Party Liability: 

  $2 million/occurrence and annual aggregate, but sublimited to: 

  $1,000,000/occurrence and annual aggregate for Privacy Notification Costs 

  First Party Computer Liability 

  $2 million/occurrence and annual aggregate subject to policy sublimits 

 

Pollution Liability – Claims made and Reported Policy 

  Retroactive Date:  Policy inception 

  Coverage excess SIR provided by ACE – Illinois Union Insurance Co. 

  $1 million/pollution condition and aggregate with a $200,000 sublimit for Fungi & Legionella 

 

  MVRMA SIR:  $75,000/pollution condition; 

  $750,000 underground storage tanks specific 

 

Member Deductible/occurrence ‐ $2,500 

 

The Financial Audit for 2014 has not been completed.  Figures from the audited 2013 financial Audit are 

as follows: 

 

  Current Assets      $3,106,793 

  Total Assets      $19,039,885 

  Current Liabilities    $7,806,613 

  Long‐Term Liabilities    $0 

  Net Position      $11,233,272 

 

There  has  been  no material  change  in  this  coverage  from  the  prior  year.    Settled  claims  have  not 

exceeded this commercial coverage in any of the past three years. 

 

The City has a group health insurance program for employees and their eligible dependents.  Premiums 

are paid  into  the General  Fund by  all  funds having  compensated employees based on  an  analysis of 

historical  claims  experience,  the  desired  fund  balances  and  the  number  of  active  participating 

employees.  The monies paid into the General Fund are available to pay claims and administrative costs.  

The  plan  is  administered  by  a  third  party  administrator,  Custom Design Benefits, which monitors  all 

claim payments.    The claims liability of $366,875 reported in the General Fund at year end is based on the requirements of GASB Statement No. 10, which requires that a  liability for claims be reported  if  information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.  Changes in the claims liability amounts were as follows:  

44

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Beginning of Current Claims End of

Fiscal Fiscal Year and Changes Claims Fiscal Year

Year Liability in Estimates Payments Liability

2014 $360,464 $3,496,055 ($3,489,644) $366,875

2013 368,500 2,977,325 (2,985,361) 360,464

   The City estimates all claims outstanding at the end of the year will be paid off within one year.  

Note 6 – Contingent Liabilities                      

Litigation  

The City management is of the opinion that the ultimate disposition of claims and legal proceedings will not have a material effect, if any, on the financial condition of the City.  

Federal and State Grants  

The City participates in several federally assisted programs. These programs are subject to financial and compliance audits by the grantor or their representative. As of December 31, 2014, the audits of certain of these programs have not been completed. Such audits could lead to a request for reimbursement to the grantor agency for expenditures disallowed under the terms of the grant. Based on prior experience, the City believes such disallowance, if any, would be immaterial.  Note 7 – Capital Assets                        Capital asset activity for the current year end was as follows: 

Beginning  Ending

Balance Additions Deletions Balance

Governmental Activities

Capital Assets, not being depreciated:

Land $66,107,412 $3,445,191 $640,000 $68,912,603

Construction in Progress 6,749,919 3,154,036 6,085,050 3,818,905

Total  Capital  Assets, not being depreciated 72,857,331 6,599,227 6,725,050 72,731,508

Capital Assets, being depreciated:

Buildings  and Improvements 45,147,539 179,668 0 45,327,207

Equipment 15,958,223 2,333,458 509,981 17,781,700

Infrastructure 82,675,174 4,997,940 0 87,673,114

Totals  at Historical  Cost 216,638,267 14,110,293 7,235,031 223,513,529

Less  Accumulated Depreciation:

Buildings  and Improvements 12,826,474 1,129,885 0 13,956,359

Equipment 12,303,682 855,379 470,169 12,688,892

Infrastructure 15,504,858 1,461,224 0 16,966,082

Total  Accumulated Depreciation $40,635,014 $3,446,488 $470,169 $43,611,333

Governmental  Activities  Capital  Assets, Net $176,003,253 $10,663,805 $6,764,862 $179,902,196

 

45

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Beginning  Ending

Balance Additions Deletions Balance

Business‐Type Activities

Capital Assets, not being depreciated:

Land $10,609,005 $85,545 $0 $10,694,550

Construction in Progress 615,784 1,841,120 2,292,241 164,663

Total  Capital  Assets, not being depreciated 11,224,789 1,926,665 2,292,241 10,859,213

Capital Assets, being depreciated:

Buildings  and Improvements 54,303,641 32,662 0 54,336,303

Equipment 8,594,404 234,184 264,887 8,563,701

Infrastructure 87,658,096 3,354,661 0 91,012,757

Totals  at Historical  Cost 161,780,930 5,548,172 2,557,128 164,771,974

Less  Accumulated Depreciation:

Buildings  and Improvements 9,903,338 1,553,619 0 11,456,957

Equipment 4,646,430 623,196 209,640 5,059,986

Infrastructure 19,845,785 1,516,383 0 21,362,168

Total  Accumulated Depreciation $34,395,553 $3,693,198 $209,640 $37,879,111

Business‐Type Activities  Capital  Assets, Net $127,385,377 $1,854,974 $2,347,488 $126,892,863

 

 Depreciation expense was charged to governmental functions as follows:  

Depreciation

Expense

General Government $577,243

Public Safety 411,593

Leisure Time Activities 415,577

Transportation and Street Repair 2,041,703

Community Development 372

Total Depreciation Expense $3,446,488

  Note 8 – Compensated Absences                    Accumulated Unpaid Vacation  City  employees  earn  vacation  leave  at  varying  rates based upon  length of  service,  subject  to  certain maximum accruals.  In the event of a termination of employment, death, or retirement, employees (or their estates) are paid for unused vacation leave.   Accumulated Unpaid Sick Leave  The City of Mason does not permit advancement of moneys on sick leave accrued.  

46

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Sick Leave Conversion at Retirement  a. Upon  retirement,  a  full‐time,  regular  employee  who  meets  the  age  and  length  of  service 

requirements of the Public Employees Retirement System or the Police and Fireman's Disability and Pension Fund, whichever  is applicable, and who was also  in the service of the City of Mason for a period of ten (10) continuous years prior to retirement from the service of the City of Mason may redeem his or her accumulated sick leave providing all other criteria are met in order to receive the benefits (i.e. age for retirement). 

 b. Redemption shall be at a rate of three (3) accumulated sick days exchanged for (1) day of pay for the 

first two hundred (200) sick days.  For the next twenty five sick days the redemption shall be two (2) accumulated  sick days exchanged  for one  (1) day of pay.   All  remaining sick days  the  redemption shall be one (1) accumulated sick days exchanged for (1) day of pay.   The maximum redemption  is limited to two hundred eighty‐seven and a half (287 1/2) sick days converted to one‐hundred and forty‐one and two‐thirds (141 2/3) days paid.   

 c. Redemption  for union  fire employees  shall be at  a  rate of  three  (3) accumulated  sick  leave days 

exchanged for one (1) day of pay with a maximum redemption limited to two‐hundred and ten (210) days converted to seventy (70) days paid. 

 d. Redemption  for  teamster  employees  shall  be  at  a  rate  of  three  (3)  accumulated  sick  leave  days 

exchanged for one (1) day of pay with a maximum redemption limited to one‐hundred and twenty (120) days converted to forty (40) days paid. 

 e. Payment will be based on the employee's base rate of pay at the time of retirement.  f. The conversion of sick leave to cash will be made as a lump sum payment and will eliminate all sick 

leave credit accrued by the employee.  Note 9 – Notes Payable                     A summary of the note transactions for the current year end are as follows:  

Beginning  Ending

Rate Balance Additions Deletions Balance

Governmental Activities

General Fund:

Real Estate Acquisition Note 1.25% $2,885,000 $0 ($2,885,000) $0

Tax Revenue Note 1.50% 3,170,000 0 (3,170,000) 0

Service Center Acquisition Note 1.25% 5,000,000 0 (5,000,000) 0

Real Estate Acquisition Note 1.00% 0 2,500,000 0 2,500,000

Service Center Acquisition Note 1.25% 0 6,000,000 0 6,000,000

Total Governmental Activities $11,055,000 $8,500,000 ($11,055,000) $8,500,000

All of  the notes  are bond  anticipation notes,  are backed by  the  full  faith  and  credit of  the City,  and mature within one year.  The note liability is reflected in the fund which received the proceeds.      The Real Estate Acquisition Note was  issued at an  interest  rate of 1.00%  to purchase  land  for  future development as agreed to in a litigation resolution for a zoning dispute. 

47

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

The  Service  Center  Acquisition  Note  was  issued  at  an  interest  rate  of  1.25%  to  finance  various improvements to the new Service Center.  Note 10 – Long‐Term Debt                      A  schedule  of  changes  in  bonds  and  other  long‐term  obligations  of  the  City  during  the  current  year follows: 

 Beginning  Ending Due  Within

Rate Balance Additions Deletions Balance One  Year

Governmental Activities

Genera l  Obl igation Bonds

2008 Various  Purpose 4.09% $13,800,000 $0 ($750,000) $13,050,000 $775,000

Mason Road Widening 3.73% 1,860,000 0 (95,000) 1,765,000 100,000

US 42 Road Improvements 3.80% 895,000 0 (40,000) 855,000 40,000

Refunding 1998 Road Improvement 3.52% 1,535,000 0 (290,000) 1,245,000 300,000

Premium on Bonds 191,569 0 (26,090) 165,479 0

Tota l  Genera l  Obl igation Bonds 18,281,569 0 (1,201,090) 17,080,479 1,215,000

Revenue  Bonds

2012 Enterprise  Parke  TIF Refunding 3.25% 415,000 0 (35,000) 380,000 40,000

Refunding Tylersvi l le  Cross ing TIF 4.50% 430,000 0 (190,000) 240,000 55,000

Everybody's  Farm TIF 5.75% 1,750,000 0 (25,000) 1,725,000 80,000

Tota l  Revenue  Bonds 2,595,000 0 (250,000) 2,345,000 175,000

Certi fi cate  of Participation Bonds

Refunding Certi fi cate  of Participation 15,660,000 0 (940,000) 14,720,000 980,000

Premium on Refunding Certi ficate  of Participation 590,783 0 (45,445) 545,338 0

Tota l  Refunding Certi fi cate  of Participation Bonds 16,269,533 0 (991,695) 15,277,838 986,250

Capita l  Leases 18,750 0 (6,250) 12,500 6,250

Tota l  Long‐Term Liabi l i ties  Bonds 37,146,102 0 (2,442,785) 34,703,317 2,376,250

Compensated Absences 1,502,604 670,242 (685,111) 1,487,735 753,339

Tota l  Governmental  Activi ties $38,648,706 $670,242 ($3,127,896) $36,191,052 $3,129,589

Beginning  Ending Due Within

Rate Balance Additions Deletions Balance One Year

Business‐Type Activities

General Obligation Bonds

Sewer Refunding $20,780,000 $0 ($1,100,000) $19,680,000 $1,135,000

Stormwater Improvement 3.65% 1,325,000 0 (100,000) 1,225,000 100,000

Golf Course Acquisition 3.69% 6,675,000 0 (315,000) 6,360,000 320,000

Premium on Bonds 3,084,166 0 (215,802) 2,868,364 0

Total General Obligation Bonds 31,864,166 0 (1,730,802) 30,133,364 1,555,000

Special Assessment Bonds

Diley Utility 6.00% 7,000 0 (7,000) 0 0

Lease

Capital Lease 10,155,000 0 (315,000) 9,840,000 325,000

Discount on Capital Lease (121,521) 5,787 0 (115,734) 0

Total Capital Lease 10,033,479 5,787 (315,000) 9,724,266 325,000

Compensated Absences ‐ Enterprise 234,468 130,534 (121,667) 243,335 122,204

Total Business‐Type Activities $42,139,113 $136,321 ($2,174,469) $40,100,965 $2,002,204

48

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Compensated Absences will be paid from the fund from which the person is paid.  Historically, this is the General  Fund  or  a  Special  Revenue  Fund.    General  obligation  bonds will  be  paid  from  the  General Obligation Bond Retirement Fund, Central Parke TIF Fund, Mason Enterprise Parke TIF Fund, Tylersville Road TIF Fund, Stormwater Utility Fund, Sewer Fund and the Golf Course Fund.  The Special Assessment Bonds are backed by the full faith and credit of the City and are repaid from the resources of the Special Assessment Bond Retirement Fund.  The City levies an assessment against the effected property owners.    Principal and interest requirements to retire the City’s long‐term obligations outstanding at year end are as follows:  

Year Principal Interest Principal Interest

2015 $2,770,000 $1,742,539 $175,000 $132,738

2016 2,885,000 1,642,013 190,000 124,263

2017 2,930,000 1,569,839 220,000 114,987

2018 3,730,000 1,456,315 230,000 104,100

2019 3,495,000 1,325,726 180,000 83,250

2020‐2024 16,980,000 4,701,541 830,000 268,401

2025‐2029 11,320,000 1,291,024 350,000 112,126

2030‐2031 70,000 2,800 170,000 14,948

$44,180,000 $13,731,797 $2,345,000 $954,813

BondsObligation Bonds

General   Revenue

  Note 11 – Leases                       

 

The City currently has capital leases for the municipal building, the community center addition, and an x‐ray machine.   The  City’s  lease  obligations meet  the  criteria  of  a  capital  lease  as  defined  by  Statement  of  Financial Accounting Standards No. 13 “Accounting for Leases”, and have been recorded on the government‐wide statements.  The leased assets have been capitalized for the amount of the present value of the minimum lease payments at the inception of the lease.    The following  is a schedule of the future  long‐term minimum  lease payments required under the capital lease, and the present value of the minimum lease payments is as follows:  

49

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Governmental  Business‐Type

Year Activities Activities

2015 $1,605,675 $770,978

2016 1,606,475 770,740

2017 1,594,625 769,350

2018 1,597,825 772,276

2019 1,599,225 769,226

2020‐2024 6,868,825 3,848,712

2025‐2029 3,371,825 3,854,172

2030‐2034 0 3,852,560

Total  minimum lease payments 18,244,475 15,408,014

Less: Amount representing interest (3,511,975) (5,568,014)

Present value of minimum lease payments $14,732,500 $9,840,000

  Capital  lease payments are made  from  the Government Center Reserve Fund,  the Community Center and the Municipal Court Improvement Funds.  The costs of capital assets acquired under capital leases in accordance with Statement of Financial Accounting Standards Board No. 13 are as follows: 

 

  Buildings and Improvements  $35,760,000    

Note 12 – Pension Plans                      Ohio Public Employees Retirement System  Ohio  Public  Employees  Retirement  System  (OPERS)  administers  three  separate  pension  plans,  a Traditional Pension Plan (TP), a Member‐Directed Plan (MD) and a Combined Plan (CO).  The TP Plan is a cost‐sharing multiple‐employer defined benefit pension plan.   The MD Plan  is  a defined  contribution plan  in which member  invests both member and employer contributions  (employer contributions vest over five years at 20% per year).  Under the MD Plan, members accumulate retirement assets equal to the value of member and (vested) employer contributions plus any investment earnings.  The CO Plan is a  cost  sharing, multiple‐employer  defined  benefit  pension  plan.   Under  the  CO  Plan, OPERS  invests employer contributions to provide a formula retirement benefit similar in nature to the TP Plan benefit.  Member contributions, the investment of which is self‐directed by the members, accumulate retirement assets in a manner similar to the MD Plan.  OPERS provides retirement, disability, survivor and death benefits and annual cost of living adjustments to members of the TP and CO Plans.  Members of the MD Plan do not qualify for the ancillary benefits.  Authority to establish and amend benefits is provided in Chapter 145 of the Ohio Revised Code.  OPERS issues a stand‐alone financial report.  Interested parties may obtain a copy by writing to the OPERS, 277 East  Town  Street,  Columbus,  Ohio  43215‐4642  or  by  calling  614‐222‐5601  or  800‐222‐7377,  or  by visiting the OPERS website at www.opers.org.  The  Ohio  Revised  Code  provides  statutory  authority  for member  and  employer  contributions.  Plan members and employer contributions rates were consistent across all three plans.   Plan members are required  to contribute 10% of  their annual covered salary  to  fund pension obligations.   The employer 

50

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

pension contribution rate for the City is 14% of covered payroll. The contribution rates are determined actuarially.   The City’s required contributions  to OPERS  for  the years ended December 31, 2014, 2013 and  2012  were  $1,022,802,  $1,082,325  and  $814,222,  respectively.    The  full  amount  has  been contributed for 2013 and 2012, and 90 percent has actually been contributed for 2014. The City’s unpaid contractually  required  OPERS  contributions  (including  post‐employment  benefits)  at  year  end  (the liability) were recorded  in the accrued wages and benefits  line  item of the government‐wide and fund financial statements along with various corresponding expenses/expenditures.  Ohio Police and Fire Pension Fund  The City contributes to the Ohio Police and Fire Pension Fund (OP&F), a cost‐sharing multiple employer defined benefit pension plan.  OP&F provides retirement and disability pension benefits, annual cost‐of‐living  adjustments,  and  death  benefits  to  plan  members  and  beneficiaries.    Benefit  provisions  are established by  the Ohio  State  Legislature and are  codified  in Chapter 742 of  the Ohio Revised Code.  OP&F  issues  a  publicly  available  financial  report  that  includes  financial  information  and  required supplementary  information.   That  report may be obtained by writing  to OP&F, 140 East Town Street, Columbus, Ohio  43215‐5164, or by visiting the OP&F website at www.op‐f.org.  From  January 1, 2014  through  July 1, 2014, plan members are  required  to contribute 10.75% of  their annual covered  salary. From  July 2, 2014  through December 31, 2014, plan members are  required  to contribute 11.5% of their annual covered salary, while employers  (the City) are required to contribute 19.5%  for  police  officers  and  24.0%  for  firefighters.    The  City’s  contributions  to OP&F  for  the  years ending December 31, 2014, 2013 and 2012 were $1,294,373, $971,426, $868,894, respectively. 90% has actually been contributed  for 2014 and  the  full amount has been contributed  for 2013 and 2012. The City’s unpaid contractually  required OP&F contributions  (including post‐employment benefits) at year end  (the  liability) were recorded  in the accrued wages and benefits  line  item of the government‐wide and fund financial statements along with various corresponding expenses/expenditures.  Note 13 – Post Employment Benefits                    Ohio Public Employees Retirement System  Plan Description  Ohio  Public  Employees  Retirement  System  (OPERS)  administers  three  separate  pension  plans:    The Traditional Pension Plan – a cost sharing, multiple‐employer defined benefit pension plan; the Member‐Directed Plan – a defined contribution plan; and the Combined Plan – a cost sharing, multiple‐employer defined benefit pension plan that has elements of both a defined benefit and defined contribution plan.   OPERS maintains a  cost‐sharing multiple employer defined benefit post‐employment healthcare plan, which  includes  a  medical  plan,  prescription  drug  program  and  Medicare  Part  B  premium reimbursement,  to  qualifying  members  of  both  the  Traditional  Pension  and  the  Combined  Plans.  Members of the Member‐Directed Plan do not qualify for ancillary benefits, including post‐employment health care coverage.   In  order  to  qualify  for  post‐employment  health  care  coverage,  age‐and‐service  retirees  under  the Traditional Pension and Combined Plans must have 10 or more years of qualifying Ohio service credit.  

51

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Health care coverage for disability benefit recipients and qualified survivor benefit recipients is available.  The health care coverage provided by OPERS meets the definition of an Other Post Employment Benefit (OPEB) as described in GASB Statement 45. OPERS’ eligibility requirements for post‐employment health care coverage changed for those retiring on and after January 1, 2015. Please see the Plan Statement in the OPERS 2013 CAFR for details.     The Ohio Revised Code permits, but does not mandate, OPERS to provide OPEB benefits to  its eligible members and beneficiaries.  Authority to establish and amend benefits is provided in Chapter 145 of the Ohio Revised Code.   OPERS issues a stand‐alone financial report.  Interested parties may obtain a copy by writing OPERS, 277 East Town Street, Columbus, OH 43215‐4642, or by calling 614‐222‐5601 or 800‐222‐7377, or by visiting the OPERS website at www.opers.org.  Funding Policy  The  Ohio  Revised  Code  provides  the  statutory  authority  requiring  public  employers  to  fund  post‐retirement health care through their contributions to OPERS.  A portion of each employer’s contribution to OPERS is set aside for the funding of post‐retirement health care benefits.   Employer contribution rates are expressed as a percentage of the covered payroll of active members.  In 2014,  the  City  contributed  at  14%  of  covered  payroll.    The  Ohio  Revised  Code  currently  limits  the employer contribution  to a rate not  to exceed 14% of covered payroll.   Active members do not make contributions to the OPEB Plan.   OPERS’ Post‐employment Health Care Plan was established under, and  is administered  in accordance with,  Internal Revenue Code  section 401(h). Each  year,  the OPERS Board of Trustees determines  the portion of the employer contribution rate that will be set aside for funding of post‐employment health care.  The  portion  of  employer  contributions  allocated  to  health  care  for members  in  the  Traditional Pension Plan and Combined Plan was 2.0% during  calendar year 2014. Effective  January 1, 2015,  the portion  of  employer  contributions  allocated  to  health  care  remains  at  2.0%  for  both  plans,  as recommended by OPERS’ actuary. The OPERS Board of Trustees is also authorized to establish rules for the  retiree  or  their  surviving  beneficiaries  to  pay  a  portion  of  the  health  care  provided.  Payment amounts vary depending on the number of covered dependents and the coverage selected.  Information from City’s Records  The rates stated  in Funding Policy, above, are the contractually required contribution rates for OPERS.  The City's actual contributions for the current year, which were used to fund postemployment benefits, were  $170,467  for  2014,  $83,256  for  2013,  and  $325,689  for  2012.    The  full  amount  has  been contributed for 2013 and 2012, and 90 percent has actually been contributed for 2014.  OPERS Board of Trustees Adopt Changes to the Health Care Plan    Changes to the health care plan were adopted by the OPERS Board of Trustees on September 19, 2012, with  a  transition  plan  commencing  January  1,  2014.   With  the  recent  passage  of  pension  legislation under SB 343 and the approved health care changes, OPERS expects to be able to consistently allocate 4 

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

percent  of  the  employer  contributions  toward  the  health  care  fund  after  the  end  of  the  transition period.   Ohio Police and Fire Pension Fund  Plan Description  The City contributes to the Ohio Police and Fire Pension Fund (OP&F) sponsored healthcare program, a cost  sharing,  multiple‐employer  defined  post‐employment  healthcare  plan  administered  by  OP&F.  OP&F provides healthcare benefits  including  coverage  for medical, prescription drugs,  dental,  vision, Medicare Part B Premium and long term care to retirees, qualifying benefit recipients and their eligible dependents.   OP&F provides access to post‐retirement healthcare coverage for any person who receives or is eligible to  receive a monthly service, disability, or survivor benefit check or  is a spouse or eligible dependent child of such person.  The healthcare coverage provided by OP&F meets the definition of an Other Post Employment Benefit (OPEB) as described in GASB Statement 45.   The Ohio Revised Code allows, but does not mandate, OP&F to provide OPEB benefits.  Authority for the OP&F Board of  Trustees  to provide healthcare  coverage  to  eligible participants  and  to  establish  and amend benefits is codified in Chapter 742 of the Ohio Revised Code.   OP&F  issues  a  publicly  available  financial  report  that  includes  financial  information  and  required supplementary  information  for  the Plan.   That  report may be obtained by writing  to OP&F, 140 East Town Street, Columbus, Ohio 43215‐5164, or by visiting the OP&F website at www.op‐f.org.  Funding Policy  The Ohio Revised Code provides  for  contribution  requirements of  the participating employers and of plan members  to  the OP&F  (defined  benefit  pension  plan).    Participating  employers  are  required  to contribute to the pension plan at rates expressed as percentages of the payroll of active pension plan members, currently, 19.5% and 24.0% of covered payroll for police and fire employers, respectively.  The Ohio Revised Code states that the employer contribution may not exceed 19.5% of the covered payroll for police employer units and 24.0% of covered payroll for fire employer units.  Active members do not make contributions to the OPEB Plan.   OP&F maintains funds for health care in two separate accounts.  One for health care benefits under IRS Code  Section  115  trust  and  one  for Medicare  Part  B  reimbursements  administrated  as  an  Internal Revenue Code 401(h) account, both of which are within  the defined benefit pension plan, under  the authority granted by the Ohio Revised Code to the OP&F Board of Trustees.    The Board of Trustees is authorized to allocate a portion of the total employer contributions made into the pension plan to the Section 115 trust and Section 401(h) account as the employer contribution for retiree healthcare benefits.   The portion of employer contributions allocated to health care was .5% of covered payroll from January 1, 2014 thru December 31, 2014. For the year ended December 31, 2014, the employer contribution allocated to the health care plan was 6.75% of covered payroll.  The amount of employer contributions allocated to the healthcare plan each year is subject to the Trustees’ primary 

53

City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

responsibility to ensure that pension benefits are adequately funded and is limited by the provisions of Sections 115 and 401(h).  The  OP&F  Board  of  Trustees  also  is  authorized  to  establish  requirements  for  contributions  to  the healthcare  plan  by  retirees  and  their  eligible  dependents,  or  their  surviving  beneficiaries.    Payment amounts vary depending on the number of covered dependents and the coverage selected.  Information from City’s Records  The  City’s  contributions  to  OP&F  for  the  year  ending  December  31,  2014  was  $156,217;  and  was $380,123  for  year  ending December  31,  2013;  and was  approximately  $340,002  for  the  year  ending December 31, 2012, and were allocated to the healthcare plan.   The actual contributions for 2012 and 2013 were 100% and 90% has actually been contributed for 2014.  Note 14 – Conduit Debt Obligations                  Conduit Debt  From time to time, Industrial Revenue Bonds have been issued to provide financial assistance to private‐sector  entities  for  the  acquisition  and  construction  of  commercial,  healthcare,  and  housing  facilities deemed to be  in the public  interest.   The bonds are secured by the property financed and are payable solely  from bonds, ownership of the acquired  facilities transfers to the private‐sector entity served by the  bond  issuance.    The  City,  the  State,  or  any  political  subdivision  thereof  is  not  obligated  in  any manner  for  repayment  of  the  bonds.    Accordingly,  the  bonds  are  not  reported  as  liabilities  in  the accompanying financial statements.  The following is the conduit debt outstanding at December 31, 2014: 

          Year        Original       Outstanding     Year Issuance      Issued        Amount  December 31, 2014     Mature  Cedar Village       2010    $16,250,000        $13,695,000    2035 

Note 15 – Construction Commitments  The City had the following outstanding commitments at year end:  

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Projects AmountService Center Improvements $3,254,146W.R. & 175 & SR 741 Interchange Study 3,000,000Quinn Park Stream Imp (stream mitigation) 467,194Gateway (I‐75 & St Rt 741) 452,331Meadows Sewer Rehab 307,670

Facility Access Control System 294,000

Freedom Way Construction 200,000Baseball Diamond Imp Corwin Nixon Park 199,666

Community Center Improvements 164,069Non‐potable System Replacement 122,498

SCADA Update Phase II 120,048

Kings Island Drive Improvement 104,246Donna Jean Culver Replacement 84,879

St Rt 741/Stoneridge Dr Signal 13,472

Traffic Controller Replacement 10,201St Rt 741 Parkside Intersection 9,950

Cox Smith Road & St Rt 741 Intersection Design 8,538

Station 52 Improvements 7,496Furbee & Castanea Drainage Improvement 5,982

Floodplain Improvement (Southwind & Wingsong) 4,800

Fire Truck Restoration "old Betsy" 1,573Bethany Road Widening 600

Total $8,833,359

  The City utilizes encumbrance accounting as part of its budgetary controls.  Encumbrances outstanding at year end may be reported as part of restricted, committed or assigned classifications of fund balance.  At year end, the City’s commitments for encumbrances in all of the funds were as follows: 

Fund Amount

General $19,736,846

Fire and Emergency Medical Service Safety 398,547

Sewer 1,060,181

Waste Collection 116,181

Stormwater Utility 137,829

Community Center 674,938

Golf Course 60,900

Nonmajor Funds 2,816,022

Total $25,001,444

Note 16 – Interfund Transactions                    Interfund transactions at year end, consisted of the following individual interfund receivables, interfund payables, transfers in and transfers out:  

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Receivable Payable In Out

General  Fund $5,600,000 $0 $0 $4,674,000

Fire and Emergency Medical  Services 0 0 2,020,000 0

Sewer Fund 0 0 7,000 0

Community Center Fund 0 5,250,000 0 0

Golf Course Fund 0 0 1,039,000 0

Other Governmental  Funds 0 350,000 2,094,144 486,144

Total  All  Funds $5,600,000 $5,600,000 $5,160,144 $5,160,144

Interfund Transfers

 Interfund balance/transfers are used to move revenues from the fund that statute or budget requires to collect  them  to  the  fund  that  statute  or  budget  requires  to  expend  them  and  unrestricted  revenues collected  in the General Fund to  finance various programs accounted  for  in other  funds  in accordance with budgetary authorizations; to segregate and to return money to the fund from which it was originally provided once a project is completed.    The  transfer  out  of  the  Street  Construction,  Maintenance  and  Repair  Fund  to  the  General  Bond Retirement Fund  (Other Governmental Funds) of $164,850 was  to make  the debt service payment  for the Mason Road Widening debt that is included in the 2013 Various Purpose General Obligation Bonds. 

The  transfer out of  the State Highway  Improvement Fund  (Other Governmental Funds)  to  the General Bond Retirement Fund (Other Governmental Funds) of $73,994 was to make the debt service payment for the US 42 Road Improvements debt that is included in the 2013 Various Purpose General Obligation Bonds. 

The street subdivision fund (other Governmental Funds) accounts for funds collected to improve streets that benefit specific developments.  These funds rarely cover the entire cost of the improvement which is  generally  paid  from  the  Street  Construction, Maintenance  and  Repair  Fund  (other  Governmental Funds).  The transfer of $240,300 reimburses the Street Construction, Maintenance and Repair Fund for capital improvement. 

The  transfer out of $7,000  from  the Special Assessment Bond Retirement  Fund  (Other Governmental Funds) to the Sewer Fund was to make the debt service payment for the Diley Utility Special Assessment debt.  Note 17 – Joint Venture            Liberty  Township,  the  City  of Mason,  and  the  City  of Middletown  contracted  to  create  the  Liberty Township  Joint  Economic  Development  District  (JEDD)  for  the  purpose  of  facilitating  economic development to create jobs and employment opportunities and to improve the economic welfare of the people  in  the  State  of Ohio  and  in  the  area  of  the  contracting  parties  through  facilitating  economic development along the corridor of Interstate 75, Cincinnati Dayton Road and State Route 129.  For more information and a copy of the financial statements, contact the City of Middletown.   A 1.5% income tax was enacted for the JEDD. Imposition of tax began on October 1, 2006 and terminates December 31, 2045, with two ten year extensions.  Mason’s  use  of  funds  provide  for  the  improvement  of  the  transportation  network  within  the  City, 

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

including the improvements of Bethany and Mason Roads.    Distribution of Gross Tax:    5% Service Fee for Middletown to collect the income   1% Escrow payment for refunds   94% Net distribution  Net Distribution:    83% Liberty Township    2% Middletown   15% Mason  Note 18 – Accountability              As of year end the following funds had deficit fund balances:  Other Governmental Funds:    State Highway Improvement  $172,219      The deficits  in fund balances were primarily due to accrual  in GAAP.   The general fund  is  liable for any deficit in these funds and will provide operating transfers when cash is required not when accruals occur.  Note 19 – Fund Balances                      Fund balance  is  classified as nonspendable,  restricted,  committed, assigned and/or unassigned based primarily on the extent to which the City  is bound to observe constraints  imposed upon the use of the resources in the government funds. The constraints placed on fund balance for the major governmental funds and all other governmental funds are presented below:        

This Space Intentionally Left Blank  

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Fire and Other

Emergency Governmental

Fund Balances General Medical  Service Funds Total

Nonspendable:

Inventory $272,951 $18,997 $0 $291,948

Unclaimed Monies 71,947 0 0 71,947

Total  Nonspendable 344,898 18,997 0 363,895

Restricted for:

Fire and Emergency Medical  Service Safety 0 6,948,658 0 6,948,658

Street Construction Maintenance and Repair 0 0 4,098,732 4,098,732

Street Subdivision 0 0 374,935 374,935

Police Officer Training 0 0 3,200 3,200

Parks and Recreation 0 0 209,239 209,239

Drug Law Enforcement 0 0 26,653 26,653

Law Enforcement and Education 0 0 4,098 4,098

Indigent Drive 0 0 69,461 69,461

Municipal  Court Computer Costs 0 0 233,858 233,858

Municipal  Court Improvement Education 0 0 98,631 98,631

Municipal  Court Improvement 0 0 241,030 241,030

Vehicle Immobilization Fee 0 0 17,398 17,398

Municipal  Court Probation Services 0 0 60,163 60,163

Municipal  Court Indigent Driver IDAM 0 0 39,638 39,638

Central  Parke TIF 0 0 110,408 110,408

Mason Enterprise Parke TIF 0 0 67,184 67,184

Tylersvil le Road TIF 0 0 107,992 107,992

I‐71 Corridor TIF 0 0 147,614 147,614

Everybody's Farm TIF 0 0 456,560 456,560

JW Harris TIF 0 0 118,607 118,607

General  Obligation Bond Retirement 0 0 830,279 830,279

Special  Assessment Bond Retirement 0 0 19,538 19,538

Total  Restricted 0 6,948,658 7,335,218 14,283,876

Committed to:

Police Crime Prevention 0 0 686 686

Total  Committed 0 0 686 686

Assigned to:

General  Capital  Improvement 16,403,235 0 0 16,403,235

Debt Service 0 0 1,976,919 1,976,919

Subdivision Inspection 0 0 143,282 143,282

Encumbrances 4,140,405 0 0 4,140,405

Total  Assigned 20,543,640 0 2,120,201 22,663,841

Unassigned (Deficit) 17,623,466 0 (172,219) 17,451,247

Total  Fund Balance $38,512,004 $6,967,655 $9,283,886 $54,763,545

 

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City of Mason, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2014                  

Note 20 – Prior Period Adjustment                    The City’s Tax  Increment Bond Retirement Fund was  renamed  to  the  JW Harris TIF Fund was  restated from a Debt Service Fund to a Special Revenue Fund.  

Nonmajor Nonmajor

Special Revenue Debt Service

Funds Funds

Fund Balance ‐ December 31, 2013 $6,720,217 $2,726,350

Restatment of Fund 8,848 (8,848)

Fund Balance ‐ December 31, 2013, Restated $6,729,065 $2,717,502

 Note 21 – Subsequent Events                      The  City  started  the  process  to  issue  a  $2,000,000  bond  anticipation  note  to  refinance  a  bond anticipation note  for  real estate acquisition of property  located on State Route 741. The note will be issued on June 25, 2015 and be due on June 23, 2016.                   

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REQUIRED SUPPLEMENTARY INFORMATION

61

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Original Final Variance fromBudget Budget Actual Final Budget

Revenues:Taxes $25,705,000 $25,705,000 $28,008,063 $2,303,063Fines, Licenses and Permits 1,383,600 1,383,600 2,067,106 683,506Intergovernmental 60,000 60,000 755,891 695,891Charges for Services 259,000 259,000 231,537 (27,463)Investment Earnings 125,000 125,000 134,535 9,535Other Revenues 535,000 535,000 1,010,922 475,922

Total Revenues 28,067,600 28,067,600 32,208,054 4,140,454

Expenditures:Current:General GovernmentCity Manager 327,584 327,584 292,959 34,625Assistant City Manager 906,479 1,001,479 983,724 17,755Finance 524,520 524,520 493,175 31,345Earnings Tax 667,576 667,576 602,189 65,387Refunds and Reimbursements 850,000 1,075,000 1,047,517 27,483

Law Director 524,187 474,187 441,916 32,271Council 374,269 374,269 300,489 73,780Municipal Court 1,303,305 1,303,305 1,247,069 56,236Land, Buildings and Grounds 977,705 822,705 681,780 140,925Auditor's Deductions 1,205,885 1,205,885 1,152,901 52,984Contingency 250,000 250,000 0 250,000

Total General Government 7,911,510 8,026,510 7,243,719 782,791

Public SafetyPolice Department 5,928,331 6,113,331 6,031,255 82,076Street Lighting 367,500 367,500 345,869 21,631Diaster Services 37,563 37,563 27,159 10,404

Total Public Safety 6,333,395 6,518,395 6,404,283 114,112

Leisure Time ActivitiesRecreation Programs 287,869 252,869 208,051 44,818Parks 1,308,498 1,208,498 1,113,295 95,203Swimming Pool 301,253 286,253 265,478 20,775Senior Center 209,350 224,350 217,908 6,442

Total Leisure Time Activities 2,106,971 1,971,971 1,804,732 167,238

Community DevelopmentCommunity Planning‐Zoning 114,493 144,493 129,589 14,904Building Inspections 543,914 593,914 580,225 13,689Economic Development 635,353 635,353 616,245 19,108Community Development 2,625,941 2,935,941 2,878,560 57,381

Total Community Development 3,919,702 4,309,702 4,204,620 105,082

Transportation & Street RepairTraffic Signals 194,097 194,097 181,981 12,116Street Maintenance & Repair 2,553,103 3,136,538 3,021,315 115,223Garage 400,425 400,425 360,989 39,436Engineering 823,615 773,615 714,808 58,807

Total Transportation & Street Repair 3,971,240 4,504,675 4,279,094 225,581(Continued)

GeneralFund

62

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Original Final Variance fromBudget Budget Actual Final Budget

Capital Outlay 1,700,000 1,700,000 1,700,000 0

Total Expenditures 25,942,818 27,031,253 25,636,448 1,394,805

Excess of Revenues Over (Under) Expenditures 2,124,782 1,036,347 6,571,606 5,535,259

Other Financing Sources (Uses):Transfers (Out)  (6,125,000) (16,125,000) (13,945,000) 2,180,000

Total Other Financing Sources (Uses) (6,125,000) (16,125,000) (13,945,000) 2,180,000

Net Change in Fund Balance (4,000,218) (15,088,653) (7,373,394) 7,715,259

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 15,344,422 15,344,422 15,344,422 0

Fund Balance End of Year $11,344,204 $255,769 $7,971,028 $7,715,259

See accompanying notes to the required supplementary information.

FundGeneral

63

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Original Final Variance fromBudget Budget Actual Final Budget

Revenues:Taxes $3,850,000 $3,850,000 $3,895,426 $45,426Intergovernmental 1,250,000 1,193,675 1,253,204 59,529Charges for Services 700,000 732,242 580,920 (151,322)Investment Earnings 0 3,410 27,651 24,241Other Revenues 0 62,317 65,835 3,518

Total Revenues 5,800,000 5,841,644 5,823,036 (18,608)

Expenditures:Current:

Public Safety 7,111,700 7,266,624 6,186,044 1,080,580Capital Outlay 1,540,722 1,540,722 1,017,268 523,454

Total Expenditures 8,652,422 8,807,346 7,203,312 1,604,034

Excess of Revenues Over (Under) Expenditures (2,852,422) (2,965,702) (1,380,276) 1,585,427

Other Financing Sources (Uses):Transfers In 2,300,000 2,300,000 2,020,000 (280,000)

Total Other Financing Sources (Uses) 2,300,000 2,300,000 2,020,000 (280,000)

Net Change in Fund Balance (552,422) (665,702) 639,724 1,305,427

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 6,268,591 6,268,591 6,268,591 0

Fund Balance End of Year $5,716,169 $5,602,889 $6,908,315 $1,305,427

See accompanying notes to the required supplementary information.

Fund

Emergency MedicalService Safety

Fire and

64

City of Mason, Ohio Notes to the Required Supplementary Information For The Year Ended December 31, 2014                Note 1 – Budgetary Process                      All  funds,  except  agency  funds,  are  legally  required  to  be  budgeted  and  appropriated.    The major documents prepared are the tax budget, the certificate of estimated resources, and the appropriation ordinance, all of which are prepared on the budgetary basis of accounting.    The  tax budget demonstrates a need  for existing or  increased  tax  rates.   The certificate of estimated resources  establishes  a  limit  on  the  amount  Council may  appropriate.    The  certificate  of  estimated resources may  be  amended  during  the  year  if  projected  decreases  in  revenue  are  identified  by  the Finance Director.  To maintain the original estimate where possible to maintain conservative estimates, amendments  for  increases occur only  if additional an appropriation  is needed by Council action.   The amounts  reported  as  the  budgeted  amounts  for  revenue  on  the  budgetary  statement  reflect  the amounts on the certificate of estimated resources when the original appropriations were adopted.  The amounts reported as the final budgeted revenue on the budgetary statements reflects the amounts on the final amended certificate of estimated resources issued during the year.  In  Ohio,  municipal  corporations  have  certain  powers  granted  to  then  in  Article  XVIII  of  the  Ohio Constitution  that  exist  outside  authority  found  in  the  Ohio  Revised  Code.    Because  these  powers originate  in  the  Constitution,  law  passed  by  the General Assembly  that  interfere with  them may  be invalid as applied to municipal corporation unless those  laws are sanctioned by other provisions of the Constitution.  These powers, granted by the Constitution and known as “home rule” powers, include the power of local self‐government, the exercise of certain police powers, and the ownership and operation of public utilities.  The  appropriations  ordinance  is  Council’s  authorization  to  spend  resources  and  set  annual  limits  on expenditures plus encumbrances at  the  level of control selected by Council.   As a power of  local self‐government, the  legal  level of control has been established by Council so that appropriation measures shall be classified so as to set forth separately the amounts appropriated for each department with  in the General  Fund.   All other  funds are maintained at  the  fund  level.   The appropriation  resolution  is subject  to  amendment  throughout  the  year  with  the  restriction  that  appropriations  cannot  exceed estimated  resources.    The  amounts  reported  as  the  original  budgeted  amounts  reflect  the  first appropriation ordinance  for  that  fund  that  covered  the  entire  year,  including  amounts  automatically carried forward from prior years.   The amounts reported as the final budgeted amounts represent the final appropriation amounts passed by Council after any  supplemental or  re‐appropriation during  the year.  While the City  is reporting financial position, results of operations and changes  in fund balance on the basis  of  generally  accepted  accounting  principles  (GAAP),  the  budgetary  basis  as  provided  by  law  is based  upon  accounting  for  certain  transactions  on  a  basis  of  cash  receipts,  disbursements  and encumbrances. The  Schedule of Revenues, Expenditures and Changes  in  Fund Balances  ‐ Budget and Actual  (Non‐GAAP Budgetary Basis) presented  for  the General Fund, and Fire and Emergency Medical Services  Fund  are  presented  on  the  budgetary  basis  to  provide  a meaningful  comparison  of  actual results with the budget. The major differences between the budget basis and GAAP basis are as follows:  

1. Revenues  are  recorded when  received  in  cash  (budget)  as  opposed  to when  susceptible  to accrual (GAAP). 

 

65

City of Mason, Ohio Notes to the Required Supplementary Information For The Year Ended December 31, 2014               

2. Expenditures  are  recorded  when  paid  in  cash  (budget)  as  opposed  to  when  the  liability  is incurred (GAAP).  

3. Encumbrances  are  treated  as  expenditures  (budget)  rather  than  as  an  assignment  of  fund balance (GAAP).  

4.   Unreported cash represents amounts received but not included as revenue on the budget basis operating  statements.  These  amounts  are  included  as  revenue  on  the GAAP  basis  operating statement. 

 5.  Some funds are reported as part of the general fund (GAAP basis as opposed to the general fund 

being reported alone (budget basis)).   

The  following  table summarizes  the adjustments necessary  to  reconcile  the GAAP basis statements  to the budgetary basis statements for the General Fund and the Fire and Emergency Medical Service Fund.  

Net Change in Fund Balance

General

Fire and 

Emergency 

Medical 

Service Safety

GAAP Basis  $2,507,711 $813,403Revenue Accruals  (2,370,821) 191,600Expenditure Accruals 6,508,158 33,268Transfer In 10,050,000 0Transfers Out (17,000,000) 0Encumbrances  (4,710,109) (398,547)Funds Budgeted Elsewhere (2,358,333) 0

Budget Basis  ($7,373,394) $639,724

  

66

COMBINING STATEMENTS AND

INDIVIDUAL FUND SCHEDULES

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NONMAJOR GOVERNMENTAL FUNDS  Special Revenue Funds  Special Revenue  funds  are  used  to  account  for  and  report  the  proceeds  of  specific  revenue sources  that  are  restricted  or  committed  to  expenditures  for  specified  purposes  other  than debt service or capital projects.  The term proceeds of specific revenue sources establishes that one or more specific restricted or committed revenues should be the foundation for a special revenue fund.    Debt Service Funds  The debt service fund  is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.  Debt service funds should be used to report resources if legally mandated (i.e. debt payable from property taxes).  Financial resources  that are being accumulated  for principal and  interest maturing  in  future years also should be reported in debt service funds. 

69

City of Mason, Ohio

Combining Balance Sheet

Nonmajor Governmental FundsDecember 31, 2014

Nonmajor Nonmajor Total

Special Debt Nonmajor

Revenue Service Governmental

Funds Funds Funds

Assets:

Equity in Pooled Cash and Investments $6,735,831 $1,194,633 $7,930,464

Restricted Cash 0 1,632,763 1,632,763

Receivables (Net): 

  Taxes 0 1,621,504 1,621,504

  Accounts 137,722 0 137,722

  Interest 7,340 2,878 10,218

  Intergovernmental 2,318,625 108,922 2,427,547

Total Assets 9,199,518 4,560,700 13,760,218

Liabilities:

Accounts Payable 7,053 660 7,713Accrued Wages and Benefits 23,926 0 23,926

Contracts Payable 255,901 0 255,901

Retainage Payable 70,117 0 70,117Interfund Payable 350,000 0 350,000

Total Liabilities     706,997 660 707,657

Deferred Inflows of Resources:

Property Taxes 0 1,621,504 1,621,504

Grants and Other Taxes 2,006,248 108,922 2,115,170

Accounts 24,605 0 24,605

Investment Earnings 4,518 2,878 7,396

Total Deferred Inflows of Resources     2,035,371 1,733,304 3,768,675

Fund Balances:

  Restricted 6,485,401 849,817 7,335,218

  Committed 686 0 686

  Assigned 143,282 1,976,919 2,120,201

  Unassigned (172,219) 0 (172,219)

Total Fund Balances    6,457,150 2,826,736 9,283,886

Total Liabilities, Deferred Inflows and Fund Balances         $9,199,518 $4,560,700 $13,760,218

70

City of Mason, Ohio

Combining Statement of Revenues, Expenditures 

and Changes in Fund Balance

Nonmajor Governmental FundsFor the Fiscal Year Ended December 31, 2014

Nonmajor Nonmajor TotalSpecial Debt Nonmajor

Revenue Service Governmental

Funds Funds Funds

Revenues:

Property and Other Taxes $0 $1,538,376 $1,538,376

Investment Earnings 27,942 12,806 40,748

Intergovernmental 2,988,074 217,119 3,205,193

Special Assessments 0 6,477 6,477

Fines, Licenses & Permits 893,307 0 893,307

Revenue in Lieu of Taxes 1,193,794 0 1,193,794

Other Revenues 74,319 0 74,319

Total Revenues 5,177,436 1,774,778 6,952,214

Expenditures:

Current:

General Government 458,507 0 458,507

Community Development 655,009 0 655,009

Transportation and Street Repair 1,251,013 0 1,251,013

Capital Outlay 2,470,228 0 2,470,228

Debt Service:

Principal 256,250 2,115,000 2,371,250

Interest and Other Charges 134,500 1,382,388 1,516,888

Total Expenditures 5,225,507 3,497,388 8,722,895

Excess of Revenues Over (Under) Expenditures (48,071) (1,722,610) (1,770,681)

Other Financing Sources (Uses):

Transfers In 255,300 1,838,844 2,094,144

Transfers (Out)  (479,144) (7,000) (486,144)

Total Other Financing Sources (Uses) (223,844) 1,831,844 1,608,000

Net Change in Fund Balance (271,915) 109,234 (162,681)

Fund Balance ‐ Beginning of Year, Restated 6,729,065 2,717,502 9,446,567

Fund Balance ‐ End of Year $6,457,150 $2,826,736 $9,283,886

71

NONMAJOR SPECIAL REVENUE FUNDS  Fund Descriptions  Street Construction, Maintenance and Repair – This special revenue fund accounts for 92.5% of  the City’s share of state gasoline  taxes and motor vehicle  license  fees.   State  law  requires that such monies be spent on street construction and maintenance.   

State Highway Improvement Fund – This special revenue fund accounts for the remaining 7.5% of  the City’s share of state gasoline  taxes and motor vehicle  license  fees.   State  law  requires that such monies be spent on state highways construction and improvements.  

Street Subdivision ‐ To track fee paid by developers that may only be used to subdivision street improvements.  Police Officer Training ‐ To account for monies designated to be used for police officer training.    

Parks and Recreation ‐ This fund accounts for monies received from residential building permits and  other  sources  collected  for  the  purpose  of  providing  funds  for  recreational  capital improvements.    

Police  Crime  Prevention  ‐  This  fund  is  used  to  account  for  donations  received  for  the prevention of crime within the City.   

Drug  Law  Enforcement  ‐  To  account  for  monies  designated  to  be  used  for  drug  law enforcement.  

Law Enforcement and Education ‐ To account for monies received from court fines imposed for drivers convicted of driving under the influence of drugs and alcohol.  Monies generated under this fund shall be used for enforcement and education of the public of such dangers.  

Indigent  Driver  ‐  This  fund  is  used  to  account  for  fees  collected  in  conjunction  with  DUI offenses. Revenues received are used, by the court,  for treatment and education of drug and alcohol offenders.   

Municipal Court Computer Costs  ‐ To account  for monies  received  from court  fines.   Monies generated under this fund shall be used for computer related expenses of the Court.  

Municipal Court Computer Education ‐ This fund is used to account for a $2.00 fee assessed in conjunction with court costs. Revenues collected are used for computer education and training within the Municipal Court.   

Municipal  Court  Improvement  ‐  This  fund  is  used  to  account  for  a  $5.00  fee  assessed  in conjunction with court costs. Revenues collected are used for  improvements to the Municipal Court facilities.   

72

Vehicle  Immobilization Fee  ‐ This  fund  is used  to account  for  reimbursements  received  from the State of Ohio for costs incurred with the Court ordered immobilization of a vehicle.   Municipal Court Probation Services ‐ To account for monies received from court fines.  Monies generated under this fund shall be used for probation services provided by the Court.  

Municipal Court Indigent Driver IDAM ‐ To account for fees collected  in conjunction with DUI offenses. Revenues received are used, by the court,  for treatment and education of drug and alcohol offenders.  

Subdivision  Inspection  ‐ This fund  is used to account for the revenues received and expenses incurred for inspection services rendered in the City of Mason.  

Central Parke TIF  ‐ This  fund  is used  to account  for  the  financial  resources and expenditures related to  the development of the Central Park business park.  

Mason  Enterprise  Parke  TIF  ‐  This  fund  is  used  to  account  for  the  financial  resources  and expenditures related to the development of the Mason Enterprise business park.   

Tylersville Road TIF ‐ This fund is used to account for the financial resources and expenditures related to the development of the Tylersville Crossing business park.  

I‐71 Corridor TIF  ‐ This  fund  is used  to account  for  the  financial  resources and expenditures related to the development and improvements to the I‐71 Corridor.  

Everybody’s  Farm  TIF  ‐  This  fund  is  used  to  account  for  the  financial  resources  and expenditures related to the development and improvements to Everybody’s Farm. 

 JW Harris TIF ‐ This fund is used to account for the financial resources and expenditures related to the development and improvements to development of 42 North Commerce Parke. 

73

City of Mason, Ohio

Combining Balance Sheet

Nonmajor Special Revenue FundsDecember 31, 2014

Street Construction, State PoliceMaintenance Highway Street Officer Parks andand Repair Improvement Subdivision Training Recreation

Assets:Equity in Pooled Cash and Investments $4,061,956 $158,271 $374,935 $3,200 $209,105Receivables (Net):   Accounts 91,844 0 0 0 0  Interest 6,731 262 0 0 347  Intergovernmental 1,592,671 56,429 0 0 0

Total Assets 5,753,202 214,962 374,935 3,200 209,452

Liabilities:Accounts Payable 0 0 0 0 0Accrued Wages and Benefits 0 0 0 0 0Contracts Payable 255,901 0 0 0 0Retainage Payable 70,117 0 0 0 0Interfund Payable 0 350,000 0 0 0

Total Liabilities     326,018 350,000 0 0 0

Deferred Inflows of Resources:Grants and Other Taxes 1,299,703 37,020 0 0 0Accounts 24,605 0 0 0 0Investment Earnings 4,144 161 0 0 213

Total Deferred Inflows of Resources     1,328,452 37,181 0 0 213

Fund Balances:  Restricted 4,098,732 0 374,935 3,200 209,239  Committed 0 0 0 0 0  Assigned 0 0 0 0 0  Unassigned 0 (172,219) 0 0 0

Total Fund Balances    4,098,732 (172,219) 374,935 3,200 209,239

Total Liabilities, Deferred Inflows and Fund Balances      $5,753,202 $214,962 $374,935 $3,200 $209,452

74

Law Municipal Court Municipal Court MunicipalPolice Crime Drug Law Enforcement Indigent Computer Computer CourtPrevention Enforcement and Education Driver Costs Education Improvement

$686 $26,253 $4,019 $69,825 $225,589 $95,970 $233,733

0 400 79 350 8,569 2,857 15,6480 0 0 0 0 0 00 0 0 0 0 0 0

686 26,653 4,098 70,175 234,158 98,827 249,381

0 0 0 714 300 196 1,7800 0 0 0 0 0 6,5710 0 0 0 0 0 00 0 0 0 0 0 00 0 0 0 0 0 0

0 0 0 714 300 196 8,351

0 0 0 0 0 0 00 0 0 0 0 0 00 0 0 0 0 0 0

0 0 0 0 0 0 0

0 26,653 4,098 69,461 233,858 98,631 241,030686 0 0 0 0 0 00 0 0 0 0 0 00 0 0 0 0 0 0

686 26,653 4,098 69,461 233,858 98,631 241,030

$686 $26,653 $4,098 $70,175 $234,158 $98,827 $249,381

Continued

75

City of Mason, Ohio

Combining Balance Sheet

Nonmajor Special Revenue FundsDecember 31, 2014

Assets:Equity in Pooled Cash and InvestmentsReceivables (Net):   Accounts  Interest  Intergovernmental

Total Assets

Liabilities:Accounts PayableAccrued Wages and BenefitsContracts PayableRetainage PayableInterfund Payable

Total Liabilities    

Deferred Inflows of Resources:Grants and Other TaxesAccountsInvestment Earnings

Total Deferred Inflows of Resources    

Fund Balances:  Restricted  Committed  Assigned  Unassigned

Total Fund Balances   

Total Liabilities, Deferred Inflows and Fund Balances  

Vehicle Municipal Court Municipal Court Immobilization Probation Indigent Driver  Subdivision Central

Fee Services IDAM Inspection Parke TIF

$17,398 $55,343 $42,168 $149,015 $110,408

0 17,044 821 110 00 0 0 0 00 0 0 0 111,247

17,398 72,387 42,989 149,125 221,655

0 712 3,351 0 00 11,512 0 5,843 00 0 0 0 00 0 0 0 00 0 0 0 0

0 12,224 3,351 5,843 0

0 0 0 0 111,2470 0 0 0 00 0 0 0 0

0 0 0 0 111,247

17,398 60,163 39,638 0 110,4080 0 0 0 00 0 0 143,282 00 0 0 0 0

17,398 60,163 39,638 143,282 110,408

$17,398 $72,387 $42,989 $149,125 $221,655

76

TotalMason Nonmajor

Enterprise Tylersville I‐71 Everybody's JW Harris Special RevenueParke TIF Road TIF Corridor TIF Farm TIF TIF Funds

$67,184 $107,992 $147,614 $456,560 $118,607 $6,735,831

0 0 0 0 0 137,7220 0 0 0 0 7,340

54,303 180,579 24,105 187,785 111,506 2,318,625

121,487 288,571 171,719 644,345 230,113 9,199,518

0 0 0 0 0 7,0530 0 0 0 0 23,9260 0 0 0 0 255,9010 0 0 0 0 70,1170 0 0 0 0 350,000

0 0 0 0 0 706,997

54,303 180,579 24,105 187,785 111,506 2,006,2480 0 0 0 0 24,6050 0 0 0 0 4,518

54,303 180,579 24,105 187,785 111,506 2,035,371

67,184 107,992 147,614 456,560 118,607 6,485,4010 0 0 0 0 6860 0 0 0 0 143,2820 0 0 0 0 (172,219)

67,184 107,992 147,614 456,560 118,607 6,457,150

$121,487 $288,571 $171,719 $644,345 $230,113 $9,199,518

77

City of Mason, Ohio

Combining Statement of Revenues, Expenditures 

and Changes in Fund Balance

Nonmajor Special Revenue FundsFor the Fiscal Year Ended December 31, 2014

Street Construction, State PoliceMaintenance Highway Street Officer Parks andand Repair Improvement Subdivision Training Recreation

Revenues:Investment Earnings $26,023 $1,021 $0 $0 $898Intergovernmental 2,871,355 116,719 0 0 0Fines, Licenses & Permits 0 0 73,791 3,200 156,420Revenue in Lieu of Taxes 0 0 0 0 0Other Revenues 67,239 0 0 0 0

Total Revenues 2,964,617 117,740 73,791 3,200 157,318

Expenditures:Current:

General Government 0 0 0 0 0Community Development 0 0 0 0 0Transportation and Street Repair 1,179,525 0 2,038 0 0

Capital Outlay 2,325,598 714 0 0 44,658Debt Service:Principal 0 0 0 0 0Interest and Other Charges 0 0 0 0 0

Total Expenditures 3,505,123 714 2,038 0 44,658

Excess of Revenues Over (Under) Expenditures (540,506) 117,026 71,753 3,200 112,660

Other Financing Sources (Uses):Transfers In 240,300 0 15,000 0 0Transfers (Out)  (164,850) (73,994) (240,300) 0 0

Total Other Financing Sources (Uses) 75,450 (73,994) (225,300) 0 0

Net Change in Fund Balance (465,056) 43,032 (153,547) 3,200 112,660

Fund Balance ‐ Beginning of Year, Restated 4,563,788 (215,251) 528,482 0 96,579

Fund Balance ‐ End of Year $4,098,732 ($172,219) $374,935 $3,200 $209,239

78

Law Municipal Court Municipal Court MunicipalPolice Crime Drug Law Enforcement Indigent Computer Computer CourtPrevention Enforcement and Education Driver Costs Education Improvement

$0 $0 $0 $0 $0 $0 $00 0 0 0 0 0 00 2,680 1,079 16,098 95,899 34,212 183,8920 0 0 0 0 0 00 0 0 0 5,651 0 412

0 2,680 1,079 16,098 101,550 34,212 184,304

0 0 0 18,302 46,196 196 160,8970 0 0 0 0 0 00 0 0 0 0 0 00 0 0 0 9,195 51,539 5,187

0 0 0 0 0 0 6,2500 0 0 0 0 0 0

0 0 0 18,302 55,391 51,735 172,334

0 2,680 1,079 (2,204) 46,159 (17,523) 11,970

0 0 0 0 0 0 00 0 0 0 0 0 0

0 0 0 0 0 0 0

0 2,680 1,079 (2,204) 46,159 (17,523) 11,970

686 23,973 3,019 71,665 187,699 116,154 229,060

$686 $26,653 $4,098 $69,461 $233,858 $98,631 $241,030

Continued

79

City of Mason, Ohio

Combining Statement of Revenues, Expenditures

and Changes in Fund Balance

Nonmajor Special Revenue FundsFor the Fiscal Year Ended December 31, 2014

Revenues:Investment EarningsIntergovernmentalFines, Licenses & PermitsRevenue in Lieu of TaxesOther Revenues

Total Revenues

Expenditures:Current:

General GovernmentCommunity DevelopmentTransportation and Street Repair

Capital OutlayDebt Service:PrincipalInterest and Other Charges

Total Expenditures

Excess of Revenues Over (Under) Expenditures

Other Financing Sources (Uses):Transfers InTransfers (Out) 

Total Other Financing Sources (Uses)

Net Change in Fund Balance

Fund Balance ‐ Beginning of Year, Restated

Fund Balance ‐ End of Year

Vehicle Municipal Court Municipal Court Immobilization Probation Indigent Driver  Subdivision Central

Fee Services IDAM Inspection Parke TIF

$0 $0 $0 $0 $00 0 0 0 00 189,701 9,187 127,148 00 0 0 0 178,7930 73 0 944 0

0 189,774 9,187 128,092 178,793

0 227,124 5,792 0 00 0 0 97,200 69,2950 0 0 0 00 0 0 0 0

0 0 0 0 00 0 0 0 0

0 227,124 5,792 97,200 69,295

0 (37,350) 3,395 30,892 109,498

0 0 0 0 00 0 0 0 0

0 0 0 0 0

0 (37,350) 3,395 30,892 109,498

17,398 97,513 36,243 112,390 910

$17,398 $60,163 $39,638 $143,282 $110,408

80

TotalMason Nonmajor

Enterprise Tylersville I‐71 Everybody's JW Harris Special RevenueParke TIF Road TIF Corridor TIF Farm TIF TIF Funds

$0 $0 $0 $0 $0 $27,9420 0 0 0 0 2,988,0740 0 0 0 0 893,307

116,220 203,983 37,257 478,332 179,209 1,193,7940 0 0 0 0 74,319

116,220 203,983 37,257 478,332 179,209 5,177,436

0 0 0 0 0 458,50735,273 83,817 13,447 355,977 0 655,009

0 0 0 0 69,450 1,251,0130 0 0 33,337 0 2,470,228

35,000 190,000 0 25,000 0 256,25014,525 19,350 0 100,625 0 134,500

84,798 293,167 13,447 514,939 69,450 5,225,507

31,422 (89,184) 23,810 (36,607) 109,759 (48,071)

0 0 0 0 0 255,3000 0 0 0 0 (479,144)

0 0 0 0 0 (223,844)

31,422 (89,184) 23,810 (36,607) 109,759 (271,915)

35,762 197,176 123,804 493,167 8,848 6,729,065

$67,184 $107,992 $147,614 $456,560 $118,607 $6,457,150

81

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Intergovernmental $2,931,419 $2,941,209 $9,790Investment Earnings 12,000 15,314 3,314Revenue in Lieu of Taxes 0 107,557 107,557Other Revenues 107,557 0 (107,557)

Total Revenues 3,050,976 3,064,080 13,104

Expenditures:Current:

Transportation and Street Repair 1,200,000 1,452,193 (252,193)Capital Outlay 7,058,599 4,382,584 2,676,015

Total Expenditures 8,258,599 5,834,776 2,423,823

Excess of Revenues Over (Under) Expenditures (5,207,623) (2,770,696) 2,436,927

Other Financing Sources (Uses):Transfers In 240,300 240,300 0Transfers (Out)  (165,000) (164,850) 150

Total Other Financing Sources (Uses) 75,300 75,450 150

Net Change in Fund Balance (5,132,323) (2,695,246) 2,437,077

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 4,524,830 4,524,830 0

Fund Balance End of Year ($607,493) $1,829,584 $2,437,077

Fund

Maintenanceand Repair

Street Construction,

82

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Intergovernmental $100,000 $115,989 $15,989Investment Earnings 0 620 620

Total Revenues 100,000 116,609 16,609

Expenditures:Current:Capital Outlay 3,701 3,701 0

Total Expenditures 3,701 3,701 0

Excess of Revenues Over (Under) Expenditures 96,299 112,908 16,609

Other Financing Sources (Uses):Transfers (Out)  (124,000) (123,994) 6

Total Other Financing Sources (Uses) (124,000) (123,994) 6

Net Change in Fund Balance (27,701) (11,086) 16,615

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 169,074 169,074 0

Fund Balance End of Year $141,373 $157,988 $16,615

Fund

HighwayImprovement

State

83

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $0 $74,091 $74,091

Total Revenues 0 74,091 74,091

Expenditures:Current:

Transportation and Street Repair 7,680 7,680 0

Total Expenditures 7,680 7,680 0

Excess of Revenues Over (Under) Expenditures (7,680) 66,411 74,091

Other Financing Sources (Uses):Transfers In 0 15,000 15,000Transfers (Out)  (450,000) (240,300) 209,700

Total Other Financing Sources (Uses) (450,000) (225,300) 224,700

Net Change in Fund Balance (457,680) (158,889) 298,791

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 528,181 528,181 0

Fund Balance End of Year $70,501 $369,292 $298,791

Fund

StreetSubdivision

84

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Intergovernmental $0 $3,200 $3,200

Total Revenues 0 3,200 3,200

Expenditures:Current:

Public Safety 0 0 0

Total Expenditures 0 0 0

Net Change in Fund Balance 0 3,200 3,200

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 0 0 0

Fund Balance End of Year $0 $3,200 $3,200

Fund

OfficerTraining

Police

85

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $20,000 $156,940 $136,940Investment Earnings 0 658 658

Total Revenues 20,000 157,598 137,598

Expenditures:Capital Outlay 90,000 90,000 0

Total Expenditures 90,000 90,000 0

Net Change in Fund Balance (70,000) 67,598 137,598

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 96,278 96,278 0

Fund Balance End of Year $26,278 $163,876 $137,598

Fund

Parks andRecreation

86

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Intergovernmental $0 $0 $0

Total Revenues 0 0 0

Expenditures:Public Safety 500 0 500

Total Expenditures 500 0 500

Net Change in Fund Balance (500) 0 500

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 686 686 0

Fund Balance End of Year $186 $686 $500

Fund

Police CrimePrevention

87

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $1,000 $2,435 $1,435

Total Revenues 1,000 2,435 1,435

Expenditures:Current:

Public Safety 20,000 0 20,000

Total Expenditures 20,000 0 20,000

Net Change in Fund Balance (19,000) 2,435 21,435

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 23,817 23,817 0

Fund Balance End of Year $4,817 $26,252 $21,435

Fund

Drug LawEnforcement

88

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $500 $1,025 $525

Total Revenues 500 1,025 525

Expenditures:Current:

Public Safety 2,000 0 2,000

Total Expenditures 2,000 0 2,000

Net Change in Fund Balance (1,500) 1,025 2,525

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 2,994 2,994 0

Fund Balance End of Year $1,494 $4,019 $2,525

Fund

Enforcementand Education

Law

89

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $1,000 $16,016 $15,016

Total Revenues 1,000 16,016 15,016

Expenditures:Current:

General Government 66,045 36,576 29,469

Total Expenditures 66,045 36,576 29,469

Net Change in Fund Balance (65,045) (20,560) 44,485

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 76,981 76,981 0

Fund Balance End of Year $11,936 $56,421 $44,485

Fund

IndigentDriver

90

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:

Fines, Licenses and Permits $50,000 $95,252 $45,252

Other Revenues 0 5,057 5,057

Total Revenues 50,000 100,309 50,309

Expenditures:Current:

General Government 71,600 49,360 22,240Capital Outlay 17,000 12,000 5,000

Total Expenditures 88,600 61,360 27,240

Net Change in Fund Balance (38,600) 38,949 77,549

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 183,169 183,169 0

Fund Balance End of Year $144,569 $222,118 $77,549

Municipal CourtComputerCostsFund

91

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:

Fines, Licenses and Permits $20,000 $33,948 $13,948

Total Revenues 20,000 33,948 13,948

Expenditures:Capital Outlay 52,000 51,842 158

Total Expenditures 52,000 51,842 158

Net Change in Fund Balance (32,000) (17,894) 14,106

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 113,560 113,560 0

Fund Balance End of Year $81,560 $95,666 $14,106

Fund

Municipal CourtComputerEducation

92

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $180,000 $182,892 $2,892

Total Revenues 180,000 182,892 2,892

Expenditures:Current:

General Government 203,014 163,892 39,122Capital Outlay 12,000 11,437 563

Total Expenditures 215,014 175,329 39,685

Net Change in Fund Balance (35,014) 7,563 42,577

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 222,992 222,992 0

Fund Balance End of Year $187,978 $230,555 $42,577

Fund

CourtImprovement

Municipal

93

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $0 $35 $35

Total Revenues 0 35 35

Expenditures:Current:

General Government 500 0 500

Total Expenditures 500 0 500

Net Change in Fund Balance (500) 35 535

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 17,363 17,363 0

Fund Balance End of Year $16,863 $17,398 $535

Fund

ImmobilizationFee

Vehicle

94

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $190,000 $187,475 ($2,525)

Total Revenues 190,000 187,475 (2,525)

Expenditures:Current:

General Government 245,865 229,798 16,067

Total Expenditures 245,865 229,798 16,067

Net Change in Fund Balance (55,865) (42,323) 13,542

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 95,556 95,556 0

Fund Balance End of Year $39,691 $53,233 $13,542

Fund

ProbationServices

Municipal Court

95

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $1,000 $8,366 $7,366

Total Revenues 1,000 8,366 7,366

Expenditures:Current:

General Government 5,816 3,140 2,676

Total Expenditures 5,816 3,140 2,676

Net Change in Fund Balance (4,816) 5,226 10,042

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 36,383 36,383 0

Fund Balance End of Year $31,567 $41,609 $10,042

Fund

Indigent Driver IDAM

Municipal Court 

96

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Fines, Licenses and Permits $100,000 $127,148 $27,148Other Revenues 0 879 879

Total Revenues 100,000 128,027 28,027

Expenditures:Current:

Community Development 99,650 98,366 1,284

Total Expenditures 99,650 98,366 1,284

Net Change in Fund Balance 350 29,661 29,311

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 117,641 117,641 0

Fund Balance End of Year $117,991 $147,302 $29,311

Fund

SubdivisionInspection

97

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Revenue in Lieu of Taxes $125,000 $178,793 $53,793

Total Revenues 125,000 178,793 53,793

Expenditures:Current:

Community Development 80,000 69,295 10,705

Total Expenditures 80,000 69,295 10,705

Net Change in Fund Balance 45,000 109,498 64,498

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 911 911 0

Fund Balance End of Year $45,911 $110,409 $64,498

Fund

CentralParke TIF

98

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Revenue in Lieu of Taxes $90,000 $116,220 $26,220

Total Revenues 90,000 116,220 26,220

Expenditures:Current:

Community Development 75,475 35,273 40,202Debt Service:Principal Retirement 35,000 35,000 0Interest and Fiscal Charges 14,525 14,525 0

Total Expenditures 125,000 84,798 40,202

Net Change in Fund Balance (35,000) 31,422 66,422

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 35,764 35,764 0

Fund Balance End of Year $764 $67,186 $66,422

Fund

EnterpriseParke TIF

Mason

99

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Revenue in Lieu of Taxes $200,000 $203,983 $3,983

Total Revenues 200,000 203,983 3,983

Expenditures:Current:

Community Development 85,650 83,817 1,833Debt Service:Principal Retirement 190,000 190,000 0Interest and Fiscal Charges 19,350 19,350 0

Total Expenditures 295,000 293,167 1,833

Net Change in Fund Balance (95,000) (89,184) 5,816

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 197,177 197,177 0

Fund Balance End of Year $102,177 $107,993 $5,816

Fund

TylersvilleRoad TIF

100

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Revenue in Lieu of Taxes $35,000 $37,257 $2,257

Total Revenues 35,000 37,257 2,257

Expenditures:Current:

Community Development 35,000 13,447 21,553

Total Expenditures 35,000 13,447 21,553

Net Change in Fund Balance 0 23,810 23,810

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 123,805 123,805 0

Fund Balance End of Year $123,805 $147,615 $23,810

Fund

I‐71Corridor TIF

101

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Revenue in Lieu of Taxes $400,000 $478,332 $78,332

Total Revenues 400,000 478,332 78,332

Expenditures:Current:

Community Development 356,375 355,977 398Capital Outlay 34,000 33,337 663Debt Service:Principal Retirement 25,000 25,000 0Interest and Fiscal Charges 100,625 100,625 0

Total Expenditures 516,000 514,939 1,061

Net Change in Fund Balance (116,000) (36,607) 79,393

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 493,168 493,168 0

Fund Balance End of Year $377,168 $456,561 $79,393

Fund

Everybody'sFarm TIF

102

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Revenue in Lieu of Taxes $170,000 $179,209 $9,209

Total Revenues 170,000 179,209 9,209

Expenditures:Current:

Transportation and Street Repair 75,000 69,450 5,550

Total Expenditures 75,000 69,450 5,550

Net Change in Fund Balance 95,000 109,759 14,759

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 8,850 8,850 0

Fund Balance End of Year $103,850 $118,609 $14,759

Fund

JW HarrisTIF

103

THIS PAGE INTENTIONALLY LEFT BLANK

104

NONMAJOR DEBT SERVICE FUNDS  Fund Descriptions  

General Obligation Bond Retirement  ‐ To accumulate monies  for  the payment of  long–term and short–term debt issued without a vote of the people.    

Special  Assessment  Bond  Retirement  ‐  To  account  for  payment  of  bonds  issued  for improvements deemed to benefit specific properties against which assessments are levied.   

Government Center Bond Retirement ‐ This fund is used to account for the financial resources and  expenditures  (debt  principal  and  interest  payments)  related  to  the  construction  of  the Mason Municipal Center.      

105

City of Mason, Ohio

Combining Balance Sheet

Nonmajor Debt Service FundsDecember 31, 2014

Total

General Special Government Nonmajor

Obligation Assessment Center Debt Service

Bond Retirement Bond Retirement Bond Retirement Funds

Assets:

Equity in Pooled Cash and Investments $830,279 $19,538 $344,816 $1,194,633

Restricted Cash 0 0 1,632,763 1,632,763

Receivables (Net): 

  Taxes 1,621,504 0 0 1,621,504

  Interest 0 0 2,878 2,878

  Intergovernmental 108,922 0 0 108,922

Total Assets 2,560,705 19,538 1,980,457 4,560,700

Liabilities:

Accounts Payable 0 0 660 660

Total Liabilities     0 0 660 660

Deferred Inflows of Resources:

Property Taxes 1,621,504 0 0 1,621,504

Grants and Other Taxes 108,922 0 0 108,922

Investment Earnings 0 0 2,878 2,878

Total Deferred Inflows of Resources     1,730,426 0 2,878 1,733,304

Fund Balances:

  Restricted 830,279 19,538 0 849,817

  Assigned 0 0 1,976,919 1,976,919

Total Fund Balances    830,279 19,538 1,976,919 2,826,736

Total Liabilities, Deferred Inflows and Fund Balances         $2,560,705 $19,538 $1,980,457 $4,560,700

106

City of Mason, Ohio

Combining Statement of Revenues, Expenditures

and Changes in Fund Balance

Nonmajor Debt Service FundsFor the Fiscal Year Ended December 31, 2014

TotalGeneral Special Government NonmajorObligation Assessment Center Debt Service

Bond Retirement Bond Retirement Bond Retirement FundsRevenues:

Property and Other Taxes $1,538,376 $0 $0 $1,538,376

Investment Earnings $0 $0 $12,806 $12,806

Intergovernmental 217,119 0 0 217,119

Special Assessments 0 6,477 0 6,477

Total Revenues 1,755,495 6,477 12,806 1,774,778

Expenditures:

Current:

Debt Service:

Principal 1,175,000 0 940,000 2,115,000

Interest and Other Charges 724,108 595 657,685 1,382,388

Total Expenditures 1,899,108 595 1,597,685 3,497,388

Excess of Revenues Over (Under) Expenditures (143,613) 5,882 (1,584,879) (1,722,610)

Other Financing Sources (Uses):

Transfers In 238,844 0 1,600,000 1,838,844

Transfers (Out)  0 (7,000) 0 (7,000)

Total Other Financing Sources (Uses) 238,844 (7,000) 1,600,000 1,831,844

Net Change in Fund Balance 95,231 (1,118) 15,121 109,234

Fund Balance ‐ Beginning of Year, Restated 735,048 20,656 1,961,798 2,717,502

Fund Balance ‐ End of Year $830,279 $19,538 $1,976,919 $2,826,736

107

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Taxes $1,515,000 $1,538,376 $23,376Intergovernmental 175,000 217,119 42,119

Total Revenues 1,690,000 1,755,494 65,494

Expenditures:Current:Debt Service:Principal Retirement 1,175,000 1,175,000 0Interest and Fiscal Charges 725,000 724,108 892

Total Expenditures 1,900,000 1,899,108 892

Excess of Revenues Over (Under) Expenditures (210,000) (143,614) 66,386

Other Financing Sources (Uses):Transfers In 238,000 238,844 844

Total Other Financing Sources (Uses) 238,000 238,844 844

Net Change in Fund Balance 28,000 95,230 67,230

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 735,049 735,049 0

Fund Balance End of Year $763,049 $830,279 $67,230

Fund

ObligationGeneral

Bond Retirement

108

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Special Assessments $0 $6,477 $6,477

Total Revenues 0 6,477 6,477

Expenditures:Current:Debt Service:Principal Retirement 7,000 7,000 0Interest and Fiscal Charges 1,088 683 405

Total Expenditures 8,088 7,683 405

Net Change in Fund Balance (8,088) (1,206) 6,882

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 20,745 20,745 0

Fund Balance End of Year $12,657 $19,539 $6,882

Fund

SpecialAssessment

Bond Retirement

109

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Investment Earnings $0 $19,305 $19,305

Total Revenues 0 19,305 19,305

Expenditures:Debt Service:Principal Retirement 940,000 940,000 0Interest and Fiscal Charges 660,700 659,125 1,575

Total Expenditures 1,600,700 1,599,125 1,575

Excess of Revenues Over (Under) Expenditures (1,600,700) (1,579,820) 20,880

Other Financing Sources (Uses):Transfers In 1,600,000 1,600,000 0

Total Other Financing Sources (Uses) 1,600,000 1,600,000 0

Net Change in Fund Balance (700) 20,180 20,880

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 1,971,650 1,971,650 0

Fund Balance End of Year $1,970,950 $1,991,830 $20,880

GovernmentCenter

Bond RetirementFund

110

OTHER GENERAL FUNDS 

 With the implementation of GASB Statement No. 54, certain funds that the City prepares legally adopted budgets for no longer meet the definition to be reported as Special Revenue funds and have been included with the General Fund in the governmental fund financial statements.  The City has only presented the budget schedules for these funds.   Fund Descriptions  General Capital Improvement  ‐ To account as a  separate division of the General Fund to reserve resources for capital improvements identified through the City’s capital improvement plan and to reserve funds for payment of short‐term debt.  Employee Medical Insurance – To account for resources and expenditures for employee health, life, and disability benefits.    City Contributions – To account for donations and contributions given to the City of Mason for specific and restrictive use.  Unclaimed Monies  –To  account  for  funds  not  claimed   by  the  owner  of  the  funds.  Most unclaimed funds is the result of outstanding checks issued by the City of Mason. 

111

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Intergovernmental $0 $9,720 $9,720Other Revenues 0 678,405 678,405

Total Revenues 0 688,125 688,125

Expenditures:Current:Capital Outlay 13,267,491 12,689,742 577,749Debt Service:Principal Retirement 11,100,000 11,055,000 45,000Interest and Fiscal Charges 247,400 173,001 74,399

Total Expenditures 24,614,891 23,917,743 697,148

Excess of Revenues Over (Under) Expenditures (24,614,891) (23,229,618) 1,385,273

Other Financing Sources (Uses):Issuance of Debt 7,250,000 8,551,968 1,301,968Transfers In 10,050,000 10,050,000 0Transfers (Out)  (7,750,000) (7,729,000) 21,000

Total Other Financing Sources (Uses) 9,550,000 10,872,968 1,322,968

Net Change in Fund Balance (15,064,891) (12,356,650) 2,708,241

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 22,435,068 22,435,068 0

Fund Balance End of Year $7,370,177 $10,078,418 $2,708,241

(1) This fund is combined with the General fund in GAAP Statements.

General CapitalImprovement

Fund (1)

112

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Charges for Services $1,334,784 $1,317,786 ($16,998)Other Revenues 0 446,437 446,437

Total Revenues 1,334,784 1,764,223 429,439

Expenditures:Current:General Government 410,267 346,813 63,454Public Safety 722,500 722,500 0Leisure Time Activities 205,700 205,700 0Community Development 17,000 17,000 0Basic Utility 283,336 283,336 0

Total Expenditures 1,638,803 1,575,349 63,454

Net Change in Fund Balance (304,019) 188,874 492,893

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 1,352,597 1,352,597 0

Fund Balance End of Year $1,048,578 $1,541,471 $492,893

(1) This fund is combined with the General fund in GAAP Statements.

Employee MedicalInsuranceFund (1)

113

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Other Revenues $0 $0 $0

Total Revenues 0 0 0

Expenditures:Current:General Government 120,000 0 120,000

Total Expenditures 120,000 0 120,000

Net Change in Fund Balance (120,000) 0 120,000

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 120,206 120,206 0

Fund Balance End of Year $206 $120,206 $120,000

(1) This fund is combined with the General fund in GAAP Statements.

CityContributions

Fund (1)

114

City of Mason, OhioSchedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual (Non‐GAAP Budgetary Basis)For the Fiscal Year Ended December 31, 2014

Final Variance fromBudget Actual Final Budget

Revenues:Other Revenues $0 $11,946 $11,946

Total Revenues 0 11,946 11,946

Expenditures:Current:General Government 45,000 0 45,000

Total Expenditures 45,000 0 45,000

Net Change in Fund Balance (45,000) 11,946 56,946

Fund Balance Beginning of Year (includes prior year encumbrances appropriated) 60,001 60,001 0

Fund Balance End of Year $15,001 $71,947 $56,946

(1) This fund is combined with the General fund in GAAP Statements.

UnclaimedMoniesFund (1)

115

NONMAJOR FUNDS  

Fiduciary  Funds:    Fiduciary  fund  types  are  used  to  account  for  assets  held  by  the  City  in  a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. 

 Fund Descriptions 

 Agency Fund ‐ Municipal Court ‐ To account for amounts held on behalf of other governments and bonds deposited with the court pending final disposition of various causes.  Agency Fund  ‐ Mason Port Authority  ‐ To enhance  future development opportunities  in  the City, to support the economic development strategies of the City and to promote participation in activities that will have a positive impact on the general economic wealth of Mason.  Agency Fund  ‐ Community  Improvement Corporation  ‐ To account  for custodial  transactions related to community improvement. 

116

City of Mason, Ohio

Statement of Changes In Assets and Liabilities

Agency FundsFor the Fiscal Year Ended December 31, 2014

Beginning Ending

Balance Additions Deductions Balance

Assets:Equity in Pooled Cash and Investments $97,798 $2,029,945 $2,073,351 $54,392

Total Assets 97,798 2,029,945 2,073,351 54,392

Liabilities:

Due to Others 97,798 2,029,945 2,073,351 54,392

Total Liabilities     $97,798 $2,029,945 $2,073,351 $54,392

Beginning Ending

Balance Additions Deductions Balance

Assets:

Equity in Pooled Cash and Investments $558,511 $425,506 $16,863 $967,154

Receivables (Net): 

  Accounts 60,000 0 60,000 0

Total Assets 618,511 425,506 76,863 967,154

Liabilities:

Due to Others 618,511 425,506 76,863 967,154

Total Liabilities     $618,511 $425,506 $76,863 $967,154

Beginning Ending

Balance Additions Deductions Balance

Assets:

Equity in Pooled Cash and Investments $274,519 $16,476 $23,656 $267,339

Total Assets 274,519 16,476 23,656 267,339

Liabilities:

Accounts Payable 0 654 0 654

Due to Others 274,519 15,822 23,656 266,685

Total Liabilities     $274,519 $16,476 $23,656 $267,339

Continued

Municipal

Mason Port

Authority

Court

Community

Improvement

Corporation

117

City of Mason, Ohio

Statement of Changes In Assets and Liabilities

Agency FundsFor the Fiscal Year Ended December 31, 2014

Total All Agency Funds

Beginning Ending

Balance Additions Deductions Balance

Assets:

Equity in Pooled Cash and Investments $930,828 $2,471,927 $2,113,870 $1,288,885

Receivables (Net): 

  Accounts 60,000 0 60,000 0

Total Assets 990,828 2,471,927 2,173,870 1,288,885

Liabilities:

Accounts Payable 0 654 0 654

Due to Others 990,828 2,471,273 2,173,870 1,288,231

Total Liabilities     $990,828 $2,471,927 $2,173,870 $1,288,885

118

STATISTICAL SECTION

City of Mason, Ohio Statistical Section                        This part of the City's comprehensive annual financial report presents detailed information as a context for  understanding what  the  information  in  the  financial  statements,  note  disclosures,  and  required supplementary information says about the City's overall financial health.  

Contents   Financial Trends:   These schedules contain  trend  information  to help  the  reader understand how  the City's financial position has changed over time.  Revenue Capacity:  These schedules contain information to help the reader understand and assess the City’s most significant local revenue sources, income tax and property tax.  Debt Capacity:   These schedules present  information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City's ability to issue additional debt in the future.  Economic and Demographic Information:  These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place and to  provide  information  that  facilitates  comparisons  of  financial  information  over  time  and  among governments.  Operating  Information:    These  schedules  contain  service  and  infrastructure  data  to  help  the  reader understand how  the  information  in  the City’s  financial  report  relates  to  the services  the City provides and the activities it performs.  Sources:  Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.   

119

City of Mason, O

hio

Net Position by Componen

tLast Ten

 Fiscal Years

(accrual basis of accounting)

Table 1

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Governmen

tal A

ctivities

   Net Investmen

t in Capital Assets

$89,318,991

$96,275,726

$104,293,216

$110,110,444

$117,869,403

$120,098,234

$122,687,025

$129,162,686

$128,860,388

$137,675,713

   Restricted

14,336,740

14,692,178

16,202,333

20,076,208

18,245,889

16,361,953

16,842,649

13,822,941

14,942,529

15,932,379

   Unrestricted

28,401,484

34,803,772

34,036,236

30,968,181

25,722,145

30,227,053

33,233,298

41,380,921

51,370,384

50,379,969

Total G

overnmen

tal A

ctivities Net Position

$132,057,215

$145,771,676

$154,531,785

$161,154,833

$161,837,437

$166,687,240

$172,762,972

$184,366,548

$195,173,301

$203,988,061

Business‐Type Activities

   Net Investmen

t in Capital Assets

$73,165,544

$66,801,441

$69,332,672

$72,445,005

$77,388,687

$81,821,259

$81,978,537

$88,637,940

$88,126,890

$89,504,980

   Restricted

11,290,444

10,055,068

10,283,063

8,331,342

4,069,854

4,107,379

4,135,486

784,933

786,591

788,035

   Unrestricted

6,610,919

7,280,452

8,109,114

8,494,022

15,260,353

10,898,229

10,851,775

10,148,188

11,896,384

15,094,142

Total Business‐Type Activities Net Position

$91,066,907

$84,136,961

$87,724,849

$89,270,369

$96,718,894

$96,826,867

$96,965,798

$99,571,061

$100,809,865

$105,387,157

Primary Governmen

t

   Net Investmen

t in Capital Assets

$162,484,535

$163,077,167

$173,625,888

$182,555,449

$195,258,090

$201,919,493

$204,665,562

$217,800,626

$216,987,278

$227,180,693

   Restricted

25,627,184

24,747,246

26,485,396

28,407,550

22,315,743

20,469,332

20,978,135

14,607,874

15,729,120

16,720,414

   Unrestricted

35,012,403

42,084,224

42,145,350

39,462,203

40,982,498

41,125,282

44,085,073

51,529,109

63,266,768

65,474,111

Total G

overnmen

tal A

ctivities Net Position

$223,124,122

$229,908,637

$242,256,634

$250,425,202

$258,556,331

$263,514,107

$269,728,770

$283,937,609

$295,983,166

$309,375,218

Source:  City of Mason, O

hio, D

epartm

ent of Finance

Fiscal Year

120

City of Mason, O

hio

Changes in Net Position

Last Ten

 Fiscal Years

(accrual basis of accounting)

Table 2

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Expenses

Governmen

tal A

ctivities:

   Gen

eral Governmen

t$10,055,191

$8,304,944

$8,820,685

$8,797,340

$8,969,554

$8,418,723

$8,793,043

$8,831,767

$6,893,775

$8,253,186

   Public Safety

7,647,086

10,239,722

12,057,909

12,041,878

11,758,497

11,753,670

12,287,188

12,023,613

12,986,006

13,513,159

   Leisure Tim

e Activities

1,927,193

2,345,289

2,643,993

2,884,015

2,860,505

2,426,474

2,301,816

2,314,310

2,198,219

2,882,829

   Community Developmen

t1,219,316

1,682,201

1,669,502

1,453,739

1,831,149

2,016,271

2,463,108

2,676,490

2,508,451

2,425,668

   Basic Utility Service

0513,694

252,588

251,649

233,714

224,627

295,972

277,539

281,729

283,225

   Transportation and Street Rep

air

3,433,612

4,163,181

6,495,013

5,928,246

4,156,093

4,691,128

5,542,878

6,231,801

8,183,460

7,324,935

   Interest and Fiscal Charges

1,685,015

1,821,938

2,259,101

2,214,589

1,981,386

1,459,621

1,830,059

1,826,561

1,659,947

1,581,121

Total G

overnmen

tal A

ctivities Expen

ses

25,967,413

29,070,969

34,198,791

33,571,456

31,790,898

30,990,514

33,514,064

34,182,081

34,711,587

36,264,123

Business‐type activities

   Sewer

3,838,763

5,511,880

6,308,598

6,467,230

6,287,295

6,335,376

6,400,635

5,962,355

6,248,535

5,743,995

   Waste Collection

1,067,929

1,129,056

1,269,478

1,390,404

1,437,256

1,498,606

1,558,320

1,440,349

1,384,282

1,413,025

   Storm

water Utility

1,051,464

1,067,755

1,073,116

1,097,373

1,011,631

1,062,423

1,134,861

1,165,556

1,142,284

1,117,558

   Community Cen

ter

3,112,769

2,439,545

3,039,852

3,041,733

3,332,634

3,905,317

4,611,276

5,372,732

5,898,548

6,483,630

   Golf Course

00

3,145,633

3,864,928

3,246,476

3,158,462

3,239,390

2,665,088

2,651,261

2,811,835

Total business‐type activities expen

ses

9,070,925

10,148,236

14,836,677

15,861,668

15,315,292

15,960,184

16,944,482

16,606,080

17,324,910

17,570,043

Total primary governmen

t expen

ses

$35,038,338

$39,219,205

$49,035,468

$49,433,124

$47,106,190

$46,950,698

$50,458,546

$50,788,161

$52,036,497

$53,834,166

Program

 Revenues

Governmen

tal A

ctivities:

   Charges for Services:

      Gen

eral Governmen

t$1,211,763

$1,491,615

$1,319,112

$2,047,656

$2,088,882

$2,258,954

$1,931,606

$2,122,272

$2,057,346

$2,793,861

      Public Safety

1,551,532

1,747,817

1,704,048

1,048,709

1,321,832

1,251,431

1,321,705

1,542,684

1,236,491

1,410,863

      Leisure Tim

e Activities

407,548

514,992

585,664

561,063

564,185

555,017

452,927

443,332

432,908

589,526

      Community Developmen

t489,196

391,088

442,307

513,136

306,726

354,236

472,771

503,782

599,799

1,047,156

      Basic Utility Service

0228,738

276,203

286,189

263,341

255,781

303,507

319,006

298,529

316,009

     Transportation and Street Rep

air

013,969

9,865

7,600

6,400

17,248

12,245

10,400

26,679

73,791

      Interest and Fiscal Charges

6,022

963

00

00

00

00

   Operating Grants and Contributions

1,847,807

2,352,269

2,567,109

2,935,939

3,469,094

3,081,227

863,594

783,868

3,562,350

2,368,802

   Capital Grants and Contributions

3,175,748

2,914,592

3,080,139

2,243,632

2,060,510

2,568,453

4,136,353

6,139,061

1,712,043

2,501,501

Total G

overnmen

tal A

ctivities Program

 Reven

ues

8,689,616

9,656,043

9,984,447

9,643,924

10,080,970

10,342,347

9,494,708

11,864,405

9,926,145

11,101,509

Business‐Type Activities

    Charges for Services:

      Sewer

5,288,919

5,342,578

5,529,145

5,486,608

5,413,042

5,370,169

5,457,968

5,934,351

6,100,178

6,511,953

      Waste Collection

1,028,451

1,075,574

1,257,739

1,392,019

1,427,989

1,501,222

1,484,311

1,580,927

1,582,570

1,595,826

Fiscal Year

121

City of Mason, O

hio

Changes in Net Position

Last Ten

 Fiscal Years

(accrual basis of accounting)

Table 2 (Continued

)

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

    Charges for Services: (continued

)

      Storm

water Utility

788,602

793,059

808,253

836,751

832,872

838,534

964,294

1,078,126

1,142,264

1,472,169

      Community Cen

ter

2,537,560

2,749,431

2,518,080

2,074,846

1,839,654

2,416,729

4,530,466

5,985,612

6,445,131

6,653,029

      Golf Course

00

2,385,062

2,408,790

2,225,669

2,107,523

1,978,633

1,966,766

1,871,546

1,936,890

   Operating Grants and Contributions

00

00

00

020,000

00

   Capital Grants and Contributions

3,807,321

3,167,731

3,516,835

762,214

642,683

519,910

963,382

1,572,077

779,644

2,786,840

Total Business‐Type Activities Program

 Reven

ues

13,450,853

13,128,373

16,015,114

12,961,228

12,381,909

12,754,087

15,379,054

18,137,859

17,921,333

20,956,707

Total Primary Governmen

t Program

 Reven

ues

$22,140,469

$22,784,416

$25,999,561

$22,605,152

$22,462,879

$23,096,434

$24,873,762

$30,002,264

$27,847,478

$32,058,216

Net (Expen

se)/Reven

ue

Governmen

tal A

ctivities

($17,277,797)

($19,414,926)

($24,214,344)

($23,927,532)

($21,709,928)

($20,648,167)

($24,019,356)

($22,317,676)

($24,785,442)

($25,162,614)

Business‐Type Activities

4,379,928

2,980,137

1,178,437

(2,900,440)

(2,933,383)

(3,206,097)

(1,565,428)

1,531,779

596,423

3,386,664

Total Primary Governmen

t Net Expen

se($12,897,869)

($16,434,789)

($23,035,907)

($26,827,972)

($24,643,311)

($23,854,264)

($25,584,784)

($20,785,897)

($24,189,019)

($21,775,950)

  

General R

evenues an

d Other Chan

ges in Net Position

Governmen

tal A

ctivities:

   Income Taxes

$19,803,888

$21,324,631

$20,514,861

$22,265,663

$20,749,797

$18,823,241

$20,615,343

$22,957,701

$26,314,564

$25,867,801

   Property Taxes Levied for:

      Gen

eral Purposes

1,861,088

2,068,561

2,116,689

1,294,885

1,196,087

498,141

583,084

542,228

611,485

423,801

      Special Reven

ue Purposes

4,125,581

4,121,987

4,161,619

3,966,207

3,859,491

3,868,790

3,860,898

3,823,815

3,966,997

3,886,757

      Deb

t Service Purposes

181,859

85,178

378,098

380,224

1,385,822

1,625,282

1,547,804

1,536,649

1,523,714

1,541,012

      Capital Project Purposes

217,918

275,675

440,642

546,268

509,685

00

00

0

   Unrestricted

 Grants and Entitlem

ents

1,915,791

3,208,505

3,103,589

3,149,438

2,787,157

2,367,375

2,870,852

2,514,375

2,608,730

1,337,037

   Paymen

t in Lieu of Taxes

00

00

0818,970

1,026,869

2,398,676

1,007,338

1,192,962

   Investmen

t Earnings

910,574

1,928,561

2,725,268

1,997,266

208,558

151,128

211,821

257,148

105,613

318,366

   Other Reven

ues

375,644

558,488

820,723

665,897

921,424

567,068

964,417

887,160

985,437

455,638

   Transfers‐Internal Activities

(1,345,662)

326,510

(1,287,036)

(3,715,268)

(9,038,489)

(3,222,025)

(1,586,000)

(996,500)

(1,054,000)

(1,046,000)

Total G

overnmen

tal A

ctivities 

28,046,681

33,898,096

32,974,453

30,550,580

22,579,532

25,497,970

30,095,088

33,921,252

36,069,878

33,977,374

Business‐Type Activities

   Investmen

t Earnings

898,940

980,492

1,121,249

720,066

83,653

62,180

97,787

63,321

29,511

83,495

   Other Reven

ues

12,077

16,542

1,166

10,626

029,865

20,572

13,663

26,313

61,133

   Transfers‐Internal Activities

1,345,662

(326,510)

1,287,036

3,715,268

9,038,489

3,222,025

1,586,000

996,500

1,054,000

1,046,000

   Special Item

0(10,580,607)

00

00

00

00

Total  Business‐Type Activities 

2,256,679

(9,910,083)

2,409,451

4,445,960

9,122,142

3,314,070

1,704,359

1,073,484

1,109,824

1,190,628

Total Primary Governmen

t $30,303,360

$23,988,013

$35,383,904

$34,996,540

$31,701,674

$28,812,040

$31,799,447

$34,994,736

$37,179,702

$35,168,002

Fiscal Year

122

City of Mason, O

hio

Changes in Net Position

Last Ten

 Fiscal Years

(accrual basis of accounting)

Table 2 (Continued

)

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Chan

ges in Net Position

Governmen

tal A

ctivities

$10,768,884

$14,483,170

$8,760,109

$6,623,048

$869,604

$4,849,803

$6,075,732

$11,603,576

$11,284,436

$8,814,760

Business‐Type Activities

6,636,607

(6,929,946)

3,587,888

1,545,520

6,188,759

107,973

138,931

2,605,263

1,706,247

4,577,292

Total Primary Governmen

t $17,405,491

$7,553,224

$12,347,997

$8,168,568

$7,058,363

$4,957,776

$6,214,663

$14,208,839

$12,990,683

$13,392,052

Source:  City of Mason, O

hio, D

epartm

ent of Finance

Fiscal Year

123

City of Mason, O

hio

Governmen

tal A

ctivities Tax Reven

ues by  Source

Last Ten

 Fiscal Years

(accrual basis of accounting)

Table 3

Fiscal

Special

Debt

Total Property

Year

Income Tax

General 

Revenue

Service

Taxes

Total

2005

$19,803,888

$1,861,088

$4,125,581

$399,777

$6,386,446

$26,190,334

2006

21,324,631

2,068,561

4,121,987

360,853

6,551,401

27,876,032

2007

20,514,861

2,116,689

4,161,619

818,740

7,097,048

27,611,909

2008

22,265,663

1,294,885

3,966,207

926,492

6,187,584

28,453,247

2009

20,749,797

1,196,087

3,859,491

1,895,507

6,951,085

27,700,882

2010

18,823,241

498,141

3,868,790

1,625,282

5,992,213

24,815,454

2011

20,615,343

583,084

3,860,898

1,547,804

5,991,786

26,607,129

2012

22,957,701

542,228

3,823,815

1,536,649

5,902,692

28,860,393

2013

26,314,564

611,485

3,966,997

1,523,714

6,102,196

32,416,760

2014

25,867,801

423,801

3,886,757

1,541,012

5,851,570

31,719,371

Source:  City of Mason, O

hio, D

epartm

ent of Finance

      Property taxes levied for:

124

City of Mason, O

hio

Fund Balances of Governmen

tal Funds

Last Ten

 Fiscal Years

(modified accrual basis of accounting)

Table 4

2005

2006

2007

2008

2009

2010

2011 (1)

2012

2013

2014

Gen

eral Fund

   Nonspen

dable

$324,731

$282,460

$282,398

$344,898

   Assigned

19,081,712

22,788,806

22,794,902

20,543,640

   Reserved

$10,729,834

$12,032,677

$7,511,771

$11,959,422

$8,243,141

$8,724,982

 

   Unassigned

5,460,148

7,334,177

12,876,440

17,623,466

   Unreserved

5,580,027

6,524,041

15,222,929

12,693,451

10,650,144

13,044,258

 

Total G

eneral Fund

$16,309,861

$18,556,718

$22,734,700

$24,652,873

$18,893,285

$21,769,240

$24,866,591

$30,405,443

$35,953,740

$38,512,004

All Other Governmen

tal Funds

   Nonspen

dable

32,267

31,565

26,839

18,997

   Restricted

14,956,736

12,786,546

13,722,199

14,283,876

   Committed

686

686

686

686

   Assigned

2,000,407

2,026,338

2,074,188

2,120,201

   Reserved

1,633,574

7,375,036

4,593,699

2,948,109

7,468,085

4,654,587

 

   Unassigned

0(238,084)

(215,251)

(172,219)

   Unreserved

, Rep

orted

 in:

      Special Reven

ue Funds

8,460,746

4,582,009

9,674,826

9,860,224

5,711,471

8,762,011

 

      Deb

t Service Funds

335,878

54,128

90,938

145,176

2,483,332

1,022,104

 

      Capital Projects  Funds

2,132,108

999,083

4,233,983

5,402,670

00

 

Total A

ll Other Governmen

tal Funds

$12,562,306

$13,010,256

$18,593,446

$18,356,179

$15,662,888

$14,438,702

$16,990,096

$14,607,051

$15,608,661

$16,251,541

Source:  City of Mason, O

hio, D

epartm

ent of Finance

(1)    ‐ Prior year amounts have not been restated for the im

plemen

tation of GASB

 Statemen

t 54.  The change in

 the classification of fund balance amounts in

 2011 are discussed

 in the Notes to the Financial Statemen

ts

Fiscal Year

125

City of Mason, O

hio

Changes in Fund Balances of Governmen

tal Funds

Last Ten

 Fiscal Years

(modified accrual basis of accounting)

Table 5

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Revenues

   Taxes

$25,337,338

$28,120,047

$29,086,348

$28,224,092

$28,023,892

$25,891,786

$26,962,137

$29,277,581

$32,703,069

$33,711,798

   Fines, Licen

ses & Permits

2,285,087

2,208,160

2,102,920

2,210,168

1,993,982

2,161,872

2,011,841

2,238,725

2,328,919

3,003,599

   Charges for Services

978,335

1,842,446

1,965,830

1,926,084

2,158,383

1,997,882

2,092,708

2,076,044

2,174,388

2,135,411

   Investmen

t Earning

950,697

1,758,873

2,625,347

2,204,775

244,519

153,341

220,863

236,004

91,918

307,704

   Intergovernmen

tal

3,628,520

5,230,246

5,419,535

5,914,718

5,698,095

7,839,983

6,533,427

7,793,877

5,885,803

4,612,903

   Special A

ssessm

ents

137,175

93,272

99,374

93,501

69,847

86,162

62,767

13,364

13,426

6,477

   Other Reven

ue

706,464

944,165

1,148,050

996,019

1,311,066

1,926,875

2,267,578

3,645,661

2,518,816

3,386,979

Total Reven

ues

34,023,616

40,197,209

42,447,404

41,569,357

39,499,784

40,057,901

40,151,321

45,281,256

45,716,339

47,164,871

Expenditures

   Gen

eral Governmen

t8,186,487

8,101,110

8,179,399

8,068,369

8,507,087

7,718,852

7,938,713

8,245,266

6,287,335

7,598,473

   Public Safety

7,107,465

10,084,749

11,442,311

11,343,794

11,312,988

11,054,466

11,766,834

11,717,593

12,381,894

13,017,332

   Leisure Tim

e Activities

1,736,255

2,117,159

2,391,309

2,488,160

2,362,857

1,787,595

1,835,718

1,722,418

1,710,742

1,959,721

   Community Developmen

t977,332

1,670,017

1,493,853

1,452,353

1,813,014

2,010,136

2,451,462

2,423,239

2,498,610

2,904,994

   Basic Utility Service

0513,694

252,588

251,649

233,714

224,627

295,972

277,539

281,729

283,225

   Transportation and Street Rep

air

2,251,292

3,153,016

4,043,848

3,543,548

3,202,238

2,753,102

3,536,095

3,084,414

3,467,723

4,998,074

Capital Outlay

6,767,208

8,892,757

13,392,267

10,552,105

7,241,907

9,280,897

3,750,585

9,189,762

7,156,134

8,248,954

Deb

t Service

   Principal Retirem

ent

1,163,420

1,011,000

1,077,000

13,921,000

2,147,000

1,240,000

4,455,000

3,080,000

2,681,250

2,371,250

   Interest and Fiscal Charges

1,471,650

2,038,266

2,013,111

2,412,382

1,992,095

1,556,820

1,863,741

1,791,037

1,657,718

1,578,415

Total Expen

ditures

29,661,109

37,581,768

44,285,686

54,033,360

38,812,900

37,626,495

37,894,120

41,531,268

38,123,135

42,960,438

Excess of Revenues

   Over (Under) Expenditures

4,362,507

2,615,441

(1,838,282)

(12,464,003)

686,884

2,431,406

2,257,201

3,749,988

7,593,204

4,204,433

Fiscal Year

126

City of Mason, O

hio

Changes in Fund Balances of Governmen

tal Funds

Last Ten

 Fiscal Years

(modified accrual basis of accounting)

Table 5 (Continued

)

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Other Finan

cing Sources (Uses)

Transfer In

5,372,100

3,441,338

7,107,110

2,369,200

5,549,055

1,765,820

1,773,664

1,828,365

4,293,511

4,114,144

Transfer Out

(5,375,100)

(3,445,338)

(7,978,110)

(5,786,700)

(14,587,544)

(3,372,367)

(3,359,664)

(2,824,865)

(5,347,511)

(5,160,144)

Issuance of Long‐Term

 Capital‐Related

 Deb

t0

012,450,000

17,570,000

0974,672

4,936,009

450,000

00

Capital Leases

00

00

00

00

25,000

0

Total O

ther Financing Sources (Uses)

(3,000)

(4,000)

11,579,000

14,152,500

(9,038,489)

(631,875)

3,350,009

(546,500)

(1,029,000)

(1,046,000)

Net Change in

 Fund Balances

$4,359,507

$2,611,441

$9,740,718

$1,688,497

($8,351,605)

$1,799,531

$5,607,210

$3,203,488

$6,564,204

$3,158,433

Deb

t Service as a Percentage of 

   Noncapital Expen

ditures

12.5%

12.5%

10.4%

38.4%

14.0%

9.2%

18.9%

14.9%

13.2%

11.3%

Source:  City of Mason, O

hio, D

epartm

ent of Finance

Fiscal Year

127

City of Mason, O

hio

Income Tax Reven

ue by Payer Type

Last Ten

 Fiscal Years

(budget (cash) basis of accounting )

Table 6

Fiscal Year

Withholding

Business

Individual

Total

Withholding

Business

Individual

Total

2005

$11,164,670

$2,961,019

$4,868,994

$18,994,683

58.8%

15.6%

25.6%

100.0%

2006

13,513,267

4,232,817

4,925,272

22,671,356

59.6%

18.7%

21.7%

100.0%

2007

13,167,588

2,779,420

5,280,262

21,227,270

62.0%

13.1%

24.9%

100.0%

2008

13,264,394

4,093,299

4,338,073

21,695,766

61.1%

18.9%

20.0%

100.0%

2009

12,384,345

3,817,042

4,137,703

20,339,090

60.9%

18.8%

20.3%

100.0%

2010

12,894,530

2,630,463

3,708,784

19,233,777

67.0%

13.7%

19.3%

100.0%

2011

13,368,319

2,885,625

4,044,183

20,298,127

65.9%

14.2%

19.9%

100.0%

2012

15,036,406

3,354,868

3,746,111

22,137,385

67.9%

15.2%

16.9%

100.0%

2013

17,387,727

3,732,510

4,577,195

25,697,432

67.7%

14.5%

17.8%

100.0%

2014

18,462,999

3,823,889

4,266,319

26,553,207

69.5%

14.4%

16.1%

100.0%

Fiscal Year

Delin

quent

Penalties

Prior Year

Current Year

Total

2005

$473,596

$211,910

$6,251,436

$12,057,741

$18,994,683

2006

294,034

135,615

6,512,430

15,729,277

22,671,356

2007

778,880

211,143

4,396,944

15,840,303

21,227,270

2008

284,367

158,728

4,977,407

16,248,783

21,669,285

2009

379,196

226,848

4,669,926

15,063,120

20,339,090

2010

202,084

215,264

4,074,582

14,741,847

19,233,777

2011

(163,665)

295,257

5,125,946

15,040,589

20,298,127

2012

308,741

256,627

4,411,346

17,160,671

22,137,385

2013

(51,451)

253,618

5,622,577

19,872,688

25,697,432

2014

253,419

195,400

4,976,987

21,127,401

26,553,207

Source:  City of Mason, O

hio, D

epartm

ent of Finance

Percentage

  of To

tal

(budget (cash) basis of accounting)

Gen

eral Governmen

tal Income Tax Reven

ue by Tax Year

Last Ten

 Fiscal Years

128

City of Mason, O

hio

Assessed and Estim

ated

 Actual Value of Taxable Propert y

Last Ten

 Fiscal Years

Table 7

Total

Assessed Value

Real Property

Public Utility

Tangible Personal Property (1)

Direct

as a Percentage

 of

Tax

Assessed

Estimated

Assessed 

Estimated

Assessed 

Estimated

Assessed

Estimated

Tax

Total Estim

ated

Year

Value

Actual Value

Value

Actual Value

Value

Actual Value

Value

Actual Value

Rate

Actual Value

 

2005

$861,180,630

$2,460,516,085

$16,252,830

$18,469,125

 $110,500,187

$442,000,748

$987,933,647

$2,920,985,958

7.32

33.82%

2006

1,004,936,080

2,871,245,942

16,147,840

18,349,818

 77,362,457

412,599,770

1,098,446,377

3,302,195,530

7.32

33.26%

2007

1,035,101,280

2,957,432,230

13,021,700

14,797,390

 36,731,160

587,698,560

1,084,854,140

3,559,928,180

7.32

30.47%

2008

1,063,362,220

3,038,177,771

13,457,340

15,292,431

4,651,040

74,416,640

1,081,470,600

3,127,886,842

7.32

34.58%

2009

1,001,908,990 

2,862,597,114 

14,371,800 

16,331,590 

3,048,210 

48,771,360 

1,019,329,000

2,927,700,064

7.32

34.82%

2010

1,006,303,280 

2,875,152,229 

15,153,830 

17,220,261 

0 

0 

1,021,457,110

2,892,372,490

7.32

35.32%

2011

1,016,440,490 

2,904,115,685 

12,955,190 

14,721,806 

0 

0 

1,029,395,680

2,918,837,491

7.32

35.27%

2012

961,184,410 

2,746,241,171 

16,625,240 

18,892,318 

0 

0 

977,809,650

2,765,133,489

7.32

35.36%

2013

969,297,620 

2,769,421,771 

18,094,150 

20,561,534 

0 

0 

987,391,770

2,789,983,305

6.72

35.39%

2014

980,478,870 

2,801,371,057 

19,495,730 

22,154,238 

0 

0 

999,974,600

2,823,525,295

6.72

35.42%

Source:  W

arren County Auditor's Office

(1)  Tangible Personal Property Tax was phased

 out

Total

129

City of Mason, O

hio

Property Tax Rates ‐

  Direct and Overlapping Governmen

tsLast Ten

 Fiscal Years

Table 8

Tax

General

Fire

Debt

Mason City

Warren 

Joint

Special

Year

Fund

Operating (2)

Service

Total

School D

istrict

County

Voc. School

District

Total

2005

2.11%

5.00%

0.21%

7.32%

80.65%

6.46%

2.70%

1.50%

98.63%

2006

1.96%

5.00%

0.36%

7.32%

81.76%

6.71%

2.70%

1.50%

99.99%

2007

1.96%

5.00%

0.36%

7.32%

83.45%

6.71%

2.70%

1.50%

101.68%

2008

0.88%

5.00%

1.44%

7.32%

83.45%

5.21%

2.70%

1.50%

100.18%

2009

0.58%

5.00%

1.74%

7.32%

83.45%

5.78%

2.70%

1.50%

100.75%

2010

0.58%

5.00%

1.74%

7.32%

83.45%

5.78%

2.70%

2.25%

101.50%

2011

0.58%

5.00%

1.74%

7.32%

83.45%

7.78%

2.70%

2.25%

103.50%

2012

0.58%

5.00%

1.74%

7.32%

83.97%

7.78%

2.70%

2.25%

104.02%

2013

0.58%

4.40%

1.74%

6.72%

83.97%

7.78%

2.70%

2.25%

103.42%

2014

0.58%

4.40%

1.74%

6.72%

83.97%

7.78%

2.70%

2.25%

103.42%

Source:  W

arren County Auditor's Office

(1)  Rates equivalen

t to $1 in

 tax per $1,000 of assessed

 valuation.

(2)  Tax year 2013 was first year for levy approved by charter am

endmen

t for fire, emergency m

edical and safety services.  Charter allows up to 5 m

ills (5% per $1,000 ).

       

City of Mason

Overlap

ping Rates

130

City of Mason, O

hio

Principal Property Taxpayers

Decem

ber 31, 2014

 Table 9

Percentage

 Of

Percentage

 Of

 Assessed

Total A

ssessed

Assessed

Total A

ssessed

Taxpayer

Valuation (1)

Ran

kValuation

Valuation

Ran

kValuation

Kings Island Company

$20,158,260

12.06%

$34,561,270

13.53%

Duke Energy Ohio Inc.

19,210,030 

2 

1.96%

9,930,440 

6 

1.01%

Twin Fountains of Mason

8,044,720

30.82%

0.00%

Tennis for Charity

5,941,480 

4 

0.61%

 

LM Developmen

t Co LTD

/Makino

4,724,780 

5 

0.44%

6,927,740 

7 

0.71%

 

Cintas Sales Corporation

4,340,060 

6 

0.30%

 

Mitsubishi Electric Auto

4,179,790 

7 

0.48%

16,732,140 

2 

1.71%

Mason Christian Village

2,899,300 

8 

0.43%

6,094,360 

8 

0.62%

H J Heinz Co LLP

2,762,290 

9 

0.28%

4,991,140

10 

0.51%

Optimus Mason II LLC

2,443,690 

10 

0.25%

Procter & Gam

ble Company

13,272,740 

3 

1.36%

Cintas Corporation #2

12,794,510 

4 

1.31%

UBE Automotive

12,132,590 

5 

1.24%

Blackhaw

k Automotive

6,026,030 

9 

0.62%

All Others

905,774,470 

92.38%

855,239,450 

87.39%

  

  

 

  

Total A

ssessed Valuation

$980,478,870

100.00%

$978,702,410

100.00%

(1)  Assessed valuation declined

 since tangible personal property tax was phased

 out in 2011 for inventory, m

achinery and equipmen

t.

Source:  W

arren County Auditor's Office

Fiscal Year 2014

Fiscal  Year 2004

131

City of Mason, O

hio

Property Tax Levies and Collections ‐

  Real, Public Utility and Tangible Personal Propert y

Table 10

Tax Year:

2004/2005

2005/2006

2006/2007

2007/2008

2008/2009

2009/2010

2010/2011

2011/2012

2012/2013

2013/2014

Fiscal Year:

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Curren

t Tax Levy

$6,932,404

$6,803,940

$7,010,538

$7,194,535

$6,829,232

$6,710,366

$6,680,693

$6,846,621

$6,714,798

$6,623,235

 

Curren

t Tax Collections

6,657,907

6,580,586

6,813,112

6,932,137

6,605,764

6,365,555

6,431,397

6,707,544

6,606,807

6,530,015

Percent of Levy Collected

96.04%

96.72%

97.18%

96.35%

96.73%

94.86%

96.27%

97.97%

98.39%

98.59%

Delinquen

t Tax Collections (1)

167,596

125,232

221,301

176,537

176,271

152,780

142,457

414,651

188,875

128,004

Total Tax Collections

6,825,503

6,705,818

7,034,413

7,108,674

6,782,035

6,518,335

6,573,854

7,122,195

6,795,682

6,658,019

Ratio of To

tal Tax Collections

   to Curren

t Taxes Levied

98.46%

98.56%

100.34%

98.81%

99.31%

97.14%

98.40%

104.02%

101.20%

100.53%

Source:  W

arren County Auditor's Office

(1)  Delinquen

t Tax Collections by levy year are not available. O

nly Delinquen

t Tax Collections by collection year are available and presented.

        The County does not iden

tify delinquen

t collections by the year for which the tax was levied

.

132

City of Mason, O

hio

Special A

ssessm

ent Billings and Collections

Last Ten

 Fiscal Years

Table 11

Current

Current 

Ratio of

Tax

Assessments

Assessments

Collection

Year

Billings

Collected

To Amount Billed

2004

$135,244

$124,578

92.11%

2005

109,086

93,272

85.50%

2006

89,047

81,902

91.98%

2007

85,635

54,338

63.45%

2008

78,433

66,741

85.09%

2009

75,692

74,226

98.06%

2010

63,322

60,878

96.14%

2011

10,833

10,833

100.00%

2012

14,852

14,011

94.34%

2013

7,544

6,160

81.65%

Source:  W

arren County Auditor's Office

Note:  Tax Year 2013 is billed

 and due in 2014

133

City of Mason, O

hio

Ratios of Outstanding Deb

t by Type

Last Ten

 Fiscal Years

Table 12

General

Bond

Tax

Certificates

Special

Taxable

Total

Fiscal 

Obligation

Anticipation

Increment

of

Assessments

Revenue

Cap

ital

Governmental

Year

Bonds

Notes

Finan

cing

Participation

Bonds

Note

Leases

Activities

2005

$3,640,000

$9,400,000

$3,405,000

$21,650,000

$551,000

$0

$0

$38,646,000

2006

3,425,000

19,700,000

3,350,000

21,005,000

455,000

00

47,935,000

2007

3,200,000

20,350,000

3,265,000

20,335,000

358,000

00

47,508,000

2008

20,215,000

4,200,000

3,140,000

19,640,000

262,000

00

47,457,000

2009

19,320,000

6,300,000

2,710,000

18,915,000

165,000

00

47,410,000

2010

20,530,000

3,800,000

2,495,000

18,325,000

70,000

3,025,000

048,245,000

2011

20,315,000

3,500,000

3,865,000

17,470,000

03,070,000

048,220,000

2012

19,215,000

3,200,000

3,230,000

16,575,000

03,120,000

045,340,000

2013

18,090,000

7,885,000

2,595,000

15,660,000

03,170,000

18,750

47,418,750

2014

16,915,000

8,500,000

2,345,000

14,720,000

00

12,500

42,492,500

General

Mortgage

Bond

Certificates

Special

Total

Total

Percentage

Fiscal 

Obligation

Revenue

Anticipation

of

Assessments

Business‐Type

Primary

of Personal

Per

Year

Bonds

Bonds

Notes

Participation

Bonds

Activities

Government

Income(1)

Cap

ita(1)

2005

$0

$35,765,000

$3,165,000

$0

$46,000

$38,976,000

$77,622,000

7.63%

2,728

2006

034,973,698

2,115,000

042,000

37,130,698

85,065,698

7.83%

2,929

2007

033,745,000

11,010,000

038,000

44,793,000

92,301,000

8.16%

3,135

2008

032,710,000

10,720,000

033,000

43,463,000

90,920,000

7.83%

3,059

2009

031,640,000

10,195,000

11,335,000

29,000

53,199,000

100,609,000

8.79%

3,354

2010

030,540,000

9,640,000

11,060,000

24,000

51,264,000

99,509,000

8.49%

3,240

2011

8,815,000

29,395,000

010,765,000

18,000

48,993,000

97,213,000

7.87%

3,121

2012

30,270,000

00

10,465,000

13,000

40,748,000

86,088,000

6.73%

2,753

2013

28,780,000

00

10,155,000

7,000

38,942,000

86,360,750

6.32%

2,746

2014

27,265,000

00

9,840,000

037,105,000

79,597,500

5.73%

2,518

Source:  City of Mason, O

hio, D

epartm

ent of Finance

Note:   Details regarding the city's outstanding deb

t can be found in

 the notes to the financial statemen

ts.

(1)    See the Sched

ule of Dem

ographic and Economic Statistics on Table 18 for personal income and population data.

Governmen

tal A

ctivities

Business‐Type Activities

134

City of Mason, O

hio

Ratios of Net Gen

eral Bonded

 Deb

t Outstanding

  To Assessed Value and Net Bonded

 Deb

t Per Capita

Table 13

Net

Ratio of Net

General

General

Bonded Debt

Net Bonded

Fiscal 

Assessed

Bonded

Less Debt

Bonded

to Assessed

Debt Per

Year

Population(1)

Value (2)

Debt (3)

Service Fund (4)

Debt

Value

Cap

ita

2005

28,455

$987,933,647

$3,640,000

$335,757

$3,304,243

0.33%

$116

2006

29,041

1,098,446,377

3,425,000

52,975

3,372,025

0.31%

116

2007

29,446

1,084,854,140

3,200,000

89,826

3,110,174

0.29%

106

2008

29,723

1,081,470,600

20,215,000

140,707

20,074,293

1.86%

675

2009

29,995

1,019,329,000

19,320,000

179,304

19,140,696

1.88%

638

2010

30,712

1,021,457,110

20,530,000

407,512

20,122,488

1.97%

655

2011

31,147

1,029,395,680

29,130,000

567,834

28,562,166

2.77%

917

2012

31,269

977,809,650

49,485,000

601,897

48,883,103

5.00%

1,563

2013

31,449

987,391,770

46,870,000

735,048

46,134,952

4.67%

1,467

2014

31,613

999,974,600

44,180,000

830,279

43,349,721

4.34%

1,371

  Source:  City of Mason, O

hio, D

epartm

ent of Finance

Note:   Details regarding the city's outstanding deb

t can be found in

 the notes to the financial statemen

ts.

(1)   U

.S. Cen

sus Bureau

 2010

(2)  Assessed Value from W

arren County Auditor's Office

(3)  Does not include Bond Anticipation Notes or Special A

ssessm

ent deb

t with governmen

tal commitmen

t.  

(4)  Does not include deb

t service fund balances for Special A

ssessm

ent deb

t with governmen

tal commitmen

t.

135

City of Mason, O

hio

Ratio of Annual Deb

t Service Expen

ditures

  For Gen

eral Obligation Bonded

 Deb

t (1)

  To Total G

eneral Governmen

t Expen

ditures

Table 14

 To

tal

Ratio of

 To

tal

General

Debt Service To

Fiscal

Debt

Government

General G

overnment

Year

Principal

Interest (2)

Service

Expenditures

Expenditures

2005

$205,000

$153,317

$358,317

$8,186,487

4.38%

2006

215,000

159,260

374,260

8,101,110

4.62%

2007

225,000

150,768

375,768

8,179,399

4.59%

2008

555,000

482,856

1,037,856

8,068,369

12.86%

2009

895,000

804,709

1,699,709

8,507,087

19.98%

2010

930,000

775,041

1,705,041

7,718,852

22.09%

2011

1,010,000

791,001

1,801,001

7,938,713

22.69%

2012

1,100,000

790,420

1,890,420

8,245,266

22.93%

2013

1,125,000

759,670

1,884,670

6,287,335

29.98%

2014

1,175,000

724,108

1,899,108

7,598,473

24.99%

Source:  City of Mason, O

hio, D

epartm

ent of Finance

 (1)  Gen

eral obligation bonds reported

 in the en

terprise funds and special assessm

ent deb

t with 

       governmen

tal commitmen

t have been excluded

.

 (2)  Excludes bond issuance and other costs.

 

136

City of Mason, O

hio

Direct and Overlapping Governmen

tal G

eneral Obligation Deb

tAs of Decem

ber 31, 2014

Table 15

Net General

Percentage

     A

mount

Obligations

Applicab

le (2)

     A

pplicab

le

Bonded Debt

to     to

Outstanding (1)

City

     City

Mason City School D

istrict

$99,810,000

60.60%

$60,484,860

Kings Local School D

istrict

41,025,000

11.98%

4,914,795

Great Oaks Career Cen

ter Joint Vocational School

12,985,000

5.05%

655,743

Lebanon City School D

istrict

51,784,754

0.22%

113,926

Deerfield Township

10,724,000

0.41%

43,968

Warren County Career Cen

ter Jt. V

oc. School

600,000

2.23%

13,380

Warren County

2,000,000

17.63%

352,600

Subtotal O

verlapping Deb

t218,928,754

66,579,272

City of Mason ‐ Direct Deb

t$42,492,500

100.00%

$42,492,500

Total D

irect and Overlap

ping Debt

$261,421,254

$109,071,772

Source:  O

hio M

unicipal Advisory Council

(1) ‐ Includes Special A

ssesmen

t and Self‐Supporting Deb

t

(2) ‐ Percentages were determined

 by dividing the assessed

 valuation of the overlapping governmen

t located within the boundaries of the City by the 

          total assessed valuation of the governmen

t.

137

City of Mason, O

hio

Legal D

ebt Margin Inform

ation

Last Ten

 Fiscal Years

Table 16

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Total D

ebt Limit (1)

Total D

ebt Limit (10.5%)

$103,733,033

$115,336,870

$113,909,685

$113,066,054

$107,029,545

$107,252,997

$108,086,546

$102,670,013

$103,676,136

$104,997,333

Total N

et Deb

t Applicable to Lim

its

12,704,243

25,187,025

34,470,174

34,994,293

35,635,696

33,562,488

30,547,166

28,803,102

31,914,952

24,584,721

Legal D

ebt Limit M

argin

$91,028,790

$90,149,845

$79,439,511

$78,071,761

$71,393,849

$73,690,509

$77,539,380

$73,866,911

$71,761,184

$80,412,612

Total N

et Deb

t Applicable to the Limit as

          a Percentage of To

tal D

ebt Limit

12.25%

21.84%

30.26%

30.95%

33.30%

31.29%

28.26%

28.05%

30.78%

23.41%

Total U

nvoted Debt Limit (1) 

Total U

nvoted Deb

t Limit (5.5%)

54,336,351

60,414,551

59,666,978

59,225,076

56,063,095

56,180,141

56,616,762

53,779,531

54,306,547

54,998,603

Total N

et Deb

t Applicable to Lim

its

12,704,243

25,187,025

34,470,174

34,994,293

35,635,696

33,562,488

30,547,166

28,803,102

31,914,952

24,584,721

Legal U

nvoted Deb

t Limit M

argin

$41,632,108

$35,227,526

$25,196,804

$24,230,783

$20,427,399

$22,617,653

$26,069,596

$24,976,429

$22,391,595

$30,413,882

Total N

et Deb

t Applicable to the Limit 

    as a Percentage of To

tal U

nvoted Deb

t Limit

23.38%

41.69%

57.77%

59.09%

63.56%

59.74%

53.95%

53.56%

58.77%

44.70%

Total D

ebt

Total U

nvoted

Limit

Debt Limit

Net assessed valuation

Statutory legal deb

t lim

itation (1)

10.5%

5.5%

Total deb

t lim

itation

$104,997,333

$54,998,603

Deb

t applicable to limit:

     D

ebt applicable to limit(2)

25,415,000

25,415,000

     Less:  applicable deb

t service fund amounts(3)

(830,279)

(830,279)

     Total net deb

t applicable to limit

24,584,721

24,584,721

Legal deb

t margin

$80,412,612

$30,413,882

Source:  City of Mason, O

hio, D

epartm

ent of Finance

(1)         D

irect deb

t lim

itation based

 upon Section 133, the Uniform

 Bond Act of the Ohio Revised

 Code.  Total deb

t lim

it should not exceed

 10.5% of net assessed property value.  Total unvoted deb

t lim

it

                should not exceed

 5.5% of net assessed property value.

(2)         City deb

t outstanding includes non self‐supporting general obligation notes and bonds only.   Enterprise deb

t is not considered

 in the computation of the legal deb

t margin.

(3)         D

oes not include deb

t service fund balances for Special A

ssessm

ent deb

t with governmen

tal commitmen

t.

Legal D

ebt Margin Calculation for Fiscal Year 2014

$999,974,600

$999,974,600

138

City of Mason, O

hio

Dem

ographic and Economic Statistics

Decem

ber 31, 2014

Table 17

Estimated

Per Cap

ita

Area

Personal

Personal

Median

School

Warren

United

Year

(Square M

iles)

Population (1)

Income(2)

Income(3)

Age(4)

Enrollm

ent(5)

County

Ohio

States

2005

18.0

28,455

$1,017,095,520

$35,744

34.5

9,731

4.4%

5.9%

4.9%

2006

18.0

29,041

1,087,033,671

37,431

34.5

10,269

4.2%

5.4%

4.3%

2007

18.4

29,446

1,131,727,564

38,434

34.5

10,681

4.7%

5.8%

4.8%

2008

18.6

29,723

1,161,158,718

39,066

34.5

10,752

6.2%

7.6%

7.1%

2009

18.6

29,995

1,144,849,160

38,168

34.5

11,038

8.8%

10.2%

9.3%

2010

18.6

30,712

1,172,215,616

38,168

38.4

10,747

8.4%

9.3%

9.1%

2011

18.6

31,147

1,235,694,931

39,673

38.4

11,013

8.5%

8.1%

8.5%

2012

18.6

31,269

1,279,464,942

40,918

38.4

10,991

5.6%

7.0%

7.5%

2013

18.6

31,449

1,366,584,846

43,454

38.4

10,911

4.6%

5.9%

6.2%

2014

18.6

31,613

1,388,537,799

43,923

38.9

10,773

3.7%

5.2%

5.4%

Sources:

(1)   U

.S. Cen

sus Bureau

 2014 estim

ate

(2)   Population estim

ate times per capita person income

(3)   U

.S. D

epartm

ent of Commerce, B

ureau

 of Economic Analysis for the Cincinnati M

etropolitan

 Statistical Area.

(4)   U

.S. Cen

sus Bureau

  2010 Cen

sus

(5)   M

ason City Schools

(6)   O

hio Dep

artm

ent of Job & Fam

ily Services, Office of Workforce Developmen

t, Bureau

 of Labor Market Inform

ation, seasonally adjusted

.  Inform

ation only available for Warren County

 

Unem

ploym

ent Rates (6)

139

City of Mason, O

hio

Principal Employers

Curren

t Year and Nine Years Ago

 (1)

Table 18

Full‐time

Full‐time

Employer

Business Activity

Employees (2)

Employer

Business Activity

Employees (2)

Procter & Gam

ble Company

Healthcare research

1,920

Procter & Gam

ble Company

Healthcare research

2,590

Luxottica (Len

scrafters)

Eyew

ear and lens

1,742

Cintas Corporation

Professional uniform

s1,397

Cintas Corporation

Professional uniform

s1,479

Luxottica (Len

scrafters)

Eyew

ear and lens

1,166

Mason City Schools

Local school district

1,163

Mason City Schools

Local school district

919

L3 Cincinnati Electronics

Aerospace and defen

se industry electronics

653

Blackhaw

k Automotive

Plastic m

olding

584

Intelligrated

 Systems LLC

Material handling solutions

494

H.J. H

einz/Portion Pac 

Portion‐controlled condim

ents

519

H.J. H

einz/Portion Pac 

Portion‐controlled condim

ents

455

Mitsubishi Electric

Automotive electrical componets

403

Mitsubishi Electric

Automotive electrical componen

ts395

L3 Cincinnati Electronics

Aerospace and defen

se industry electronics

371

Lindner Cen

ter of Hope

Men

tal health treatmen

t center

253

J.W. H

arris

Brazing, soldering and welding alloys

252

Great W

olf Lodge

Resort/ Indoor Waterpark

231

W/S Packaging‐Superior Label

Print pressured sen

sitive labels

215 

 Income Tax

 Income Tax

 Withholding 

 Withholding 

Employer

Business Activity

Ran

king(3)

Employer

Business Activity

Ran

king(3)

Procter & Gam

ble Company

Healthcare research

1Procter & Gam

ble Company

Healthcare research

1

Luxottica (Len

scrafters)

Eyew

ear and lens

2Luxottica (Len

scrafters)

Eyew

ear and lens

2

Cintas Corporation

Professional uniform

s3

Cintas Corporation

Professional uniform

s3

Mason City Schools

Local school district

4Mason City Schools

Local school district

4

L3 Cincinnati Electronics

Aerospace and defen

se industry electronics

5Param

ount Kings Island

Amusemen

t Park

5

Intelligrated

 Systems LLC

Material handling solutions

6L3 Cincinnati Electronics

Aerospace and defen

se industry electronics

6

Kings Island

Amusemen

t park

7H.J. H

einz/Portion Pac 

Portion‐controlled condim

ents

7

Mitsubishi  Electric

Automotive electrical componen

ts8

UBE Automotive

Manufacture aluminum wheels

8

Makino

Machining manufacturer

9Mitsubishi Electric

Automotive electrical componets

9

Rhinestahl Corporation

Tooling eq

uipmen

t10

Blackhaw

k Automotive

Plastic m

olding

10

Source:  Full‐time em

ployees from City of Mason Economic Developmen

t

             Income tax withholding ranking from City of Mason Income Tax

(1)   O

nly curren

t year and nine years ago inform

ation available. Inform

ation for ten years ago

 not available.

(2)   The em

ployer's percentage of total employm

ent for each principal employer was not available.

(3)   State law and city income tax ordinance prohibits the release of income tax inform

ation.  The withholding am

ount could not be provided

.

Fiscal Year 2014

Fiscal Year 2005

140

City of Mason, O

hio

Full‐time City of Mason Employee by Function

Last Ten

 Fiscal Years

Table 19

Full‐time position at Decem

ber 31

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

General G

overnment

City Administration

10

10

10

10

10

10

10

10

10

10

Council

11

11

11

11

Engineering

10

11

11

11

11

11

11

11

11

11

Facility

11

11

11

11

13

Finance

10

10

10

10

10

10

10

10

10

10

Municipal Court

22

22

22

22

22

20

20

20

20

20

Public Safety

Police

Officers

37

39

41

43

43

43

43

43

43

43

Non‐sworn

15

67

77

77

77

7

Fire

23

32

32

33

33

33

33

36

42

42

Leisure Tim

e Activities

19

20

21

22

22

22

22

22

22

16

Park Maintenance

5

Community Development

Planning

11

12

22

22

22

Building Inspection

55

55

55

55

55

Economic Developmen

t3

34

33

33

33

3

Basic Utility Service

15

15

15

15

15

15

15

15

15

15

Billing

11

11

11

11

11

Storm

water

11

11

11

11

11

Tran

sportation and Street Repair

20

21

21

21

21

21

21

21

21

20

Total Full‐Time Positions

193

198

204

208

208

206

206

209

215

215

Total Part‐Time Positions

240

287

265

209

217

188

188

182

203

208

Source:  City of Mason Annual Budget for full‐time positions and  City of Mason payroll for part‐time positions

141

City of Mason, O

hio

Operating Indicators and Capital Position Statistics

Last Ten

 Fiscal Years

Table 20

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Police Protection:

 Number of Stations

11

11

11

11

11

 Number of Marked Patrol V

ehicles

19

19

21

17

20

20

21

21

19

19

Calls for Service

12,564

14,804

19,878

26,087

24,810

33,735

27,448

31,545

36,635

41,193

Moving Violation Citations

2,628

2,779

3,742

3,426

3,175

3,797

2,460

2,638

2,502

2,226

Arrests

611

739

851

822

785

899

843

536

910

908

Fire & Emergency M

edical(1):

Fire Responses

1,087

992

1,003

1,206

1,184

1,013

886

1,118

978

1,229

  Em

ergency M

edical Responses

2,287

2,257

2,704

2,611

2,431

2,570

2,516

2,601

2,477

2,767

 Number of Stations

22

22

22

22

22

 Number of Em

ergency Veh

icles

17

17

19

19

20

19

20

20

19

19

Leisure Tim

e Activities

    Parks

66

67

77

77

77

    Park acreage (developed

)242

279

279

296

296

296

296

296

296

296

   Sw

imming Pool

11

11

11

11

11

   Community Cen

ter (open

ed in

 2002)

11

11

11

11

11

Community Development

 Permits Issued

179

97

77

52

35

54

49

54

92

192

Utility Services

 Sanitary sewers (m

iles)

123

129

132

133

134

135

136

137

137

138

 Storm

 sew

ers (m

iles)

84

87

91

92

92

93

94

95

95

96

Sewage Treatm

ent capacity per day

          (million gallons)

5.00

8.67

8.67

8.67

8.67

8.67

8.67

8.67

8.67

8.67

Tran

sportation & Street Repair

 Number of Streets (ded

icated

)408

420

433

440

445

446

448

452

452

454

 Lane Miles

341

343

351

354

355

355

356

357

357

359

Traffic Signals

39

40

40

40

40

40

40

40

40

40

Bike Paths (m

iles)

11

12

14

17

17

19

19

19

19

19

Source:  City of Mason, O

hio, D

epartm

ent of Finance

   

Fiscal Year

142

                  

 This page intentionally left blank. 

PLATTENBURG Certified Public Accountants

    

CITY OF MASON, OHIO    

    

Single Audit Reports    

December 31, 2014  

 

CITY OF MASON, OHIO

SCHEDULE OF EXPENDITURES OF FEDERAL  AWARDS 

FOR THE YEAR ENDED DECEMBER 31, 2014

Pass Through

Federal Grantor/Pass ‐ Through Entity

Grantor, Program Title Number CFDA Disbursements

U.S. DEPARTMENT OF JUSTICE

Direct Funding

        Bulletproof Vest Partnership 2014‐BVP 16.710 7,150

Pass‐Through Ohio Department of Justice:

        Justice Assistance Grant 2014‐JG‐LLE‐5293 16.804 9,720

Subtotal ‐ Department of Justice 16,870

U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL HIGHWAY ADMINISTRATION

Pass‐Through Ohio Department of Transportation

     Congestion Mitigation Program:

         Mason‐Montgomery Road/Bethany Road Round About PID 89179 20.205 1,228,524

         Kings Island Drive Safety Improvements PID 89180 20.205 12,093

Subtotal ‐ Department of Transportation 1,240,617

US DEPARTMENT OF HOMELAND SECURITY ‐ 

FEDERAL EMERGENCY MANAGEMENT AGENCY

Direct Funding

        SAFER Grant EMW‐2011‐FH‐00823 97.044 553,200

Subtotal ‐ Department of HOMELAND SECURITY 553,200

$1,810,687

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTE A ‐‐ SIGNIFICANT ACCOUNTING POLICIES

The accompanying schedule of federal awards expenditures is a summary of the activity of the City's federal award programs. 

The schedule has been prepared using the cash basis of accounting.

1

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www.plattenburg.com

   

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL  

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS   City Council City of Mason Warren County 6000 Mason‐Montgomery Road Mason, Ohio  45040  We  have  audited,  in  accordance  with  the  auditing  standards  generally  accepted  in  the  United  States  of America and the standards applicable to financial audits contained in Government Auditing  Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the City of Mason, Ohio  (the  City),  as  of  and  for  the  year  ended  December  31,  2014,  and  the  related  notes  to  the  financial statements, which  collectively  comprise  the  City’s  basic  financial  statements,  and  have  issued  our  report thereon dated June 23, 2015.   Internal Control over Financial Reporting  In planning and performing our audit of the financial statements, we considered the City’s internal control over financial  reporting  (internal  control)  to  determine  the  audit    procedures  that  are  appropriate  in  the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.  Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.  A deficiency in internal control exists when the design or operation of a control does not allow management or employees,  in  the normal course of performing  their assigned  functions,  to prevent, or detect and  correct, misstatements on  a  timely basis.   A material weakness  is  a deficiency, or  a  combination of deficiencies,  in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a  timely basis.   A significant deficiency  is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.  Our  consideration  of  internal  control was  for  the  limited  purpose  described  in  the  first  paragraph  of  this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or,  significant deficiencies.   Given  these  limitations, during our audit we did not  identify any deficiencies  in internal control that we consider to be material weaknesses.   However, material weaknesses may exist that have not been identified.     

2

PLATTENBURG Certified Public Accountants

 Compliance and Other Matters  As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts.  However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.  The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.  We noted certain matters  that we  reported  to management of  the City  in a  separate  letter dated  June 23, 2015.  Purpose of this Report  The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance.  This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance.  Accordingly, this communication is not suitable for any other purpose.  Cincinnati, Ohio June 23, 2015   

3

PLATTENBURG Certified Public Accountants

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

www.plattenburg.com

  

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND  ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A‐133  

  City Council City of Mason Warren County 6000 Mason‐Montgomery Road Mason, Ohio  45040  Report on Compliance for Each Major Federal Program  We have audited the City of Mason, Ohio’s (the City) compliance with the types of compliance requirements described  in the OMB Circular A‐133 Compliance Supplement that could have a direct and material effect on each of  the City’s major  federal programs  for  the year ended December 31, 2014. The City’s major  federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.  Management's Responsibility  Management  is responsible for compliance with the requirements of  laws, regulations, contracts, and grants applicable to its federal programs.  Auditor's Responsibility  Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on  our  audit  of  the  types  of  compliance  requirements  referred  to  above. We  conducted    our  audit  of compliance  in  accordance with  auditing  standards  generally  accepted  in  the United  States of America;  the standards  applicable  to  financial  audits  contained  in  Government  Auditing  Standards,  issued  by  the Comptroller General of the United States; and OMB Circular A‐133, Audits of States, Local Governments, and Non‐Profit Organizations. Those standards and OMB Circular A‐133 require that we plan and perform the audit to obtain  reasonable  assurance  about whether  noncompliance with  the  types  of  compliance  requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes  examining,  on  a  test  basis,  evidence  about  the  City’s  compliance  with  those  requirements  and performing such other procedures, as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance.     

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PLATTENBURG Certified Public Accountants

 Opinion on Each Major Federal Program  In our opinion, the City, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2014.   Report on Internal Control over Compliance   Management  of  the  City  is  responsible  for  establishing  and  maintaining  effective  internal  control  over compliance with  the  types of  compliance  requirements  referred  to  above.  In planning  and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that  could  have  a  direct  and  material  effect  on  each  major  federal  program  to  determine  the  auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A‐133, but not for the purpose  of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.  A  deficiency  in  internal  control  over  compliance  exists  when  the  design  or  operation  of  a  control  over compliance  does  not  allow management or  employees,  in  the  normal  course  of  performing  their  assigned functions,  to  prevent,  or  detect  and  correct,  noncompliance with  a  type  of  compliance  requirement  of  a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected  and  corrected,  on  a  timely  basis.  A  significant  deficiency  in  internal  control  over  compliance  is  a deficiency, or  a  combination of deficiencies,  in  internal  control over  compliance with  a  type of  compliance requirement  of  a  federal  program  that  is  less  severe  than  a material  weakness  in  internal  control  over compliance, yet important enough to merit attention by those charged with governance.  Our  consideration  of  internal  control  over  compliance  was  for  the  limited  purpose  described  in  the  first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not  identify any deficiencies  in  internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.  The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A‐133. Accordingly, this report is not suitable for any other purpose.     

5

PLATTENBURG Certified Public Accountants

 Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A‐133  We have  audited  the  financial  statements of  the  governmental  activities,  the business‐type  activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended December 31,  2014,  and  the  related  notes  to  the  financial  statements,  which  collectively  comprise  the  City’s  basic financial  statements.    We  issued  our  report  thereon  dated  June  23,  2015,  which  contained  unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A‐133  and  is not  a  required part of  the basic  financial  statements.    Such  information  is  the  responsibility of management and was derived from and relates directly to the underlying accounting and other records used to  prepare  the  basic  financial  statements.  The  information  has  been  subjected  to  the  auditing  procedures applied  in  the audit of  the  financial  statements and certain additional procedures,  including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial  statements  or  to  the  basic  financial  statements  themselves,  and  other  additional  procedures  in accordance with auditing  standards generally accepted  in  the United States of America.  In our opinion,  the schedule  of  expenditures  of  federal  awards  is  fairly  stated  in  all material  respects  in  relation  to  the  basic financial statements as a whole.    Cincinnati, Ohio June 23, 2015 

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PLATTENBURG Certified Public Accountants

CITY OF MASON, OHIO  SCHEDULE OF FINDINGS AND QUESTIONED COSTS 

Year Ended December 31, 2014  

Section I – Summary of Auditor’s Results  

(d)(1)(i) Type of Financial Statement Opinion Unmodified

(d)(1)(ii) Were there any material control weakness No

conditions reported at the financial

statement level (GAGAS)?

(d)(1)(ii) Were there any other significant control No

deficiencies reported at the financial

statement level (GAGAS)?

(d)(1)(iii) Was there any material reported non‐compliance No

at the financial statement level (GAGAS)?

(d)(1)(iv) Were there any material internal control  No

weakness conditions reported for major

federal programs?

(d)(1)(iv) Were the any other significant control No

deficiencies reported for major

federal programs?

(d)(1)(v) Type of Major Programs' Compliance Opinion Unmodified

(d)(1)(vi) Are there any reportable findings under No

Section .510?

(d)(1)(vii) Major Programs (list): Congestion Mitigation Program

CFDA# 20.205

(d)(1)(viii) Dollar Threshold:  Type A/B Programs Type A: > $300,000

Type B:  all others

(d)(1)(ix) Low Risk Auditee? No Section  II – Findings Related  to  the Financial Statements Required  to be Reported  in Accordance with GAGAS  None  Section III – Federal Award Findings and Questioned Costs 

 None  7

PLATTENBURG Certified Public Accountants

         

CITY OF MASON DECEMBER 31, 2014 

  

SCHEDULE OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS OMB CIRCULAR A‐133 

  

None Noted. 

8

                  

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88EastBroadStreet,FourthFloor,Columbus,Ohio43215‐3506Phone:614‐466‐4514or800‐282‐0370Fax:614‐466‐4490

www.ohioauditor.gov

CITY OF MASON

WARREN COUNTY

CLERK’S CERTIFICATION

This is a true and correct copy of the report which is required to be filed in the Office of the Auditor of State pursuant to Section 117.26, Revised Code, and which is filed in Columbus, Ohio.

CLERK OF THE BUREAU CERTIFIED OCTOBER 15, 2015

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APPENDIX B

FISCAL YEAR 2016 BUDGET OF THE CITY

Ordinance 2015 - 124

Annual Appropriation Ordinance

BE IT ORDAINED by the Council of the City of Mason, Ohio. six members elected thereto concurring:

Section I. That to provide for the current expenses and other expenditures of the City or Mason, during thefiscal year ending December 31, 2016 the Ibllowing sums be and they are hereby set aside and appropriated. asfollows:

General Fund

POLICE DEPARTMEN'l

STREET LIGHTING

DISASTER SERVICES

S 6,691,217

369,500

38,000

Total for Security of Persons and Property 7,098,717

PARKS & RECREATION 372,374

PARKS MAINTENANCE/SERVICE 1,446,356

SWIMMING POOL 303,432

SENIOR CENTER 209,185

Total for Leisure Time Activities 2,331,3471

COMMUNITY PLANNING & ZONING 166,707

BUILDING INSPECTION 726,479

ECONOMIC DEVELOPMENT 632,532

COMM UNITY DEVELOPMENT 1,114,000

Total for• Community Environment 2,639,718 1

•TRAFFIC SIGNALS 150,650

STREET MAINTENANCE & REPAIR 2,869,230

GARAGE 547,394

ENGINEERING 685,149

B-2

Total for Transportation 4,252,423

CITY MANAGER 338,3-13

ASSISTANT CITY MANAGER 1,046,434

FINANCE 494,214

INCOME TAX 711,975

I NCOM E TAX REFUNDS 1,000,000

LAW DIRECTOR 504,902

COUNCIL 305,757

MUNICIPAL COURT 1,283,936

LANDS, BUILDINGS & GROUNDS 803,999

AUDITORS DEDUCTIONS 1,203,500

Total for General Government 7,693,060

L CONTINGENCIES 250,000

I 'TRANSFERS (to Other Funds) 6,295,0001

Grand Total General Fund Appropriations S30,560,265

GENERAL CAPITAL impRovEmENT FUND 58,102,624

Special Revenue Funds

SAFETY FUND S 7,497,552sAFETv FUND RESERVE: (income tax credit velum:Is) 75,000STREET MAINTENANCE & REPAIR (CAPITAL) FUND 5,577,000STATE HIGHWAY FUND 122,000STREET SUBDIVISION FUND 400,000RECREATION TAX FUND 0POLICE OFFICER TRAINING FUND 0POLICE CRIME PREVENTION FUN[)LAW E MNNFORCEET TRUST FUND (MOE) 18,(10%)

B-3

LAW ENFORCEMENT & EDUCATION FUND (DUI) 500

COURT INDIGENT DRIVERS ALCOHOL FUND 55,000MUNICIPAL COURT CLERK COMPUTER FUND 104,000MUNICIPAL COURT COMPUTER FUND 3,000MUNICIPAL. COURT SPECIAL PROJECT FUND 210,697VEHICLE IMMOBILIZATION FEE FUND 500MUNICIPAL COURT PROBATION SERVICES FUND 239,657INDIGENT DRIVER IDAM FUND 9,0001W HARRIS TIE FUND 95.000CENTRAL PARKE TIE FUNI) 90,0001-71 CORRIDOR TIF FUND 90,000SUBDIVISION INSPECTION FUND 109,191CITY CONTRIBUTION FUNI) 120,000

Grand Total Special Revenue Funds 514,816,597

Debt Service Funds

GENERAL BOND RETIREMENT FUND S 2,575,000MASON ENTERPRISE TIF FUNI) 95,000TyLERsviLLE ROAD TIE FUND 230,000EVERYBODY'S FARM TIE FUND 550,000MUNICIPAL CENTER LEASE FUNI) 1,600,000

Grand Total Debt Service Funds 55,050,000

Enterprise Funds

SERVER UTILITY FUND S 5,237,149SEWER EXPANSION FUND 1.210.000WASTE COLLECTION UTILITY FUND 1,526,315STORM WATER UTILITY FUND 1,1)87,008CON11‘1 UNITY CENTER FUND 7,413,402CON'IMUNITY CENTER BUILDING SERVICE FUND 0COMMUNITY CENTER EXPANSION FUND 1,041,000COLE COURSE FUND 8,952,239

Grand Total Enterprise Funds S26,467,I 13

Trust and :Agencv Funds

EMPLOYEE MEDICAL INSURANCE FUND S 3,955,000UNCLAIMED MONIES FUND 45,000MASON PORT AUTHORITY 750,000CICIVETERANS MEMORIAL FUND 0COlV1MUNrry IMPROVEMENT CORPORATION FUND 40,000

B-4

Grand Total Trust and Agency Funds S4,790,000

Grand Total All Funds S 89,786,599

Section 2. That the legal level of budgetary control shall be established at the department level for the GeneralFund and all other funds shall be at the fund level as appropriated in Section 1 of this Ordinance.

Section 3. That subsequent ordinances approved by Council authorizing any expenditure or encumbrance notincluded or anticipated in this Ordinance may be encumbered and expended prior to the supplementalappropriation ordinance at the end of fiscal year ending December 31, 2016 to approve the additionalappropriation.

Section 4. That this Ordinance shall take effect and be in force from and after the earliest. period allowed by law.

Passed the 141h day of December. 2015.

Attest:

Clerk o ounci I

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C-1

APPENDIX C

FORM OF BOND COUNSEL OPINION

The form of the legal approving opinion of Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, Bond Counsel, is set forth below. The actual opinion will be delivered on the date of delivery of the Bonds referred to therein and may vary from the form set forth to reflect circumstances both factual and legal at the time of such delivery. Recirculation of the Final Official Statement shall create no implication that Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, has reviewed any of the matters set forth in such opinion subsequent to the date of such opinion. April 26, 2016

City of Mason, Ohio Mason, Ohio

RBC Capital Markets, LLC Cincinnati, Ohio

We have served as bond counsel to our client, the City of Mason, Ohio (the “Issuer”), and in that capacity, we have examined the transcript of proceedings (the “Transcript”) relating to the Issuer’s $8,575,000 Various Purpose General Obligation Refunding Bonds, Series 2016, dated April 26, 2016 (the “Bonds”). In our capacity as bond counsel, we have also examined such other documents, matters and law as we have deemed necessary to render the opinions below.

We have relied on the certified matters contained in the Transcript and certifications of public officials and others that have been furnished to us regarding questions of fact material to our opinions, without undertaking to verify the same by independent investigation. In addition, we have assumed the due and legal authorization, execution and delivery of the documents we have examined, and the valid, binding and enforceable nature of those documents upon the parties, other than the Issuer.

Based on that examination and on the laws, regulations, rulings and judicial decisions in effect on the date hereof, and subject to the limitations stated below, we are of the opinion that:

1. The Bonds have been duly authorized and executed by the Issuer, and constitute valid general obligations of the Issuer in accordance with their terms. Unless paid from other sources, the Bonds are payable from an ad valorem tax to be levied upon all the taxable property in the Issuer, within the limitations prescribed by law.

2. Interest on the Bonds is excludible from gross income for federal income tax purposes, pursuant to the Internal Revenue Code of 1986, as amended (the “Code”). Furthermore, interest on the Bonds will not be treated as a specific item of tax preference in computing the alternative minimum tax for individuals and corporations under the Code. In rendering the opinions in this paragraph, we have assumed continuing compliance with certain covenants designed to meet the requirements of Section 103 of the Code. Failure to comply with certain of such requirements may cause interest on the Bonds to be includible in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds.

C-2

The Issuer has designated the Bonds as “qualified tax-exempt obligations” under Section 265 of the Code.

3. Interest on the Bonds is exempt from most taxes levied by the State of Ohio and its subdivisions, including income, ad valorem, transfer, and excise taxes, the Ohio commercial activity tax and the tax on the net income measure of the issued and outstanding shares of a corporation under the Ohio corporation franchise tax; however, interest on the Bonds is not exempt from the following Ohio taxes: (i) the tax on the net worth measure of the issued and outstanding shares of corporations and financial institutions under the Ohio corporation franchise tax, (ii) the tax on the value of the gross estate with respect to the Ohio estate tax, (iii) the tax on the value of the capital and surplus of a domestic insurance company with respect to the Ohio insurance tax, (iv) the tax on the shares of and capital employed by dealers in intangibles with respect to the Ohio dealers in intangibles tax, and (v) the tax levied on the basis of the total equity capital of financial institutions with respect to the Ohio financial institutions tax.

It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds are subject to (i) bankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization, moratorium and other laws in effect from time to time affecting creditors’ rights, (ii) the application of equitable principles, whether considered at law or in equity, (iii) the exercise of judicial discretion and (iv) limitations on legal remedies against public entities.

We express no opinion herein regarding the accuracy, adequacy, or completeness of any offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to purchasing, holding or disposing of the Bonds other than as expressly set forth herein.

The opinions rendered in this letter are given as of the date hereof, and no other opinion shall be implied or inferred as a result of anything contained in or omitted from this letter. We assume no obligation to revise or supplement the opinions in this letter to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may occur hereafter. Our engagement as bond counsel with respect to the Bonds has concluded on this date.

Very truly yours,

D-1

APPENDIX D

FINANCIAL STATEMENT

FINANCIAL STATEMENTMUNICIPALITY

SECTION 133.05, O.R.C.

STATE OF OHIOSS

COUNTY OF WARREN )

I, JOSEPH J. REIGELSPERGER, OF THE MUNICIPALITY OF MASON. STATE OF OHIO, DO HEREBY CERTIFY THAT THE FOLLOWING

STATEMENTS CONCERNING THE FINANCES OF SAID MUNICIPALITY ARE TRUE AND CORRECT AS THEY APPEAR FROM

THE RECORDS IN MY OFFICE.

1 ASSESSED VALUATION of the taxable property of the municipality, as shown

on the tax duplicate for the year 2015 $ 1,088,293,380.00

2 Total of all bonds and notes or other evidence of indebtedness and

outstanding, INCLUDING THE PRESENT ISSUE OF $ 9,750,000.00 (refunding - no increase in balance) $ 75,260,000.00

3 EXEMPT DEBT:(A) Securities issued under Chapter 122.,140.,725., or 761,, or Section 131.23, O.R.C.

(B) Securities issued to pay costs of permanent improvements to the extent they are

issued in anticipation of the receipt of, and are payable as to principal from, federal

or state grants for that principal or for the costs of those permanent improvements

(C) Securities issued to evidence loans from the state capital improvements fund

pursuant to Chapter 164, O.R.C.

(D) Other securities, including self-supporting securities, excepted by law from the

calculation of net indebtedness or from the application of Chapter 133, O.R.C.

(E) Any other securities outstanding on October 30, 1989, and then excepted from

the calculation of net indebtedness or from the application of Chapter 133, O.R.C.

and securities issued at any time to fund or refund those securities

(F) Self-supporting securities issued for any purposes including, without limitations,

any of the following general purposes:

(a) Water systems or facilities;

(b) Sanitary sewage systems or facilities, or surface and storm water drainage

and sewage systems or facilities or a combination of those systems or $1.125 million storm water

facilities; $ 19,670,000.00 $18.545 million sewer

(c) Electric plants and facilities and steam or cogeneration facilities that generate

or supply electricity, or steam and electrical or steam distribution systems

and lines;(d) Airports or landing fields or facilities;

(e) Railroads, rapid transit and other mass transit systems;

(f) Off-street parking lots, facilities or buildings or on-street parking facilities, or any

combination of off-street and on-street parking facilities;

(g) Facilities for the care or treatment of the sick or infirm, and for housing and

persons providing such care or treatment and their families;

(h) Solid waste or hazardous waste collection or disposal facilities, or resource

recovery and solid or hazardous waste recycling facilities, or any combination

of those facilities;

(I) Urban development projects;

(j) Recreational, sports, convention, auditorium, museum, trade show, and other

public attraction facilities;

(k) Facilities for natural resources exploration, development, recovery, use

and sale;

(I) Correctional and detention facilities, including multi-county municipal jails, and

related rehabilitation facilities;

(m) Other self-supporting securities; $ 2,480,000.00 Road Improvments paid

(G) Securities issued for the purpose of purchasing, constructing, improving, or from JEDD, MVLF, & Gas Tax

extending water or sanitary or surface and storm water sewerage systems or

facilities, or a combination of those systems or facilities, to the extent that an

agreement entered into with another subdivision requires the other subdivisions to

pay to the municipal corporation amounts equivalent to debt charges on the

securities

(H) Securities issued under order of the director of health or director of environmental

protection under Section 6109.18, O.R.C..

(I) Securities issued under Section 3, 10, or 12 of Article XVIII, Ohio Constitution

(J) Securities that are not general obligations of the municipal corporation $ 2,105,000.00 TIF Bonds

(K) Voted securities issued for the purposes of urban redevelopment to the extent that

their principal amount does not exceed an amount equal to two percent of the tax

valuation of the municipal corporation

D-2

(L) Unvoted general obligation securities to the extent that the legislation authorizing

them includes covenants to appropriate annually from lawfully available municipal

income taxes, and to continue to levy and collect municipal income taxes in, amounts

necessary to meet the debt charges on those securities

(M) Self-supporting securities issued prior to July 1, 1977, under Chapter 133, O.R.C..

for the purpose of municipal university residence halls to the extent that revenues

of the successor state university allocated to debt charges on those securities

from sources other than municipal excises and taxes, are sufficient to pay those

debt charges

(N) Special assessment bonds or notes issued in anticipation of the levy or collection

of special assessments, either in original or refunded form.

(0) Securities issued in anticipation of the collection of current revenue for the fiscal

year or other period not to exceed twelve consecutive months, or securities issued

in anticipation of the collection of the proceeds from a specifically identified voter

approved tax levy

(P) General Obligation Securities issued for purposes under Section 133.12, O.R.C.

(Q) Bonds issued to pay final judgement or court approved settlements under

authorizing laws and securities issued under Section 2744.081, O.R.C.

(R) Other types of exempt debt:

Specify: Certificates of Participation for Municipal Building Lease & Community Ctr

TOTAL

4 Total bonds and notes subject to 10-1/2% limitation (2 minus 3)

(A) Amount in sinking fund or bond retirement fund applicable to the payment of

principal:

(B) Net amount subject to 10-1/2% limitation:

5 Bonds and notes included in item 4 above but issued WITHOUT AUTHORITY OF AN

ELECTION

(A) Amount in sinking fund or bond retirement fund applicable to the payment

of principal:

(B) Net amount subject to 5-1/2% limitation:

6 Bonds and notes included in items 4 and 5 above, issued during PRESENT CALENDAR

YEAR WITHOUT AUTHORITY OF AN ELECTION:

$

$

$ 20,745,000.00

$ 45,000,000.00

$ 30,260,000.00

899,380.00

$ 29,360,620.00

$ 30,260,000.00

899,380.00

$ 29,360,620.00

l FURTHER CERTIFY (a) that the income from the waterworks, sewer system, off-street parking and other revenue

producing facilities for which bonds were issued as included in item 3(F) above is sufficient to cover all

operating expenses of such facilities and interest charges on such bonds and to provide a sufficient amount

for retirement or sinking fund to retire $ 22,150,000.00 principal amount of such bonds as they

become due, and (B) that revenues of the municipal university or of the municipal recreational facilities, from

sources other than taxation, are sufficient to pay all operating expenses of the residence halls or recreational

facilities, and the principal and interest on $ principal amount of bonds included in item

3(M) above, as they become due.

IN WITNESS WHEREOF, I have hereunto set my hand and seal this 28h day of

January, 2016

Joseph J. Reigelsperger

Finance Director

Title

D-3

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E-1

APPENDIX E

TEN MILL CERTIFICATE

TEN-MILL CERTIFICATE

For Pol

itic

al Sub

divi

sion

s Is

suin

g Unvoted General Obligation Debt

I, Cou

nty Auditor of

COUNTY OF WARREN, OHIO, her

eby

certify in connection with the

pro

pose

d is

sue of obl

igat

ions

of th

e Ci

ty of Mason, Ohio (t

he "Issuer") in

the

pr

inci

pal amount of $9,750,000 dated

date of issuance, 2016, that th

e ta

x ra

tes re

quir

ed t

o pr

oduc

e an

amount to pa

y th

e hi

ghes

t an

nual

agg

rega

te debt charges fo

r th

e proposed issue and a

ll other obligations of th

e ss

uer and the

sub

divi

sion

sov

erla

ppin

g it,

whi

ch are payable fro

m ta

xes su

bjec

t to the

ten

-mil

l limitation of Article XI

I, Section 2, Oh

io Constitution and applicable Revised Code pro

visi

ons,

based on the

facts set

forth bel

ow and

ass

umin

gth

at all

lev

ies we

re to be made for tho

se debt charges on the

gen

eral

tax lis

t and dup

lica

te, are as follows:

Overlapping

Subd

ivis

ion

Assessed

Valuation

Bonds and Notes Outstanding

Payable from Tax Ins

ide

10-

Mill

Limitation

Present

Prin

cipa

l

Amount

Debt Charges for

cal

enda

r ye

ar in which

they will be the

highest (2018)

Required Tax Rat

e

in Mills for Two

Prev

ious

Columns

For Principal

For Interest

County

Warren

$6,191,008,820

Bonds and

Notes

$24,

099,

799

$2,407,962

$451

,728

0.46

19

City Mason

$1,088,293,380

Bonds and

Notes

$43,585,000

$4,1

66,9

23$1,739,179

5.42

69

School District

Kings LSD

$751,836,150

Bonds and

Not

es$2

,761

,320

$196

,969

$70,645

0.35

59

Township

Deer

fiel

d$1,120,941,080

Bonds and Notes

$7,1

50,0

00$604,174

$90,

417

0.61

96

Other

Great Oaks Ins

titu

te of Te

chno

logy

$18,632,547,970

Bonds and Notes

$10,905,000

$2,9

65,0

00$185,850

0.16

91

PROPOSED ISSUE

$9,7

50,0

00$750,000

$391,500

1.04

89

TOTAL

8.0823

DATED this 29

th cla

y of

Jan

uary

, 2016.

16-3

MATT NOLAN, WARREN COUNTY ADT

_ItT

ORINSTRUCTIONS

-1. When bond anticipation notes con

stit

ute th

e proposed iss

ue or are ot

herw

ise in

clud

ed above, use the

est

imat

ed debt charges for the bonds ant

icip

ated

by the

not

es as des

crib

ed in th

e note leg

isla

tion

.2

If the Issuer is

a county, the

information should re

late

to th

e county, and the

com

bina

tion

of overlapping city/village, school district. township and other political subdivisions requiring th

e hi

ghes

t mi!!age fo

r debt charges inside the ten-

mill limitation,

3. Do not include voted bonds or no

tes,

mortgage revenue bonds issued under Article Xti

ttl,

Section 12, Ohio Constitution, or bonds payable sol

ely and exc

lusi

vely

from revenues or funds not der

ived

from pro

pert

y taxation.

4. Fi

tt in

all blanks. using th

e word "NONE" where app

lica

ble.

5. Include all

required mi

llag

e for debt charges even though no taxes are currently levied fo

r those debt charges.

E-2

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