COUNTY OF ERIE, NEW YORK $89,560,000 REVENUE ANTICIPATION NOTES, 2015 (THE NOTES )

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1 NEW ISSUE - Book-Entry-Only RATING: (See Rating herein) In the opinion of Barclay Damon, LLP, Bond Counsel to the County, under existing statutes and court decisions and assuming continuing compliance with certain tax certifications described herein, (i) interest on the Notes is excluded from gross income for Federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the Code ) and (ii) interest on the Notes is not treated as a preference item in calculating the alternative minimum tax imposed on individuals and corporations under the Code; such interest, however, is included in the adjusted current earnings of corporations for purposes of calculating the alternative minimum tax imposed upon such corporations. In addition, in the opinion of Bond Counsel to the County, under existing statutes, interest on the Notes is exempt from personal income taxes of New York State and its political subdivisions, including The City of New York. See Tax Matters herein. COUNTY OF ERIE, NEW YORK $89,560,000 REVENUE ANTICIPATION NOTES, 2015 (THE NOTES ) Dated: December 14, 2015 Due: June 30, 2016 Interest Rate = 1.500% Reoffering Yield = 0.440% CUSIP #295084NR4 The Notes are general obligations of the County of Erie, New York (the County ), for payment of which the County has pledged its full faith and credit. All of the taxable real property within the County is subject to the levy of ad valorem taxes to pay both the principal of and interest on the Notes, subject to certain statutory limitations imposed by Chapter 97 of the Laws of 2011 (the Tax Levy Limit Law ). See The Tax Levy Limit Law herein. The Notes mature as stated above with interest payable at maturity. Interest on the Notes shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Notes are not subject to redemption prior to maturity. Principal of and interest on the Notes will be paid by the County s Paying Agent, Wells Fargo Bank N.A. (the Paying Agent ), to The Depository Trust Company, which will in turn remit such principal and interest to its Participants for subsequent distribution to the Beneficial Owners of the Notes as described herein. The Notes are offered subject to the final approving opinion of Barclay Damon, LLP, Albany, New York, Bond Counsel, and certain other conditions. FirstSouthwest Company serves as an independent financial advisor to the County. It is expected that delivery of the Notes in definitive form will be made on or about December 14, Dated: December 8, 2015 TD SECURITIES (USA) LLC

2 COUNTY OF ERIE, NEW YORK MARK C. POLONCARZ, ESQ. County Executive STEFAN I. MYCHAJLIW County Comptroller MICHAEL SIRAGUSA, ESQ. County Attorney JOHN J. MILLS Chair, Legislature JOSEPH C. LORIGO, ESQ. Majority Leader, Legislature BETTY JEAN GRANT Minority Leader, Legislature BARCLAY DAMON, LLP Bond Counsel FIRSTSOUTHWEST COMPANY Financial Advisor DRESCHER & MALECKI, LLP Independent Auditors

3 The management of the County of Erie, New York (the County ) has prepared the prospective financial information set forth herein to present certain projections of future financial information. The accompanying prospective financial information was not prepared with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of the County s management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management s knowledge and belief, the expected course of action and the expected future financial performance of the County. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this Official Statement are cautioned not to place undue reliance on the prospective financial information. Neither the County s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and they assume no responsibility for and disclaim any association with the prospective financial information. The assumptions and estimates underlying the prospective financial information are inherently uncertain and, though considered reasonable by the management of the County as of the date of its preparation, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of the County or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this Official Statement should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved. The County does not intend to update or otherwise revise the prospective financial information to reflect circumstances existing since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error. Furthermore, the County does not intend to update or revise the prospective financial information to reflect changes in general economic or industry conditions. Additional information relating to the principal assumptions used in preparing the projections is set forth herein. No person has been authorized by the County to give any information or to make any representations not contained in this Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor there any sale of the Notes by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof. If and when included in this Official Statement, the words expects, forecasts, projects, intends, anticipates, estimates and analogous expressions are intended to identify forward-looking statements and any such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, among others, general economic and business conditions, changes in political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, litigation and various other events, conditions and circumstances, many of which are beyond the control of the County. These forward-looking statements speak only as of the date of this Official Statement. The County disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the County s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

4 TABLE OF CONTENTS Page INTRODUCTION...1 THE NOTES...1 Authorization...1 Description...1 Nature of the Obligations...1 Purpose of the Notes...2 BOOK-ENTRY-ONLY SYSTEM...2 INDEBTEDNESS OF THE COUNTY...4 Constitutional Requirements...4 Calculation of Constitutional Debt Limit...5 Calculation of Total Net Indebtedness...6 Statutory Procedure...6 Outstanding Direct Indebtedness...7 Debt Ratios...8 Annual Debt Service Schedule...9 Trends in Long-Term Direct Indebtedness...10 Debt Policy...10 Capital Projects...11 Short-Term Indebtedness...11 Estimated Overlapping Debt...13 PROVISIONS AFFECTING RIGHTS AND REMEDIES...14 COUNTY GOVERNMENT...14 RELATED ENTITIES...16 Niagara Frontier Transportation Authority...16 New York Power Authority (Settlement)...16 Buffalo Sewer Authority...17 Buffalo Niagara Convention Center...17 First Niagara Center...17 Erie Community College...17 Ralph Wilson Stadium...18 Erie County Industrial Development Agency...18 Erie Tobacco Asset Securitization Corporation...19 Erie County Medical Center Corporation...19 ERIE COUNTY FISCAL STABILITY AUTHORITY...20 Purpose and Operations...20 Directors and Management...21 Financing Agreement...21 ECFSA Monitoring and Control Functions...21 ECFSA Oversight Actions To-Date...22 COUNTY FINANCES...24 Four-Year Financial Plan...24 Projected Financial Information...24 Financial Statements...25 Budgetary Process County Budget...26 Page Operating Budget for Various Funds...27 Budget Monitoring Report and Mid- Year 2015 County Budget Review County Budget...28 Capital Program...29 Audited Results of Financial Operations for Fiscal Year Summary of Audited Financial Results for Comparative Summary of Financial Results...32 REVENUE SOURCES AND EXPENDITURES...33 General...33 Revenues...34 Valuations, Tax Levies and Rates...36 Constitutional Tax Limit...36 Constitutional Taxing Power For The Tax Levy Limit Law...37 Tax Collection...39 Expenditures...39 ECONOMIC CONDITIONS...39 General...39 Economy...41 Local Economy...44 Transportation...45 Educational, Cultural, Media and Recreational Facilities...46 County Employees...47 County Employee Pension Benefits...48 Other Post-Employment Benefits...48 LITIGATION...49 SELF-INSURANCE...50 TAX MATTERS...50 Opinion of Bond Counsel...50 Certain Ongoing Federal Tax Requirements and Covenants...50 Certain Collateral Federal Tax Consequences...50 Information Reporting and Backup Withholding...51 Miscellaneous...51 RATING...52 MARKET FACTORS...52 DISCLOSURE UNDERTAKING...52 LEGAL MATTERS...54 INVESTMENT POLICY...54 FINANCIAL ADVISOR...54 OTHER INFORMATION...54 APPENDIX A - County of Erie Basic Financial Statements, Required Supplementary Information and Federal Financial Assistance Schedules for the Year Ended December 31, 2014 and Independent Auditors Reports... A-1 APPENDIX B Cash Flow Schedules...B-1 i

5 OFFICIAL STATEMENT of the COUNTY OF ERIE, NEW YORK INTRODUCTION This Official Statement (the Official Statement ), which includes the cover page, has been prepared by the County of Erie, New York (the County ), in connection with the sale by the County of its $89,560,000 Revenue Anticipation Notes, 2015 (the Notes ). This Official Statement has been executed on behalf of the County by the Comptroller, the chief fiscal officer of the County. All quotations from and summaries and explanations of provisions of the Constitution and laws of the State of New York (the State ), and acts and proceedings of the County contained herein do not purport to be complete, and are qualified in their entirety by reference to the official compilations thereof, and all references to the Notes and the proceedings of the County relating thereto are qualified in their entirety by reference to the definitive form of the Notes and such proceedings. Since 2005, the County has operated under State-imposed fiscal oversight imposed by the Erie County Fiscal Stability Authority ( ECFSA ) which was created by the Erie County Fiscal Stability Authority Act (the ECFSA Act ). (See ERIE COUNTY FISCAL STABILITY AUTHORITY herein for a discussion of its enabling legislation and its role in the oversight of County finances over the period from 2005 to the present.) Authorization THE NOTES The Notes are issued pursuant to the Constitution and laws of the State, including the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State, Revenue Anticipation Note Resolution adopted by the County Legislature on July 16, 2015 and approved by the County Executive on July 17, 2015, and other proceedings and determinations related thereto. Description The Notes will be dated December 14, 2015, and will mature on June 30, 2016, with interest payable at maturity and calculated on the basis of a 360-day year consisting of twelve 30-day months. The Notes will not be subject to redemption prior to maturity. The Notes will be issued in fully registered form, and, when issued, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository for the Notes. Individual purchases of ownership interests in the Notes will be made in book-entry-only form, in the principal amount of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their ownership interest in the Notes. (See Book-Entry-Only System herein.) Principal and interest on the Notes will be paid by Wells Fargo Bank N.A. (the Paying Agent ) to DTC, which will in turn remit such principal and interest to its Participants, for subsequent distribution to the Beneficial Owners of the Notes. See Book-Entry-Only System herein. Nature of the Obligations The Notes, when duly issued and paid for, will constitute a contract between the County and the owner thereof. The Notes are general obligations of the County and will contain a pledge of the faith and credit of the County for the payment of the principal thereof and the interest thereon. For the payment of such principal and interest, the County has the power and statutory authorization to levy ad valorem taxes on all taxable real property 1

6 within the County subject to the statutory limitations imposed by Chapter 97 of the Laws of 2011 of the State of New York (the Tax Levy Limit Law ). See The Tax Levy Limit Law herein. Under the Constitution of the State, the principal of and interest on the Notes will constitute indebtedness contracted by the County, for the payment of which the County is required to pledge its faith and credit, and the State is specifically precluded from restricting the power of the County to levy taxes on real property for the payment of such indebtedness. However, the Tax Levy Limit Law imposes a statutory limitation on the County s power to increase its annual tax levy. The amount of such increase is limited by the formulas set forth in the Tax Levy Limit Law. See The Tax Levy Limit Law herein. Purpose of the Notes The Notes are issued in anticipation of the collection and receipt of revenues due to the County in the current fiscal year from (i) State Social Services aid, (ii) Social Services aid from the United States government, (iii) State Receivables Health, (iv) State Receivables Mental Health, and (v) the collection or receipt of revenues due and payable to the County in the current fiscal year from sales and compensating use taxes. Source Adopted Budget Amount Actual Collection as of November 30, 2015 (1) State Social Services Aid $84,366,050 $42,186,244 Federal Social Services Aid 172,529,814 97,353,278 Sales and Compensating Use Taxes 446,529, ,972,072 State Receivables Health 30,461,400 19,474,499 State Receivables Mental Health 37,695,674 36,408,988 (1) Reference should be made to the cash flow schedules in Appendix B for the County s projections, as of the date hereof, of the timing of receipt of revenues, including those with respect to which the Notes are issued. Pursuant to State law, whenever the amount of revenue anticipation notes issued against a specific type of revenue equals the estimated amount of such specific type of revenue in anticipation of the collection or receipt of which such notes have been issued, less the amount of such revenue actually received or collected, all of such revenue, as thereafter received or collected, must be set aside in a special bank account to be used only for the payment of such notes as they become due. The proceeds of the Notes will be used by the County to pay ordinary and current operating expenses properly payable out of the moneys in anticipation of which such Notes are issued. As a result the timing of receipt of revenues, the County requires operating loan moneys to meet its normal obligations. Section of the Local Finance Law authorizes the County to issue revenue anticipation notes during a fiscal year in anticipation of the receipt of moneys becoming due during such fiscal year and also authorized the County to issue a single issue of revenue anticipation notes in anticipation of the receipt of more than one specific type of revenue, provided that the amount of indebtedness contracted against each specific type is stated in the proceedings authorizing the issuance of such notes and that such representative amounts do not exceed the amounts of indebtedness which could be contracted against each such specific type of revenue. BOOK-ENTRY-ONLY SYSTEM The Depository Trust Company ( DTC ), New York, New York, will act as securities depository for the Notes. The Notes will be issued as fully-registered securities, in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Note certificate will be issued for Notes, in the aggregate principal amount of the Notes, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct 2

7 Participants of sales and other securities transactions in deposited securities, through electronic computerized bookentry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Notes on DTC s records. The ownership interest of each actual purchaser of each Note ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase, Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Direct or Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in the Notes, except in the event that use of the book-entry system for the Notes is discontinued. To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee does not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC s records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Notes, such as redemptions, tenders, defaults, and proposed amendments to the Note documents. For example, Beneficial Owners of the Notes may wish to ascertain that the nominee holding the Notes for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payment of principal and interest on the Notes will be made to DTC by the Paying Agent. Redemption proceeds, distributions, and dividend payments on the Notes 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 County on the payable date, in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC (nor its nominee) or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County, 3

8 disbursement of such payments to Direct Participants will be the responsibility of DTC), and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Notes at any time by giving reasonable notice to the County. Under such circumstances, in the event that a successor depository is not obtained, Note certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Note certificates will be printed and delivered to DTC. The information contained in the above section concerning DTC and DTC s book-entry system has been obtained from sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof. NEITHER THE COUNTY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (II) THE PAYMENT OR TIMELINESS OF PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF OR INTEREST ON THE NOTES; OR (III) ANY NOTICE OR TIMELINESS OF NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO HOLDERS OF THE NOTES. Constitutional Requirements INDEBTEDNESS OF THE COUNTY The New York State Constitution limits the power of the County (and other municipalities and school districts of the State) to issue obligations, to contract indebtedness, and to lend its credit to others. Such constitutional limitations include the following, in summary form, and are generally applicable to the Notes: Purpose and Pledge. The County shall not give or loan any money or property to or in aid of any individual, or private corporation or private undertaking, or give or loan its credit to or in aid of any of the foregoing or any public corporation; provided, however, that the County may, if authorized by the State Legislature, lend its money or credit to certain entities, for the purpose of providing certain hospital or other facilities. The State Legislature has provided such authorization with respect to the Erie County Medical Center Corporation through enactment of Chapter 143 of the Laws of (See Related Entities - Erie County Medical Center Corporation herein.) The County may contract indebtedness only for County purposes, and shall pledge its faith and credit for the payment of the principal thereof and interest thereon. Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or to be paid within three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than two years after the date such indebtedness shall have been contracted and ending no later than the expiration of the period of probable usefulness of the object or purpose or, in the alternative, the expiration of the weighted average period of probable usefulness of the several purposes, for which it is contracted, and in no event may this period exceed forty years. No installment may be more than fifty per centum in excess of the smallest prior installment unless the County Legislature provides for substantially level or declining debt service payments in the manner prescribed by the State Legislature. The County is required to provide an annual appropriation for the payment of interest due during the year on its indebtedness and for the amounts required in such year for amortization and redemption of its indebtedness. Debt Limit. The County has the power to contract indebtedness for any lawful County purpose so long as the principal amount thereof shall not exceed seven per centum of the average full valuation of taxable real estate of the County and subject to certain enumerated exclusions and deductions such as water and certain sewer facilities and cash or appropriations for current debt service. The constitutional method for determining average full valuation is calculated by taking the assessed valuations of taxable real estate for the last five completed assessment rolls and applying thereto the ratio which such assessed valuation bears to the full valuation; full valuation is determined by the State Board of Real Property Services or such other State agency or officer as the 4

9 State Legislature shall direct. The State Legislature also is required to prescribe the manner by which such ratio shall be determined by such authority. Calculation of Constitutional Debt Limit The constitutional debt limit calculation of the County is shown as follows: TABLE 1 Calculation of Constitutional Debt Limit As of October 31, 2015 For Fiscal Year Ended December 31 Equalized Full Valuation of Taxable Real Property $ 46,738,119, ,235,307, ,138,287, ,996,864, ,214,694, Total five year full valuation... $ 238,323,272, Five year average full valuation... $ 47,664,654, Debt limit - 7% of average full valuation... $ 3,336,525, SOURCE: NYS Office of the State Comptroller - Data Management Unit (The Balance of Page Intentionally Left Blank) 5

10 Calculation of Total Net Indebtedness The calculation of total net indebtedness for the County is set forth below: TABLE 2 Calculation of Total Net Indebtedness As of October 31, 2015 Five year average full valuation ( )... $47,664,654, Debt Limit 7% of average full valuation... $ 3,336,525, Outstanding Indebtedness: Bonds General... $ 375,589, Bonds Sewer... 72,562, Bond Guaranty - ECMCC (1)... 87,500, Total Indebtedness ,652, Less Exclusions: Sewer Exclusion... 72,562, Budgeted Appropriations... 7,320, Total Exclusions... 79,882, Total Net Indebtedness... $ 455,769, Net Debt Contracting Margin... $ 2,880,755, Percentage of Debt Contracting Power Exhausted % (1) Erie County Medical Center Corporation SOURCES: Property Value NYS Office of the State Comptroller Data Management Unit, Indebtedness and exclusions Erie County Comptroller s Office Statutory Procedure In general, the State Legislature has granted the authorization and prescribed the procedures for the County to borrow and incur indebtedness by the enactment of the Local Finance Law, subject to the constitutional provisions set forth under Constitutional Requirements and to limitations imposed on the County by the ECFSA Act. The power to spend money, however, generally derives from other law, including the County Law and the General Municipal Law of the State. The Local Finance Law also provides that where a bond resolution, or a summary thereof, is published with a statutory form of notice, the validity of the bonds authorized thereby, including bond anticipation notes issued in anticipation of the sale thereof, may be contested only if: (1) such obligations are authorized for a purpose for which the County is not authorized to expend money; or (2) there has not been substantial compliance with the provisions of law which should have been complied with in the authorization of such obligations; and an action contesting such validity is commenced within twenty days after the date of such publication; or (3) such obligations are authorized in violation of the provisions of the Constitution. 6

11 Such publication procedure has been followed with respect to each of the bond resolutions pursuant to which the Bonds are being issued, and the validity of the Bonds (and any bond anticipation notes issued in anticipation of the sale thereof) has not been contested. Each bond resolution generally authorizes the construction, acquisition, or installation of the object or purpose to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds therein authorized subject to legal (Constitution, Local Finance Law, and case law) restrictions relating to the period of probable usefulness with respect thereto. In addition, under each bond resolution, the County Legislature (Finance Board) may delegate, and has delegated, power to issue and sell bonds and bond anticipation notes in anticipation thereof to the Comptroller, as the chief fiscal officer of the County. In general, the Local Finance Law authorizes the County Legislature (Finance Board) to delegate its power to issue general obligation revenue anticipation notes, tax anticipation notes, budget notes and capital notes, to the Comptroller. Outstanding Direct Indebtedness The following table shows all outstanding direct indebtedness for which the County has pledged its faith and credit for payment of the principal thereof and the interest thereon: TABLE 3 Direct General Obligation Indebtedness Outstanding As of October 31, 2015 Bonds: Buildings and other Improvements... $112,984, Highway Improvements ,810, Sewer District Facilities... 72,562, Ralph Wilson Stadium... 50,348, Court House Facilities... 36,102, Community College... 29,794, First Niagara Center... 11,295, Computer System... 11,159, Prison Facilities... 11,587, Convention Center... 7,810, Buffalo Zoo... 2,281, Hospital , (1) Gross Direct Debt... $448,152, (1)(2) Exclusions : Sewer District Debt... 72,562, Budgeted 7,320, Appropriations... Total Deductions... 79,882, Net Direct Debt... $368,269, (1) Pursuant to the agreement governing the sale of the County hospital and nursing home to Erie County Medical Center Corporation, the County continues to be directly responsible for the payment of certain bonded debt for these facilities. Bonded debt, in the amount of $87,500,000 of Erie County Medical Center Corporation for which the County has indirect responsibility as guarantor, is not included above. (2) This schedule reflects remaining principal for bonds issued from 1996 to 2015 by the County. SOURCE: Erie County Comptroller s Office 7

12 Debt Ratios The following table sets forth certain rates relating to the County s gross and net direct general obligation indebtedness: TABLE 4 Debt Ratios (a) As of October 31,2015 Amount Per Capita (b) Full Value (c) Percentage of Equalized Gross Direct Debt $448,152,065 $ % Net Direct Debt $368,270,000 $ % (a) (b) (c) Does not include underlying indebtedness. The County's 2014 population estimate of 922,835 was compiled by the NYS Department of Economic Development The County's equalized full value of taxable real estate for 2015 is $49,214,694,098. (The Balance of Page Intentionally Left Blank) 8

13 Annual Debt Service Schedule The following schedule sets forth all principal and interest payments due as of October 31, 2015 on all outstanding long-term general obligation indebtedness of the County: TABLE 5 Annual Debt Service Requirements for Bonds Fiscal Year Ending December 31 Principal Payments Interest Payments Total Debt Service $ 8,491, $ 4,077, $ 12,568, ,542, ,773, ,316, ,170, ,352, ,523, ,292, ,739, ,032, ,828, ,481, ,310, ,930, ,306, ,237, ,478, ,346, ,824, ,054, ,649, ,703, ,751, ,845, ,597, ,853, ,376, ,230, ,865, ,673, ,538, ,042, ,079, ,122, ,509, ,605, ,114, ,745, ,302, ,048, ,377, , ,365, ,630, , ,493, ,711, , ,468, ,376, , ,025, ,318, , ,864, ,213, , ,657, ,142, , ,489, ,387, , ,636, , , ,113, , , ,091, , , ,077, , , , , , , , , , $448,152, $114,965, $563,117, (1) Amount is net of debt service payments of $61,553, made from January 1, 2015 to October 31, SOURCE: Erie County Comptroller s Office 9

14 Trends in Long-Term Direct Indebtedness The following table sets forth the total long-term bonded indebtedness of the County outstanding at the end of each of the last ten fiscal years: TABLE 6 Outstanding Long-Term Direct Indebtedness (1) (As of December 31) Fiscal Year Amount (2) $446,656, ,910, ,582, ,245, ,954, ,722,294 (3) ,691,804 (3) ,619,957 (3) ,285,000 (3) ,605,000 (3) (1) Excludes all sewer debt payable from special assessments. (2) Excludes ECMCC bond guaranty of $101,375,000 for , $99,305,000 for 2009, $97,150,000 for 2010, $94,900,000 for 2011, $92,550,000 for 2012, $90,085,000 for 2013 and $87,500,000 for (3) Excludes ECFSA Bonds and includes Erie County Mirror Bonds. SOURCE: Erie County Comptroller s Office Debt Policy It is the County s policy to fund major capital projects through the use of long-term financing. Interim financing for projects under construction may be provided through bond anticipation notes. Minor capital projects are typically funded in current budgets. In order to serve its citizens on a countywide basis, the County has constructed and financed a road system, libraries, parks, facilities for health and social service-related activities, and various community college facilities. The County is also actively involved in constructing and financing sewage treatment facilities and interceptor sewer systems in districts throughout the County, but not in the cities of Buffalo and Tonawanda. The costs of operation and debt service of these facilities are borne by special assessment of the residents of each such district and revenues from contracts with other sewer systems. The County sewer systems are generally supplemented by town and village systems, which are financed, constructed and maintained on a local basis, and by facilities furnished and financed by the Buffalo Sewer Authority. A condition precedent to the construction of any facilities to be financed by borrowing is the adoption of a bond resolution pursuant to the Local Finance Law, which requires that the County estimate the maximum amount to be expended. The period of probable usefulness must also be determined subject to the maximum periods set forth in the Local Finance Law. Notwithstanding the period set forth in a bond resolution, the County may amortize the indebtedness over a shorter period. 10

15 Capital Projects The following table summarizes the anticipated financing status of the County s approved capital projects in general functional categories: TABLE 7 Capital Projects (As of October 31, 2015) Total Authorization Bonds Issued Down Payments Aid Received Authorized & Unissued Buildings $ 56,808, $ 45,555, $ - $ - $ 11,253, ECC (1) 3,608, ,023, ,584, Parks 4,024, ,250, ,774, Hospital (2) 32,275, ,376, , Highways 29,032, ,764, ,268, Other 2,095, ,934, , Sewer 104,675, ,723, ,028, ,756, ,166, Totals $232,519, $148,628, $ 3,028, $ 6,756, $74,106, (1) Erie Community College. (2) The agreement relating to the sale of the Erie County Medical Center Healthcare Network to the Erie County Medical Center Corporation requires the County to complete all Network capital projects established prior to December 31, 2003 (amount authorized for these projects, amount financed, and amount authorized remaining to be financed, shown in table). SOURCE: Erie County Comptroller s Office The County s present estimates indicate that all projects authorized can be completed substantially within the amounts of each bond authorization. However, no assurance can be given that the actual cost will not be greater than estimated, in part because of the anticipatory nature of capital planning. For a summary of the County s capital program, see County Finances -- Capital Program. Short-Term Indebtedness The County is authorized to issue various types of short-term obligations, including bond anticipation notes, tax anticipation notes, revenue anticipation notes, budget notes and capital notes. Bond Anticipation Notes ( BAN ). The County may individually finance some of its capital projects with the proceeds of bond anticipation notes and renewals thereof. The County, in accordance with constitutional requirements, must periodically reduce the principal thereof to the extent required by law, from a source other than proceeds of borrowings. Statutory law in the State permits bond anticipation notes to be renewed, provided such required periodic payments are made and provided that, except with respect to notes issued for assessable improvements, such renewals do not extend five years beyond the original date of borrowing. Tax Anticipation Notes ( TAN ). Generally, tax anticipation notes may be issued by the County during a fiscal year in anticipation of the collection of unpaid real property taxes levied for such fiscal year, or for any of the four preceding fiscal years. Such notes must mature within one year from the date of their issuance. If the taxes against which such notes are issued remain uncollected, such notes may be renewed from time to time for periods of up to one year in an amount not exceeding the amount of such uncollected taxes. Such notes, including renewals, must be redeemed not later than five years from the date of original issuance, but in no event more than five years after the close of the fiscal year for which taxes were levied in anticipation of the collection of which such notes were issued. Payment of interest on such notes is provided by appropriation in the County budget. If such notes, including renewals, have not been redeemed from real property taxes within five years after the fiscal year for which the taxes were originally levied, moneys for the redemption thereof must be provided by appropriation in the County budget. The proceeds of such notes may be used for any purpose for which the tax receipts against which such notes were issued could be used. Budget Notes. Budget notes generally may be used for the purpose of meeting expenditures for which an insufficient or no provision has been made in the County budget. In general, the maximum principal amount of 11

16 budget notes which may be issued in any fiscal year may not exceed approximately 5% of the County budget; however, budget notes may also be issued in unlimited amounts for certain specified purposes. Budget notes must mature not later than the close of the fiscal year following the fiscal year in which they are issued, and must be redeemed from taxes levied for the fiscal year of maturity or from other available revenues. However, if the notes are authorized subsequent to the adoption of the budget, such notes may mature not later than the end of the second fiscal year succeeding the fiscal year in which they are issued. Capital Notes. Capital notes may be issued to finance all or part of the costs of any object or purpose for which serial bonds may be issued. They have usually been issued to provide moneys required by Section of the Local Finance Law as the down payment in connection with the financing of a given object or purpose. Revenue Anticipation Notes ( RANs ). Revenue anticipation notes may be issued in any fiscal year in anticipation of the collection or receipt of taxes (other than real property taxes) and certain other types of revenue which are due and payable in such fiscal year and moneys to be received from the State or Federal government which are due in such fiscal year. Pursuant to State law, such notes must mature within one year after the date of issuance, and may be renewed from time to time for periods of up to one year; however, the maturity of such notes, including renewals, may not extend beyond the end of the second fiscal year following the fiscal year in which such notes were originally issued. The issuance of revenue anticipation notes has been necessitated, in part, by the State s practice of requiring local governments to pay 100% of the expenditures for various programs in advance, and then providing subsequent reimbursement for the non-local share. (The Balance of Page Intentionally Left Blank) 12

17 below: A summary of the County s short-term borrowing for the fiscal years 1995 through 2014 is presented TABLE 8 Short-Term Borrowing History (1) Year Amount Type Issue Date Maturity Date $ 80,000,000 RAN 09/21/95 09/20/ ,000,000 RAN 04/18/96 04/17/ ,000,000 RAN 11/20/96 11/19/ ,000,000 RAN 06/26/97 06/25/ ,000,000 RAN 10/30/97 10/29/ ,000,000 RAN 10/14/98 10/13/ N/A N/A N/A N/A N/A N/A N/A N/A N/A ,000,000 RAN 09/18/02 09/17/ ,000,000 RAN 06/24/03 06/23/ ,500,000 RAN 07/14/04 07/13/ ,000,000 RAN 03/11/05 03/10/ ,000,000 RAN 07/14/05 07/13/ ,000,000 RAN 06/13/06 06/13/ ,000,000 RAN 06/27/07 06/27/ ,000,000 RAN 09/30/08 06/30/ ,534,867 BAN (2) 05/20/09 05/18/ ,000,000 RAN 10/27/09 06/30/ ,000,000 RAN 08/12/10 06/30/ ,000,000 RAN 12/14/10 04/14/ ,000,000 RAN 10/06/11 06/29/ ,000,000 RAN 10/11/12 06/28/ ,440,000 RAN 08/27/13 06/30/ ,000,000 RAN 09/18/14 06/30/15 (1) Excludes all Bond Anticipation Notes ("BANs") issued by the New York State Environmental Facilities Corporation for the benefit of self-supporting sewer districts. (2) BANs may be issued in anticipation of bond proceeds to be received at a later date. On May 17, 2010, the BANs were paid by the issuance of long-term general obligation bonds by the ECFSA pursuant to an agreement entered into by the parties. SOURCE: Erie County Comptroller s Office Estimated Overlapping Debt The following table of total and net indebtedness of the various political subdivisions within the County has been compiled from the latest outstanding debt information available from the New York State Office of the State Comptroller for all subdivisions. Such indebtedness is not a debt of the County and the County is not liable therefor. Exclusions for municipalities consist of items legally excluded in the determination of net indebtedness by such municipalities (water and excluded sewer debt, tax and revenue anticipation notes, etc.), and estimated State building aid for school districts. 13

18 TABLE 9 Overlapping Debt (000s omitted) Governmental Unit Fiscal Year Ended Net Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt Cities... 06/30/13 $ 468, % $ 468,077 Towns... 12/31/13 372, % 372,231 Villages... 05/31/13 71, % 71,154 School districts... 06/30/13 1,915, % 1,915,641 Fire districts... 12/31/13 8, % 8,418 Totals... $ 2,835,521 $ 2,835,521 PROVISIONS AFFECTING RIGHTS AND REMEDIES Under current law, provision is made for contract creditors of the County to enforce payments upon such contracts, if necessary, through court action, although the present statute limits interest on the amount adjudged due to creditors to nine per centum per annum from the date due to the date of payment. As a general rule, property and funds of a municipal corporation serving the public welfare and interest have not been judicially subjected to execution or attachment to satisfy a judgment, although judicial mandates have been issued to officials to appropriate and pay judgments out of current funds or the proceeds of a tax levy. The Constitution of the State requires that every county, city, town, village, and school district in the State provide annually by appropriation for payment of all interest and principal on its serial bonds and certain other obligations, and that, if at any time the respective appropriating authorities shall fail to make such appropriations, a sufficient sum shall be set apart from the first revenues thereafter received and shall be applied to such purposes. The Constitution of the State also provides that the fiscal officer of any county, city, town, village or school district may be required to set apart and apply such revenues at the suit of any holder of any such obligations. The State has consented that any municipality in the State may file a petition with any United States District Court or court of bankruptcy under any provision of the laws of the United States, now or hereafter in effect, for the composition or adjustment of municipal indebtedness. However, pursuant to the Erie County Fiscal Stability Authority Act, notwithstanding any provision to the contrary in title six-a of Article two of the State Local Finance Law, the County shall not file any petition authorized by such title six-a without the approval of the Erie County Fiscal Stability Authority and the State Comptroller (see County Finances Erie County Fiscal Stability Authority Act herein). Subject to such approvals, under the United States Constitution, Congress has jurisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute, generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with easier access to judicially approved adjustment of debts including judicial control over identifiable and unidentifiable creditors. In recent times, certain events and legislation affecting remedies on default have resulted in litigation. While courts of final jurisdiction have upheld and sustained the rights of bondholders and noteholders, such courts might hold that future events, including financial crises as they may occur in the State and in municipalities of the State, require the exercise by the State of its emergency and police powers to assure the continuation of essential public services. No principal or interest payment relating to any County indebtedness is past due. The County has never defaulted in the payment of the principal of or interest on any indebtedness. COUNTY GOVERNMENT General. The County is a municipal corporation of the State. With a 2010 population of 919,040, a decline of approximately 30,000 from the 2000 population of 950,265, according to the U.S. Census Bureau, it is one of the State s most populous counties. It has a land area of 1,058 square miles and is situated in Western New York, bounded on the west by Lake Erie and Canada, to the north by Niagara County, to the east by Genesee County and Wyoming County, and to the south by Cattaraugus and Chautauqua Counties. The County includes the State s 14

19 second largest city by population, Buffalo, as well as the cities of Lackawanna and Tonawanda and 25 towns. The County has numerous established residential areas, and its largest taxpayers include National Grid Power Corporation, National Fuel Gas Corporation, NY State Electric and Gas Corporation, Benderson Development Company, Inc. and Verizon New York, Inc. The County includes major urbanized and industrial areas, as well as farmlands. The County provides a variety of general governmental services, which supplement local city, town and village services. These include parks, cultural and recreational facilities, police, libraries, youth and senior citizen services, and correctional facilities. The County is responsible for providing mandated social service programs. The County also owns and operates a community college. It provides sanitary sewage collection, treatment and disposal facilities through a variety of special assessment districts. Subject to the State Constitution, the County operates pursuant to the County Charter and Administrative Code, and in accordance with other laws governing the County generally, to the extent that such laws are applicable to counties operating under a charter form of government. The Charter was enacted by local law and approved by the electors at a general election held in November of The Administrative Code was enacted into local law in 1960, and became effective in The Charter and Administrative Code have been amended from time to time since enactment. Pursuant to the ECFSA Act, the State currently is not controlling and supervising the financial affairs of the County and certain Covered Organizations (as defined in the ECFSA Act) affiliated with the County. ECFSA entered an advisory period on June 2, 2009 and has remained in an advisory period since that time. (See COUNTY FINANCES Four-Year Financial Plan and ERIE COUNTY FISCAL STABILITY AUTHORITY herein.) County Legislature. The legislative power of the County is vested in a County Legislature. Its members are elected for two-year terms by the voters in their respective legislative districts. The Legislature meets at both regular and special meetings throughout the year. The Legislature reviews, approves modifications and adopts the annual County budget, levies taxes, authorizes the incurrence of all indebtedness of the County, and exercises all powers of local legislation in relation to enacting, amending, repealing or rescinding local laws, legalizing acts, ordinances, or resolutions subject to veto by the County Executive. Both the number of members and boundaries of legislative districts may be varied from time to time in accordance with requirements of the Federal and State Constitutions or by Charter amendment. There are currently 11 legislative districts, and an equal number of members of the County Legislature. County Executive. The County Executive is elected from the County at large every four years in the year preceding the presidential election. The County Executive must be a resident of the County at the time of the election and during the term of office. The Office of County Executive is considered a full time position, and the incumbent may hold no other public office. In addition to acting as the chief executive officer and administrative head of the County government, the County Executive acts as the chief budget officer of the County. Certain actions, including supplemental or emergency appropriations of the County Legislature, cannot take effect unless approved by the County Executive. The current County Executive is Mark C. Poloncarz. County Comptroller. The County Comptroller, who is elected from the County at large for a four-year term, is the chief fiscal, accounting, reporting and auditing officer of the County. The Comptroller is charged with the administration of the financial affairs of the County, maintaining total and complete accounting records for all receipts, investments and disbursements, including liabilities, fund balances, encumbrances, expenditures, appropriations and revenues, certifying the availability of funds, prescribing approved methods of accounting, and auditing all affairs of the County, including financial, compliance and management audits. The current County Comptroller is Stefan I. Mychajliw. Audit Committee. Effective January 1, 1986, the Audit Committee for Erie County was established. This Committee is comprised of three community representatives and two members of the County Legislature. This Committee is currently responsible for the preparation of requests for proposals for the annual audits of the County and Erie Community College; the evaluation of responses; and making recommendations to the County Legislature for the selection of independent accounting firms. The Audit Committee is also required to prepare an annual report for the County Executive and County Legislature based on its review of audited financial statements and management letters. 15

20 RELATED ENTITIES Following is information relative to certain entities that have significant financial relationships with the County: Niagara Frontier Transportation Authority The Niagara Frontier Transportation Authority ( NFTA ) was created in 1967 as a public benefit corporation under the Public Authorities Law of the State. The NFTA is responsible for all public transportation systems in Erie and Niagara Counties. Its Board consists of a chairman and 10 other members appointed by the Governor with the advice and consent of the State Senate. Of the 10 members other than the Chairman, one is appointed upon the written recommendation of the County Executive, and one is appointed upon the written recommendation of the County Legislature. With respect to surface transportation, NFTA Metro operates a 6.4-mile light rail rapid transit ( LRRT ) between downtown Buffalo and the South Campus of the State University of New York at Buffalo. Full operation of the LRRT commenced in NFTA Metro s surface operations also include 332 buses, 35 vans and 4 trolleybuses, with a ridership of approximately 94,000 people per day. NFTA also owns and operates Buffalo Niagara International Airport ( BNIA ), which is NFTA s second largest business center and serves more than 5 million passengers each year, and the Niagara Falls International Airport ( NFIA ), which serves as an air charter airport for the area, a general aviation airport, and a military base and home station for units of both the United States Air Force Reserve and the New York State Air National Guard. In accordance with Section 18-b of New York State Transportation Law, Erie and Niagara Counties are required to match annual appropriations made by the State for transit operating assistance to the NFTA. The County s matching share for 2014 is $3,657,200, which is 89.2% of the State appropriation. The County s 2014 budget provides for an additional appropriation of $19,346,256 for NFTA operating assistance. This amount is equal to approximately 4.17% of the amount collected in the County from the imposition of sales tax at the rate of 3%, as required by Chapter 70 of the Laws of New York Power Authority (Settlement) In 2006, the New York Power Authority under the Niagara Power Project Relicensing process formally approved a $279 million, 50-year settlement that will see the bulk of the funds allocated towards waterfront development efforts in both Erie and Niagara counties. The pact includes a $3.5 million annual payment to the Erie Canal Harbor Development Corporation ( ECHDC ) for 50 years to help facilitate waterfront development in Buffalo. The Erie County Greenway Fund also will receive $2 million annually for 50 years to create and remediate waterfront parkland in both the County and Niagara County. Furthermore, another 14 acres of prime waterfront land has been reclaimed and is currently used to store the ice boom across the Niagara River. ECHDC has undertaken a number of waterfront redevelopment projects including the completion of the $53 million Erie Canal Harbor Redevelopment Project, which revitalized 12.5 acres of idle waterfront space into a contemporary downtown tourist destination. Additionally, development has begun on the Canalside project, which is currently slated to include more than $294 million in public and private investments. The project consists of over 1 million square feet of commercial (retail, lodging, and office), cultural, and residential space along the Buffalo waterfront. ECHDC has contracted with Global Spectrum, one of the world s largest venue management companies, to manage Canalside. It has also contracted with two architectural firms to develop plans for the South Aud Block that is south of Canalside. Recently, approximately 350 acres of waterfront land was transferred from the Niagara Frontier Transportation Authority to ECHDC, whose mission and resources will better enable it to support and expedite the land s redevelopment. Approximately 190 acres of the transferred Outer Harbor land, including a small boat marina and a beach, form the new Buffalo Harbor State Park, the first State park in the City of Buffalo under the State Office of Parks, Recreation and Historic Preservation. Planning for the remaining, adjacent land is not 16