Notice of Replacement

dated July 10, 2018

regarding

Preliminary Official Statement dated July 9, 2018

with respect to

BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY

$46,615,000*
Revenue Bonds
(City of Birmingham Funding),
Series 2018D

The Preliminary Official Statement dated July 9, 2018 (the “Preliminary Official Statement”)
relating to the issuance of the Revenue Bonds (City of Birmingham Funding), Series 2018D (the “Series
2018D Bonds”) by the Birmingham-Jefferson Civic Center Authority (the “Authority”) has been replaced by
the version attached hereto. The attached version corrects information with respect to the corporate sponsor
agreements relating to the Series 2018F Bond described in the Preliminary Official Statement. The corrected
information appears under the following headings in APPENDIX A:

“MANAGEMENT’S PROJECTIONS – Assumptions Regarding Projections – Funding Agreements,

Corporate Sponsorships and Other Contractual Arrangements”

“THE PLAN OF FINANCING – Issuance of Series 2018 Bonds – Series 2018F Bond”

“DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS – Corporate Sponsorship and
Other Contractual Arrangements – Naming Rights Agreement”

The Series 2018F Bond is being issued to evidence a direct loan from Regions Bank. The Series
2018F Bond is not being publicly offered.

ADDITIONAL INFORMATION

For further information during the initial offering period with respect to the Series 2018D Bonds, contact
Matt Adams, Raymond James & Associates, Inc., 2900 Highway 280, Suite 100, Birmingham, Alabama 35223
(telephone: (205) 802-4275).

*
Preliminary; subject to change.
offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Preliminary Official Statement dated July 9, 2018
This Preliminary Official Statement has not been approved by the Authority, and the information herein is subject to completion and amendment without notice. Under no circumstances shall this Preliminary Official Statement constitute an

New Issue - Book-Entry Only Ratings: Standard & Poor’s: AA, Stable
Moody’s: Aa2, Stable

Birmingham-Jefferson Civic Center Authority

$46,615,000*
Revenue Bonds
(City of Birmingham Funding),
Series 2018D
Bond Issuer. The Bonds are being issued by the Birmingham-Jefferson Civic Center Authority (the “Authority”).

Purpose of Financing. Proceeds of the Bonds will be used by the Authority to finance certain capital projects
at the Authority’s civic center complex. Proceeds of the Bonds will also be used to pay costs of issuance of the
Bonds. See “Appendix A – The Plan of Financing”.
Authorizing Document. The Bonds will be issued pursuant to and secured by that certain Trust Indenture
dated August 1, 2018 (the “Indenture”) by and between the Authority and Regions Bank, as trustee (the “Trustee”).
Source of Payment. The Bonds will be limited obligations of the Authority payable solely from payments (the
“City Contributions”) made to the Authority by the City of Birmingham, Alabama (the “City”) pursuant to that certain
Funding Agreement dated July __, 2018 (the “Funding Agreement”) between the City and the Authority. The City’s
obligation to make the City Contributions is a general obligation of the City, secured by the full faith and credit of
the City. The Bonds will also be secured by a pledge of the moneys and investments on deposit in the special funds
created by the Indenture. See “Security and Source of Payment” herein.
The Bonds are limited obligations of the Authority payable solely from the sources described in this Official
Statement, including the City Contributions. The City’s obligation under the Funding Agreement to make the
City Contributions is a general obligation of the City for the payment of which the full faith and credit of the City
have been irrevocably pledged. The Authority has no taxing power.
Pricing Terms and Payment Dates. Pricing information for the Bonds, including principal maturities,
interest rates, payment dates and authorized denominations, is shown on the inside cover of this Official Statement.
Redemption. The Bonds are subject to redemption prior to maturity as herein described.
Form and Date of Delivery. The Bonds are being issued under the book entry system maintained by The
A definitive Official Statement will be made available prior to the delivery of these securities.

Depository Trust Company (“DTC”). The Bonds are expected to be delivered on or about August ____, 2018.
Legal Opinions. The Bonds are offered in book-entry only form when, as and if issued by the Authority
and received by the Underwriters subject to the approving opinion of Maynard, Cooper & Gale, P.C., Birmingham,
Alabama, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Authority by
its counsel, Waldrep Stewart & Kendrick, LLC, Birmingham, Alabama. Certain legal matters will be passed upon for
the Underwriters by their counsel, Balch & Bingham LLP, Birmingham, Alabama.
Tax Status. Interest on the Bonds (i) will not be included in gross income of the holders for purposes of federal
income taxation and (ii) will not be an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations, subject to limitations or exceptions described under “Tax Matters”. The
opinion of bond counsel will address these aspects of the tax status of the Bonds and should be read in its entirety for
a complete understanding of the scope of the opinion and the conclusions expressed. It is also the opinion of bond
counsel that under existing law interest on the Bonds is exempt from income taxation by the State of Alabama. The
proposed form of the opinion of bond counsel is attached hereto as Appendix G.
Risk Factors. For a description of certain risks involved in an investment in the Bonds, see “Risk Factors”.
Underwriters. The Bonds are being purchased from the Authority by

Raymond James Stifel

Loop Capital Markets Securities Capital Corporation
Date of Official Statement. The date of this Official Statement is July ____, 2018.

* Preliminary; subject to change.

 $46,615,000*
Revenue Bonds
(City of Birmingham Funding),
Series 2018D

PRICING INFORMATION

Maturity Principal Interest

(May 1) Amount Rate Yield Price CUSIP

Date of Bonds. The Bonds will be dated as of the date of their initial delivery. There will be no accrued
interest payable as part of the initial offering price.

Authorized Denominations. The Bonds may be issued in denominations of $5,000 or any integral
multiple thereof.

Interest Payment Dates. Interest on the Bonds is payable on May 1 and November 1 of each year,
beginning November 1, 2018.

Principal Payment Dates. The Bonds mature on May 1 in years and amounts as shown above.

Redemption Prior to Maturity. The Bonds are subject to redemption prior to maturity as described
herein. See “DESCRIPTION OF THE BONDS—Redemption Prior to Maturity.”

____________________

*Preliminary; subject to change.

 USE OF THIS OFFICIAL STATEMENT

Neither this Official Statement nor any advertisement of the Bonds is to be construed as a contract or
agreement with the holders of the Bonds. The agreement of the Authority with the holders of the Bonds is fully set
forth in the Bonds and the Indenture.

No dealer, broker, salesman or other person has been authorized by the Authority to give any information
or to make any representation other than as contained in this Official Statement, and, if given or made, such other
information or representation must not be relied upon as having been authorized by them.

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 Underwriters have provided the following sentence for inclusion in this Official Statement. The
Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, their
responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this
transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

The Bonds have not been registered under The Securities Act of 1933, as amended, or any state securities
laws, and neither the Securities and Exchange Commission nor any state regulatory agency will pass upon the
accuracy, completeness or adequacy of this Official Statement. The Indenture has not been qualified under the Trust
Indenture Act of 1939, as amended.

The information in this Official Statement is provided as of the date of this Official Statement. Nothing
contained in this Official Statement shall under any circumstances create an implication that there has been no
change in such information after the date of this Official Statement.

The information set forth in this Official Statement has been obtained from sources which are deemed to be
reliable but is not guaranteed as to accuracy or completeness. All estimates and assumptions contained herein are
believed to be reliable, but no representation is made that such estimates or assumptions are correct or will be
realized.

All quotations from and summaries and explanations of provisions of laws and documents in this Official
Statement do not purport to be complete, and reference is made to such laws and documents for full and complete
statements of their provisions.

In connection with this offering the Underwriters may engage in transactions that stabilize, maintain or
otherwise affect the price of the Bonds. Such transactions may include purchases of the Bonds for the purpose of
maintaining the price of the Bonds. Such transactions, if commenced, may be discontinued at any time.

The attached appendices are integral parts of this Official Statement and must be read together with all of
the foregoing statements.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Official Statement including, without limitation, statements containing
the words “estimates,” “believes,” “anticipates,” “expects,” and words of similar import, constitute forward-looking
statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Authority, the City or other entities to which the
forward-looking statements relate to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.

The forward-looking statements included herein are necessarily based on various assumptions and
estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to
the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social,
economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or
omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and
legislative, judicial, and other governmental authorities and officials. Assumptions to the foregoing involve
judgments with respect to, among other things, future economic, competitive, and market conditions and future
business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the
control of the Authority and the City. Any of such assumptions could be inaccurate and, therefore, there can be no
assurance that the forward-looking statements included in this Official Statement will prove to be accurate. Given
these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking
statements. The Authority disclaims any obligation to update any such factors or to publicly announce the results of
any revision to any of the forward-looking statements contained herein to reflect future events or developments.
 TABLE OF CONTENTS

Page

INTRODUCTION ............................................................................................................................................................... 1
DEFINED TERMS ............................................................................................................................................................. 2
THE AUTHORITY ............................................................................................................................................................ 3
THE CITY........................................................................................................................................................................ 3
DESCRIPTION OF THE BONDS .......................................................................................................................................... 3
Pricing Information ................................................................................................................................................... 3
Date, Form of Bonds and Denominations................................................................................................................. 3
Calculation of Interest Payments .............................................................................................................................. 3
Book Entry System ................................................................................................................................................... 3
Redemption Prior to Maturity ................................................................................................................................... 3
Authority for Issuance .............................................................................................................................................. 5
SECURITY AND SOURCE OF PAYMENT ............................................................................................................................ 6
Source of Payment .................................................................................................................................................... 6
Security Provided by Indenture ................................................................................................................................ 6
The Funding Agreement and City Contributions ...................................................................................................... 7
No Additional Bonds ................................................................................................................................................ 7
PLAN OF FINANCING ....................................................................................................................................................... 7
General...................................................................................................................................................................... 7
Debt Service on the Bonds........................................................................................................................................ 8
RISK FACTORS ................................................................................................................................................................ 9
General...................................................................................................................................................................... 9
Limited Obligations .................................................................................................................................................. 9
Limited Taxing Authority of City ............................................................................................................................. 9
Limitation on Remedies ............................................................................................................................................ 9
Projections and Completion of the Projects .............................................................................................................. 9
Economic Conditions.............................................................................................................................................. 10
Ratings .................................................................................................................................................................... 10
Loss of Tax Exemption ........................................................................................................................................... 10
The United States Bankruptcy Code ....................................................................................................................... 11
LITIGATION WITH RESPECT TO AUTHORITY ................................................................................................................. 11
LITIGATION WITH RESPECT TO CITY ............................................................................................................................ 12
UNDERWRITING ............................................................................................................................................................ 12
FINANCIAL ADVISORS .................................................................................................................................................. 12
RELATIONSHIPS ............................................................................................................................................................ 12
RATINGS ....................................................................................................................................................................... 13
FINANCIAL STATEMENTS OF AUTHORITY ..................................................................................................................... 13
COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY.............................................................................................. 13
LEGAL MATTERS .......................................................................................................................................................... 13
TAX MATTERS.............................................................................................................................................................. 14
General.................................................................................................................................................................... 14
Opinion of Bond Counsel ....................................................................................................................................... 14
Collateral Tax Consequences.................................................................................................................................. 14
PREPARATION AND CIRCULATION OF OFFICIAL STATEMENT........................................................................................ 15
CONTINUING DISCLOSURE............................................................................................................................................ 15
General.................................................................................................................................................................... 15
Compliance with Prior Undertakings by Authority ................................................................................................ 15
Compliance with Prior Undertakings by City ......................................................................................................... 16
MISCELLANEOUS .......................................................................................................................................................... 16
AUTHORIZATION AND APPROVAL ................................................................................................................................ 16
APPENDIX A - Information About the Authority
APPENDIX B - Financial Statements of the Authority
APPENDIX C - Information About the City
APPENDIX D - Comprehensive Annual Financial Report of the City for the fiscal year ended
June 30, 2017
APPENDIX E - Form of Funding Agreement
APPENDIX F - Form of Indenture
APPENDIX G - Form of Opinion of Bond Counsel
APPENDIX H - Forms of Continuing Disclosure Agreements
APPENDIX I - The DTC Book-Entry System
 OFFICIAL STATEMENT

BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY

$46,615,000*
Revenue Bonds
(City of Birmingham Funding),
Series 2018D

INTRODUCTION

This Official Statement, including the cover page and appendices hereto, is being furnished in connection
with the sale by the Birmingham-Jefferson Civic Center Authority (the “Authority”) of its $46,615,000* Revenue
Bonds (City of Birmingham Funding), Series 2018D (the “Bonds”). The Authority is a public corporation under the
constitution and laws of the State of Alabama authorized to construct, maintain, operate and manage a civic center
located in and for the benefit of the City of Birmingham, Alabama (the “City”) and Jefferson County, Alabama (the
“County”). The Authority owns and operates the Birmingham-Jefferson Convention Complex (the “Complex”),
which is comprised of several structures providing complete facilities for sports events, musical and theatrical
entertainment, conventions, meetings, banquets, trade shows and other events. For additional information about the
Authority and the Complex, see APPENDIX A. For financial statements of the Authority, see APPENDIX B.

The Bonds are being issued pursuant to a Trust Indenture dated August 1, 2018 (the “Indenture”) by and
between the Authority and Regions Bank, an Alabama banking corporation, as trustee (the “Trustee”). The Bonds
will be issued pursuant to the Enabling Law (defined herein). The Enabling Law and the Indenture provide that the
Indenture will constitute a contract with the holders of the Bonds.

Proceeds of the Bonds will be used to (i) finance a portion of certain capital projects being constructed on
the Authority’s civic center campus (the “Capital Projects”), and (ii) pay costs associated with the issuance of the
Bonds. See “PLAN OF FINANCING”.

Pursuant to a Funding Agreement dated July __, 2018 between the City and the Authority (the “Funding
Agreement”), the City has agreed to make payments to the Authority in the amount of $3,000,000 per year for a
period of 30 years (the “City Contributions”), such payments to be made in 60 equal semi-annual installments due
on April 20 and October 20 of each year. The City’s obligation to make the City Contributions is a general
obligation of the City, secured by the full faith and credit of the City. For additional information about the City, see
APPENDIX C. In addition, the City’s Comprehensive Annual Financial Report for the fiscal year ended June 30,
2017 is included in APPENDIX D.

The Bonds will be limited obligations of the Authority payable solely out of the trust estate established
pursuant to the Indenture (the “Trust Estate”), which includes (i) the rights of the Authority in and to the Funding
Agreement, including all City Contributions and all other payments by the City pursuant to the Funding Agreement,
and (ii) money and investments in the funds and accounts established under the Indenture. See “SECURITY AND
SOURCE OF PAYMENT”.

The Bonds will be limited obligations of the Authority payable solely from the sources described in
this Official Statement.

This Official Statement provides information for prospective investors in the Bonds. The cover page and
the inside cover page provide a summary of the terms of the offering of the Bonds. The entire Official Statement
and the appendices should be read for a complete description of the terms of the offering and for important
information about the Authority.

*
Preliminary; subject to change.
 Investment in the Bonds involves a certain degree of risk. See “RISK FACTORS” for a description of those
risks.

DEFINED TERMS

This section of the Official Statement contains a glossary of certain defined terms used frequently in this
Official Statement. Other terms are defined elsewhere in this Official Statement.

“Authority” means the Birmingham-Jefferson Civic Center Authority, an Alabama public corporation.

“Bond Payment Date” means each date on which Debt Service is payable on the Bonds, including any
date fixed for redemption of Bonds.

“Bonds” means the Bonds offered pursuant to this Official Statement.

“Book Entry System” means the book entry system maintained by DTC for the ownership, transfer,
exchange and payment of debt obligations.

“Business Day” means any day other than a Saturday, a Sunday, or a day on which the Trustee is
authorized to be closed under general law or regulation applicable in the place where the Trustee performs its
obligations under the Indenture.

“Callable Bonds” means Bonds that are subject to optional redemption.

“Capital Projects” means (i) renovation of the Authority’s Arena (as defined in APPENDIX A) and the
Authority’s existing convention and meeting space, and (ii) construction of a Stadium (as described and defined in
APPENDIX A). The Capital Projects are described in greater detail in APPENDIX A under the heading “THE PLAN OF
FINANCING”.

“City” means the City of Birmingham, Alabama, a municipal corporation under the laws of the State of
Alabama.

“City Contributions” means the payments made by the City to the Authority under the Funding
Agreement.

“Continuing Disclosure Agreement” means, with respect to the Authority, the Continuing Disclosure
Agreement entered into by the Authority in connection with the issuance of the Bonds and, with respect to the City,
the Continuing Disclosure Agreement entered into by the City in connection with the issuance of the Bonds.

“Debt Service” means the principal, redemption premium (if any) and interest payable on the Bonds.

“DTC” means The Depository Trust Company and its successors and assigns.

“Enabling Law” means (i) Act No. 547 enacted at the 1965 Regular Session of the Legislature of the State
of Alabama, as amended, (ii) Amendment No. 280 to the Constitution of Alabama of 1901, and (iii) Amendment
No. 772 to the Constitution of Alabama 1901.

“Funding Agreement” means the Funding Agreement dated July __, 2018 between the Authority and the
City.

“Indenture” means that certain Trust Indenture dated August 1, 2018 by and between the Authority and
Regions Bank, as trustee.

“Term Bonds” means Bonds subject to scheduled mandatory redemption.

2
 “Trustee” means Regions Bank, an Alabama banking corporation, until a successor Trustee shall have
become such pursuant to the applicable provisions of the Indenture, and thereafter “Trustee” means such successor.

THE AUTHORITY

Certain information with respect to the Authority and its financial condition, operations and facilities is
included in APPENDIX A and APPENDIX B to this Official Statement.

THE CITY

The City is primarily located in Jefferson County, which is Alabama’s most populous county and the
principal center of finance, trade, manufacturing, transportation and medicine in the State of Alabama. Certain
information with respect to the City and its financial system is included as APPENDIX C to this Official Statement.

The City’s Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017 is included as
APPENDIX D to this Official Statement. More information regarding the City and its finances can be found on the
MSRB’s Electronic Municipal Market Access System (EMMA) website at www.emma.msrb.org (base CUSIP
number 09088R).

DESCRIPTION OF THE BONDS

Pricing Information

See the pricing terms on the inside cover of this Official Statement for principal maturities, interest rates
and payment dates for the Bonds. The Bonds will be subject to redemption prior to maturity as provided herein.
See “DESCRIPTION OF THE BONDS–Redemption Prior to Maturity.”

Date, Form of Bonds and Denominations

The Bonds will be dated as of the date of their initial delivery. The Bonds will be issuable only as fully
registered bonds in denominations of $5,000 or any multiple thereof.

Calculation of Interest Payments

Interest payable on the Bonds will be calculated on the basis of a 360-day year of twelve 30-day months.

Book Entry System

The Bonds are being issued in electronic form under the Book Entry System procedures of DTC. While the
Bonds are in the Book Entry System, the method and procedures for payment of the Bonds and matters pertaining to
registration of transfers and exchanges of the Bonds will be governed by the rules and procedures of the Book Entry
System. The Indenture contains alternate provisions for the method of payment and registration of transfers and
exchanges of Bonds if the Book Entry System is discontinued. See APPENDIX I – “THE DTC BOOK ENTRY SYSTEM”
for a description of the DTC Book Entry System. See APPENDIX F – “FORM OF INDENTURE” for a description of
applicable Indenture provisions if the Book Entry System is terminated.

Redemption Prior to Maturity

The Bonds will be subject to redemption prior to maturity as follows:

3
 (a) Optional Redemption. Any Bond that matures after ________, _____ may be redeemed in whole
or in part on any date on or after _______, _____ at a redemption price equal to 100% of the principal amount
redeemed plus accrued interest thereon to the date of redemption.

(b) Scheduled Mandatory Redemption of Term Bonds.

(1) The Bonds maturing in ____ are referred to herein as the “____ Term Bonds”. The ____
Term Bonds shall be redeemed, at a redemption price equal to 100% of the principal amount to be
redeemed plus accrued interest thereon to the redemption date, or shall mature on dates and in principal
amounts (after credit as provided below) as follows:

____ Term Bonds

Redemption Principal
Date Amount to be
(May 1) Redeemed

(maturity)

Not later than the date on which notice of scheduled mandatory redemption is to be given to the holders of
the ____ Term Bonds, the Trustee shall select the amount of the ____ Term Bonds for redemption by lot;
provided, however, that the Authority may, by timely notice delivered to the Trustee, direct that any or all
of the following amounts be credited against the principal amount of the ____ Term Bonds scheduled for
redemption on such date: (i) the principal amount of the ____ Term Bonds of such maturity delivered by
the Authority to the Trustee for cancellation and not previously claimed as a credit; (ii) the principal
amount of the ____ Term Bonds of such maturity previously redeemed (other than the ____ Term Bonds of
such maturity redeemed pursuant to the scheduled mandatory redemption requirement) and not previously
claimed as a credit; and (iii) the principal amount of the ____ Term Bonds of such maturity otherwise
defeased and not previously claimed as a credit.

(2) The Bonds maturing in ____ are referred to herein as the “____ Term Bonds”. The ____
Term Bonds shall be redeemed, at a redemption price equal to 100% of the principal amount to be
redeemed plus accrued interest thereon to the redemption date, or shall mature on dates and in principal
amounts (after credit as provided below) as follows:

4
 ____ Term Bonds
Redemption Principal
Date Amount to be
(May 1) Redeemed

(maturity)

Not later than the date on which notice of scheduled mandatory redemption is to be given to the holders of
the ____ Term Bonds, the Trustee shall select the amount of the ____ Term Bonds for redemption by lot;
provided, however, that the Authority may, by timely notice delivered to the Trustee, direct that any or all
of the following amounts be credited against the principal amount of the ____ Term Bonds scheduled for
redemption on such date: (i) the principal amount of the ____ Term Bonds of such maturity delivered by
the Authority to the Trustee for cancellation and not previously claimed as a credit; (ii) the principal
amount of the ____ Term Bonds of such maturity previously redeemed (other than the ____ Term Bonds of
such maturity redeemed pursuant to the scheduled mandatory redemption requirement) and not previously
claimed as a credit; and (iii) the principal amount of the ____ Term Bonds of such maturity otherwise
defeased and not previously claimed as a credit.

Selection of Bonds for Redemption. If less than all Bonds outstanding are to be redeemed, the principal
amount of such Bonds of each maturity and interest rate to be redeemed may be specified by the Authority by timely
notice delivered to the Trustee, or, in the absence of timely receipt by the Trustee of such notice, shall be selected by
the Trustee by lot or by such other method as the Trustee shall deem fair and appropriate; provided, however, that
the principal amount of Bonds of each maturity and interest rate to be redeemed may not be larger than the principal
amount of Bonds of such maturity and interest rate then eligible for redemption and may not be smaller than the
smallest Authorized Denomination. If less than all Bonds of the same maturity and interest rate are to be redeemed,
the particular Bonds of such maturity and interest rate to be redeemed shall be selected by the Trustee from the
outstanding Bonds of such maturity and interest rate then eligible for redemption by lot or by such other method as
said Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (in
Authorized Denominations) of the principal of Bonds of such maturity and interest rate of a denomination larger
than the smallest Authorized Denomination.

Notice of Redemption. Except as otherwise provided in the Indenture, notice of redemption shall be given
to affected Bondholders not less than 20 days prior to the redemption date. While the Book Entry System is in
effect, the Trustee will provide notice of redemption only to DTC, and notice of redemption will be given by DTC
through methods established by the rules and regulations of the Book Entry System or, if the Book Entry System is
not in effect or its rules and regulations are not applicable under the circumstances, by certified or registered mail.
The notice of redemption may state that the redemption of Bonds is contingent upon specified conditions, such as
receipt of a specified source of funds, or the occurrence of specified events. If the conditions for such redemption
are not met, the Authority shall not be required to redeem the Bonds identified in such notice, and any Bonds
surrendered on the specified redemption date shall be returned to the Holders of such Bonds.

Authority for Issuance

The Authority was created under the Enabling Law, which authorizes the creation in the County of public
corporations for the purpose of establishing, maintaining and operating a civic center. The Enabling Law empowers
the Authority to, among other things, borrow money, issue revenue bonds as evidence of money so borrowed, which
bonds shall be payable solely from taxes made payable to the Authority by any act of the Legislature heretofore or
hereafter adopted and from the revenues of the Authority derived from the activities, operations and enterprises in

5
which the Authority is authorized to engage and to pledge for payment of its bonds all or any part of the taxes
payable to the Authority under any act of the Legislature heretofore or hereafter adopted. The Authority’s bonds
may from time to time be refunded by the issuance or sale or exchange of refunding bonds at such times and in such
forms and of such tenor, maturities or rate or rates of interest as may be determined by the Authority if such
refunding is by sale of refunding bonds.

The Bonds are being issued under the authority of the Enabling Law.

All debts created and bonds issued by the Authority are solely and exclusively an obligation of the
Authority and shall not create an obligation or debt of any municipality or county of the State.

SECURITY AND SOURCE OF PAYMENT

Source of Payment

The City Contributions will be pledged and assigned by the Authority pursuant to the Indenture for the
benefit of the holders of the Bonds. The Bonds are limited obligations of the Authority payable solely out of the
City Contributions.

The Bonds will not be general obligations of the Authority, and the covenants and representations
contained in the Indenture or in the Bonds will not and shall never constitute a liability or charge against the general
credit of the Authority. The City’s obligation to make the City Contributions will be a general obligation of the
City, secured by the full faith and credit of the City. The Bonds are not secured by any pledge of revenues of the
Authority other than the City Contributions.

Security Provided by Indenture

Trust Estate. The Bonds will be secured by the Trust Estate established under the Indenture, which will
include:

(a) Funding Agreement. All right, title and interest of the Authority in and to the City Funding
Agreement, including all City Contributions and all other payments by the City pursuant to the City Funding
Agreement; provided, however, that nothing contained in the Indenture shall impair, diminish or otherwise affect the
Authority’s obligations under the City Funding Agreement or impose any of such obligations on the Trustee.

(b) Indenture Funds. Money and investments from time to time on deposit in, or forming a part of,
the Indenture Funds. The Indenture Funds securing the Bonds include the Debt Service Fund, the Series 2018D
Acquisition Fund and the Series 2018D Costs of Issuance Fund. The function of these Indenture Funds is as
follows:

Debt Service Fund. The Debt Service Fund is established to hold funds for the payment of Debt
Service on the Bonds. The Funding Agreement requires the City to make the City Contributions, which
will be made directly to the Trustee and deposited by the Trustee to the Debt Service Fund to be used to
pay Debt Service on the Bonds. The Authority and the City have executed a payment direction in which
the City has agreed to pay the City Contributions directly to the Trustee. On each Bond Payment Date
money in the Debt Service Fund shall be applied by the Trustee to pay Debt Service on the Bonds.

Series 2018D Acquisition Fund. The Series 2018D Acquisition Fund is established to hold
proceeds of the Bonds pending disbursement to pay costs of acquiring and constructing the Capital
Projects. The Trustee will make payments from the Series 2018D Acquisition Fund upon receipt of a
requisition from the Authority in the form required by the Indenture.

Series 2018D Costs of Issuance Fund. The Series 2018D Costs of Issuance Fund is established
to hold proceeds of the Bonds for the payment of costs of issuance of the Bonds. The Trustee will make

6
 payments from the Series 2018D Costs of Issuance Fund upon receipt of a requisition from the Authority in
the form required by the Indenture.

Pending disbursement for the purposes provided by the Indenture, money in the Indenture Funds may be
invested at the direction of the Authority as provided by the Indenture. Pending such disbursement, money and
investments in the Indenture Funds are subject to the lien of the Indenture. See the proposed Form of Indenture
included as APPENDIX F.

The Funding Agreement and City Contributions

The Funding Agreement requires the City to make the City Contributions. The City Contributions are
annual payments to be made by the City to the Authority in the amount of $3,000,000 per year for a period of 30
years for the purpose of providing a share of the funding for the Capital Projects. Pursuant to the Indenture, the
Authority has pledged and assigned the City Contributions to the Trustee as security for the Bonds. The City
Contributions shall be paid directly to the Trustee in 60 equal semi-annual installments of $1,500,000 each due on
April 20 and October 20 of each year, with the first installment due on the 20th day of October, 2018 (each such
installment date being 10 days prior to each Bond Payment Date). The form of the Funding Agreement is attached
hereto as APPENDIX E.

The City’s obligation to make the City Contributions is a general obligation of the City, secured by
the full faith and credit of the City. The City expects to make the City Contributions from proceeds of the City’s
occupational tax, but the City’s obligation to make the City Contributions does not include a special pledge of the
City occupational tax or any other tax revenues collected by the City.

The obligation of the City to make the City Contributions is absolute and unconditional, irrespective of any
rights of set-off, recoupment or counter-claim the City might otherwise have against the Authority. Under the terms
of the Funding Agreement, the City is not permitted to suspend or discontinue the payment of any City
Contributions or terminate the Funding Agreement for any cause whatsoever or fail to perform and observe any of
its other agreements and covenants contained therein while the Bonds remain outstanding. It should be noted,
however, that the City is permitted by law to pay, prior to the payment of debt service on its obligations (including
the Funding Agreement), the expenses of providing necessary and appropriate governmental services.

The Authority and the City have also entered into a project cooperation agreement (the “Project
Cooperation Agreement”) with respect to the development and construction of the Capital Projects. If the Authority
defaults under the Project Cooperation Agreement, the City may pursue any remedies at law or in equity to compel
performance by the Authority, including without limitation an action for specific performance, but no such default
shall result in a termination of the Funding Agreement or a reduction or delay in the City Contributions.

The Bonds are secured by a pledge of the City Contributions received by the Authority pursuant to the City
Funding Agreement. No other outstanding obligations of the Authority are payable from, or secured by a pledge of
and security interest in, the City Contributions. The Indenture does not permit the issuance of additional parity
bonds thereunder.

No Additional Bonds

The Indenture does not permit the issuance of any additional bonds thereunder.

PLAN OF FINANCING

General

The Bonds are being issued as part of an overall plan of financing that will allow the Authority to refund
certain outstanding debt and finance two major capital projects that will significantly expand the Authority’s
capabilities. These projects include (i) the acquisition and construction of a Stadium and (ii) the renovation of the
Arena (together, the “Capital Projects”). Proceeds of the Bonds will be used to finance a portion of the Capital

7
Projects and pay costs associated with the issuance of the Bonds. For additional information about the plan of
financing, including a detailed description of the Capital Projects, a comprehensive sources and uses of funds, and a
table of debt service requirements for all outstanding debt of the Authority, see “THE PLAN OF FINANCING” in
APPENDIX A.

Debt Service on the Bonds

The following table contains the estimated debt service requirements on the Bonds.

Bond Year
Ending
May 1 Principal* Interest* Total*

2019 $1,220,000 $1,777,555 $2,997,555

2020 730,000 2,269,750 2,999,750
2021 765,000 2,233,250 2,998,250
2022 805,000 2,195,000 3,000,000
2023 845,000 2,154,750 2,999,750
2024 885,000 2,112,500 2,997,500
2025 930,000 2,068,250 2,998,250
2026 975,000 2,021,750 2,996,750
2027 1,025,000 1,973,000 2,998,000
2028 1,075,000 1,921,750 2,996,750
2029 1,130,000 1,868,000 2,998,000
2030 1,185,000 1,811,500 2,996,500
2031 1,245,000 1,752,250 2,997,250
2032 1,310,000 1,690,000 3,000,000
2033 1,375,000 1,624,500 2,999,500
2034 1,440,000 1,555,750 2,995,750
2035 1,515,000 1,483,750 2,998,750
2036 1,590,000 1,408,000 2,998,000
2037 1,670,000 1,328,500 2,998,500
2038 1,755,000 1,245,000 3,000,000
2039 1,840,000 1,157,250 2,997,250
2040 1,930,000 1,065,250 2,995,250
2041 2,030,000 968,750 2,998,750
2042 2,130,000 867,250 2,997,250
2043 2,235,000 760,750 2,995,750
2044 2,350,000 649,000 2,999,000
2045 2,465,000 531,500 2,996,500
2046 2,590,000 408,250 2,998,250
2047 2,720,000 278,750 2,998,750
2048 2,855,000 142,750 2,997,750

Total $46,615,000 $43,324,305 $89,939,305

_________________

*Preliminary; subject to change.

Note: Totals may not foot due to rounding.

8
 RISK FACTORS

General

In making a decision whether to purchase the Bonds, potential investors should consider certain risks and
investment considerations which could affect the ability of the Authority to pay Debt Service on the Bonds in a
timely manner and which could affect the marketability of or the market price for the Bonds. These risks and
investment considerations are discussed throughout this Official Statement. Certain of these risks and investment
considerations are set forth in this section for convenience, but this discussion is not intended to be a comprehensive
or exhaustive compilation of all possible risks and investment considerations nor a substitute for an independent
evaluation of the information presented in this Official Statement. Each prospective investor of Bonds should read
this Official Statement in its entirety, including the appendices hereto, and should consult such prospective
investor’s own investment and/or legal advisor for a more complete explanation of the matters that should be
considered when evaluating an investment such as the Bonds. Each prospective investor should carefully examine
his, her or its own financial condition in order to make a judgment as to his, her or its ability to bear the risk of an
investment in the Bonds.

Limited Obligations

The Bonds are limited obligations of the Authority, payable solely from the City Contributions, and the full
faith and credit of the Authority is not pledged for payment of the principal thereof or the interest thereon. The
Authority does not have any taxing power. See “SECURITY AND SOURCES OF PAYMENT.”

Limited Taxing Authority of City

Revenues of the City legally available for payment of the City Contributions include ad valorem, sales, use
occupational license and business license taxes, non-business licenses, permit fees, lease taxes, court fines and fees,
emergency transport services fees, revenues from the operation of certain City-owned enterprises (such as various
off-street parking facilities) and other general revenues of the City. None of such legally available revenues are
specially pledged to the payment of the City Contributions. The City has limited taxing authority. The City can
increase ad valorem taxes only after the prior approval of the legislature of the State of Alabama and the majority
vote in favor thereof of the qualified electors of the City voting at an election thereof. The City may increase certain
privilege license and excise taxes without legislative approval or an election, but the City currently levies sales and
use taxes, business license taxes, lodging taxes, and similar privilege license taxes at rates commensurate with
county and municipal jurisdictions and taxing authorities in the regional trade area of the City.

Limitation on Remedies

The remedies available under the Funding Agreement upon the occurrence of an event of default are in
many respects dependent upon judicial actions, which are often subject to substantial discretion and delay.
Remedies available to the Authority for an event of default under the Funding Agreement may be limited or
restricted by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights
and general principles of equity, including the exercise of judicial discretion in appropriate cases. It should also be
noted that decisions of the Alabama Supreme Court hold that a governmental entity, such as the City, may first use
its taxes and other revenues to pay the expenses of providing necessary governmental services before paying debt
service on its bonds, warrants or other obligations.

Projections and Completion of the Projects

The Arena renovation and Stadium construction are major projects for the Authority, and completion of
these Capital Projects involves various risks and uncertainties. The estimated cost of completion is based on cost
estimated from preliminary designs and plans, but there is no guaranteed maximum price contract for completion of
either project. The Authority intends to adjust plans and specifications for each Capital Project as necessary to allow
completion with available budgeted funds. If there are significant cost overruns, the Authority may not have the
funds for completion without additional tax support or contributions, and there is no assurance that any such
additional funding sources would be available. The Series 2018E Bonds are payable solely out of payments by the
County pursuant to the County Funding Agreement. The source of payment is not dependent upon revenues derived

9
from the operation of the Arena, the Stadium or any other facilities of the Authority. However, failure to complete
these projects could cause financial distress for the Authority’s operations and could affect the economic stability of
the Authority.

In addition to completion risk for the projects, the effect on the Authority’s operations from the
construction of the projects and from interstate construction adjacent to the Authority’s facilities during the same
period could have a material impact on the Authority’s operations. See Appendix A – “RESULTS OF OPERATIONS –
Management’s Discussion” and “MANAGEMENT’S PROJECTIONS”.

Management of the Authority has prepared projections for future operations that are included in
APPENDIX A (the “Projections”). See “MANAGEMENT’S PROJECTIONS”. The Projections cover the period through
fiscal year 2023, which includes the construction period for both Capital Projects. The Projections were prepared by
management of the Authority. No independent feasibility consultant or similar professional was retained to provide
any review or support for the assumptions used in the Projections. These Projections are not part of a feasibility
study that meets the guidelines or standards of the American Institute of Certified Public Accountants (AICPA) for a
feasibility study. The Projections are subject to important assumptions that are included in APPENDIX A. Although
management believes the Projections and related assumptions are reasonable, there will usually be
differences between the Projections and actual results, because events and circumstances frequently do not
occur as expected, and those differences could be material.

Economic Conditions

The ability of the City to make the City Contributions will be affected by, and will be subject to, general
economic and political events and conditions that will change in the future to an extent and with effects that cannot
be determined at this time. These general economic and political events and conditions include, among other things,
population, demographic and employment changes and trends; periods of inflation or deflation; variable patterns of
national and regional economic growth, whether cyclical or structural in nature; disruptions in credit and financial
markets; political gridlock concerning, among other matters, national tax and spending policies and health care
policies; political developments in the City, County, State and the United States of America; budget and debt limit
controversies nationally and at the State and local levels; unusually large numbers of business failures and business
and consumer bankruptcies and policy responses, or lack thereof, to the foregoing.

The City Contributions may also be affected by a number of local factors including, without limitation, the
total sales and use tax rates in the City relative to surrounding areas, the available mix of retail shopping in the City
versus surrounding areas, the opening or closing of businesses accounting for substantial amounts of taxable sales in
the City, income levels in the City and surrounding areas, purchases from internet retailers that are not required to
withhold City sales taxes, and changing population demographics that may impact spending and saving rates. It is
not possible to predict the effect that local factors may have on future revenues of the City that are available to make
the City Contributions.

Ratings

The Bonds have been rated as indicated on the cover page of this Official Statement. No assurance can be
given that the current ratings on the Bonds will be maintained. A reduction or withdrawal of any rating could affect
the secondary market price of the Bonds and the liquidity of the investment in the Bonds.

Loss of Tax Exemption

It is expected that the Bonds will qualify as tax-exempt obligations for federal income tax purposes as of
the date of issuance. See “TAX MATTERS.” Bond counsel is delivering an opinion with respect to certain aspects of
the tax status of the Bonds. That opinion is attached to this Official Statement as APPENDIX G and should be read in
its entirety for a complete understanding of the scope of the opinion and the conclusions expressed. A legal opinion
is only the expression of professional judgment and does not constitute a guaranty with respect to the matters
covered. In addition, the opinion of bond counsel speaks only as of its date, and bond counsel does not undertake to
advise Bondholders about subsequent developments.

10
 The tax status of the Bonds could be affected by post-issuance events. There are various requirements of
the Internal Revenue Code that must be observed or satisfied after the issuance of the Bonds in order for the Bonds
to qualify for, and retain, tax-exempt status. These requirements include use of the proceeds of the Bonds, use of the
facilities financed by the Bonds, investment of Bond proceeds, and the rebate of so-called excess arbitrage earnings.
Compliance with these requirements is the responsibility of the Authority.

The Internal Revenue Service conducts an audit program to examine compliance with the requirements
regarding tax-exempt status. Under current IRS procedures, in the initial stages of an audit with respect to the
Bonds, the Authority would be treated as the taxpayer, and the owners of the Bonds may have limited rights to
participate in the audit process. The initiation of an audit with respect to the Bonds (or any other series of bonds
being issued as part of the plan of financing) could adversely affect the market value and liquidity of the Bonds,
even though no final determination about the tax-exempt status has been made. If an audit results in a final
determination that the Bonds do not qualify as tax-exempt obligations, such a determination could be retroactive in
effect to the date of issuance of the Bonds.

In addition to post-issuance compliance, a change in law after the date of issuance of the Bonds could affect
the tax-exempt status of the Bonds or the effect of investing in the Bonds. For example, Congress could eliminate
the exemption for interest on the Bonds, or it could reduce or eliminate the federal income tax, or it could adopt a
so-called flat tax.

The Indenture does not provide for the payment of any additional interest or penalty if a determination is
made that the Bonds do not comply with the existing requirements of the Internal Revenue Code or if a subsequent
change in law adversely affects tax-exempt status of the Bonds or the effect of investing in the Bonds.

The United States Bankruptcy Code

The United States Bankruptcy Code (the “Bankruptcy Code”) permits municipal corporations, political
subdivisions and public agencies or instrumentalities that are insolvent or unable to meet their debts to file petitions
for relief in the Federal bankruptcy courts. Alabama law authorizes the City to file for protection from its creditors,
including the Authority, under Chapter 9 of the Bankruptcy Code. No approval of any state official or legislative
body is a condition precedent to the City’s seeking relief under Chapter 9. A petition filed under Chapter 9 of the
Bankruptcy Code by the City could affect the payment of the City Contributions under the Funding Agreement. See
“UNITED STATES BANKRUPTCY CODE” in APPENDIX C.

LITIGATION WITH RESPECT TO AUTHORITY

There is no litigation pending or, to the knowledge of the Authority, threatened, attacking or questioning
the validity of the Bonds or the issuance and sale thereof or the use of the proceeds thereof. There is no litigation
pending or, to the knowledge of the Authority, threatened, relating to the organization of or the incumbency of any
of the directors or officers of the Authority.

Simultaneously with the delivery of the Bonds, the Authority will deliver a certificate to the effect that no
such litigation is pending or to the knowledge of the Authority threatened.

The Authority is a defendant in several suits and has been notified of various claims against it. The
Authority believes that any liability resulting from such suits and claims will be covered by the Authority’s liability
insurance or can be satisfied out of other funds of the Authority available to discharge such liability without
impairing the ability of the Authority to perform any of its obligations under the Indenture or its other obligations.

11
 LITIGATION WITH RESPECT TO CITY

There is no litigation pending or, to the knowledge of the Authority, threatened, attacking or questioning
the validity of the Funding Agreement or the use of City funds pursuant to the Funding Agreement. For a discussion
of certain litigation pending or threatened against the City, see APPENDIX C.

UNDERWRITING

The Bonds are being purchased from the Authority by Raymond James & Associates, Inc., Stifel, Nicolaus
& Company, Incorporated, Loop Capital Markets LLC and Securities Capital Corporation (the “Underwriters”).
The Underwriters have agreed to purchase the Bonds for an aggregate purchase price of $_______________ (which
represents the face amount of the Bonds less underwriters’ discount of $_______________ plus net original issue
premium of $______________). The initial public offering prices for the Bonds set forth on the inside front cover
page hereof may be changed by the Underwriters, and the Underwriters may offer and sell the Bonds to certain
dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the offering
prices set forth on the cover page. The Underwriters will purchase all of the Bonds if any are purchased.

The Underwriters and their respective affiliates are full service financial institutions engaged in various
activities, which may include sales and trading, commercial and investment banking, advisory, investment
management, investment research, principal investment, hedging, market making, brokerage and other financial and
non-financial activities and services. In the various course of their various business activities, the Underwriters and
their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments
and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers, and such investment and trading activities
may involve or relate to assets, securities and/or instruments of the Authority (directly, as collateral securing other
obligations or otherwise) and/or persons and entities with relationships with the Authority. The Underwriters and
their respective affiliates may also communicate independent investment recommendations, market color or trading
ideas and/or publish or express independent research views in respect of such assets, securities or instruments and
may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets,
securities and instruments.

FINANCIAL ADVISORS

Porter, White & Company, Inc., Birmingham, Alabama, and Rice Advisory, LLC, Montgomery, Alabama
(the “Financial Advisors”), are serving as Financial Advisors to the Authority with respect to the sale of the Bonds.
The Financial Advisors assisted in the preparation of this Official Statement and in other matters relating to the
planning, structuring and issuance of the Bonds and provided other advice. Although the Financial Advisors have
assisted in the preparation of this Official Statement, the Financial Advisors were not and are not obligated to
undertake, and have not undertaken to make, an independent verification and assume no responsibility for the
accuracy, completeness or fairness of the information contained in this Official Statement.

RELATIONSHIPS

Maynard Cooper & Gale, P.C. is serving as bond counsel to the Authority in connection with the issuance
of the Bonds and has previously been engaged by the Authority, by the City and by certain of the Underwriters for
other matters unrelated to the Bonds.

J.J. Johnson, the Vice-Chair of the Authority’s Board of Directors, currently works in a part-time capacity
at Waldrep Stewart & Kendrick, LLC, the firm that is representing the Authority in connection with the issuance of
the Bonds.

12
 Balch & Bingham LLP represented the County in connection with the negotiation of the Funding
Agreement entered into by the County and the Authority with respect to the Authority’s Revenue Bonds (Jefferson
County Funding), Series 2018E. Balch & Bingham LLP also currently represents the County in certain matters
unrelated to the Bonds and has previously represented certain of the Underwriters in matters unrelated to the Bonds.

RATINGS

Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”) have assigned a rating of Aa2
(stable outlook) and AA (stable outlook), respectively, to the Bonds, based on their assessment of the Authority’s
ability to make payments on the Bonds from the sources described herein, without regard to credit enhancement.
Any further explanation as to the significance of such ratings may be obtained only from the appropriate rating
agency. There is no assurance that any such ratings will remain in effect for any given period of time or that the
ratings will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its
judgment, the circumstances so warrant. Any such downward revision or withdrawal of a rating may have an
adverse effect on the market price of the Bonds. The above ratings are not recommendations to buy, sell or hold the
Bonds.

FINANCIAL STATEMENTS OF AUTHORITY

The financial statements of the Authority as of August 31, 2017 and 2016 and for the years then ended,
included in this Official Statement, have been audited by Banks, Finley, White & Co., Birmingham, Alabama,
independent auditors, as stated in their report appearing in APPENDIX B to this Official Statement.

The information contained in APPENDIX A and APPENDIX B to this Official Statement is provided for
informational purposes to illustrate the general financial condition of the Authority. The Bonds will not be secured
by a pledge of the full faith and credit of the Authority. The Bonds will be limited obligations of the Authority
payable solely from and secured by a pledge of and security interest in the proceeds of the City Contributions. See
“SECURITY AND SOURCE OF PAYMENT” herein.

COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY

The City’s comprehensive annual financial report (the “CAFR”) for the fiscal year ended June 30,
2017 is attached hereto as APPENDIX D. The audited financial statements of the City for the fiscal year ended June
30, 2017, included within the CAFR, have been audited by Banks, Finley, White & Co., Birmingham, Alabama,
independent auditors, as stated in their report appearing in APPENDIX D.

Banks, Finley, White & Co, independent auditor, has not been engaged to perform and has not performed,
since the date of its report included as APPENDIX D, any procedures on the financial statements addressed in that
report on the City of Birmingham. Banks, Finley, White & Co. also has not performed any procedures relating to
this offering document. The City’s CAFR has been included for general information purposes only.

LEGAL MATTERS

The Bonds will be issued subject to the approving opinion of Maynard, Cooper & Gale, P.C., Birmingham,
Alabama, Bond Counsel. It is anticipated that the approving opinion of Bond Counsel will be in substantially the
form attached to this Official Statement as APPENDIX G. Certain legal matters will be passed upon for the Authority
by its counsel, Waldrep Stewart & Kendrick, LLC, Birmingham, Alabama, and for the Underwriters by their
counsel, Balch & Bingham LLP, Birmingham, Alabama.

13
 TAX MATTERS

General

Under existing law, the tax status of the Bonds will include the following characteristics:

Federal Tax-Exempt Status. Interest on the Bonds will be excluded from gross income for federal income
tax purposes if the Authority complies with all requirements of the Internal Revenue Code of 1986 (the “Internal
Revenue Code”) that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be and
remain excluded from gross income. Failure to comply with such requirements could cause the interest on the Bonds
to be included in gross income, retroactive to the date of issuance of the Bonds. The Authority has covenanted in the
Indenture to comply with all such requirements.

Federal Tax Preference Treatment. Interest on the Bonds will not be an item of tax preference for
purposes of the federal alternative minimum tax imposed on individuals and corporations; however, it should be
noted that with respect to certain corporations (as defined for federal income tax purposes), such interest is taken
into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax
imposed on such corporations, and that the federal alternative minimum tax imposed on corporations is eliminated
for tax years beginning after December 31, 2017.

State Tax-Exempt Status. Interest on the Bonds will be exempt from State of Alabama income taxation.

Opinion of Bond Counsel

Maynard, Cooper & Gale, P.C., Birmingham, Alabama, has served as bond counsel to the Authority with
respect to the issuance of the Bonds. The opinion of bond counsel will address the tax status summarized above and
is attached to this Official Statement as APPENDIX G. The opinion should be read in its entirety for a complete
understanding of the scope of the opinion and the conclusions expressed.

Collateral Tax Consequences

General. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in
collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions,
property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits,
certain S corporations with “excess net passive income,” foreign corporations subject to a branch profits tax, life
insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or
carry the Bonds. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective
purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences.

Original Issue Discount. The original issue discount, if any, in the selling price of a Bond, to the extent
properly allocable to each owner of such Bond, is excluded from gross income for federal income tax purposes with
respect to such owner. The original issue discount is the excess of the stated redemption price at maturity of such
Bond over the initial offering price to the public, excluding underwriters and other intermediaries, at which price a
substantial amount of the Bonds of such maturity were sold.

Under Section 1288 of the Internal Revenue Code of 1986, as amended, original issue discount on tax-
exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a
Bond during any accrual period generally equals (i) the issue price of such Bond plus the amount of original issue
discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such Bond (determined on the
basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period),
minus (iii) any interest payable on such Bond during such accrual period. The amount of original issue discount so
accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period,
will be excluded from gross income for federal income tax purposes, and will increase the owner’s tax basis in such
Bond. Purchasers of any Bond at an original issue discount should consult their tax advisers regarding the
determination and treatment of original issue discount for federal income tax purposes, and with respect to state and
local tax consequences of owning such Bonds.

14
 Premium. An amount equal to the excess of the purchase price of a Bond over its stated redemption price
at maturity constitutes premium on such Bond. A purchaser of a Bond must amortize any premium over such Bond’s
term using constant yield principles, based on the Bond’s yield to maturity. As premium is amortized, the
purchaser’s basis in such Bond and the amount of tax-exempt interest received will be reduced by the amount of
amortizable premium properly allocable to such purchaser. This will result in an increase in the gain (or decrease in
the loss) to be recognized for federal income tax purposes on sale or disposition of such Bond prior to its maturity.
Even though the purchaser’s basis is reduced, no federal income tax deduction is allowed. Purchasers of any Bonds
at a premium, whether at the time of initial issuance or subsequent thereto, should consult with their own tax
advisors with respect to the determination and treatment of premium for federal income tax purposes, and with
respect to state and local tax consequences of owning such Bonds.

PREPARATION AND CIRCULATION OF OFFICIAL STATEMENT

The information in this Official Statement has been provided by the Authority based on information and
data, which the Authority believes to be correct, but such information is not guaranteed as to accuracy or
completeness. All estimates and assumptions contained herein are believed to be reliable, but no representation is
made that such estimates or assumptions are correct or will be realized.

CONTINUING DISCLOSURE

General

When the Bonds are issued, the Authority and the City (the “Obligors”) will enter into separate continuing
disclosure agreements (the “Continuing Disclosure Agreements”) pursuant to the requirements of Rule 15c2-12
(“Rule 15c2-12”) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended. The Continuing Disclosure Agreements will be entered into by the Obligors for the benefit of the
beneficial owners of the Bonds and will obligate the Obligors to provide certain information annually and to file
notice of the occurrence of certain events. Forms of the Continuing Disclosure Agreements are attached to this
Official Statement as APPENDIX H.

Failure by the Obligors to comply with the provisions of the respective Continuing Disclosure Agreements
will not constitute an event of default under the Indenture or any related financing documents; however, nothing in
the Continuing Disclosure Agreements preclude the holder of any Bond from seeking a court order requiring the
Obligors to comply with their obligations under the Continuing Disclosure Agreements, and the failure to comply
will itself be a reportable event under Rule 15c2-12 and the Continuing Disclosure Agreements.

Compliance with Prior Undertakings by Authority

In connection with the prior issuance of certain of its obligations, the Authority has entered into other
continuing disclosure agreements under Rule 15c2-12. During the past five years, the Authority has failed to file
certain information required to be filed pursuant to those agreements, or has failed to file all of such information on
a timely basis, as follows:

• The audited financial information and other financial information of the Authority for the fiscal
years 2015, 2016 and 2017 were all filed late by a number of days ranging from 1 day late to 3
days late. The Authority did not file material event notices with respect to these late filings as
required by Rule 15c2-12.

• The Authority did not file material event notices related to certain rating upgrades that occurred in
2013 and 2014 with respect to the Authority’s Series 2005-A Bonds. The rating changes with
respect to these bonds were publicly available to investors.

• Assured Guaranty Municipal Corp (formerly FSA) and National Public Financial Guarantee Corp
(formerly MBIA and in certain cases FGIC) have insured previously outstanding bonds of the
Authority. The ratings on these bond insurance companies have been downgraded or upgraded at

15
 various times over the past several years. The rating changes related to the bond insurance
companies were not reported by the Authority, but were widely publicized in the market and were
also publicly available to investors.

• The Authority failed to file certain annual financial information related to area population, wage
and employment data, income data and the hotel and tourism industry required to be filed by
certain of its prior continuing disclosure agreements. The Authority did not file material event
notices with respect to these failures as required by Rule 15c2-12.

The Authority has made corrective filings with EMMA to remedy the filing deficiencies described above. In
addition, the Authority has implemented remedial steps to ensure material compliance with its obligations under
each continuing disclosure agreement applicable to all outstanding bonds of the Authority, including the Bonds, in
future years.

Compliance with Prior Undertakings by City

In connection with the prior issuance of certain of its obligations, the City has entered into other continuing
disclosure agreements under Rule 15c2-12. During the past five years, the City has failed to file certain information
required to be filed pursuant to those agreements, or has failed to file all of such information on a timely basis, as
follows:

• The City’s comprehensive annual financial report for the fiscal year 2013 was filed within 6
calendar months from the end of the City’s fiscal year but two days after the 180 day count
requirement had run. The City did not file a material event notice with respect to this late filing as
required by Rule 15c2-12.

• National Public Financial Guarantee Corp (formerly MBIA and in certain cases FGIC) (the “Bond
Insurer”) has insured outstanding bonds and warrants of the City. The rating on the Bond Insurer
was upgraded in 2014. The rating change related to the Bond Insurer was not reported by the
City, but was widely publicized in the market and was also publicly available to investors.

MISCELLANEOUS

The summaries and explanations of the provisions of the Bonds and certain financing documents contained
in the forepart of this Official Statement do not purport to be complete, and reference is made to the pertinent
provisions of the Bonds and the Indenture for a complete statement of their provisions. Such documents are on file
and available for review during regular business hours upon request at the corporate trust offices of the Trustee.

The agreement of the Authority with the holders of the Bonds is fully set forth in the Bonds and the
Indenture, and neither any advertisement of the Bonds nor this Official Statement is to be construed as constituting
an agreement with the purchasers, holders or beneficial owners of the Bonds. So far as any statements are made in
this Official Statement involving matters of opinion, whether or not expressly so stated, they are intended merely as
such and not as representations of fact.

The attached appendices are integral parts of this Official Statement and must be read together with all of
the foregoing statements.

The Authority has reviewed the information contained herein which relates to it and its facilities and
operations and has approved all such information for use within the Official Statement.

AUTHORIZATION AND APPROVAL

This Official Statement and the distribution of this Official Statement have been duly authorized and
approved by the Authority.

16
 APPENDIX A

INFORMATION ABOUT THE AUTHORITY

[THIS PAGE INTENTIONALLY LEFT BLANK]
 INFORMATION ABOUT THE AUTHORITY

TABLE OF CONTENTS

Page

THE AUTHORITY ....................................................................................................................................................... A-1

General................................................................................................................................................................. A-1
Governance and Management ............................................................................................................................. A-1
Major Facilities .................................................................................................................................................... A-2

RESULTS OF OPERATIONS .......................................................................................................................................... A-6

Sources of Revenues ............................................................................................................................................ A-6
Financial Data ...................................................................................................................................................... A-6
Management’s Discussion ................................................................................................................................... A-9

MANAGEMENT’S PROJECTIONS ............................................................................................................................... A-10

Introduction ....................................................................................................................................................... A-10
Assumptions Regarding Projections .................................................................................................................. A-15

THE PLAN OF FINANCING ........................................................................................................................................ A-18

General............................................................................................................................................................... A-18
Capital Projects .................................................................................................................................................. A-18
Refunding Plan .................................................................................................................................................. A-19
Issuance of Series 2018 Bonds .......................................................................................................................... A-19
Sources and Uses for Plan of Financing ............................................................................................................ A-21
Equity for Portions of Capital Projects Not Eligible for Tax-Exempt Financing .............................................. A-21

DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS ......................................................................... A-22

General............................................................................................................................................................... A-22
The Pledged Tax Proceeds................................................................................................................................. A-22
Description of Pledged Taxes ............................................................................................................................ A-22
City Funding Agreement ................................................................................................................................... A-27
County Funding Agreement............................................................................................................................... A-28
Corporate Sponsorship and Other Contractual Arrangements ........................................................................... A-28

DEBT STRUCTURE OF THE AUTHORITY .................................................................................................................... A-29

Current Financing Plan ...................................................................................................................................... A-29
Outstanding Debt ............................................................................................................................................... A-29
Series 2018F Bond Evidencing Regions Bank Loan ......................................................................................... A-30
Short-Term Debt ................................................................................................................................................ A-30
Additional Capital Improvements ...................................................................................................................... A-31
Anticipated Debt ................................................................................................................................................ A-32
Series 2011 CDA Bonds .................................................................................................................................... A-32
Debt Service Requirements on Authority Debt ................................................................................................. A-32
Coverage Ratios for Debt Service on Senior Lien Bonds and Subordinate Lien Bonds.................................... A-35
Requirements for Additional Bonds .................................................................................................................. A-35

DEMOGRAPHICS ...................................................................................................................................................... A-36

General............................................................................................................................................................... A-36
Population .......................................................................................................................................................... A-37
Employment Statistics ....................................................................................................................................... A-37
Health Care ........................................................................................................................................................ A-40
Per Capita Personal Income ............................................................................................................................... A-40
Housing and Construction ................................................................................................................................. A-41
Education ........................................................................................................................................................... A-41
Transportation .................................................................................................................................................... A-41
Hotels ................................................................................................................................................................. A-41
Tourism.............................................................................................................................................................. A-43

Current Members of the Board ................................................................................................................... A-2

Authority Revenue Sources ........................................................................................................................ A-6
Statement of Activities ............................................................................................................................... A-7
Statements of Net Position.......................................................................................................................... A-8
Projection of Revenue and Expenses ........................................................................................................ A-12
Projection of Capital Expenditures and Unrestricted Cash and Investments ............................................ A-14
Assumed Timeline for Key Events ........................................................................................................... A-15
Sources and Uses ...................................................................................................................................... A-21
Security and Source of Payment ............................................................................................................... A-22
Collections of Pledged Taxes ................................................................................................................. A-27
Pro Forma Debt of Authority .................................................................................................................. A-30
Debt Service Requirements on Outstanding Authority Debt .................................................................. A-34
Debt Service Coverage Ratios ................................................................................................................ A-35
Historical Population Trends .................................................................................................................. A-37
Comparative Employment Trends .......................................................................................................... A-38
Birmingham-Hoover MSA Historic Distribution of Non-Agricultural Employment ............................. A-39
Largest Employers in the Birmingham-Hoover MSA ............................................................................ A-39
Comparison of Per Capita Personal Income ........................................................................................... A-40
Residential Construction Activity in Birmingham-Hoover MSA ........................................................... A-41
Birmingham Area Hotel Market ............................................................................................................. A-42
Top Ten Hotels ....................................................................................................................................... A-42
Tourism in Birmingham Area ................................................................................................................. A-43
Financial Impact of Tourism .................................................................................................................. A-44
 THE AUTHORITY

General

The Authority was created under the Enabling Law as a public corporation authorized to construct,
maintain, operate and manage a civic center located in and for the benefit of the City of Birmingham, Alabama (the
“City”) and Jefferson County, Alabama (the “County”). The Enabling Law empowers the Authority, among other
things, to acquire both real and personal property, to construct, own and operate any or all facilities useful or
necessary to provide for public meetings, athletic contests, concerts, theatrical performances, trade shows,
exhibitions or any other events that contribute to the cultural betterment of the community, to own and operate
hotels and to borrow money and to issue bonds which will be payable from taxes made payable to the Authority by
any act of the Legislature of Alabama and from the revenues of the Authority derived from the activities, operations
and enterprises in which the Authority is authorized to engage. The Authority was organized in 1965.

The Authority owns and operates the Birmingham-Jefferson Convention Complex (the “Civic Center” or
“Complex”), which is comprised of several structures providing complete facilities for sports events, musical and
theatrical entertainment, conventions, meetings, banquets, trade shows and other events. The Complex is located
near the center of the City covering a nine-square-block area with access to three interstate highways and a number
of other major roadways. The Complex hosted an average of 680 events per year and averaged 1.07 million
attendees per year from 2014 through 2017. For a more complete description of the facilities that comprise the
Complex, see “Major Facilities” below.

The Authority has approximately 130 full-time and 166 part-time employees (not including hotel
employees or contract labor employees). Authority employees are not covered under the City’s or the County’s
pension plan and those who meet certain eligibility requirements participate in the Authority-administered money-
purchase pension plan, the trustee of which is TD Ameritrade, Denver, Colorado. For additional information about
the Authority’s retirement plans, see the notes to the audited financial statements of the Authority included in
APPENDIX B.

Governance and Management

The Authority is governed by a nine-member Board of Directors (the “Board”). The Board is comprised of
the Mayor of the City, the President of the Commission of the County and seven members elected by the incumbent
members of the State Senate from Jefferson County and the incumbent members of the State House of
Representatives from Jefferson County. The Chairman and other officers are elected by the full Board membership
and serve until their terms as Board members expire. If a vacancy on the Board occurs (other than an ex-officio
Director) and the Legislative delegation fails to fill such vacancy within sixty days, the remaining members of the
Board may elect a new Director. The Board members serve without compensation, but are reimbursed for actual
expenses incurred in the performance of their duties.

The current members of the Board, their present principal business or professional affiliations and the year
of expiration of their current terms of office are set forth below:

A-1
 Current Members of the Board

Name Occupation Term

Dennis Lathem, Chairman Executive Director, Coalbed Methane Gas 2019

J. J. Johnson, Vice-Chair (1) Retired, Regions Bank 2019
Dr. Clyde G. Echols, Treasurer Optometrist, EyeCare Associates 2018
Hon. Jay Roberson, Secretary President, Top Ten Mgmt, LLC 2020
Joe Sanders Owner, Master Image Commercial Printing 2020
Nick Sellers Senior VP Business Origination, Southern 2020
Power
Dr. Billy T. Marsh Retired, High School Principal 2018
Hon. Randall Woodfin Mayor of City of Birmingham Ex Officio
Hon. Jimmie Stephens President, Jefferson County Commission Ex Officio
________________

Note (1): Ms. Johnson is currently working in a part-time capacity at Waldrep Stewart & Kendrick, LLC, which is acting as
counsel for the Authority in connection with the issuance of the Series 2018 Bonds.

The Executive Director and CEO of the Authority directs and coordinates the ongoing operation of the
Complex to carry out the objectives of the Authority as articulated by the Board. The senior management of the
Authority is as follows:

Tad Snider, Executive Director and CEO. Tad Snider is the Executive Director and CEO of the
Authority. He has held numerous positions during his 25 year career with the Authority. Progressive growth in
each of those positions resulted in Mr. Snider’s appointment as Chief Executive Officer of the Authority in 2010.
Mr. Snider’s responsibilities as Executive Director and CEO include the overall management, sales, marketing and
operation of the Authority’s facilities, overseeing a full-time and part-time staff of nearly 600 and an annual
operating budget in excess of $70 million. A Birmingham native, Mr. Snider received his undergraduate degree in
marketing from Auburn University. He is a member of the International Association of Assembly Managers
(“IAAM”), a graduate of the Oglebay Public Facility Management School, the International Association of Venue
Managers Senior Executive Symposium at Cornell University and Leadership Birmingham.

Wayne Averitt, Director of Finance. Wayne Averitt is Director of Finance of the Authority. He joined the
Authority in this position in November 1995. He is responsible for financial reporting and controls, investment
accounting, budgeting, purchasing and accounting services, including investment and debt management and the
development and management of the Authority’s annual operating capital budget of $35 million. In addition to
these responsibilities, he oversees compliance with the Alabama Bid Law and the annual financial statement audit.
Mr. Averitt has significant experience in governmental accounting and financial management, having previously
practiced five years in public accounting specializing in audits of nonprofits and governmental organizations.
Mr. Averitt holds a bachelor’s degree in accounting from The University of Alabama. He is a member of the
Alabama Society of Certified Public Accountants.

Major Facilities

Legacy Arena. In December 2014, the Authority entered into a sponsorship agreement with Legacy
Community Federal Credit Union, which became effective January 1, 2015. The Arena is now known as Legacy
Arena at the BJCC (the “Arena”). With a seating capacity of 19,000, the Arena is one of the largest enclosed
sports/entertainment facilities in the Southeast. The main floor covers approximately 17,000 square feet, and
dividers can convert the main seating area into a smaller capacity venue. The Arena can accommodate a wide
variety of events, including college and professional basketball games and tournaments, hockey, tennis, boxing,
track, circuses, concerts, ice shows, religious services, political rallies, rodeos and motor vehicle exhibitions.
Facilities include concession stands and bars, press box and press lounge, television facilities, dressing rooms,
training rooms, locker rooms, offices and ticket windows, plus sound, lighting and other equipment.

A-2
 The Arena will undergo an extensive renovation as part of the plan of financing. See “THE PLAN OF
FINANCING—The Series 2018 Capital Projects” in this APPENDIX A. During the renovation project, the Arena will
be unable to host any events for approximately 24 months. The Authority is expected to experience a substantial
decline in operating revenues and PILOTs during this period. See “RESULTS OF OPERATIONS—Management’s
Discussion” herein.

Exhibition Halls. The Complex contains three exhibition halls, two of which can be configured as a single
unit. Together the exhibition halls furnish over 220,000 square feet of usable exhibit space, with connections for
electricity, water, natural gas, telephones and compressed air. The exhibition halls can be used as separate units,
each with its own ticket window and main entrance. The North Exhibition Hall includes a lobby (together with
offices and an auditorium-style meeting room), a lounge, which is used for receptions, two fully equipped kitchens,
portable bars, two permanent fast-food counters and eight restrooms. Direct access to the hall from the street is
afforded through a 42-foot by 20-foot roll-up door. Movable walls can be placed at 30,000 square foot increments.
Ceiling height is 25 feet and there are five loading docks, two with load levelers. The South Exhibition Hall has a
kitchen/bar, a permanent fast-food counter, two restrooms and a separate 30-foot by 18-foot vehicle entry.

Meeting rooms. Located on the second floor level of each exhibition hall structure are meeting rooms with
moveable walls, which may be divided into multiple separate rooms, each with theater style seating and designed to
accommodate groups of varying sizes and banquet style seating for groups ranging from 60 to over 1,700 persons,
depending upon wall arrangements. Audio-visual equipment, recording equipment, microphone and spotlights are
available. The meeting room level is accessible by escalator, elevators, stairs and a freight elevator.

Concert Hall. The 3,000-seat Concert Hall is designed such that adjustments can be made for speech or
music. The stage is 85 feet deep with an 88-foot wide proscenium. Other facilities include a 60-foot wide orchestra
pit sitting on two hydraulic lifts, a pipe organ, 12 dressing rooms, two chorus dressing rooms with capacity of 50
people each, a ballet rehearsal room, a reception room, multilevel lobbies with built-in bars, loading dock, scenery
storage, symphony library, a full complement of stage lighting and a removable orchestra shell.

Theater. The Theater accommodates 1,071 persons. Two lifts allow the shape and size of the 50-foot by
20-foot stage to change from straight proscenium opening to thrust theater to theater-in-the-round. Other facilities
include multilevel lobbies, built-in bars, two rehearsal halls, scenery shop, dressing rooms and an enclosed truck
loading dock. Events presented in the Theater include ballets, operas, plays, concerts, recitals, meetings and
seminars.

Alabama Sports Hall of Fame. The Alabama Sports Hall of Fame is located at the southeast corner of the
East Exhibition Hall. It occupies approximately 33,000 square feet of floor space and contains a wide variety and
array of articles and personal mementos reflecting the careers of famous Alabama sports figures. Out of ESPN’s list
of the top 100 athletes of the century, five of the top fifteen are in the Alabama Sports Hall of Fame: Jesse Owens,
Hank Aaron, Joe Louis, Willie Mays and Carl Lewis. A video viewing theater, sound-sensored displays, and several
interactive video facilities for the participation and enjoyment of visitors are also included in the facility.

Sheraton Hotel. The Complex includes a 16-story Sheraton hotel containing 757 guest rooms. The
Sheraton Birmingham, which is owned and operated by the Authority, also contains various meeting rooms, banquet
facilities, lounges, restaurants and other commercial areas. The guest rooms include single and double occupancy
rooms as well as suites. The Sheraton Birmingham also contains the largest ballroom in the City.

Westin Hotel. The Authority owns and operates the Westin Birmingham hotel, which opened in 2013 and
is located within the Complex. The Westin Birmingham contains 294 guest rooms, including seven suites.
Additional amenities include lounge, restaurant, rooftop pool, multi-media business center and fitness studio.

Uptown. The Complex is home to the new Uptown Entertainment District (“Uptown”), which achieved
100% occupancy in May 2014. Its tenants include eight bars and restaurants, which serve Complex patrons and the
local community. Since the first restaurant opening in February 2014, Uptown tenants have joined together to host
street festivals, pep rallies, food tastings and musical entertainment.

A-3
 The Forum Building. The Forum Building is a 364,000-square-foot facility featuring flexible meeting
space. The building contains the 276-seat Forum Theater and a 75-seat tiered media room.

Parking. The Civic Center campus provides over 5,000 spaces of parking in both surface lots and parking
decks. Some of the Complex’s surface parking will be eliminated by the Stadium project. The Authority is in the
process of assessing its parking needs and developing a long-term parking plan. See “DEBT STRUCTURE OF THE
AUTHORITY—Additional Capital Improvement Plans”.

The map on the following page shows the Complex campus, including the location of the stadium being
financed with proceeds of the Series 2018 Bonds.

A-4
A-5
 RESULTS OF OPERATIONS

Sources of Revenues

The Authority receives its revenue from two primary sources: operations and tax proceeds. The
Authority’s gross revenues from these sources for the years indicated were as follows:

Authority Revenue Sources

Years Ended August 31

2013 2014 2015 2016 2017

Operations (1) $46,253,705 $59,083,531 $63,149,254 $62,968,229 $68,084,848

Tax Proceeds (2) 16,005,657 16,927,259 17,866,853 18,406,194 18,709,473

$62,259,362 $76,010,790 $81,016,107 $81,374,423 $86,794,321

________________

Note (1): Includes payments in lieu of taxes (“PILOTs”) retained by the Authority, which are treated as operating revenues
of the Authority for financial reporting purposes. For a description of the PILOTs, see “DESCRIPTION OF SOURCES
OF PAYMENT FOR SERIES 2018 BONDS – Description of Pledged Taxes – Payments in Lieu of Taxes (PILOTs)”.
Note (2): This includes (a) the Pledged Tax Proceeds other than PILOTS and (b) the CDA-Related Taxes that support
payment of the Series 2011 CDA Bonds. The Pledged Tax Proceeds are the tax proceeds pledged to the payment
of the Series 2018A Bonds, 2018B Bonds and 2018C Bonds. For a description of the Pledged Tax Proceeds see
“DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS – Description of Pledged Tax Proceeds”. For a
description of the CDA-Related Taxes and the Series 2011 CDA Bonds see “DEBT STRUCTURE OF THE
AUTHORITY—Series 2011 CDA Bonds”.
Tax proceeds do not include proceeds from the Special Car Rental Tax. The Authority will not begin receiving
proceeds of the Special Car Rental Tax until November 2018.

The CDA-Related Taxes are not pledged as security for any of the Series 2018 Bonds. The amount of
the CDA-Related Taxes included in “Tax Proceeds” in Table 2 was $4,112,413 in 2013, $4,704,987 in 2014,
$4,890,963 in 2015, $4,870,388 in 2016 and $4,917,788 in 2017.

Financial Data

The following financial data for the five years ended August 31, 2017 is derived from the audited
consolidated financial statements of the Authority. The report on the audited financial statements for the two years
ended August 31, 2017 and 2016 appears in APPENDIX B to this Official Statement. A copy of the audited financial
statements for the years ended August 31, 2013, 2014 and 2015 is available from the Authority upon request or is
available in the Authority’s continuing disclosure filings on the MSRB’s Electronic Municipal Market Access
System (EMMA) website at www.emma.msrb.org (base CUSIP number 091156).

A-6
 Statement of Activities

Year Ended August 31

2013(1) 2014(2) 2015 2016 2017
OPERATING REVENUES
Revenues from operations $46,253,705 $59,083,531 $63,149,254 $62,968,229 $68,084,848

Total operating revenue 46,253,705 59,083,531 63,149,254 62,968,229 68,084,848

OPERATING EXPENSES
Salaries and employee benefits 20,892,892 23,973,407 23,571,455 24,339,324 26,427,912
Utilities 7,951,054 7,738,587 6,208,765 6,865,124 7,520,213
Repairs and maintenance 1,365,186 1,855,007 2,243,373 2,318,824 2,713,740
Rent 378,234 109,723 113,591 308,057 52,637
Management fees 2,804,630 3,652,865 3,534,353 3,446,405 3,612,422
Contract services and labor 4,022,738 5,280,559 5,025,550 4,789,373 5,232,311
Capital equipment 1,720,863 1,533,730 924,370 2,522,828 2,404,205
Cost of services 3,816,475 4,883,487 3,857,268 3,747,911 3,298,022
General, administrative and other operating
expenses 7,289,015 8,750,259 11,354,691 10,545,433 10,936,427
Total operating expenses before
depreciation 50,241,087 57,777,624 56,833,416 58,883,279 62,197,889

Depreciation 11,308,169 12,663,197 13,239,857 13,312,584 13,521,722

Total operating expenses 61,549,256 70,440,821 70,073,273 72,195,863 75,719,611

Operating loss (15,295,551) (11,357,290) (6,924,019) (9,227,634) (7,634,763)

NONOPERATING REVENUES
(EXPENSES)
Special tax proceeds(3) $16,005,657 $16,927,259 $17,866,853 $18,406,194 $18,709,473
Interest income 450,200 374,206 324,292 601,292 668,986
Interest expense (4,577,360) (6,173,926) (6,255,296) (6,001,241) (5,804,777)
Other income 243,377 243,377 520,217 -- --
Amortization of bond cost (85,490) -- -- -- --
Other non-operating expense -- -- -- (115,654) (394,901)

Total non-operating revenues, net 12,036,384 11,370,916 12,456,066 12,890,591 13,178,781

Changes in net position (3,259,167) 13,626 5,532,047 3,662,957 5,544,018

Net position at beginning of the year 143,887,663 139,954,556 139,968,182 146,017,518 149,680,475

Net position at the end of the year $140,628,496 $139,968,182 $145,500,229 $149,680,475 $155,224,493

____________________________________________

Note (1): The audited financial statements of the Authority for the year ending August 31, 2013 included “Special tax
proceeds” of $16,005,657 as a line item under Operating Revenues, and accordingly showed Operating Income of
$710,106. This chart instead shows “Special tax proceeds” under Non-Operating Revenues, following the format
of the audited financial statements of the Authority for all other years shown.
Note (2): As restated.
Note (3): Includes proceeds of the CDA-Related Taxes that support payment of the Series 2011 CDA Bonds. See “DEBT
STRUCTURE OF THE AUTHORITY – Series 2011 CDA Bonds”. Does not include any proceeds of the Special Car
Rental Tax, which the Authority expects to begin receiving in November 2018.

A-7
 Statements of Net Position

Years Ended August 31

2013 2014 2015 2016 2017
ASSETS
Current assets:
Cash and cash equivalents $12,126,480 $11,832,751 $10,784,154 $13,381,521 $8,687,890
Restricted cash and cash equivalents 7,433,312 10,956,436 24,548,035 22,689,297 20,622,494
Accounts receivable 4,935,146 4,858,422 4,765,892 5,038,907 7,082,202
Inventory 180,540 172,083 167,462 166,278 149,225
Prepaid expenses 295,750 362,026 445,015 506,397 455,189
Total current assets 24,971,228 28,181,718 40,710,558 41,782,400 36,997,000

Investments 11,437,807 11,065,415 26,709,764 26,517,903 40,849,888

Property, plant and equipment, net 234,396,985 -- -- -- --
Restricted investments 7,206,947 4,607,396 2,580,445 2,577,780 2,584,443
Capital assets, net -- 227,792,237 222,513,595 221,594,882 212,208,449
Unamortized bond issuance cost 673,941 -- -- -- --

Total assets $278,686,908 $271,646,766 $292,514,362 $292,472,965 $292,639,780

LIABILITIES AND NET POSITION

Current liabilities:
Accounts payable $2,610,986 $1,687,277 $3,191,813 $2,729,389 $ 2,208,278
Accrued expenses 2,623,148 2,912,220 2,785,942 3,123,679 4,735,836
Deposit and advance ticket sales 4,369,420 2,159,992 2,243,320 3,753,612 3,165,176
Current portion of unearned income 346,454 346,454 346,454 344,787 326,454
Total current liabilities 9,950,008 7,105,943 8,567,529 9,951,467 10,435,744

Current liabilities payable from

restricted assets:
Current portion of bonds payable 4,620,000 4,145,904 2,996,800 2,984,904 2,979,648
Current portion of notes payable 940,000 1,045,000 1,160,000 1,280,000 1,400,000
Accrued interest payable 1,890,335 1,799,588 1,806,988 1,774,863 1,737,613
Accreted interest payable -- 1,714,939 1,869,096 1,903,200 1,935,096
Total current liabilities payable from
restricted assets 7,450,335 8,705,431 7,832,884 7,942,967 8,052,357

Long-term liabilities:
Bonds payable 36,330,352 33,132,450 48,304,477 45,208,499 42,119,984
Accreted interest payable 10,076,112 9,288,725 10,126,056 9,117,960 7,974,979
Unamortized bond discounts (609,615) -- -- -- --
Unamortized bond premiums 23,179 -- -- -- --
Notes payable 69,615,000 68,570,000 67,410,000 66,130,000 64,730,000
Unearned income 5,223,041 4,876,035 4,773,187 4,441,597 4,102,223
Total long-term liabilities 120,658,069 115,867,210 130,613,720 124,898,056 118,927,186

Total liabilities 138,058,412 131,678,584 147,014,133 142,792,490 137,415,287

NET POSITION
Invested in capital assets net of related
debt 111,865,186 107,566,133 90,366,103 92,247,131 89,331,129
Restricted for debt service 13,612,873 13,073,794 22,858,918 22,736,592 19,401,503
Restricted for capital replacements & additions 1,027,386 1,901,588 3,681,113 2,530,485 3,647,676
Unrestricted 14,123,051 17,426,667 28,594,095 32,166,267 42,844,185
Total net position 140,628,496 139,968,182 145,500,229 149,680,475 155,224,493

Total liabilities and net position $278,686,908 $271,646,766 $292,514,362 $292,472,965 $292,639,780

A-8
Management’s Discussion

Overview. The issuance of the Series 2018 Bonds and the completion of the Stadium and Arena projects
constitute the second phase of the Authority’s long term, comprehensive expansion plan for the Complex. The
initial phase included the development of the Westin Birmingham and the Uptown Entertainment District in 2013,
both of which have produced positive financial results. The expansion plan is an integral part of the overall
revitalization of downtown Birmingham and will increase national exposure for the City. See “THE PLAN OF
FINANCING—Capital Projects” for further discussion of the Stadium and Arena projects.

The newly renovated Arena will be one of the premier sports and entertainment facilities in the Southeast,
repositioning the Authority to attract national conventions, marquee concerts and shows, and to compete as a host
site for NCAA basketball tournament events and the SEC or other conference basketball tournaments. The open-air
stadium will be the home to The University of Alabama at Birmingham (“UAB”) football team, the Magic City
Classic, and the Birmingham Bowl, and it will connect attendees with the Authority’s hotels, restaurants and parking
facilities to drive additional revenue across the Complex. Both of these projects will allow the Authority to attract
new events and substantially increase the number of attendees at the Complex.

In fiscal year 2017, the Complex hosted approximately 650 events and attracted more than one million
attendees. Over the last five years, the Authority’s combined total operating revenue and special tax proceeds has
increased steadily, from $62.3 million in fiscal year 2013 to $86.8 million in fiscal year 2017. The Authority’s
management believes the upcoming projects represent tremendous growth opportunities for the Complex and for the
City, as evidenced by the unprecedented corporate commitment and community involvement with the projects.

Impact of Arena Renovation. The Authority is booking events at the Arena through March 2020.
Although preliminary work on the Arena renovation, such as mobilization and staging work, will begin while the
Arena is still in use, work on the actual Arena renovation will not begin until after March of 2020 and will require
approximately 24 months to complete. The Authority expects that the Arena renovation will be completed by
February 2022.

Arena events and related PILOTs account for approximately 11% of the Authority’s total operating
revenues. Arena events account for approximately 40% of the Authority’s total PILOT revenues. The Authority
expects a decline in operating revenues and PILOTs during the Arena renovation period, which will be offset to
some extent by reduced operating expenses. Management plans to offset the net reduction in revenues through the
use of approximately $12.5 million of the Authority’s unrestricted cash reserves in order to balance its operating
budget during the Arena renovation period.

Impact of Work on Adjacent Interstate Highway. The Complex is located adjacent to the convergence of
three major interstate highways, I-59, I-20 and I-65. The Alabama Department of Transportation (ALDOT) has
undertaken an extensive construction project for the interstate system adjacent to the Complex. Work on the
interchanges on either side of the Complex has been in progress since 2012, and work on the elevated section
between the interchanges is expected to begin this year. Work on this section of the interstate is expected to be
completed by the end of calendar year 2020.

Although work on the interstate system has disrupted traffic flow around the Complex to some extent, the
effect on the Authority’s operating revenues has not been significant to date. It is difficult to predict with certainty
what the effect will be on the Authority’s operations from the work on the elevated section of the interstate between
the interchanges, which is immediately adjacent to the Complex and is scheduled to begin in the last quarter of this
calendar year. Some of the interstate construction period will overlap with the period when the Arena will be closed
for renovation work, which should reduce the impact to some extent. Although it is not possible to predict with
certainty what the future impact of this work will be, the Authority’s planned use of $12.5 million of unrestricted
cash to balance its operating budget during the Arena renovation period takes into account the estimated combined
effect of the interstate work and the Arena renovation.

Use of Unrestricted Cash Reserves. The Authority expects to have approximately $55 million of
unrestricted cash reserves as of the end of the current fiscal year (ending August 31, 2018). A portion of these
unrestricted cash reserves was accumulated to facilitate planned capital projects, including preliminary design and

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engineering costs for the Arena renovation and stadium and anticipated down time for the Arena, as well as a
portion of the cost of the energy infrastructure upgrade and Sheraton renovation projects discussed below under
“DEBT STRUCTURE OF THE AUTHORITY – Additional Capital Improvements”. The Authority expects that
approximately $22.5 million of its unrestricted cash reserves will be used to (i) balance the operating budget during
the Arena renovation period (approximately $12.5 million), (ii) pay a portion of the cost of the energy infrastructure
upgrade (approximately $5 million), and (iii) pay a portion of the cost of the Sheraton renovation (approximately $5
million).

Funding of Other Capital Projects with Remaining 2015 Bond Proceeds. The Authority has various
ongoing routine capital projects that are part of its capital budget for the next three years, including building
renovation projects, furniture and fixture replacements, and roof replacement. In addition, the Authority is currently
doing utility relocation work at the Arena and the Stadium site to prepare for those projects. The Authority currently
has approximately $14 million of proceeds remaining from the 2015 Bonds that are expected to be used for these
routine capital projects and the utility relocation work.

MANAGEMENT’S PROJECTIONS

Introduction

In preparation for the financing of the Stadium and the Arena renovation, management of the Authority has
prepared a projection of revenues and expenses and a projection of capital expenditures and unrestricted cash and
investments (collectively, the “Projections”), which are included in the two tables below. Important assumptions
regarding these Projections are described after the tables in the section titled “Assumptions Regarding Projections”.
Although management believes the Projections and related assumptions are reasonable, there will usually be
differences between the Projections and actual results, because events and circumstances frequently do not
occur as expected, and those differences could be material. In addition, the Projections should be read in
conjunction with the following cautionary statements about the Projections:

• These Projections were prepared by management. No independent feasibility consultant or similar

professional was retained to provide any review or support for the assumptions used in the Projections.
These Projections are not part of a feasibility study that meets the guidelines or standards of the AICPA for
a feasibility study.

• The historical results of operations included in the Projections are presented for comparison purposes, but
the historical data is not presented in accordance with GAAP. Although management represents that the
information included in the historical portions of the tables is consistent with, and was derived from, the
Authority’s audited financial statements for the periods indicated, neither the historical data nor the
projections in these tables is presented in accordance with GAAP standards.

• The Projections and accompanying assumptions contain forward-looking statements. Forward-looking

statements include all statements that do not relate solely to historical or current fact and can be identified
by use of words like “may”, “believe”, “will”, “expect”, “project”, “estimate”, “plan”, or “continue”.
These forward-looking statements are based on the current plans and expectations of the Authority on the
date hereof, and are subject to a number of known and unknown uncertainties and risks, many of which are
beyond its control, which could significantly affect current plans and expectations and the future financial
position and result of operations of the Authority. These factors include, but are not limited to:

o The schedule for completion of the significant interstate work being done adjacent to the
Authority’s facilities and the effect of that work on the Authority’s operations.
o Construction delays, both on the adjacent interstate work and on the Stadium and Arena
renovation.
o The ability to obtain financing on favorable terms for the additional projects to be undertaken
during the projection period, including the Sheraton renovation and the energy infrastructure
project.

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 o Higher costs of operation than the projected cost.
o Lower growth of revenues than the projected growth.
o The lack of historical experience for analogous taxes to support projected revenues from the
Special Car Rental Tax.
o Performance by the City and the County under their respective funding agreements, and
performance by UAB and the other third-party sponsors of their obligations under the various
support agreements.
o The Authority has not yet executed any contracts for construction of the Stadium and the Arena
renovation and does not have a guaranteed maximum price contract or other similar agreement.
The actual cost of completing these projects could be higher than the cost currently estimated.
Additional financing or other sources of funding might be required to complete the Capital
Projects.
o Economic and demographic developments in the Authority’s service area.
o The future demand for convention, trade show, entertainment, sports and other events that the
Authority expects to provide or for hotel accommodations in the service area.

Investors are cautioned not to unduly rely on the Projections and other forward-looking statements
when evaluating the information presented in this Official Statement, including this Appendix A and
the following two tables.

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 Projection of Revenue and Expenses
(dollars in 000s)

Actual (Fiscal Year ended August 31) Projected (Fiscal Year ending August 31)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Authority Operations
Authority operating revenues 12,279 14,964 15,166 16,296 18,112 19,584 18,409 16,742 14,170 16,571 19,927
Authority operating expenses (19,762) (21,153) (20,451) (22,956) (25,439) (27,097) (25,742) (25,037) (22,296) (24,041) (26,364)
Authority operating profit (7,484) (6,190) (5,285) (6,660) (7,327) (7,513) (7,333) (8,295) (8,126) (7,470) (6,437)

Hotel Operations
Hotel operating revenues 28,637 38,565 41,904 40,836 43,449 42,556 41,326 42,153 48,256 49,222 50,206
Hotel operating expenses (28,847) (36,624) (36,383) (35,928) (36,759) (38,943) (39,722) (40,516) (41,327) (42,153) (42,996)
Hotel operating profit (210) 1,940 5,522 4,909 6,690 3,613 1,605 1,637 6,930 7,068 7,210

Stadium Operations
Stadium operating revenues - - - - - - - - 518 3,106 3,168
Stadium operating expenses - - - - - - - - (741) (4,445) (4,534)
Stadium operating profit - - - - - - - - (223) (1,339) (1,365)

Total operating profit (7,694) (4,249) 237 (1,751) (637) (3,899) (5,728) (6,658) (1,419) (1,740) (593)

Tax receipts/debt funding sources

Sales and Use Tax 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Tobacco Tax 702 661 623 624 614 580 569 557 546 535 524
Lodging Tax (1%) 1,962 2,009 2,146 2,228 2,322 2,267 2,313 2,359 2,406 2,454 2,503
Special Beverage Tax 2,074 2,184 2,435 2,601 2,714 2,639 2,692 2,746 2,801 2,857 2,914
Special Lodging Tax 5,955 6,098 6,494 6,748 7,055 6,861 6,998 7,138 7,281 7,426 7,575
Payments in lieu of taxes 3,707 5,555 6,079 5,836 6,524 6,632 6,765 5,794 4,498 6,569 8,342
Car Rental Tax - - - - - - 2,500 3,060 3,121 3,184 3,247
Subtotal 15,600 17,706 18,977 19,238 20,430 20,180 23,036 22,855 21,853 24,225 26,306

City of Birmingham - - - - - - 3,000 3,000 3,000 3,000 3,000

Jefferson County - - - - - - 1,000 1,000 1,000 1,000 1,000
Private Contributions & Leases - - - - - 250 1,100 1,100 3,400 3,800 3,800
Total receipts 15,600 17,706 18,977 19,238 20,430 20,430 28,136 27,955 29,253 32,025 34,106
A-12
 Actual (Fiscal Year ended August 31) Projected (Fiscal Year ending August 31)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Cash flow for D/S, Reserves, & Capex 7,906 13,456 19,213 17,487 19,792 16,530 22,408 21,296 27,834 30,285 33,513

Stadium capital reserve funding - - - - - - - - (67) (400) (408)

Hotel capital reserve funding (1,432) (1,928) (2,095) (2,042) (2,172) (2,128) (2,066) (2,108) (2,413) (2,461) (2,510)
Bank loan escrow account (250) (1,100) (1,100) (3,165) 565 -
Interest & other income 450 374 324 601 669 - - - - - -
D/S on BJCC Debt (6,074) (6,128) (6,663) (6,393) (6,395) (6,395) (18,866) (18,861) (19,102) (23,228) (22,665)
D/S on Sheraton renovation loan - - - - - - (2,916) (2,916) (2,916) (2,916) (2,916)
D/S on Mechanical energy upgrades - - - - - - (1,500) (1,500) (1,500) (1,500) (1,500)
Cash flow 850 5,775 10,780 9,653 11,894 7,758 (4,040) (5,188) (1,328) 345 3,514

Debt Service Coverage

Tax Revenue (available for senior pledge) 15,600 17,706 18,977 19,238 20,430 20,180 23,036 22,855 21,853 24,225 26,306
Senior Debt Service 6,393 9,915 9,911 9,915 9,914 9,915
Senior DSCR 3.2x 2.3x 2.3x 2.2x 2.4x 2.7x

Tax Revenue (after senior payment) 13,786 13,121 12,943 11,939 14,311 16,391
Subordinate Debt Service - 4,958 4,955 4,956 4,954 4,953
Subordinate DSCR 2.6x 2.6x 2.4x 2.9x 3.3x

Note (1): For coverage of combined maximum annual debt service on all Series 2018 Bonds payable from the Pledged Tax proceeds, see Table 13.

A-13
 Projection of Capital Expenditures and Unrestricted Cash and Investments
(dollars in 000s)

Actual (fiscal year) Projected (fiscal year)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Additional Capital Expenditures
Misc. capex not otherwise identified 9,395 6,354 5,300 11,877 4,135 5,957 8,780 8,780 2,000 2,000 2,000
Capex funded from prior bond issues &
other (5,625) (1,575) (328) (828) (3,438) (3,257) (6,780) (6,780)
Capex funded from unrestricted cash
balances (3,770) (4,779) (4,972) (11,049) (698) (2,700) (2,000) (2,000) (2,000) (2,000) (2,000)

Beginning unrestricted cash balances 22,529 23,564 22,898 37,494 39,899 49,538 54,595 48,556 41,367 38,039 36,385
Capex funded from unrestricted cash
balances (3,770) (4,779) (4,972) (11,049) (698) (2,700) (2,000) (2,000) (2,000) (2,000) (2,000)
Ending unrestricted cash balances 23,564 22,898 37,494 39,899 49,538 54,595 48,556 41,367 38,039 36,385 37,899

Restricted Reserves Available for

Capex
2015 Bond Proceeds - - 20,867 20,159 16,817 13,560 6,780 - - - -

Unrestricted Cash & Investments

Unrestricted Cash & Investments (from
audit) 15,515 14,803 37,490 39,899 49,538 54,595 48,556 41,367 38,039 36,385 37,899
PILOTs (unrestricted as of FY 15) 8,050 8,095 4 - - - - - - - -
Unrestricted Cash & Investments 23,564 22,898 37,494 39,899 49,538 54,595 48,556 41,367 38,039 36,385 37,899

Total Cash & Investments Avail. for

Capex 23,564 22,898 58,361 60,058 66,355 68,156 55,336 41,367 38,039 36,385 37,899

A-14
Assumptions Regarding Projections

Assumed Timeline for Key Events

Fiscal Year 2018 2019 2020 2021 2022

Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Start Finish
Close Financing Jul-18
I20/59 Bridge Work Sep-18 Sep-19
Stadium Construction Dec-18 Jun-21
Hotel Refurbishment Sep-18 Aug-19
Arena Construction Apr-20 Mar-22
World Games (1) Jul-21 Jul-21

______________________

Note (1): The World Games is a major international multi-sport event meant for sports, or disciplines or events within a
sport, that are not contested in the Olympic Games. Birmingham is the host city for the 2021 World Games.

Authority Operating Revenue. For the fiscal year ending August 31, 2019, management expects a slight
decline in operating revenue from fiscal year 2018 based on interstate construction and expected programming. The
financial projections assume a 24-month closure of the Arena from April 2020 through March 2022. The financial
projections indicate the expected impact of the Arena closure and interstate construction during fiscal years 2020,
2021 and 2022. During fiscal year 2020, the Authority’s operating revenue will be impacted by 5 months of closure
(April 2020 – August 2020). After being closed for the duration of fiscal year 2021, the Authority’s operating
revenue during fiscal year 2022 will be impacted by seven months of closure (September 2021 – March 2022).
During the Arena closure, Authority management expects a decline of approximately $5 million (adjusted for
inflation) in revenue on an annual basis due to the complete closure of the Arena. During the fiscal years with
partial Arena closure, the projected operating revenue is adjusted based on the number of months in which the Arena
will be closed. For example, in fiscal year 2022, the Authority will operate seven months without the Arena. During
fiscal year 2020, the Authority will incur a revenue reduction of approximately $3 million (7/12ths of $5 million,
adjusted for inflation). After completion of the Arena, management expects the Authority to return to normal
operations, growing with inflation. Inflation is estimated at 2% annually throughout the projection period. The
financial projections do not include any additional growth beyond inflation after the completion of the Arena.

Authority Operating Expenses. The temporary closure of the Arena will reduce operating expenses by
approximately $3 million (adjusted for inflation), on an annual basis. During the fiscal years with partial Arena
closure, the projected operating expenses are adjusted based on the number of months in which the Arena will be
closed. After the completion of the Arena, the Authority’s operating expenses are expected to increase with
inflation. In 2021, the Authority expects to install energy-saving mechanical upgrades, resulting in $1.5 million of
energy savings per year. The energy savings will be guaranteed by Alabama Power Company.

Hotel Operating Revenue. In June of 2018 the Sheraton hotel suffered significant damage to
approximately half of its rooms as a result of a break in a water main inside the building. The Authority expects the
property damage to be covered by its property insurance and expects a portion of the lost revenue to be recovered
through the Authority’s business interruption. The Authority had planned a renovation of the Sheraton hotel in
fiscal years 2020 through 2022. However, the renovation project will be accelerated and combined with the water
damage work for efficiency. The renovation work is now expected to be completed in fiscal years 2019 and 2020.

The hotel operating revenue for fiscal year 2018 has been estimated using projections provided by hotel
management (Marriott International) that include the estimated impact of the water damage at the Sheraton hotel in
June of 2018. The projections for fiscal years 2019 and 2020 include the effect of the renovation and repair project
at the Sheraton. Authority management anticipates a combined $2 million net revenue decline at its hotels (Sheraton
and Westin) during fiscal years 2019 and 2020 due to the renovation and repair projects, the interstate construction
and the Arena renovation. The Authority expects that after the renovation and repair work on the Sheraton is

A-15
completed, the Sheraton should generate a one-time revenue increase of 13% and earn a profit margin of 7%. After
the initial one-time revenue increase, the projections assume that hotel revenue will increase with inflation.

Hotel Operating Expense. As mentioned previously, hotel financial performance for fiscal year 2018 has
been estimated using projections provided by hotel management (Marriott International). In fiscal year 2019,
Authority management assumes inflationary growth from fiscal year 2018 levels. The financial projections assume
that the operating expenses of both hotels will increase with inflation.

Stadium Operating Revenue. Stadium revenue projections were provided by the feasibility consultant,
CSL (Convention Sports and Leisure). Projected Stadium operating revenues exclude items already dedicated to
debt service, such as leases, naming rights, and suites during the anticipated funding agreement 10-year period.
Those dedicated Stadium revenues are included under the line item “Private Contributions & Leases”. Stadium
revenues are expected to increase with inflation. The Stadium is expected to open in July 2021 (2 months of
operations in fiscal year 2021) to host the World Games. The financial projections assume that Stadium revenues
will increase with inflation.

Stadium Operating Expense. Stadium expense projections were provided by the feasibility consultant,
CSL (Convention Sports and Leisure) and adjusted by management based on expected programming and staffing
levels. The financial projections assume that Stadium expenses will increase with inflation.

Existing Tax Revenue. Tax revenue for fiscal year 2018 has been annualized from year-to-date tax
collections through April 30, 2018. PILOTs (payments in lieu of taxes) are driven by operating activities in the
Arena, hotels, and convention and concert halls. Management has estimated the remaining fiscal year 2018 PILOTs
based on upcoming events and historical seasonality. Sales and use tax revenue is fixed at $1.2 million per year by
statute assuming minimum collections are met. The County-wide tobacco tax has declined over the past 10 years.
The financial projections assume that the tobacco tax will continue to decline 2% per year. The following table
summarizes the growth rates used in the financial model for each existing tax revenue stream. Inflation is estimated
at 2% annually.

Tax Revenue Growth Rate

Sales and Use Tax Flat (by statute)
Tobacco Tax Declining (-2%)
Lodging Tax (1%) Inflation (+2%)
Special Beverage Tax Inflation (+2%)
Special Lodging Tax Inflation (+2%)
Payments in lieu of taxes Inflation (+2%)

PILOTs are generated by operating activities at the Authority’s facilities (ticket sales, concessions, hotel revenue,
etc.); therefore, the renovation and closure of the Arena and the interstate construction will have an impact on the
PILOTs collected due to decreased activity during the Arena closure. During the 24-month Arena closure, the
Authority expects an estimated annual loss of $2.5 million in PILOT revenue. During the fiscal years with partial
Arena closure, the PILOT revenue is adjusted based on the number of months in which the Arena will be closed.
Upon completion, the Stadium will generate PILOTs from ticket sales and concessions. Authority management
expects that the Stadium will generate at least $1 million of additional PILOTs per year, based on anticipated
programming. The financial model does not include additional PILOTs that may be earned from increased hotel
activities due to larger events at the Stadium.

New Special Car Rental Tax Revenue. The Special Car Rental Tax is a new tax that, according to the act
levying this tax, will not begin until two months after the financing for these projects is contractually committed.
The Authority expects to begin receiving car rental tax revenues in November 2018. There is no existing tax on car
rentals in the County that is closely analogous to the new Special Car Rental Tax; therefore, the ability to project
revenues from this tax is limited. The Authority estimates that this tax will produce approximately $3 million per
year in tax revenue based on Jefferson County data from the 2012 economic census and historical car rental revenue
at the Birmingham-Shuttlesworth International Airport (a national car rental study consulted by the Authority
indicates that approximately 50% of the rental car market revenue is produced at airports). The financial projections
assume prorated revenues from the Special Car Rental Tax of $2.5 million in fiscal year 2019 (based on 10 months
A-16
of collections in such fiscal year) and that the Special Car Rental Tax revenue after fiscal year 2019 will increase
with inflation.

Funding Agreements, Corporate Sponsorships and Other Contractual Agreements. The Authority has
entered into funding agreements with both the City of Birmingham ($3 million per year for 30 years) and Jefferson
County ($1 million per year for 30 years). Additionally, the Authority expects to receive $3.8 million (annually) in
private contributions from Regions Bank, Alabama Power, Vulcan Materials, UAB (including its affiliates) and
other corporate sponsors under various pledge and naming rights agreements, and from private companies
committing to sign sky box leases over a 10 year period. All of these agreements provide for fixed payment
schedules; there is no increase for inflation or other factors.

Stadium Capital Reserve. The financial projections assume that the Authority will fund a capital reserve
account for future Stadium maintenance. The financial projections assume that the Authority will reserve $400,000
per year, increasing with inflation.

Hotel Capital Reserve. The financial model assumes that the Authority will continue to fund a reserve
account for future hotel maintenance. The projections assume reserve funding at 5% of hotel revenue. Historical
reserve funding has averaged approximately 3% for the last five fiscal years.

Bank Loan Escrow Account. The financial projections assume that the Authority will deposit all revenues
derived from the corporate sponsorship agreements, pledge agreements and stadium leases into an interest-bearing
escrow account to be used to pay debt service on the Series 2018F Bond.

Plan of Financing. The financial projections assume that the Authority incurs debt consisting of
approximately $287 million in senior lien bonds, subordinate lien bonds, and bank loans to construct a Stadium and
renovate its Arena. Debt service in the financial projections with respect to the bonds being issued to finance the
Stadium and Arena renovation is substantially similar to the projected debt service in Table 11.

Additional Debt. In addition to the Bonds being issued to finance the Stadium and Arena renovation the
Authority expects to secure bank loans to fund two additional projects: (i) Sheraton upgrades and (ii) mechanical
energy saving upgrades. The Authority does not expect to obtain commitments for this additional financing before
the Bonds are issued.

Sheraton Upgrades. The Authority is required by Marriott to update the Sheraton, which will be renovated
in tandem with the Arena and Stadium timelines. The scope focuses on the guestrooms, with full renovation of the
rooms, and partial bathroom renovations, separating the two towers (Atrium and Tower) in two phases so that the
renovation is completed during low occupancy season. The lobby areas will undergo a comprehensive soft goods
renovation while food and beverage facilities will require full renovation. The final phase includes a soft goods
renovation of the ballroom space. Additional repairs and maintenance will be required on the hotel’s exterior façade.
The total cost estimate is $30 million. The plan will be funded by a combination of current cash on hand and bank
financing. The financial projection assumes debt service of approximately $2.9 million per year based on a 10 year,
$25 million bank financing using an estimated interest rate of 2.9%. No commitment for this financing has been
obtained. The Authority does not intend to pledge the Pledged Tax Proceeds to the payment of this debt.

Mechanical Plant Energy Savings Project. The Authority has entered into a Guaranteed Energy Saving
Contract with Alabama Power Company. The purpose of the project is to modernize the mechanical systems of the
complex resulting in savings of energy and maintenance while increasing operating dependability and efficiency.
The upgrades will include chillers, boilers, controls, lighting, water conservation, sub-metering and electrical
retrofits. The total cost estimate is approximately $20 million. The project will be funded by a combination of
current cash on hand (approximately $5 million) and bank financing (approximately $15 million). The projections
assume that $1.5 million of energy savings will begin in fiscal year 2021. The Authority expects that the annual
energy savings from this project (estimated to be $1.5 million per year) will offset 100% of annual debt service on
the bank financing. No commitment for this financing has been obtained. The Authority does not intend to pledge
the Pledged Tax Proceeds to the payment of this debt.

A-17
 Capital Expenditures. The historical capital expenditures of the Authority have been funded from a
combination of bond proceeds and cash reserves. The historical capital expenditures funded from bond proceeds
have been separated from the amount funded from cash reserves (including hotel cash reserves). The Authority
expects to spend its remaining 2015 bond proceeds (estimated to be approximately $13.6 million as of the end of
fiscal year 2018) over the next two years (fiscal year 2019 and fiscal year 2020). Additionally, the financial
projections assume that the Authority will invest approximately $2 million per year on miscellaneous capital
expenditures from excess cash flow.

Unrestricted Cash Reserves. The financial projections estimate an annual cash reserve balance after
paying debt service, funding reserves (hotel and Stadium), and investing in additional capital expenditures ($2
million per year). The financial projections do not take into account changes in working capital. Additional cash
from unrestricted reserves may be used to cover the cash portion of the Sheraton upgrades and mechanical plant
energy savings project, as needed.

THE PLAN OF FINANCING

General

The bonds offered pursuant to this Official Statement are being issued as part of an overall plan of
financing by the Authority that includes the refunding of certain outstanding debt of the Authority and the financing
of certain capital projects on the campus of the Complex (the “Capital Projects”). Under the plan of financing, the
Authority will issue six separate series of bonds (collectively, the “Series 2018 Bonds”): (i) its Special Tax Bonds,
Series 2018A (the “Series 2018A Bonds”); (ii) its Special Tax Bonds (Subordinate Lien), Series 2018B (the “Series
2018B Bonds”); (iii) its Special Tax Bonds (Subordinate Lien), Taxable Series 2018C (the “Series 2018C Bonds”);
(iv) its Revenue Bonds (City of Birmingham Funding), Series 2018D (the “Series 2018D Bonds”); (v) its Revenue
Bonds (Jefferson County Funding), Series 2018E (the “Series 2018E Bonds”); and (vi) its Private Contribution
Bond, Taxable Series 2018F (the “Series 2018F Bond”). The principal amount of each series of bonds is included in
Table 8.

The Series 2018A Bonds, Series 2018B Bonds, Series 2018C Bonds, Series 2018D Bonds and Series
2018E Bonds are being publicly offered. The Series 2018F Bond will evidence a loan from Regions Bank. Each
series of Series 2018 Bonds has a separate source of payment and security as described below under “Issuance of
Series 2018 Bonds” and as described under “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS” in
this APPENDIX A.

The proceeds of the Series 2018A Bonds, the Series 2018B Bonds, the Series 2018D Bonds, the Series
2018E Bonds and the Series 2018F Bond will be used to finance the costs of acquiring and constructing the Capital
Projects, which are described below. The proceeds of the Series 2018C Bonds will be used to refund the Authority’s
Refunding and Capital Outlay Special Tax Bonds, Series 1992 (the “Series 1992 Bonds”). Proceeds of the Series
2018 Bonds will also be used to pay costs incurred in connection with the issuance of the Series 2018 Bonds.

Capital Projects

The Capital Projects consist of (a) renovation of the Arena and the Authority’s existing convention and
meeting space, and (b) construction of a flexible-use, open-air stadium (the “Stadium”) that will provide an
additional venue for convention, sports and entertainment events. The Stadium will be the home stadium for UAB
football, which will be the Stadium’s lead tenant.

Renovation of Legacy Arena. Legacy Arena was originally constructed in 1975. This project will be the
first top-to-bottom renovation of the entire structure since its original construction. The Arena will undergo an
extensive overhaul designed to modernize the Arena and enhance the patron experience. The renovated Arena will
include wider concourses for better circulation and visibility, additional luxury suites, club level facilities,
modernized and expanded concessions and bathrooms, improved ingress and egress, new seating throughout the
Arena and new locker room and dressing areas. Exterior improvements will include a new entry plaza and a
completely new façade. The renovated Arena will have a seating capacity of 19,000 with 17,000 square feet of floor
A-18
space and will be able to accommodate basketball, hockey, tennis, boxing, track, circuses, concerts, ice shows,
religious services, political rallies, rodeos, motor vehicle exhibitions and numerous other events. The estimated total
cost of the renovations is approximately $125 million.

Stadium. The Stadium will be a new, open-air, 45,000-seat, state-of-the-art venue. It will be constructed
on a 10.25-acre site on the northeast corner of the Authority’s footprint and will be located adjacent to the Uptown
Entertainment District. Features will include premium clubs and suites, state-of-the-art concession and bathroom
facilities, the ability to expand to 55,000 seats with portable seating, a skywalk connection to the rest of the
Complex and an outdoor event plaza at the southern entrance to the Stadium. The Stadium will be able to host
football, soccer, concerts and other outdoor events, and will be the home of UAB football. The estimated total cost
of the Stadium is approximately $175 million.

The Authority has not executed any contracts for construction of the Stadium or the Arena renovation and
does not have a guaranteed maximum price or other similar agreement. The actual cost of completing the Capital
Projects could be higher than the cost currently estimated. Additional financing or other sources of funding might
be required to complete the Capital Projects.

Refunding Plan

The Authority issued its Series 1992 Bonds as capital appreciation bonds secured by a first lien on the
Authority’s portion of the proceeds of the Sales and Use Tax, Tobacco Tax and Lodging Tax. The Series 1992
Bonds had an outstanding accreted value of approximately $10,371,000 on June 1, 2018.

To provide for the refunding of the Series 1992 Bonds, the Authority and The Bank of New York Mellon
Trust Company, N.A. will enter into an Escrow Trust Agreement (the “Escrow Agreement”). Pursuant to the
Escrow Agreement, an irrevocable trust fund (referred to in the Escrow Agreement as the “Escrow Fund”) will be
established for the benefit of the holders of the Series 1992 Bonds. Proceeds of the Series 2018C Bonds in the
amount of $9,425,000, together with funds contributed by the Authority in the approximate amount of $2,000,000,
will be deposited in the Escrow Fund and invested in certain direct obligations of the United States Treasury (the
“Escrow Securities”). The principal and interest on the Escrow Securities, without reinvestment, together with the
initial cash balance in the Escrow Fund remaining after investment in such securities, will be sufficient to pay the
principal and interest requirements on the Series 1992 Bonds from (and including) September 1, 2018 through their
respective maturities.

Issuance of Series 2018 Bonds

Series 2018A Bonds. The Authority is issuing the Series 2018A Bonds pursuant to that certain Trust
Indenture dated February 1, 2015 between the Authority and Regions Bank, as successor trustee, as supplemented
by a First Supplemental Trust Indenture (the “Senior Lien Indenture”). The Series 2018A Bonds will be limited
obligations of the Authority payable solely from and secured by a pledge of and security interest in the Pledged Tax
Proceeds on a first priority basis. The Series 2018A Bonds will be secured by the Pledged Tax Proceeds on a parity
of lien with the pledge thereof in favor of the Authority’s Special Tax Bonds, Tax-Exempt Series 2015-A (the
“Series 2015A Bonds”) and any additional bonds issued pursuant to the Senior Lien Indenture. For a description of
the Pledged Tax Proceeds, see “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS – The Pledged Tax
Proceeds” in this APPENDIX A.

Series 2018B Bonds. The Authority is issuing the Series 2018B Bonds pursuant to that certain Trust
Indenture (Subordinate Lien) dated August 1, 2018 (the “Subordinate Lien Indenture”) between the Authority and
Regions Bank, as trustee. The Series 2018B Bonds will be limited obligations of the Authority payable solely from
and secured by a pledge of and security interest in the Pledged Tax Proceeds, subject and subordinate, however, to
the prior pledge of the Pledged Tax Proceeds to the payment of the obligations issued under the Senior Lien
Indenture. The Series 2018B Bonds will be secured under the Subordinate Lien Indenture on a parity of lien with
the pledge thereof in favor of the Series 2018C Bonds and any other additional bonds issued pursuant to the
Subordinate Lien Indenture. For a description of the Pledged Tax Proceeds, see “DESCRIPTION OF SOURCES OF
PAYMENT FOR SERIES 2018 BONDS – The Pledged Tax Proceeds” in this APPENDIX A.

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 Series 2018C Bonds. The Authority is issuing the Series 2018C Bonds pursuant to the Subordinate Lien
Indenture. The Series 2018C Bonds will be taxable obligations. The Series 2018C Bonds will be limited
obligations of the Authority payable solely from and secured by a pledge of and security interest in the Pledged Tax
Proceeds, subject and subordinate, however, to the prior pledge of the Pledged Tax Proceeds to the payment of the
obligations issued under the Senior Lien Indenture. The Series 2018C Bonds will be secured under the Subordinate
Lien Indenture on a parity of lien with the pledge thereof in favor of the Series 2018B Bonds and any other
additional bonds issued pursuant to the Subordinate Lien Indenture. For a description of the Pledged Tax Proceeds,
see “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS – The Pledged Tax Proceeds” in this
APPENDIX A.

Series 2018D Bonds. The Authority is issuing the Series 2018D Bonds pursuant to that certain Trust
Indenture dated August 1, 2018 (the “City-Supported Bond Indenture”) between the Authority and Regions Bank, as
trustee. The Series 2018D Bonds will be limited obligations of the Authority payable solely from and secured by a
pledge of payments received by the Authority from the City under that certain Funding Agreement dated July __,
2018 (the “City Funding Agreement”) between the Authority and the City. Pursuant to the City Funding
Agreement, the City is obligated to contribute $3,000,000 per year for 30 years to finance a portion of the cost of the
Capital Projects. The City Funding Agreement constitutes a general obligation of the City. The Series 2018D
Bonds will not be secured by a pledge of the Pledged Tax Proceeds. For a more complete description of the City
Funding Agreement, see “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS – The City Funding
Agreement” in this APPENDIX A. In addition, the proposed form of the City Funding Agreement is attached as an
Appendix to the Official Statement for the Series 2018D Bonds.

Series 2018E Bonds. The Authority is issuing the Series 2018E Bonds pursuant to that certain Trust
Indenture dated August 1, 2018 (the “County-Supported Bond Indenture”) between the Authority and Regions
Bank, as trustee. The Series 2018E Bonds will be limited obligations of the Authority payable solely from and
secured by a pledge of payments received by the Authority from the County under that certain Funding Agreement
dated July __, 2018 (the “County Funding Agreement”) between the Authority and the County. Pursuant to the
County Funding Agreement, the County is obligated to contribute $1,000,000 per year for 30 years to finance a
portion of the cost of the Capital Projects. The County Funding Agreement constitutes a general obligation of the
County. The Series 2018E County-Supported Bonds will not be secured by a pledge of the Pledged Tax Proceeds.
For a more complete description of the County Funding Agreement, see “DESCRIPTION OF SOURCES OF PAYMENT
FOR SERIES 2018 BONDS – The County Funding Agreement” in this APPENDIX A. In addition, the proposed form of
the County Funding Agreement is attached as an Appendix to the Official Statement for the Series 2018E Bonds.

Series 2018F Bond. The Authority will issue the Series 2018F Bond pursuant to a financing agreement
(the “Financing Agreement”) between the Authority and Regions Bank (the “Lender”). The Series 2018F Bond
evidences a direct loan from the Lender in the amount of $31,000,000. The Series 2018F Bond will be a taxable
obligation. The Series 2018F Bond will be a limited obligation of the Authority payable solely from and secured by
a pledge and assignment of (i) contributions made to the Authority by various corporate or university sponsors in
support of the Stadium project, (ii) amounts received under a naming rights agreement with respect to the Stadium
between the Authority and a corporate sponsor, (iii) lease and marketing rights payments from UAB for the use of
the Stadium for UAB home football games, and (iv) lease revenues received by the Authority from the leasing of the
premium suites in the Stadium. See “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS – Corporate
Sponsorships and Other Contractual Arrangements” in this APPENDIX A for a more complete description of the
sources of payment for the Series 2018F Bond. The Series 2018F Bond will not be secured by a pledge of the
Pledged Taxes.

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Sources and Uses for Plan of Financing

The following table shows estimated sources and uses of funds for the 2018 plan of financing. The amounts
included in the table are preliminary and subject to change.

Sources and Uses

(in 000’s)

Series Series Series Series Series Series

2018A 2018B 2018C 2018D 2018E 2018F
Bonds Bonds Bonds Bonds Bonds Bond Total

Sources of Funds:
Principal Amount $117,360* $67,535* $9,435* $46,615* $15,380* $31,000* $287,325*
Net Original Issue Premium
Interest Earnings

Funds contributed by Authority

Total Sources of Funds

Uses of Funds:
Deposit to Escrow Fund for
Series 1992 Bonds
Costs of Series 2018 Capital
Improvements
Costs of Issuance (1)

Total Uses of Funds

_________________

*Preliminary; subject to change.

Note (1): Includes underwriters’ discount, legal and accounting fees, printing costs, rating agency fees, other costs of
issuance and bond rounding amounts.

Equity for Portions of Capital Projects Not Eligible for Tax-Exempt Financing

Some portions of the Capital Projects may not be eligible for tax-exempt financing. For example, the
stadium will include skyboxes that are not eligible for tax-exempt financing. In addition, the granting of naming
rights for the Stadium is considered private use of some portion of the Stadium, which portion may not be financed
with tax-exempt bonds. The Authority expects to allocate the taxable proceeds of the Series 2018F Bond to Capital
Improvement costs not eligible for tax-exempt financing. $31 million of proceeds from the Series 2018F Bond is
expected to be sufficient to finance the ineligible portions of the Capital Projects.

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 DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS

General

This section of APPENDIX A describes the various sources of payment and security that are included in the
overall plan of financing for the Series 2018 Bonds.

Each series of Series 2018 Bonds is payable from and secured by a separate source of payment. For
the specific source of payment and security for the bonds offered pursuant to this Official Statement, see
“SECURITY AND SOURCE OF PAYMENT” in the front portion of this Official Statement.

The security and source of payment for each separate series of Series 2018 Bonds is set out in the following
table:

Security and Source of Payment

Series Source of Payment

2018A First priority lien on Pledged Tax Proceeds

2018B Subordinate lien on Pledged Tax Proceeds
2018C Subordinate lien on Pledged Tax Proceeds
2018D City Funding Agreement
2018E County Funding Agreement
2018F Private pledge agreements, naming rights agreements,
stadium lease and suite leases

The Pledged Tax Proceeds

The Pledged Tax Proceeds consist of the Authority’s portion of the proceeds from seven (7) separate
sources of revenue: the Special Beverage Tax, the Special Lodging Tax, the Special Car Rental Tax, the PILOTs,
the Sales and Use Tax, the Tobacco Tax and the Lodging Tax (all as defined below). None of such taxes or
payments in lieu of taxes has an expiration or termination date under its respective authorizing legislation.

The Series 2018A Bonds, the Series 2018B Bonds and the Series 2018C Bonds will be payable from and
secured by a pledge of the Pledged Tax Proceeds. Following the issuance of the Series 2018 Bonds, the Series
2018A Bonds, the Series 2018B Bonds, the Series 2018C Bonds and the Series 2015-A Bonds will be the only
outstanding obligations of the Authority that are payable from, or secured by a pledge of and security interest in, the
Pledged Tax Proceeds. The pledge of the Pledged Tax Proceeds to the payment of the Series 2018A Bonds and the
Series 2015-A Bonds is a senior, first-priority pledge of such tax proceeds. The pledge of the Pledged Tax Proceeds
to the payment of the Series 2018B Bonds and the Series 2018C Bonds is subject and subordinate to the prior pledge
of the Pledged Tax Proceeds to the payment of the Series 2018A Bonds, the Series 2015-A Bonds and any other
Additional Bonds issued pursuant to the Senior Lien Indenture.

Description of Pledged Taxes

Special Beverage Tax. The Special Beverage Tax is a 3% sales tax levied, in addition to all other taxes, on
alcoholic beverages sold in the County by restaurants that are licensed by the Alabama Alcoholic Beverage Control
Board. The Special Beverage Tax is levied pursuant to Act No. 2001-545 of the 2001 Regular Session of the
Alabama Legislature, as amended by Act No. 2003-288, adopted at the 2003 Regular Session of the Alabama
Legislature, and as validated and confirmed by Act No. 2004-531, adopted at the 2004 Regular Session of the
Alabama Legislature (the “Special Beverage Tax Act”). The sale of table wine in the County is specifically
exempted from the tax imposed by the Special Beverage Tax Act. In addition, the proceeds of all sales that are
presently exempt under the State of Alabama sales and use tax statutes are exempt from the Special Beverage Tax.

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 All amounts collected in the County pursuant to the Special Beverage Tax Act are allocated to the
Authority to be used for the support of the operations of the Authority.

The taxes levied by the Special Beverage Tax Act are due and payable to the Jefferson County Director of
Revenue (the “Director of Revenue”) on or before the last day of each month following the month in which the taxes
accrued. The Director of Revenue remits the proceeds of the Special Beverage Tax to the Authority before the 20th
day of each calendar month.

Special Lodging Tax. The Special Lodging Tax is a privilege or license tax levied, in addition to all other
taxes, on any person, organization, or other entity engaging in the County in the business of renting or furnishing
any room or rooms, lodgings, or accommodations, in any hotel, motel, inn, tourist court, or any other place in which
rooms, lodgings or accommodations are regularly furnished for a consideration. The Special Lodging Tax is levied
pursuant to Act No. 2001-546 of the 2001 Regular Session of the Alabama Legislature, as validated and confirmed
by Act No. 2004-531, adopted at the 2004 Regular Session of the Alabama Legislature (the “Special Lodging Tax
Act”). The amount of the tax is equal to 3% of the charge for such rooms, lodgings or accommodations. The Special
Lodging tax Act limits to 14% the amount of all lodging taxes levied in the County.

The Special Lodging Tax provides for certain exemptions from the levy of the Special Lodging Tax,
including (a) charges for property sold or services furnished which are required to be included in the tax levied
under the State sales and use tax legislation; (b) boarding houses, tourist homes and similar establishments regularly
offering less than five rooms for rental; (c) charges for the rental of rooms, lodgings or accommodations furnished
by any hospital, nursing homes, or convalescent homes, or by any charitable or eleemosynary institutions; and
(d) charges for the rental of rooms, lodgings or accommodations for a period of thirty continuous days or more.

All amounts collected in the County pursuant to the Special Lodging Tax Act are legislatively allocated to
the Authority to be used for the support of the operation of the Authority.

The taxes levied by the Special Lodging Tax Act are due and payable to the Director of Revenue on or
before the last day of each month following the month in which the taxes accrued. The Director of Revenue remits
the proceeds of the Special Lodging Tax to the Authority before the 20th day of each calendar month.

Special Car Rental Tax. The Special Car Rental Tax is a privilege or license tax levied, in addition to all
other taxes, on any person, organization, or other entity engaging or continuing in the County in the business of
leasing or renting any passenger automotive vehicle for one year or less. The Special Car Rental Tax is levied
pursuant to Act No. 2001-550 of the 2001 Regular Session of the Alabama Legislature, as amended by Act No.
2018-288 of the 2018 Regular Session of the Alabama Legislature. The amount of the tax is equal to 3% of the
charge for such rental or lease.

All amounts collected in the County pursuant to the Special Car Rental Tax Act are legislatively allocated
to the Authority to be used for the support of the operation of the Authority.

The taxes levied by the Special Car Rental Act are due and payable to the Director of Revenue on or before
the last day of each month following the month in which the taxes accrued. The Director of Revenue remits the
proceeds of the Special Tax to the Authority before the 20th day of each calendar month.

The Authority estimates that the Special Car Rental Tax will generate approximately $3,000,000 per year.
This estimate is based on the more conservative indication of potential tax revenues from two separate analyses
conducted by the Authority. The first analysis uses data from the 2012 Economic Census, which reported that
passenger car rental revenues in the County for that year totaled $139,039,000. The 3% Special Car Rental Tax
would generate approximately $4.2 million when applied to the passenger car rental revenue reported by the 2012
Economic Census.

The second analysis uses historical auto rental activity occurring at the Birmingham-Shuttlesworth
International Airport (the “Airport”) over the last 10 years. According to information compiled by The Birmingham
Airport Authority, which collects a 10% commission fee on car rental sales occurring at the Airport, car rental sales
at the Airport have averaged approximately $50,220,000 per year for the ten-year period covering 2008 through
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2017. The Authority applied a 2x multiplier to the historical Airport collections for an estimate of $100 million in
car rental revenue for the County. The 2x multiplier was based on (i) a market study of the national car rental
industry conducted by IBIS World, Santa Monica, CA, indicating that approximately 50% of rental car market
revenue is produced at airports, and (ii) the actual number of car rental entities located in the County as compared to
the number of entities located at the Airport. The 3% Special Car Rental Tax would generate $3,000,000 per year
when applied to the $100 million annual car rental revenue estimate described above.

There is no historical collection data available for the Special Car Rental Tax, and no assurance can
be given that the Authority’s estimate will be realized. Therefore, the coverage for the Senior Lien Bonds and
the Subordinate Lien Bonds does not take into account any estimated proceeds generated by such tax. Nevertheless,
the implementation of the Special Car Rental Tax should increase the amount of Pledged Tax Proceeds available to
service the debt on the Senior Lien Bonds and the Subordinate Lien Bonds. For a discussion of additional risks
associated with the Special Car Rental Tax, see “RISK FACTORS—Past Challenges to Procedures of the Alabama
Legislature” in the front portion of the Official Statements for the Series 2018A Bonds and the Series 2018B Bonds.

Payments In Lieu Of Taxes (PILOTs). The Authority engages in various transactions at its facilities that
would ordinarily give rise to taxes that would be levied by the State or any municipality or county of the State with
respect to such transactions if the Authority were not constitutionally exempt from such taxes under Amendment
No. 280 to the Alabama Constitution. The Authority’s Enabling Law was amended in 2003 to authorize the
Authority to impose and collect a fee or charge in lieu of such taxes that would otherwise be levied absent the
constitutional exemption. Such taxes include leasing or rental taxes, sales taxes, lodging taxes, taxes on the sale of
alcoholic beverages and taxes on the sale of tobacco products. Under the Enabling Law, the Authority may use the
proceeds of the PILOTs (referred to in the Enabling Law as “transaction-related fees”) for any purpose for which the
Authority may apply its other funds under the provisions of the Enabling Law.

The Greater Birmingham Convention and Visitors Bureau (“GBCVB”) provides marketing services with
respect to events at the Civic Center and other events in the Birmingham area that promote tourism and commerce.
The GBCVB is funded in part by a share of various lodging taxes. In 2003, after the PILOT legislation was passed,
the Authority and GBCVB entered into an agreement (the “GBCVB Allocation Agreement”) that was intended to
restore to GBCVB the amount of funding that would otherwise have been received by GBCVB but for the effect of
the PILOTs. Thus, the GBCVB Agreement provides that GBCVB will receive from the Authority an amount equal
to 4% of the Authority’s hotel room revenue each year. The amount allocated and paid each year to GBCVB
pursuant to the GBCVB Allocation Agreement is not secured by any lien on the PILOTS. However, the Senior Lien
Indenture and the Subordinate Lien Indenture provide that amounts payable pursuant to the GBCVB Agreement are
not included in Pledged Tax Proceeds for purposes of the Additional Bond tests of the Senior Lien Indenture and the
Subordinate Lien Indenture.

The total amount of lodging taxes that would be payable with respect to the Authority’s hotels is currently
17-1/2% of room revenue. The amount of PILOTS with respect to the Authority’s hotels that is retained by the
Authority and included in the Authority’s financial statements is 10% of room revenue. An amount equal to 4% of
room revenue is paid to GBCVB pursuant to the GBCVB Allocation Agreement. An amount equal to 3-1/2 % of
room revenue is paid to the City pursuant to the CDA Development Agreement. See “DEBT STRUCTURE OF THE
AUTHORITY – Series 2011 CDA Bonds”. For financial reporting purposes, the amount of PILOTS allocated to
GBCVB pursuant to the GBCVB Allocation Agreement and the amount of PILOTs allocated to the City pursuant to
the CDA Development Agreement are excluded from revenue of the Authority. All other PILOTs retained by the
Authority, including PILOTs equal to 10% of hotel room revenues, are reported as “revenues from operations”. In
addition, the amount of PILOTS used to make these payments to GBCVB under the GBCVB Agreement and to the
City under the CDA Development Agreement are not included in Pledged Tax Proceeds for purposes of the
Additional Bond tests of the Senior Lien Indenture and the Subordinate Lien Indenture and are not reported as part
of the Pledged Tax Proceeds in Table 10.

The Sales and Use Tax. The Sales and Use Tax is a privilege or license tax legislatively imposed, in
addition to all other taxes, in the County pursuant to Act No. 405 enacted at the 1967 Regular Session of the
Alabama Legislature, as amended by Act No. 659 enacted at the 1973 Regular Session of the Alabama Legislature
(the “Sales and Use Tax Act”). The Sales and Use Tax Act provides that there shall be levied in every county in the
State having a population of 500,000 or more, according to the last or any subsequent federal census (the County
A-24
being the only county in the State in this category), a sales tax (the “Sales Tax”) on all persons (a) engaged in the
business of selling tangible personal property at retail, (b) conducting places of amusement or entertainment, or
(c) engaged in any business subject to the sales tax imposed by the State of Alabama. The Sales Tax so levied is
required to be passed on to the consumer or purchaser at retail. The Sales Tax is in the nature of a tax on gross
receipts of all businesses in the County subject to the tax.

The Sales and Use Tax Act further provides for the levy of a use tax (the “Use Tax”) on the use of tangible
personal property brought into the County. The Use Tax is complementary to the Sales Tax and is payable at the
same rate as the Sales Tax in those cases where the Sales Tax would be payable if the tangible property had been
sold within the County. The Sales and Use Tax is levied at one-quarter (1/4) of the rate at which the State sales and
use taxes are levied. The State sales and use taxes are currently levied at the rate of four percent (4%) of the gross
sales or gross receipts, as the case may be, of all businesses subject to the tax, except that the rate with respect to
certain machinery, motor vehicles and trailers is one and one-half percent (1-1/2%). Certain sales are exempt from
both taxes as provided in the Sales and Use Tax Act. The Sales and Use Tax Act further provides that in the event
the present State sales and use tax statutes are repealed, the Sales and Use Tax will continue to be imposed and
levied within the County as if the State sales and use tax statutes had not been repealed.

The Sales Tax is due and payable on or before the 20th day of the month next succeeding the month during
which the tax accrued. The Use Tax is due and payable on or before the 20th day of the month next succeeding the
quarterly period during which the tax accrued. The Sales and Use Tax Act provides that, on or before the 20th day of
the month next following each month during which Sales and Use Tax is levied, the Director of Revenue is required
to make a division of the gross proceeds of these taxes collected by the County as follows:

1. The first one-half share of the gross tax proceeds collected by the County shall be paid
into various funds, departments and accounts of the County as required by law.

2. The second one-half share of the gross tax proceeds is required to be applied as follows:

(a) $100,000 is required to be paid each month to the Authority, and in the event
that such one-half share of the proceeds collected during such preceding calendar month is less
than $100,000, all such one-half share is required to be paid to the Authority;

(b) in the event that the total of the amounts paid to the Authority during the month
(but out of the collections from the then preceding month) from the net proceeds of the Tobacco
Tax and the Lodging Tax, aggregate less than $100,000, such amount of the second one-half share
shall be paid to the Authority as when added to the amounts already paid to the Authority from the
net proceeds of the Tobacco Tax and the Lodging Tax will equal the sum of $100,000 per month;
and

(c) the remaining balance of the second one-half share shall be paid into various
funds, departments and accounts of the County as required by law.

The Authority’s maximum claim to the second one-half share of the proceeds from the Sales and Use Taxes
under present law (the “Authority’s Maximum Annual Sales Tax Claim”) is $2,400,000 per year (the sum of the
amounts which may be realized annually under paragraphs (a) and (b) above).

The Tobacco Tax. The Tobacco Tax is levied in the County pursuant to Act No. 524 enacted at the 1965
Regular Session of the Alabama Legislature, as amended (the “Tobacco Tax Act”). The Tobacco Tax Act provides
that there shall be levied in every county of the State having a population of 500,000 or more, according to the last
or any subsequent federal census (i.e., the County), a license tax on every person who sells, stores or delivers
cigarettes or smoking tobacco in the county, which tax shall be in addition to all other taxes imposed. The rates of
the Tobacco Tax range from $.01 on each package of cigarettes to $.23 on each package depending on the number
of cigarettes and the weight of the tobacco contained in each package.

Under the Tobacco Tax Act, the collection and administration of the Tobacco Tax in the County is the
responsibility of the Director of Revenue who, prior to the 20th day of each month, is required to pay to the
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Authority the proceeds of the Tobacco Tax collected in the next preceding month, after first having deducted one
percent (1%) of the total proceeds for that month to cover the expense of collection and administration. Amounts
shown in Table 7, “Collections of Pledged Taxes”, are net of the expense of collection and administration of the
Tobacco Tax.

The Lodging Tax. A lodging license tax (the “Lodging Tax”) is levied in the County pursuant to Act No.
525 enacted at the 1965 Regular Session of the Legislature of Alabama (the “Lodging Tax Act”). The Lodging Tax
Act provides that there shall be levied in every county of the State having a population of 500,000 or more,
according to the last or any subsequent federal census (i.e., the County), a privilege or license tax on every person
engaged in the county in the business of renting or furnishing any room or rooms, lodging or accommodations, in
any hotel, inn, motel, tourist court or trailer court. The Lodging Tax is imposed at the rate of one percent (l%) of the
charge for such room, rooms, lodging or accommodations, including the charge for use or rental of personal
property and services furnished in such room.

The Lodging Tax Act provides for certain exemptions from the levy of the Lodging Tax. The exemptions
are (a) charges for property sold or services furnished which are required to be included in the tax levied under the
State sales tax legislation (i.e., Act No. 100 of the Second Special Session of 1959 of the Alabama Legislature);
(b) boarding houses, tourist homes and similar establishments regularly offering less than five rooms for rental to
transients; (c) charges for the rental of rooms, lodging or accommodations furnished by any hospital, nursing home,
convalescent home or by any charitable institution; (d) charges for the rental of rooms, lodging or accommodations
to a person for a period of thirty continuous days or more; and (e) charges for the renting or furnishing of space for
the accommodation of a trailer to a person for a period of thirty continuous days or more.

Under the Lodging Tax Act, the collection and administration of the Lodging Tax in the County is the
responsibility of the Director of Revenue who, prior to the 20th day of each month, is required to pay to the
Authority, the proceeds of the Lodging Tax collected in the immediately preceding month after first having deducted
one percent (1%) of the total tax proceeds for that month to cover the expense of collection and administration.
Amounts shown in Table 7, “Collections of Pledged Taxes”, are net of the expense of collection and administration
of the Lodging Tax.

Historical Collections. The following table lists the collections of the taxes and PILOTs described above
for the five years ended August 31, 2017.

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 Collections of Pledged Taxes
------------------------($000s) ------------------------
2013 2014 2015 2016 2017
Special Beverage Tax $2,074 $2,184 $2,435 $2,601 $2,714
Special Lodging Tax 5,955 6,098 6,494 6,748 7,055
Special Car Rental Tax (1) -- -- -- -- --
Payments in Lieu of Taxes (2) 3,707 5,555 6,079 5,836 6,524
Sales and Use Tax 1,200 1,200 1,200 1,200 1,200
Tobacco Tax (3) 702 661 623 624 614
Lodging Tax (3) 1,962 2,009 2,146 2,228 2,322
Totals (1) $15,600 $17,707 $18,977 $19,237 $20,429
___________________
Source: The Authority
Note (1): The Special Car Rental Tax will become effective after the Series 2018 Bonds are issued. The Authority
expects to receive proceeds from this tax beginning in November 2018.
Note (2): Net of allocations to GBCVB pursuant to the GBCVB Allocation Agreement and allocations to the City
pursuant to the CDA Development Agreement. See “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES
2018 BONDS – Description of Pledged Taxes – Payments in Lieu of Taxes (PILOTs)”.
Note (3): Net of 1% retained by the Department of Revenue for the collection and administration of such taxes.

The Authority estimates that the Special Car Rental Tax will generate approximately $3,000,000 per year,
but no historical collection data is available. For an explanation of the basis for this estimate, see “Special Car
Rental Tax” above. No assurance can be given that actual collections with respect to the Special Car Rental Tax
will equal or exceed the Authority’s estimate. The projections in Table 5 assume that the Authority will receive
only 10 months of the Special Car Rental Tax in fiscal year 2019.

City Funding Agreement

Pursuant to the City Funding Agreement, the City is obligated to make payments to the Authority in the
amount of $3,000,000 per year for a period of 30 years (the “City Contributions”) for the purpose of providing a
share of the funding for the Capital Projects. The Authority has pledged and assigned the City Contributions as
security for the Series 2018D Bonds. The City Contributions shall be paid directly to the trustee for the Series
2018D Bonds in 60 equal semi-annual installments of $1,500,000 each due on April 20 and October 20 of each year,
with the first installment due on the 20th day of October, 2018 (each such installment date being 10 days prior to an
interest payment date for the Series 2018D Bonds).

The City’s obligation to make the City Contributions is a general obligation of the City, secured by
the full faith and credit of the City. The City expects to make the City Contributions from proceeds of the City’s
occupational tax, but the City’s obligation to make the City Contributions does not include a special pledge of the
City occupational tax or any other tax revenues collected by the City.

The obligation of the City to make the City Contributions is absolute and unconditional, irrespective of any
rights of set-off, recoupment or counter-claim the City might otherwise have against the Authority. Pursuant to the
City Funding Agreement, the City shall not suspend or discontinue the payment of any City Contributions or
terminate the City Funding Agreement for any cause whatsoever or fail to perform and observe any of its other
agreements and covenants contained therein while the Series 2018D Bonds remain outstanding. The Authority and
the City have also entered into a project cooperation agreement (the “Project Cooperation Agreement”) with respect
to the development and construction of the Capital Projects. If the Authority defaults under the Project Cooperation
Agreement, the City may pursue any remedies at law or in equity to compel performance by the Authority, including

A-27
without limitation an action for specific performance, but no such default shall result in a termination of the City
Funding Agreement or a reduction or delay in the City Contributions.

The Series 2018D Bonds are secured by a pledge of the City Contributions received by the Authority
pursuant to the City Funding Agreement. No other obligations of the Authority are or will be payable from, or
secured by a pledge of and security interest in, the City Contributions. The City-Supported Bond Indenture does not
permit the issuance of additional parity bonds thereunder.

Enforcement of the City Funding Agreement may be limited by (i) bankruptcy, insolvency, or other similar
laws affecting the enforcement of creditors’ rights and (ii) general principles of equity, including the exercise of
judicial discretion in appropriate cases. An example of the possible adverse exercise of equitable principles would
be judicial permission to pay essential operating expenses ahead of debt service.

County Funding Agreement

Pursuant to the County Funding Agreement, the County is obligated to make payments to the Authority in
the amount of $1,000,000 per year for a period of 30 years (the “County Contributions”) for the purpose of
providing a share of the funding for the Capital Projects. The Authority has pledged and assigned the County
Contributions as security for the Series 2018E Bonds. The County Contributions shall be paid directly to the trustee
for the Series 2018E Bonds in 60 equal semi-annual installments due on June 20 and December 20 of each year,
with the first installment due on the 20th day of December, 2018 (each such installment date being 10 days prior to
an interest payment date for the Series 2018E Bonds).

The County’s obligation to make the County Contributions is a general obligation of the County,
secured by the full faith and credit of the County. The County’s obligation to make the County Contributions
does not include a special pledge of any tax revenues collected by the County.

The obligation of the County to make the County Contributions is absolute and unconditional, irrespective
of any rights of set-off, recoupment or counter-claim the County might otherwise have against the Authority. The
County shall not suspend or discontinue the payment of any County Contributions or terminate the County Funding
Agreement for any cause whatsoever or fail to perform and observe any of its other agreements and covenants
contained therein while the County-Supported Bonds remain outstanding.

The Series 2018E Bonds are secured by a pledge of the County Contributions received by the Authority
pursuant to the County Funding Agreement. No other obligations of the Authority are or will be payable from, or
secured by a pledge of and security interest in, the County Contributions. The County-Supported Bond Indenture
does not permit the issuance of additional parity bonds thereunder.

Enforcement of the County Funding Agreement may be limited by (i) bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditors’ rights and (ii) general principles of equity, including the exercise
of judicial discretion in appropriate cases. An example of the possible adverse exercise of equitable principles
would be judicial permission to pay essential operating expenses ahead of debt service.

Corporate Sponsorship and Other Contractual Arrangements

The Series 2018F Private Contribution Bond will be a limited obligation of the Authority payable solely
from and secured by a pledge of (i) contributions to the stadium project by various corporate or university sponsors
or (ii) revenues generated from contractual agreements with respect to the use and operation of the Series 2018
Capital Projects. The various sources of funding for the Series 2018F Private Contribution Bond include the
following:

Corporate Pledge Agreements. Alabama Power Company and Regions Bank will each enter into a pledge
agreement with the Authority providing for contributions from each corporate entity in the amount of $500,000
annually for a period of 10 years. Vulcan Materials and the Greater Birmingham Convention and Visitors Bureau
will each enter into a pledge agreement with the Authority providing for contributions from each corporate entity in

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the amount of $100,000 annually for a period of 10 years. The total funding from the Pledge Agreements will be
$1,200,000 per year for 10 years.

Naming Rights Agreement. The Authority is expected to enter into a naming rights agreement (the
“Naming Rights Agreement”) with a corporate sponsor concerning a naming rights arrangement for the Stadium.
The Naming Rights Agreement is expected to provide certain branding, marketing, advertising and sponsorship
opportunities for the benefit of the sponsor, including interior and exterior signage at the Stadium, certain radio
broadcast advertising rights, publication and merchandising rights, and social media platform rights. In exchange
for the naming rights sponsorship, the sponsor is expected to pay the Authority $1,000,000 per year for 15 years,
commencing in the spring of 2021. The Authority is currently in negotiations with a potential corporate sponsor, but
the Naming Rights Agreement has not been finalized.

Stadium Lease and Marketing Rights for UAB Football. The Authority and The Board of Trustees of The
University of Alabama, for and on behalf of UAB, will enter into a stadium lease for UAB Blazers football games
and a naming and marketing rights agreement providing certain naming and marketing rights to UAB with respect to
the Stadium as the home of UAB football. These agreements between UAB and the Authority relating to UAB
football’s use of the Stadium will generate a total of $500,000 per year for a period of 10 years.

Suite Leases. The Stadium will include approximately 30 premium suites. Each of the corporate and
university sponsors described above will be entitled to the use of a premium suite or suites in connection with its
pledge agreement, naming rights agreement or stadium lease. The Authority will lease the remaining suites for
$50,000 per year for a period of 10 years. The Authority has commitments for all of the available suites from
corporate partners who have agreed to support the funding of the Stadium project. The suite leases will generate a
total of $1,050,000 per year in revenue for the Authority.

DEBT STRUCTURE OF THE AUTHORITY

Current Financing Plan

The financing plan for the Series 2018 Bonds includes (i) refunding of the Authority’s Series 1992 Bonds
and (ii) financing of the Series 2018 Capital Projects. See “PLAN OF FINANCING” in this APPENDIX A.

Outstanding Debt

After giving effect to the issuance of the Series 2018 Bonds and the current financing plan, the Authority
will have the following debt outstanding:

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 Pro Forma Debt of Authority

Outstanding
Principal Source of Payment or
Balance (1) Security
Fixed Rate Debt
Series 2015A Bonds $ 38,825,000 First priority lien on Pledged Tax Proceeds
Series 2018A Bonds 117,360,000 First priority lien on Pledged Tax Proceeds
Series 2018B Bonds 67,535,000 Subordinate lien on Pledged Tax Proceeds
Series 2018C Bonds 9,435,000 Subordinate lien on Pledged Tax Proceeds
Series 2018D Bonds (2) 46,615,000 City Funding Agreement (City general
obligation)
Series 2018E Bonds (3) 15,380,000 County Funding Agreement (County general
obligation)
Series 2018F Bond (4) 31,000,000 Sponsorship and pledge agreements, stadium
lease and suite leases
$326,150,000

Miscellaneous Debt
Series 2011CDA Bonds (5) $64,730,000 CDA City Funding Agreement (City General
Obligation)

Total Debt $390,880,000

Note (1): For the Series 2018 Bonds, this is the expected principal balance upon issuance. These amounts are preliminary
and subject to change. For all other debt, this is the principal balance as of July 2, 2018.
Note (2): These bonds are limited obligations of the Authority payable solely from the payments made by the City to the
Authority under the City Funding Agreement.
Note (3): These bonds are limited obligations of the Authority payable solely from the payments made by the County to the
Authority under the County Funding Agreement.
Note (4): This bond evidences a direct loan from Regions Bank. This bond is a limited obligations of the Authority payable
solely from the payments made to the Authority under the corporate sponsorship agreements and other contractual
arrangements relating to the Stadium project. See “DESCRIPTION OF SOURCES OF PAYMENT FOR SERIES 2018 BONDS
– Corporate Sponsorship and Other Contractual Arrangements” in this Appendix A.
Note (5): These bonds are limited obligations of the Authority payable solely from the payments made by the City to the
Authority under the CDA City Funding Agreement.

Series 2018F Bond Evidencing Regions Bank Loan

The Authority is obtaining a draw-down construction loan (the “Loan”) from Regions Bank (the “Lender”)
to finance a portion of the Capital Projects. The Authority will be able to draw up to $31,000,000 on the Loan. The
Loan will bear interest at a fixed rate. The Authority will make semi-annual interest payments and annual principal
payments on the Loan, which will mature on September 30, 2031. The Loan will be evidenced by the Series 2018F
Bond. The Series 2018F Bond will be a limited obligation of the Authority payable solely from the revenues
derived from the corporate pledge agreements, the naming rights agreement, the stadium lease and marketing rights
agreements and the suite leases described above. The financing agreement with respect to the Loan will not contain
any special covenants for the benefit of the Lender or events of default that would adversely affect the holders of the
other Series 2018 Bonds.

Short-Term Debt

The Authority will not have any outstanding short-term debt when the Series 2018 Bonds are issued.

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Additional Capital Improvements

In addition to the Arena renovation and Stadium projects, the Authority has two significant capital projects
that are expected to be part of its capital budget plans during the next three years: (i) replacement and improvement
of the Authority’s energy infrastructure facilities and (ii) renovation of the Sheraton Hotel facility.

Infrastructure for Energy and Mechanical Systems. The Authority has determined that the infrastructure
for mechanical and energy systems of the Complex must be replaced or upgraded to increase dependability and
efficiency. The infrastructure project will include the acquisition and installation of chillers, boilers, controls,
lighting, electrical and water sub-metering equipment and electrical retrofits. When work is completed, the
improved infrastructure facilities are expected to reduce operating expenses through energy and maintenance cost
savings. The Authority has entered into a performance guaranty contract with Alabama Power Company, which
will assist in the design and construction of the project. The estimated cost of this project is approximately $20
million. Approximately $5 million of the cost is expected to be derived from unrestricted cash reserves of the
Authority, and approximately $15 million of the cost is expected to be financed by a direct loan from one or more
banks. The Authority does not expect this direct loan to be payable from the Pledged Tax Proceeds. The contract
with Alabama Power will provide a performance guaranty on the reduction of operating expenses for a period of 10
years. The guaranteed operating expense savings during the initial 10-year period are expected to be substantially
the same as the annual debt service on the direct loan during the initial 10-year period.

Sheraton Renovation. During the next three years the Authority intends to renovate the Sheraton Hotel in
order to maintain the brand affiliation and enhance occupancy. The renovation plan is in the preliminary stages and
is expected to include full renovation of the hotel’s rooms, partial renovations to the bathrooms, a comprehensive
soft goods renovation in the lobby areas, full renovation of the kitchen space and other food and beverage facilities,
a soft goods renovation of the ballroom space, and additional repairs and maintenance to the hotel’s exterior façade.
The plan will be completed in two separate phases (atrium areas in one phase and room tower renovations in a
second phase) so that the renovations can be completed during low occupancy season. The estimated total cost for
the renovation plan is approximately $30 million. Approximately $5 million of the cost is expected to be derived
from unrestricted cash reserves of the Authority, and approximately $25 million of the cost is expected to be
financed by a direct loan from one or more banks. The Authority does not expect this direct loan to be payable from
the Pledged Tax Proceeds.

Other Capital Projects. The Authority has not approved any other major capital projects for the next three
years. However, the Authority’s capital budget planning is an ongoing process, and it is possible that other capital
projects could be considered and approved during the next three years.

The Stadium project will eliminate some surface parking currently available at the Complex, and additional
event activity expected when the Arena renovation and Stadium projects are completed may require some additional
capital expenditures for parking and traffic control needs. The Authority is initiating a study of various alternatives
to address these needs, including use of existing public parking in the vicinity with complementary public
transportation or shuttle services, acquisition or leasing of property adjacent to the Complex, and possible reductions
in parking and traffic flow needs resulting from ride-sharing services and automated vehicles. It is not possible to
predict what alternative or alternatives will be selected and what capital costs may be required for parking and traffic
flow needs. However, the Authority does not expect significant borrowing for this purpose during the next three
years.

From time to time the Authority receives and considers proposals from governmental entities or private
developers for the construction or development of new facilities that will enhance or complement the civic center
facilities of the Authority. Unless additional tax revenues are approved at the state or local level and allocated to the
Authority (the Authority does not have taxing authority of its own), any new capital project must undergo a
thorough need and feasibility assessment to ascertain that the project will be self-supporting. Except for projects
described above, the Authority has not approved any other significant capital projects.

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Anticipated Debt

As described above, during the next three years the Authority expects to borrow approximately $40 million
in the aggregate for the Sheraton renovation project and the infrastructure project. The borrowing is expected to be
through direct lending from one or more banks. The source of repayment of the borrowing is expected to be
revenues from operations of the Authority, rather than the Pledged Tax proceeds. The Authority does not expect
any additional borrowing during the next three years to finance new facilities or capital improvements to its existing
facilities. This expectation could change depending on the Authority’s assessment of the need to finance new
capital projects and market conditions.

The Authority expects that portions of its outstanding debt may be refunded from time to time. The amount
of debt outstanding is not expected to increase significantly as a result of any refunding.

Series 2011 CDA Bonds

Construction of both Uptown and the Westin Birmingham was financed through the issuance by The
Commercial Development Authority of the City of Birmingham (the “CDA”) of its $71,790,000 Revenue Bonds
(Civic Center Improvement Project), Series 2011 (the “Series 2011 CDA Bonds”). The CDA agreed to use the
proceeds of the Series 2011 CDA Bonds to construct these facilities. When the Series 2011 CDA Bonds were
issued, the CDA also entered into an Agreement of Sale (the “CDA Sale Agreement”) with the Authority in which
the Authority agreed to purchase these facilities upon completion of construction. When the Series 2011 CDA
Bonds were issued the Authority and the City of Birmingham also entered into a Funding Agreement (the “CDA
Funding Agreement”) in which the City agreed to provide funds for the payment of the Series 2011 CDA Bonds.

The CDA Funding Agreement is a full faith and credit obligation of the City that also provides for the
pledge and assignment of certain taxes levied by the City (the “CDA-Related Taxes”). The CDA Funding
Agreement has been assigned to the trustee for the Series 2011 CDA Bonds. Payments under the CDA Funding
Agreement are made by the City directly to the trustee for holders of the Series 2011 CDA Bonds.

In February 2013, after completion of construction of the Westin Birmingham and Uptown, title to those
facilities was transferred by the CDA to the Authority. As required by the terms of the CDA Sale Agreement, the
Authority assumed the payment obligation with respect to the Series 2011 CDA Bonds; however, the Authority’s
obligation for payment of these Bonds is limited solely to the payments by the City pursuant to CDA Funding
Agreement.

The Authority’s financial statements include the amounts payable by the City under the CDA Funding
Agreement as tax proceeds allocated to the Authority. Because those payments are customarily appropriated from
the CDA-Related Taxes, the payments under the CDA Funding Agreement are also reflected as payments from the
CDA-Related Taxes.

In connection with the development of the Westin hotel the Authority and the City entered into a Pre-
Development Agreement (the “CDA Development Agreement”) in which the Authority agreed to pay to the City an
amount equal to 3-1/2% of hotel room charges at the Authority’s hotels. The Authority collects PILOTs with
respect to its hotel room charges in an amount equal to 3-1/2% of room charges and makes a monthly payment in
that amount is made to the City. However, the payment obligation of the Authority to the City under the CDA
Development Agreement is not secured by a pledge of, or lien on, the PILOTS or any other revenues of the
Authority.

Debt Service Requirements on Authority Debt

The table on the following page presents the debt service requirements on all debt of the Authority that will
be outstanding when the Series 2018 Bonds are issued. For principal and interest requirements on the Series 2018
Bonds offered pursuant to this Official Statement, see “PLAN OF FINANCING—Debt Service on the Bonds” in the
front portion of this Official Statement.

A-32
 The debt service table reflects the following assumptions, inclusions and omissions:

Scheduled Mandatory Redemption Requirements. The principal amount of bonds to be retired in a fiscal
year pursuant to mandatory redemption provisions, if any, is shown as maturing in that fiscal year.

Estimated Interest Payments. For purposes of the Preliminary Official Statement, interest on the Series
2018 Bonds is estimated based on current market conditions.

Series 2018 Bond Amounts are Preliminary. Debt service requirements with respect to the Series 2018
Bonds are preliminary and subject to change.

Debt not Included. The table does not include debt service due or previously paid on the Series 1992
Bonds, which are being refunded as part of the plan of financing. The table also does not include the debt service
requirements on the Series 2011 CDA Bonds, which are payable solely out of payments made by the City pursuant
to the CDA Funding Agreement.

A-33
 Debt Service Requirements on Outstanding Authority Debt
(in 000’s)

Senior Lien Bonds Subordinate Lien Bonds

Total Total City County Private
Fiscal Year Total Subordinate Tax- Supported Supported Contribution
Ending Senior Lien Lien Supported Bonds Bonds Bonds
August 31 2015A 2018A(1) Bonds 2018B(1) 2018C(1) Bonds Bonds 2018D(1)(2) 2018E(1)(2) 2018F(1)(2) Total

2019 $3,992 $5,923 $9,915 $3,810 $1,147 $4,958 $14,873 $2,998 $995 $ - $18,866
2020 3,996 5,916 9,911 3,809 1,146 4,955 14,866 3,000 995 - 18,861
2021 3,993 5,922 9,915 3,810 1,146 4,956 14,871 2,998 998 235 19,102
2022 3,996 5,918 9,914 3,806 1,148 4,954 14,868 3,000 995 4,365 23,228
2023 3,996 5,919 9,915 3,805 1,148 4,953 14,868 3,000 997 3,800 22,665
2024 3,996 5,920 9,916 3,804 1,150 4,954 14,870 2,998 998 3,800 22,665
2025 3,996 5,915 9,911 3,806 1,150 4,955 14,867 2,998 998 3,800 22,663
2026 3,998 5,916 9,914 3,806 1,147 4,953 14,867 2,997 998 3,800 22,662
2027 3,996 5,916 9,912 3,810 1,147 4,957 14,869 2,998 997 3,800 22,663
2028 3,995 5,921 9,916 3,807 1,150 4,957 14,873 2,997 1,000 3,800 22,669
2029 3,997 5,916 9,913 4,958 4,958 14,871 2,998 997 3,250 22,115
2030 3,995 5,920 9,915 4,955 4,955 14,870 2,997 998 2,700 21,564
2031 9,914 9,914 4,957 4,957 14,871 2,997 998 5,398 24,264
2032 9,913 9,913 4,954 4,954 14,867 3,000 997 - 18,864
2033 9,912 9,912 4,956 4,956 14,867 3,000 996 - 18,862
2034 9,915 9,915 4,957 4,957 14,872 2,996 998 - 18,865
2035 9,911 9,911 4,958 4,958 14,869 2,999 999 - 18,867
2036 9,911 9,911 4,958 4,958 14,869 2,998 999 - 18,865
2037 9,913 9,913 4,956 4,956 14,869 2,999 997 - 18,865
2038 9,912 9,912 4,953 4,953 14,865 3,000 999 - 18,865
2039 9,913 9,913 4,953 4,953 14,866 2,997 995 - 18,858
2040 9,913 9,913 4,956 4,956 14,870 2,995 1,000 - 18,864
2041 9,914 9,914 4,957 4,957 14,870 2,999 997 - 18,866
2042 9,913 9,913 4,954 4,954 14,867 2,997 999 - 18,863
2043 9,916 9,916 4,958 4,958 14,874 2,996 998 - 18,868
2044 9,916 9,916 4,958 4,958 14,874 2,999 996 - 18,869
2045 9,913 9,913 4,954 4,954 14,866 2,997 997 - 18,859
2046 9,915 9,915 4,955 4,955 14,870 2,998 996 - 18,864
2047 9,912 9,912 4,956 4,956 14,867 2,999 998 - 18,864
2048 9,912 9,912 4,956 4,956 14,868 2,998 998 - 18,863
Total $47,946 $249,457 $297,403 $137,187 $11,480 $148,667 $446,070 $89,939 $29,918 $38,748 $604,676
___________________
Note (1): Preliminary; subject to change.
Note (2): These bonds are not payable from Pledged Tax Proceeds. The Series 2018D Bonds are payable solely from payments by the City pursuant to the City Funding Agreement; the
Series 2018E Bonds are payable solely out of payments by the County pursuant to the County Funding Agreement; and the Series 2018F Bond is payable solely out of the
private contributions.
A-34
Coverage Ratios for Debt Service on Senior Lien Bonds and Subordinate Lien Bonds

Debt Service Coverage Ratios

(Preliminary; subject to change)

Senior Lien Bonds

Maximum annual debt service on Senior Lien Bonds $9.916 million
Average historical Pledged Taxes in FY 2016 and 2017 19.834 million
Coverage based on historical collections 2.0x

Projected Pledged Taxes for FY 2019 (including car rental tax) (1) $22.929 million
Coverage based on projected FY 2019 Pledged Taxes 2.31x

Subordinate Lien Bonds

Maximum annual debt service on Subordinate Lien Bonds $4.958 million
Net average historical Pledged Taxes in FY 2016 and 2017(2) 9.918 million
Coverage based on net historical collections 2.00x
Projected net Pledged Taxes for FY 2019 (including Special Car Rental Tax)(1)
$13.013 million
Coverage based on projected net Pledged Taxes in FY 2019 2.62x

All Bonds Payable from Pledged Tax Proceeds

Maximum annual debt service on all bonds payable from Pledged Taxes $14.874 million
Net historical Pledged Taxes in FY 2016 and 2017 (2) 19.834 million
Coverage based on historical collections 1.33x
Projected net Pledged Taxes for FY 2019 (including Special Car Rental Tax) (1) $22.929 million
Coverage based on projected net Pledged Taxes in FY 2019 1.54x

Note (1): This projection assumes fiscal year 2019 collections of the Pledged Taxes will be equal to fiscal year 2017
collections with no increase ($20.43 million) and that collections of the Special Car Rental Tax in fiscal year 2019
(collections for only 10 months of the year) will be $2.5 million. The Authority expects collections of the Special
Car Rental Tax for a full year in fiscal year 2019 would be approximately $3.0 million. Coverage presented in
management’s Projections for fiscal year 2019 will vary from the ratios presented in this table due to assumed
growth rates applied to the Pledged Taxes in the Projections.
Note (2): Net collections are collections less maximum annual debt service on the Senior Lien Bonds.

Requirements for Additional Bonds

Senior Lien Indenture. The Senior Lien Indenture permits the Authority to issue Additional Bonds which
will be secured by a first priority pledge of the Pledged Tax Proceeds on a parity with the Series 2015A Bonds, the
Series 2018A Bonds and any other Additional Bonds issued under the Senior Lien Indenture, provided that the
Authority satisfies the conditions for issuing Additional Bonds set out in the Senior Lien Indenture. Among other
requirements, to issue Additional Bonds under the Senior Lien Indenture the Authority is required to deliver to the
trustee under the Senior Lien Indenture a certificate of the chief financial officer of the Authority certifying that the
average amount of Pledged Tax Proceeds received during the two most recently completed fiscal years of the
Authority was not less than 200% of the maximum annual debt service payable during the then current or any
subsequent fiscal year with respect to the Bonds outstanding under the Senior Lien Indenture and the Additional
Bonds to be issued. For a complete description of the requirements for issuing Additional Bonds under the Senior
Lien Indenture, see the form of the Senior Lien Indenture in APPENDIX C to the Official Statement for the Series
2018A Bonds.

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 The Senior Lien Indenture provides that any taxes added to the Pledged Tax Proceeds can be included in
the coverage calculation for Additional Bonds only after each rating agency that rates any bonds secured by the
Senior Lien Indenture has confirmed that the addition of such tax will not cause the rating on the secured bonds to
be reduced or withdrawn. The Special Car Rental Tax is being added to Pledged Tax Proceeds in connection with
the issuance of the Series 2018A Bonds. Because the Special Car Rental Tax was not collected in fiscal years 2016
and 2017 (the test years for issuance of the Series 2018A Bonds), the Special Car Rental Tax collections are not
relevant for the issuance of the Series 2018A Bonds as Additional Bonds under the Senior Lien Indenture. The
Authority has applied for rating confirmations with respect to the addition of the Car Rental Tax and expects to
obtain the required rating confirmations.

Subordinate Lien Indenture. The Subordinate Lien Indenture permits the Authority to issue Additional
Bonds which will be secured by a pledge of the Pledged Tax Proceeds, subject and subordinate, however, to the
prior pledge of the Pledged Tax Proceeds to the payment of the obligations issued under the Senior Lien Indenture,
on a parity with the Series 2018B Bonds, the Series 2018C Bonds and any other Additional Bonds issued under the
Subordinate Lien Indenture, provided that the Authority satisfies the conditions for issuing Additional Bonds set out
in the Subordinate Lien Indenture. Among other requirements, to issue Additional Bonds under the Subordinate
Lien Indenture the Authority is required to deliver to the trustee under the Subordinate Lien Indenture a certificate of
the chief financial officer of the Authority certifying that the amount of Adjusted Pledged Tax Proceeds was not less
than 200% of the maximum annual debt service payable during the then current or any subsequent fiscal year with
respect to the Bonds outstanding under the Subordinate Lien Indenture and the Additional Bonds to be issued. For
purposes of this requirement, “Adjusted Pledged Tax Proceeds” means (i) the average amount of Pledged Tax
Proceeds received during the two most recently completed Fiscal Years minus (ii) the maximum Annual Debt
Service (as defined in the Senior Lien Indenture) on the Senior Lien Bonds. For a complete description of the
requirements for issuing Additional Bonds under the Subordinate Lien Indenture, see the form of the Subordinate
Lien Indenture in APPENDIX C to the Official Statement for the Series 2018B Bonds and the Series 2018C Bonds.

DEMOGRAPHICS

General

Birmingham is the most populous city in Alabama, with a 2010 Census population of 212,237. The City is
the county seat of Jefferson County (population 658,466) and is located in north central Alabama within 200 miles
of Atlanta, Nashville, Memphis and Montgomery. Jefferson County, which had a population of 658,466 in 2010, is
the center of the seven-county Birmingham-Hoover Metropolitan Statistical Area (MSA)*, which covers
approximately 5,310 square miles. The seven Birmingham-Hoover MSA counties are: Bibb, Blount, Chilton,
Jefferson, St. Clair, Shelby and Walker. The total population of the 7 counties now comprising the Birmingham-
Hoover MSA was 1,128,047 in 2010. Birmingham is the principal health care, financial, transportation, distribution
and wholesale and retail center of the State. The Medical Center of the University of Alabama at Birmingham and
the facilities of Birmingham’s other hospitals serve as a State and regional center for health care.

The economic and demographic information included in this section demonstrates generally that the
population of the City is declining but that population in surrounding areas is growing and that other economic
statistics for the City and adjacent areas indicate a stable economy. In the early to mid-1980s, the City conducted an
aggressive annexation campaign, increasing the area of the City from approximately 101 to 160 square miles, which
added approximately 1,500 new residents. Much of the land annexed by the City was undeveloped or commercial.
Currently, however, there is no proactive pursuit of annexation.

*
The Birmingham Standard Metropolitan Statistical Area (SMSA) was established in 1967, and originally included Jefferson,
Shelby and Walker Counties. The composition of the MSA has varied over time. Currently, the MSA includes Bibb, Blount,
Chilton, Jefferson, Shelby, St. Clair and Walker Counties. The population figures above include all seven counties.

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Population

The Birmingham-Hoover MSA has experienced steady population growth over the years and is expected to
continue to grow at a moderate rate, as indicated in the table below. It is anticipated that the highest rate of
population growth in the Birmingham-Hoover MSA will occur outside the present city limits of the City of
Birmingham and that the City will continue to serve as an employment, service and cultural center for residents of
the suburban areas. The following table summarizes historical population trends for Birmingham, Jefferson County,
the Birmingham-Hoover MSA, and the State of Alabama.

Historical Population Trends

Jefferson Birmingham- State of

Year Birmingham County Hoover MSA Alabama

2022 217,340 688,538 1,199,087 5,063,778

2017 214,517 675,422 1,169,018 4,951,876
2010 212,237 658,466 1,128,047 4,779,736
2000 242,820 662,047 1,052,238 4,447,100
1990 265,968 651,527 956,858 4,040,389
1980 286,799 671,324 884,040 3,893,888
1970 300,910 644,991 794,083 3,444,165
1960 340,887 634,864 772,044 3,266,740
1950 326,037 558,928 708,721 3,061,743

Sources: Decennial Census: U.S. Census Bureau; 2017 estimate and 2022 forecasts: ESRI, forecast methodology includes
U.S. Census Bureau estimates, county-to-county migration data from the Internal Revenue Service, building
permits and housing starts and residential postal delivery counts.

Employment Statistics

In the past several decades, the Birmingham area economy (along with the economies of other industrial
urban areas) has been adversely affected by the nationwide reduction in activity and employment in the industrial
sector. Over time, the local economy has become increasingly diversified, with service-related industries providing
the majority of jobs in the area. The following tables present information on unemployment, employment by
industry, and the largest employers in the MSA.

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 Comparative Employment Trends

Annual Averages (in thousands)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
City of Birmingham
Labor Force 98.9 98.0 96.2 96.3 94.5 94.2 93.0 92.6 92.5 91.7
Employed 92.2 85.5 83.9 85.2 85.8 86.4 85.7 86.0 86.0 86.9
Unemployed 6.7 12.5 12.3 11.1 8.7 7.8 7.3 6.6 6.5 4.8
Unemployment Rate 6.8% 12.8% 12.8% 11.5% 9.2% 8.3% 7.8% 7.1% 7.0% 5.3%

Jefferson County, AL
Labor Force 311.6 307.0 318.5 319.7 316.5 315.4 312.2 310.8 311.1 309.1
Employed 294.8 274.0 285.6 289.9 293.0 294.4 292.6 293.0 293.3 296.0
Unemployed 16.8 33.0 32.9 29.7 23.4 21.0 19.6 17.9 17.9 13.1
Unemployment Rate 5.4% 10.8% 10.3% 9.3% 7.4% 6.7% 6.3% 5.8% 5.7% 4.2%

Birmingham-Hoover
Labor Force 533.1 526.4 539.8 543.1 540.2 540.6 536.0 535.4 537.7 534.6
Employed 506.2 472.5 486.8 495.5 502.5 506.5 504.0 506.0 508.2 513.0
Unemployed 26.8 53.9 53.0 47.6 37.7 34.0 32.0 29.3 29.5 21.6
Unemployment Rate 5.0% 10.2% 9.8% 8.8% 7.0% 6.3% 6.0% 5.5% 5.5% 4.0%

State of Alabama
Labor Force 2,176.5 2,163.0 2,196.0 2,202.7 2,176.3 2,174.0 2,161.6 2,157.3 2,173.2 2,168.4
Employed 2,053.5 1,924.7 1,964.6 1,990.4 2,003.3 2,017.0 2,015.1 2,020.6 2,045.6 2,073.1
Unemployed 123.0 238.3 231.5 212.3 173.1 157.0 146.5 131.4 127.6 95.3
Unemployment Rate 5.7% 11.0% 10.5% 9.6% 8.0% 7.2% 6.8% 6.1% 5.9% 4.4%

United States
Labor Force 154,287 154,142 153,889 153,617 154,975 155,389 155,922 157,130 159,187 160,320
Employed 145,362 139,877 139,064 139,869 142,469 143,929 146,305 148,834 151,436 153,337
Unemployed 8,924 14,265 14,825 13,747 12,506 11,460 9,617 8,296 7,751 6,982
Unemployment rate 5.8% 9.3% 9.6% 8.9% 8.1% 7.4% 6.2% 5.3% 4.9% 4.4%

Source: Alabama Department of Industrial Relations; Bureau of Labor Statistics.

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 Birmingham-Hoover MSA
Historic Distribution of Non-Agricultural Employment

(Jobs in thousands)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Goods Producing
Mining and Logging 3.1 2.8 3.0 3.4 3.5 3.2 3.0 2.8 2.4 2.2
Construction 32.7 26.8 24.2 24.3 24.6 24.8 24.6 25.3 25.6 26.1
Manufacturing 42.3 36.7 34.7 35.1 37.0 38.2 38.7 38.1 37.7 37.8
Subtotal 78.1 66.3 61.8 62.8 65.1 66.1 66.3 66.2 65.7 66.1

Service Providing
Trade, Transportation, and Utilities 115.0 107.5 105.4 105.8 107.4 108.4 109.0 110.2 110.5 109.9
Information 11.0 10.1 9.5 9.0 8.9 8.9 8.5 8.2 8.0 7.6
Financial Activities 41.4 40.3 39.5 40.0 40.6 41.7 42.2 42.3 42.2 42.2
Professional and Business Services 66.7 60.6 60.2 61.3 63.6 63.2 63.6 65.2 66.0 66.6
Education and Health Services 64.4 64.3 65.1 65.1 66.5 68.0 68.5 69.7 71.3 73.2
Leisure and Hospitality 44.4 43.0 42.5 43.5 44.5 46.2 47.7 48.9 50.4 51.6
Other Services 24.3 23.8 23.7 23.4 23.7 23.7 23.7 23.8 23.9 24.0
Government 83.9 83.8 84.1 82.7 81.4 80.8 81.2 81.5 82.6 83.8
Subtotal 451.1 433.4 430.0 430.8 436.6 440.9 444.4 449.8 454.9 458.7

Total Nonfarm Employment 529.2 499.7 491.8 493.6 501.7 507.0 510.7 516.0 520.6 524.8
___________________

Source: Bureau of Labor Statistics; the data includes all full and part-time non-agricultural wage and salary
employees, but excludes proprietors, self-employed persons, workers in private households and unpaid family
workers.

Largest Employers in the Birmingham-Hoover MSA

2017
Local
Name Industry Employees
University of Alabama at Birmingham Research university and medical center 23,000
Regions Financial Corp. Financial services 9,000
Children's of Alabama Healthcare 4,755
AT&T(1) Telecommunications 4,517
St. Vincent's Health System Healthcare 4,476
Brookwood Baptist Health Healthcare 4,459
BlueCross and BlueShield of Alabama Insurance 3,105
Alabama Power Company(2) Utilities 3,092
Birmingham VA Medical Center Healthcare 2,440
BBVA Compass Financial services 2,285

Note (1): Employees, 2016 data.

Note (2): Jefferson and Shelby County employees only.
Source: Birmingham Business Journal, 2018 Book of Lists

A-39
Health Care

The area’s numerous hospitals and specialized health care facilities have turned the Birmingham area into a
major medical center. UAB, the area’s largest employer, is home to a world-renowned patient-care and research
medical center. The Kirklin Clinic, opened in June 1992 by the University of Alabama Health Services Foundation,
has enhanced the Birmingham area’s reputation in healthcare. Birmingham is Alabama’s center for advanced
technology, with high-technology firms involved in industries such as telecommunications, engineering, aerospace
design and computer services, in addition to health care. Southern Research Institute, located on Birmingham’s
Southside, is the largest nonprofit independent research laboratory located in the Southeast. UAB is ranked among
the top 30 institutions in funding received from the National Institutes of Health.

Per Capita Personal Income

Per capita personal income is defined as the current income from all sources received by one resident in an
area. It is measured before deduction of income and other personal taxes, but after deduction of personal
contributions for social security, government retirement, and other social insurance programs. Per capita personal
income in the Birmingham-Hoover MSA and the County are above average for the State. Per capita personal
incomes in the Birmingham-Hoover MSA are slightly below the national average, while per capita personal incomes
in the County are approximately equivalent to the national average.

The following chart provides a comparison of per capita income among the Birmingham-Hoover MSA,
Jefferson County, the State and the United States:

Comparison of Per Capita Personal Income

1970 1980 1990 2000 2005 2010 2015 2016

Jefferson County $3,629 $9,491 $18,940 $31,201 $37,711 $42,245 $48,542 $49,386
% of US 82.3% 89.2% 92.2% 97.2% 105.0% 104.9% 100.2% 100.3%
Birmingham-Hoover MSA $3,411 $8,983 $17,980 $28,970 $35,493 $38,950 $45,115 $45,795
% of US 77.3% 84.5% 87.5% 90.2% 98.9% 96.7% 93.1% 93.0%
Alabama $3,074 $7,913 $15,820 $24,258 $29,802 $33,697 $38,214 $38,896
% of US 69.7% 74.4% 77.0% 75.5% 83.0% 83.7% 78.9% 79.0%
United States $4,411 $10,636 $20,542 $32,110 $35,904 $40,278 $48,429 $49,204
___________________
Source: Bureau of Economic Analysis, U.S. Dept. of Commerce.

A-40
Housing and Construction

The following table presents certain information about housing starts and construction activity in the area
over the past 10 years:

Residential Construction Activity in Birmingham-Hoover MSA

Single-Family Multi-Family

Permits Value Number Value

Year Issued (000s) of Units (000s)
2008 2,325 415,270 1,034 110,242
2009 1,683 282,759 124 10,473
2010 1,563 275,049 361 37,360
2011 1,795 346,975 567 41,806
2012 1,847 410,574 1,454 97,756
2013 2,035 479,433 1,011 78,501
2014 2,337 524,212 1,046 94,882
2015 2,414 585,974 1,319 118,064
2016 2,701 632,439 762 70,646
2017 2,720 665,736 219 26,413
Source: U.S. Census Bureau.

Education

The Birmingham-Hoover MSA County is home to multiple colleges, universities, junior colleges, and trade
schools, with a combined enrollment of over 60,000. Three of Alabama’s largest 25 colleges and universities are
located in the Birmingham-Hoover MSA, including UAB, Jefferson State Community College, and Samford
University. The largest institution is UAB, which includes the University College, the graduate school, and UAB
Health Services. UAB, featuring a wide range of undergraduate, graduate and professional programs, is the third-
largest educational institution in Alabama, with a total enrollment of approximately 18,655 in the spring of 2017.
UAB Health Services includes the Schools of Medicine, Dentistry, Nursing, Optometry, Public Health and Health-
Related Professions.

Transportation

Birmingham is linked to the rest of the nation via four major interstate highways: I-20, I-59, I-65, and I-22.
I-22 was completed in 2016, linking Birmingham to Memphis, Tennessee. Over 100 truck lines have terminals in
the area. Additionally, Birmingham is served by three Class I major railroads: Norfolk Southern, CSX Corporation,
and Burlington Northern Santa Fe Railway (BNSF). Amtrak also provides service through Birmingham via the
Crescent, which runs a daily passenger service from New Orleans to New York. Barge transportation is available at
Port Birmingham in western Jefferson County. These facilities are part of the Warrior-Tombigbee waterway system,
which provides access to the Port of Mobile in south Alabama. The area is linked with the Tennessee-Tombigbee
waterway system, which connects the County with inland ports in Midwest America. The Birmingham Airport
Authority completed construction on a new state-of-the-art terminal in 2014, which includes a Federal Inspection
Station to facilitate direct international air traffic. Commercial airline service is available through Birmingham's
airport, which is served by four major carriers – American, Delta, United, and Southwest – as well as commuter
airlines. The airport served 2.7 million passengers from June 30, 2016 to June 30, 2017.

Hotels

The table below shows statistical information on the Birmingham area hotel market:

A-41
 Birmingham Area Hotel Market

2016 2017 % change

Number of properties 138 138 0.0%
Total rooms 14,440 14,429 -0.1%
Total available room nights 4,867,470 4,927,263 1.2%
Average daily rate $103.50 $108.76 5.1%
Average occupancy rate 62.8% 65.2% 3.8%
Average guest party size (persons) 2.00 2.05 2.5%
Average length of stay (days) 2.41 2.43 0.8%
Out-of-state (%) 55.0% 55.0% 0%
Alabama (%) 45.0% 45.0% 0%

Source: Greater Birmingham Convention and Visitor’s Bureau

The table below shows the top ten hotels (expressed in terms of total number of rooms) in the Birmingham
area in 2017:

Top Ten Hotels

Hotel Rooms
Sheraton Birmingham* 757
Hyatt Regency Birmingham, The Wynfrey Hotel 329
DoubleTree Hotel Birmingham 298
The Westin Birmingham* 294
Marriott Birmingham 291
Renaissance Birmingham Ross Bridge Golf Resort & Spa 259
Embassy Suites Birmingham 242
Holiday Inn Birmingham Airport 220
Embassy Suites Birmingham/Hoover 208
USA Economy Lodge (Irondale) 207

Source: Greater Birmingham Convention & Visitors Bureau; Smith Travel Research; Birmingham Business Journal, Book of
Lists, 2018
* Owned by the Authority

A-42
Tourism

The following table shows estimated statistical data relating to tourism in the Birmingham area for the
calendar years ended December 31, 2016 and 2017:

Tourism in Birmingham Area

2016 2017 % change

Estimated visitors to Birmingham 4,445,002 4,654,375 4.5%
Accommodations:
Hotels/motels/resort 2,862,182 3,057,808 6.8%
Private homes 1,592,820 1,596,567 0.2%

Economic impact:
Estimated tourist expenditures $1,817,152,651 $1,913,030,885 5.3%
Total full-time job equivalents 44,093 46,006 4.3%
Total resident income ($ millions) $977.73 $1,028.09 5.2%

Governmental revenues generated:

State government ($ millions) $150.83 $158.90 5.3%
Local governments ($ millions) $81.40 $85.55 5.1%

Purpose for trip to Birmingham:

Pleasure 41% 40% -1.0%
Business 46% 47% 1.0%
Meetings/conventions 13% 13% 0.0%

Source: Greater Birmingham Convention and Visitor’s Bureau

A-43
 The following table shows estimates of the financial impact of tourism in the Birmingham area for the
calendar year ended December 31, 2017:

Financial Impact of Tourism

2017 Birmingham tourist expenditures ($ millions)

Lodging $356.47
Shopping 488.02
Food 534.38
Ground transportation 242.86
Recreation 282.94
All Other 8.37
Total $1,913.03

2017 Birmingham recreation expenditures ($ millions)

Popular events admissions $114.04
Sporting events 55.17
Other evening entertainment 43.64
Sightseeing/attractions 18.31
Historic/cultural admissions 21.02
Cultural performance admissions 15.84
Wagering 5.03
Licenses/Permits 5.52
Other recreation 4.36
Total $282.94

Source: Greater Birmingham Convention and Visitor’s Bureau

A-44
 APPENDIX B

Financial Statements of the Authority

[THIS PAGE INTENTIONALLY LEFT BLANK]
BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY

FINANCIAL STATEMENTS

August 31, 2017 and 2016

With Independent Auditor's Report

 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
Birmingham, Alabama

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITOR'S REPORT 1-2

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 3-4

MANAGEMENT'S DISCUSSION AND ANALYSIS 5-9

FINANCIAL STATEMENTS

Statements of Net Position 10

Statements of Activities 11

Statements of Cash Flows 12-13

Notes to the Financial Statements 14-27

 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis of the Birmingham-Jefferson Civic Center Authority's
(hereinafter referred to as the "Authority") financial performance provides an overview of the
financial activities of the Authority for the fiscal years ended August 31, 2017 and 2016. This
discussion and analysis was prepared by members of the Authority's Finance Department. Please
read it in conjunction with the Authority's financial statements, which begin on page 10.

Financial Highlights

The Authority's cash and cash equivalents balance at August 31, 2017 was $8,687,890,
representing an decrease of $(4,693,631) from August 31, 2016. The reason for the decrease is as
a result of transferring $5.5 million into the Authority's reserve investment account:

 The Authority's operating revenues amounted to $68,084,848 in 2017, increasing from

$62,968,229 in 2016. The Authority's operating expenses before depreciation amounted to
$62,197,889 in 2017, increasing from $58,883,279 in 2016. The increase in revenues was
due to higher occupancy in the Sheraton Birmingham Hotel. The Authority experienced a
very active year with numerous concerts, sporting events, and family shows that
contributed to the increase in revenue over the previous year.

 The Authority's special tax proceeds amounted to $18,709,473 in 2017, an increase from
$18,406,194 in 2016. The increase was due to the growth in lodging and liquor tax
proceeds from Jefferson County.

 The Authority experienced an increase in net position of $5,544,018 in 2017.

Overview of Financial Statements

The Financial Statements consist of two parts: Management’s Discussion and Analysis, and the
Basic Financial Statements. The Basic Financial Statements also include notes that explain in
more detail some of the information in the financial statements.

Required Basic Financial Statements

The Authority’s financial statements, reported on an entity-wide basis, are prepared in

accordance with accounting principles generally accepted in the United States of America as
promulgated by the Government Accounting Standards Board (GASB) principles. The financial
statements are prepared on an accrual basis and reflect a special-purpose government engaged in
a single business-type activity.

Statement of Net Position - This statement presents information on all of the Authority’s assets
and liabilities, with the difference between the two reported as net position. This statement
provides information about the nature and the amounts of investments in resources (assets) and
the obligations to Authority creditors (liabilities). It provides one way to measure the financial
health of the Authority by providing a basis for evaluating the capital structure of the Authority
and assessing the liquidity and financial flexibility of the Authority. However, one will need to
consider the other non-financial factors such as changes in economic conditions and new or
changed governmental legislation.
5
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS

The statement, similar to a balance sheet, is presented in the format where “Assets” minus
“Liabilities” equals “Net Position”. Assets and liabilities are presented in order of liquidity. The
focus on the Statement of Net Position is designed to represent the net available liquid (non-
capital) assets, net of liabilities for the Authority. “Net Position” (formerly equity) may be
reported in three broad categories:

 Invested in Capital Assets, Net of Related Debt: This component of net position consists
of all Capital Assets, reduced by the outstanding balances of any bonds, notes or other
borrowings that are attributable to the acquisition, construction, or improvement of those
assets.

 Restricted: This component of net position consists of restricted assets, when constraints
are placed on the asset by creditors (such as debt covenants), grantors, contributors, laws,
regulations, etc.

 Unrestricted: This component consists of net position that do not meet the definition of
the above two categories.

Statement of Activities - This statement presents information concerning the Authority’s

current year revenues and expenses. This statement, similar to an Operating Statement, reflects
the Authority’s income or loss for the period. Revenues and expenses are categorized as either
operating or non-operating based upon the definitions provided by GASB Statement Nos. 33 and
34. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of when cash is received or paid. Thus, revenues and expenses are
reported in this statement for some items that will result in cash inflows and cash outflows in
future periods.

Statement of Cash Flows - This statement complements the accrual-basis financial statements
and presents information showing the total cash receipts and cash disbursements of the Authority
during the current fiscal year. The statement reports cash receipts, cash payments, and net
changes in cash resulting from operations, capital financing, and investing activities. This
statement provides answers to such questions as where did some cash come from, what was cash
used for, and what was the change in cash balance during the reporting period.

Notes to the Financial Statements - Notes to the financial statements provide additional
information that is essential to a full understanding of the data provided. These notes give
greater understanding of the overall activity of the Authority and how values are assigned to
certain assets and liabilities and the longevity of these values. In addition, notes reflect the
impact (if any) of any uncertainty the Authority may face.

A condensed summary of the Authority's net position at August 31, 2017 and 2016 is shown in
Table 1, and a summary of the changes in net position for the years ended August 31, 2017 and
2016, is shown in Table 2 below:

6
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS

Table 1 - Statements of Net Position

2017 2016

Current and other assets $ 80,431,331 $ 70,878,083

Capital assets, net 212,208,449 221,594,882

Total assets 292,639,780 292,472,965

Current liabilities 10,435,744 9,951,467

Payable from restricted assets 8,052,357 7,942,967
Long-term liabilities 118,927,186 124,898,056

Total liabilities 137,415,287 142,792,490

Net Position:
Invested in capital assets, net 89,331,129 92,247,131
Restricted 23,049,179 25,267,077
Unrestricted 42,844,185 32,166,267

Total Net Position $ 155,224,493 $ 149,680,475

Table 2 - Statements of Activities

2017 2016

Total operating revenues $ 68,084,848 $ 62,968,229

Total operating expenses 75,719,611 72,195,863

Operating loss (7,634,763) (9,227,634)

Total non-operating income (expenses) 13,178,781 12,890,591

Change in net position 5,544,018 3,662,957

Net position at beginning of year 149,680,475 146,017,518

Net position at end of year $ 155,224,493 $ 149,680,475

Summary of Cash Flow Activities - The following shows a summary of the major sources and
uses of cash and cash equivalents. Cash equivalents are considered highly liquid investments
with maturity of three months or less:

7
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS

Table 3 - Statements of Cash Flows

2017 2016

Cash provided by (used for) operating

activities $ 4,056,827 $ 4,477,208
Cash provided by (used for) capital and
related financing activities 3,247,299 (4,418,743)
Cash provided by (used for) investing
activities (14,064,560) 680,164
Net increase (decrease) in cash and cash
equivalents (6,760,434) 738,629
Cash and Cash equivalents:
Beginning of the year 36,070,818 35,332,189

End of the year $ 29,310,384 $ 36,070,818

The Authority's financial statements are prepared on an accrual basis in accordance with U.S.
generally accepted accounting principles promulgated by the Governmental Accounting
Standards Board (GASB). The Authority is structured as a single enterprise fund with revenues
recognized when earned, not when received. Expenses are recognized when incurred, not when
they are paid. See notes to the financial statements for a summary of the Authority's significant
accounting policies.

Bonds and Notes Payable Outstanding

In 1992, the Authority issued $18,805,938 of Series 1992 Bonds dated December 1, 1992,
maturing annually from 1993 through 2022, with interest coupons ranging from 3.00 percent to
6.80 percent.

Balance outstanding August 31, 2017 - $2,182,190

In 2011, the Authority entered into a purchase agreement with The Commercial Development
Authority of Birmingham ("CDA"). Per the agreement, the CDA issued a series of 2011-A
Revenue Bonds in the amount of $58,230,000 and 2011-B Revenue Bonds in the amount of
$13,560,000. The Authority entered into an agreement with the CDA to make payments on the
bond debts as they become due beginning with the April 1, 2013 maturity.

The 2011-A Revenue Bonds mature annually on April 1, from 2022 through 2031, and
$37,525,000, of the aggregate balance matures on April 1, 2041. The interest rates range from
5.00% to 5.50%.

Balance outstanding August 31, 2017 - $58,230,000

The 2011-B Revenue Bonds mature annually through April 1, 2022 with an interest rate of
6.00%.

Balance outstanding August 31, 2017 - $7,900,000

8
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS

In 2015, the Authority issued $39,960,000 of Series 2015-A Bonds, dated July 1, 2015, maturing
annually from 2018 through 2021 with coupons ranging from 2.00% to 5.00%.

Balance outstanding August 31, 2017 - $39,960,000

In 2015, the Authority issued $7,170,000 of Series 2015-B Bonds, dated July 1, 2015, maturing
annually from 2015 through 2018, with coupons ranging from 0.35% to 1.70%.

Balance Outstanding August 31, 2017 - $1,415,000

Standard & Poor's, a widely recognized bond rating agency, upgraded the Authority's credit
rating from 'AA-' to 'AA' with a "stable outlook".

Request for Information

This financial report is designed to provide a general overview of the Authority's finances for all
those interested. Questions concerning any of the information provided in this report or request
for additional information should be addressed in writing to the Director of Finance,
Birmingham-Jefferson Civic Center Authority, 2100 Richard Arrington Jr. Blvd. N.,
Birmingham, Alabama 35202 or call 205-458-8479.

Respectfully submitted,
Wayne Averitt, CPA, Director of Finance

9
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
STATEMENTS OF NET POSITION
August 31, 2017 and 2016
2017 2016
ASSETS
Current assets:
Cash and cash equivalents $ 8,687,890 $ 13,381,521
Restricted cash and cash equivalents 20,622,494 22,689,297
Accounts receivable 7,082,202 5,038,907
Inventory 149,225 166,278
Prepaid expenses 455,189 506,397
Total current assets 36,997,000 41,782,400

Investments 40,849,888 26,517,903

Restricted investments 2,584,443 2,577,780
Capital assets, net 212,208,449 221,594,882

Total assets $ 292,639,780 $ 292,472,965

LIABILITIES AND NET POSITION

Current liabilities:
Accounts payable $ 2,208,278 $ 2,729,389
Accrued expenses 4,735,836 3,123,679
Deposit and advance ticket sales 3,165,176 3,753,612
Current portion of unearned income 326,454 344,787
Total current liabilities 10,435,744 9,951,467

Current liabilities payable from restricted assets:

Current portion of bonds payable 2,979,648 2,984,904
Current portion of notes payable 1,400,000 1,280,000
Accrued interest payable 1,737,613 1,774,863
Accreted interest payable 1,935,096 1,903,200
Total current liabilities payable from restricted assets 8,052,357 7,942,967

Long-term liabilities:
Bonds payable 42,119,984 45,208,499
Accreted interest payable 7,974,979 9,117,960
Notes payable 64,730,000 66,130,000
Unearned income 4,102,223 4,441,597
Total long-term liabilities 118,927,186 124,898,056

Total liabilities 137,415,287 142,792,490

NET POSITION
Invested in capital assets net of related debt 89,331,129 92,247,131
Restricted for debt service 19,401,503 22,736,592
Restricted for capital replacements and additions 3,647,676 2,530,485
Unrestricted 42,844,185 32,166,267
Total net position 155,224,493 149,680,475

Total liabilities and net position $ 292,639,780 $ 292,472,965

See accompanying notes to the financial statements. 10

 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
STATEMENTS OF ACTIVITIES
For the years ended August 31, 2017 and 2016

2017 2016
OPERATING REVENUES
Revenues from operations $ 68,084,848 $ 62,968,229

Total operating revenues 68,084,848 62,968,229

OPERATING EXPENSES
Salaries and employee benefits 26,427,912 24,339,324
Utilities 7,520,213 6,865,124
Repairs and maintenance 2,713,740 2,318,824
Rent 52,637 308,057
Management fees 3,612,422 3,446,405
Contract services and labor 5,232,311 4,789,373
Capital equipment 2,404,205 2,522,828
Cost of services 3,298,022 3,747,911
General, administrative and other operating expenses 10,936,427 10,545,433

Total operating expenses before depreciation 62,197,889 58,883,279

Depreciation 13,521,722 13,312,584

Total operating expenses 75,719,611 72,195,863

Operating loss (7,634,763) (9,227,634)

NON-OPERATING REVENUES (EXPENSES)

Special tax proceeds $ 18,709,473 $ 18,406,194
Interest income 668,986 601,292
Interest expense (5,804,777) (6,001,241)
Other non-operating expense (394,901) (115,654)

Total non-operating revenues, net 13,178,781 12,890,591

Changes in net position 5,544,018 3,662,957

Net position at beginning of the year 149,680,475 146,017,518

Net position at the end of the year $ 155,224,493 $ 149,680,475

See accompanying notes to the financial statements. 11

 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
STATEMENTS OF CASH FLOWS
For the years ended August 31, 2017 and 2016

2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 65,095,410 $ 63,545,372
Payments to vendors (36,718,679) (35,757,466)
Payments to employees (24,944,240) (24,001,587)
Receipts from other operating activities 624,336 690,889

Net cash provided by (used for) operating activities 4,056,827 4,477,208

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Principal paid on special tax bonds (3,016,800) (3,030,904)
Interest paid on special tax bonds and notes (7,030,083) (7,084,328)
Special tax proceeds 18,709,473 18,733,071
Principal paid on notes payable and lease obligations (1,280,000) (1,160,000)
Acquisition and construction of capital assets (4,135,291) (11,876,582)

Net cash provided by (used for) capital and related

financing activities 3,247,299 (4,418,743)

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received on investments 668,986 601,292
Purchases of investments (14,331,985) -
Proceeds from sales of investments - 194,526
Unrealized gain/loss on investments (401,561) (115,654)

Net cash provided by (used for) investing activities (14,064,560) 680,164

Net increase in cash and cash equivalents (6,760,434) 738,629

Cash and cash equivalents at beginning of the year 36,070,818 35,332,189

Cash and cash equivalents at end of the year $ 29,310,384 $ 36,070,818

See accompanying notes to the financial statements. 12

 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
STATEMENTS OF CASH FLOWS (CONT'D)
For the years ended August 31, 2017 and 2016

2017 2016
Reconciliation of change in net position to net cash
provided by operating activities:
Operating loss $ (7,634,763) $ (9,227,634)
Adjustments to reconcile change in net position to net
cash provided by operating activities:
Depreciation 13,521,722 13,312,584
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (2,043,295) (599,892)
Decrease (increase) in inventory 17,053 1,184
Increase in prepaid expenses 51,208 (61,382)
Increase (decrease) in accounts payable (521,111) (462,424)
Increase (decrease) in accrued expenses 1,612,156 337,737
Increase in advance deposits and ticket sales (588,436) 1,510,292
Increase in unearned income (357,707) (333,257)

Net cash provided by (used for) operating activities $ 4,056,827 $ 4,477,208

Supplemental disclosure of cash flow information

Cash paid for interest during the year $ 5,842,027 $ 6,033,366

See accompanying notes to the financial statements. 13

 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity
The Birmingham-Jefferson Civic Center Authority ("the Authority") was created by the
legislation of the State of Alabama, as a public corporation authorized to construct, maintain,
operate and manage a civic center in the City of Birmingham, Jefferson County, Alabama.
Jefferson County and the City of Birmingham appropriate specific tax proceeds to enable the
Authority to make annual principal and interest payments on its bonds outstanding. Included in
the financial statements are the Authority and the Sheraton Birmingham Hotel and the Westin
Birmingham Hotel, which are divisions of the Authority.

Basis of Presentation
The Authority's financial statements are reported in accordance with Governmental Accounting
Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of
Resources, Deferred Inflows Resources and Net Position, and follow the accrual basis of
accounting. Net position is classified and reported in three components: invested in capital
assets, net of related debt; restricted net position; and unrestricted net position. These
classifications are defined as follows:

 Invested in capital assets, net of related debt - This component of net position consists of
capital assets, including restricted capital assets, net of accumulated depreciation and reduced
by the outstanding balances of any bonds, mortgages, notes or other borrowings that are
attributable to the acquisition, construction or improvement of those assets. If there are
significant unspent related debt proceeds at year end, the portion of the debt attributable to the
unspent proceeds is not included in the calculation of invested in capital assets, net of related
debt. Rather, that portion of the debt is included in the same net position component as the
unspent proceeds.

 Restricted net position - This component of net position includes assets subject to external
constraints imposed by creditors (such as through debt covenants), grantors, contributors,
laws or regulations of other governments, or constraints imposed by law through
constitutional provisions or enabling legislation.

 Unrestricted net position - This component of net position consists of net assets that do not
meet the definition of "restricted" or "invested in capital assets, net of related debt."

The Authority may fund outlays for a particular purpose from both restricted (e.g., restricted
bond) and unrestricted resources. In order to calculate the amounts to report as restricted-net
position and unrestricted-net position in the enterprise fund financial statements, a flow
assumption must be made about the order in which the resources are considered to be applied. It
is the Authority's policy to consider restricted-net position to have been depleted before
unrestricted-net position is applied.

14
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

The Authority has elected to apply all applicable GASB pronouncements, as well as Financial
Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB)
opinions issued on or before November 30, 1989, unless those pronouncements conflict with or
contradict GASB pronouncements.

On July 1, 2009, the Financial Accounting Standards Board (FASB) released the Accounting
Standards Codification (ASC). The ASC became the single source of authoritative
nongovernmental generally accepted accounting principles (GAAP) and is effective for periods
ending after September 15, 2009. All existing accounting standards documents were superseded,
and any other literature not included in the ASC is considered nonauthoritative. The adoption of
the ASC did not have any impact on the Board's financial condition, results of operations and
cash flows, as the ASC did not change existing GAAP. The adoption of the ASC changes the
approach of referencing authoritative literature by topic rather than by type of standard.
Accordingly, references to former FASB positions, statements, interpretations, opinions,
bulletins or other pronouncements in the Board's notes to basic financial statements are now
presented as references to the corresponding topic in the ASC.

Measurement Focus, Basis of Accounting

The accounting policies of the Authority conform to accounting principles generally accepted in
the United States of America applicable to state and local governmental agencies, and as such,
the Authority is accounted for as a proprietary fund. The basic financial statements presented are
reported using the economic resources measurement focus and the accrual basis of accounting.
Under this method, revenues are recorded when earned and expenses are recorded at the time the
liabilities are incurred, regardless of when the related cash flows take place. Non-exchange
transactions, in which the Authority gives (or receives) value without directly receiving (or
giving) equal value in exchange, include taxes and donations. This measurement focus
emphasizes the determination of the change in the Authority's net assets.

The financial statements are presented in accordance with GASB Statement No. 34, Basic
Financial Statements - and Management's Discussion and Analysis - For State and Local
Governments, GASB Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, and related
GASB pronouncements.

Assets, Liabilities and Equity

Cash and Cash Equivalents

The Authority considers all highly liquid investments with a maturity of three months or less
when purchased to be cash equivalents.

15
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

Receivables
Receivables consist of all revenues earned at year end and not yet received. Allowances for
uncollectible accounts receivable are based upon historical trends and the periodic aging of
accounts receivable.

Inventory
Inventory is carried at the lower of cost (first-in, first-out) or market and consists of food and
beverages for sale at each Hotel's restaurant and lounges, as well as a base supply of linens,
china and silverware used in its facilities.

Fixed Assets
Purchased property, plant and equipment is stated at historical cost or estimated cost if actual
historical cost is not available. Depreciation and amortization is computed using the straight-line
method over the estimated useful lives of 15 to 50 years for buildings and 3 to 15 years for
furniture, fixtures and equipment. The Authority capitalizes all fixed assets in excess of $10,000.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets' lives are not capitalized.

Revenues and Expenses

The Authority, the Sheraton Birmingham Hotel and the Westin Birmingham Hotel recognize
revenues when customers are billed. Expenses are all attributed to business-type activities as the
Authority is operated as one enterprise fund.

The Authority distinguishes operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with the Authority's principal ongoing operations. Operating
expenses include 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.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Fair Value
The authority estimates the fair value of accounts receivable and payable, accrued expense and
notes payable approximates carrying value due to the short term nature of these instruments.

16
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 2 - CASH AND INVESTMENTS

The Authority maintains cash in depository accounts and investments. Investments consist of
certificates of deposit, with maturities ranging from three to twelve months, and United States
Government securities. Certificates of deposit are recorded at cost which approximates market
value. Account balances at August 31 are as follows:

2017 2016

Cash $ 8,687,890 $13,381,521

Certificates of deposit and money
market accounts 5,861,823 2,175,389
United States Government securities 34,988,065 24,342,513

$49,537,778 $39,899,423

The Authority maintains its cash accounts with high credit quality financial institutions. The
Authority had cash and certificate of deposit balances on deposit with one financial institution at
August 31, 2017 and 2016 that exceeded balances insured by the FDIC and are secured by
collateral through the Alabama State Treasury's Security of Alabama Funds Enhancement
(SAFE) Program. Under the SAFE program, the Authority's funds are protected through a
collateral pool administered by the Alabama State Treasury. Certain banks holding deposits
belonging to the state, counties, cities or agencies of any of these entities must pledge securities
as collateral against these deposits. In the event of the failure of a bank, securities pledged by
that bank would be liquidated by the State Treasurer to replace the public deposits. If the
securities pledged failed to produce adequate funds for that purpose, every bank participating in
the pool would share the liability for the remaining balance.

NOTE 3 - FAIR VALUE MEASUREMENTS

SFAS No. 157, Fair Value Measurements, establishes a framework for measuring fair value.
That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements). The hierarchy consists of three broad levels,
described as follows:

Level 1 - Inputs that consist of unadjusted quoted prices for identical assets in active markets
that the Authority has the ability to access.

Level 2 - Inputs consist of 1) quoted prices for similar assets in active markets, 2) quoted
prices for identical or similar assets in inactive markets, 3) inputs other than quoted prices that
are observable, and 4) inputs that are derived principally from or corroborated by observable
market data by correlation or other means. If the asset has a specified (contractual) term, the
Level 2 input must be observable for substantially the full term.

17
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 3 - FAIR VALUE MEASUREMENTS (CONT'D)

Level 3 - Inputs consist of unobservable inputs where there is little or no market activity, and
the reporting entity makes estimates and assumptions related to the pricing of the asset
including assumptions regarding risk.

The asset's fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement. Valuation techniques used
need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for assets measured at fair
value:

Certificates of deposit, money market accounts and United States Government securities -
The carrying amount approximates fair value.

The preceding methods described may produce a fair value calculation that may not be indicative
of net realizable value or reflective of future fair values. Furthermore, although the Authority
believes its valuation methods are appropriate and consistent with other market participants, the
use of different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.

All of the Authority's investments are Level 1 investments (See Notes 2 and 5).

NOTE 4 - CAPITAL ASSETS

Capital assets consisted of the following at August 31:

2017 2016
Land and improvements $ 50,052,504 $ 50,027,569
Exhibition hall 73,298,630 73,298,630
Mechanical plant 3,953,673 3,953,673
Concert hall and theater 31,704,305 31,704,305
Arena 31,073,525 31,073,525
Sheraton Hotel 94,965,001 91,916,987
Sheraton restaurant 702,938 702,938
Medical forum 32,110,009 32,107,771
Parking deck 9,458,906 9,458,906
Office building 3,352,329 3,352,329
Equipment 41,947,025 41,528,809
Message center 157,680 157,680
Westin furniture and equipment 6,003,120 6,003,120
Westin Hotel 53,392,348 53,392,348
Westin restaurant 4,538,558 4,538,558
Entertainment district 22,592,281 22,484,131
Construction in progress 8,132,371 7,598,635
467,435,203 463,299,914
Less: accumulated depreciation (255,226,754) (241,705,032)

$ 212,208,449 $ 221,594,882

18
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - CAPITAL ASSETS (CONT'D)

Balances of major classes of capital assets and accumulated depreciation at August 31, 2016, and
changes therein for the year then ended, are as follows:
Balance at Balance at
August 31, August 31,
2016 Increases Decreases 2017
Nondepreciable:
Land $ 49,241,248 $ 24,935 $ - $ 49,266,183
Construction-in-progress 7,598,635 533,736 - 8,132,371
Depreciable:
Buildings 364,446,282 2,871,429 - 367,317,711
Leasehold improvements 1,833,678 206 - 1,833,884
Furniture and equipment 40,180,071 704,983 - 40,885,054
Less accumulated depreciation (241,705,032) (13,521,722) - (255,226,754)

Capital assets, net $ 221,594,882 $ (9,386,433) $ - $ 212,208,449

Balances of major classes of capital assets and accumulated depreciation at August 31, 2016, and
changes therein for the year then ended, are as follows:
Balance at Balance at
August 31, August 31,
2015 Increases Decreases 2016
Nondepreciable:
Land $ 43,118,354 $ 6,122,894 $ - $ 49,241,248
Construction-in-progress 3,210,785 4,744,578 (356,728) 7,598,635
Depreciable:
Buildings 362,563,155 1,365,838 - 364,446,282
Leasehold improvement 1,833,678 - - 1,833,678
Furniture and equipment 40,180,071 - - 40,180,071
Less accumulated depreciation (228,392,448) (13,312,584) - (241,705,032)

Capital assets, net $ 222,513,595 $ (1,079,274) $ (356,728) $ 221,594,882

NOTE 5 - RESTRICTED ASSETS

The 1992, 2002, 2005, and 2015 Bond Resolutions (See Note 6) require that certain funds be
maintained by a trustee as long as any of the bonds remain outstanding. Additionally, in
accordance with the terms of the Management Agreement, each Hotel maintains a restricted cash
fund account which must be held and invested by the Authority. The interest bearing account is
for the purpose of establishing a reserve for replacements and additions to furniture and
equipment.

Restricted asset accounts at August 31, were comprised of the following:

2017 2016

Cash and cash equivalents $ 20,622,494 $ 22,689,297

United States Government securities 2,584,443 2,577,780

$ 23,206,937 $ 25,267,077

19
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 5 - RESTRICTED ASSETS (CONT'D)

Restricted asset accounts at August 31, were comprised of the following:

2017 2016

SERIES 1992 BONDS

Bond Fund - Created for the purpose of payment of
the principal and interest on the bonds when due. $ 2,584,443 $ 2,577,780

SERIES 2015-A & B BONDS

Bond Fund - Created for the purpose of
payment of the principal and interest on
the bonds when due. 16,817,060 20,158,812

RESERVE FUND
Held by and invested by the Authority in an interest
bearing account for the purpose of establishing a
reserve for replacements and additions to furniture
and equipment for the Hotels as indicated in the
Management Agreement. 3,805,434 2,530,486

$ 23,206,937 $25,267,078

NOTE 6 - BONDS PAYABLE

At August 31, bonds payable consisted of the following:

2017 2016
Refunding and capital outlay special tax bonds,
Series 1992 $ 2,182,190 $ 2,646,523
Special Tax Bonds, Series 2015-A 41,502,442 41,611,880
Special Tax Bonds, Series 2015-B 1,415,000 3,935,000
45,099,632 48,193,403
Less: current installments (2,979,648) (2,984,904)

$42,119,984 $45,208,499

20
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 6 - BONDS PAYABLE (CONT'D)

1992 Series
The refunding and capital outlay special tax bonds, 1992 Series ("1991 Series"); outstanding at
August 31, 2016 consist of capital appreciation bonds (original issue discount bonds). The
capital appreciation bonds accrete interest payable at maturity and mature as follows:

Interest
Original Approximate Accreted to
Year Ending Principal Yield to August 31,
August 31, Amount Maturity 2017

2018 $ 429,648 6.75% $ 1,780,944

2019 401,856 6.80% 1,669,910
2020 375,864 6.80% 1,561,891
2021 351,552 6.80% 1,460,861
2022 328,824 6.80% 2,644,354

$ 1,887,744 $ 9,117,960

The 1992 Series bonds are secured by a pledge of the Sales and Use Tax, Tobacco Tax, and
Lodging Tax.

2015-A Series
On March 11, 2015, the Authority issued $39,960,000 of Series 2015-A Bonds, maturing July 1,
2030, with varying rates from 2.00 to 5.00%, payable on July 1 and December 1 of each year.
The Series 2015-A bonds were issued for the purpose of currently refunding the Authority's
Special Tax Bonds, Series 2005-A and to fund certain capital improvements. Future debt service
payments for the 2015-A Series are as follows:

Year ending August 31, Principal Interest

2018 $ 1,135,000 $ 1,419,156

2019 2,630,000 1,362,406
2020 2,765,000 1,230,906
2021 2,845,000 1,147,956
2022-2026 15,830,000 4,151,794
2027-2030 14,755,000 1,228,138

$39,960,000 $10,540,356

The Authority increased its aggregate debt service by approximately $3,101,011 over the next 15
years an incurred an economic gain (the difference between the present values of the old debt
service requirements and the new debt service requirements) of approximately $1,122,818.

21
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 6 - BONDS PAYABLE (CONT'D)

2015-B Series
On February 25, 2015, the Authority issued $7,170,000 of Series 2015-B Bonds, maturing July
1, 2030, with varying rates from 0.35 to 1.70%, payable on July 1 and December 1 of each year.
The Series 2015-B bonds were issued for the purpose of currently refunding the Authority's
Special Tax Bonds, Series 2011. Future debt service payments for the 2015-B Series are as
follows:

Year ending August 31, Principal Interest

2018 $ 1,415,000 $ 24,055

$ 1,415,000 $ 24,055

The Authority decreased its aggregate debt service by approximately $ over the next four years
and incurred an economic loss (the difference between the present value of the old debt service
requirements and the new debt service requirements) of approximately $.
Balance at Balance at
August 31, August 31, Due Within
2016 Additions Payments 2017 One Year
Bonds payable
Refunding and capital outlay
special tax bonds, Series 1992 $ 2,849,448 $ - $ (464,904) $ 2,384,544 $ 429,648
Special tax bonds, Series 2015-A 39,960,000 - - 39,960,000 1,135,000
Special tax bonds, Series 2015-B 3,935,000 - (2,520,000) 1,415,000 1,415,000
Premium 1,757,575 - (127,054) 1,630,521 -
Discount (202,924) 32,467 - (170,457) -

Total bonds payable $ 48,299,099 $ 32,467 $ (3,111,958) $ 45,219,608 $ 2,979,648

Balance at Balance at
August 31, August 31, Due Within
2015 Additions Payments 2016 One Year
Bonds payable
Refunding and capital outlay
special tax bonds, Series 1992 $ 3,346,248 $ - $ (496,800) $ 2,849,448 $ 464,904
Special tax bonds, Series 2015-A 39,960,000 - - 39,960,000 -
Special tax bonds, Series 2015-B 6,435,000 - (2,500,000) 3,935,000 2,520,000
Premium 1,884,628 - (127,053) 1,757,575 -
Discount (358,704) 155,780 - (202,924) -

Total bonds payable $ 51,267,172 $ 155,780 $ (3,123,853) $ 48,299,099 $ 2,984,904

22
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 7 - NOTES PAYABLE

The Authority entered into a purchase agreement with The Commercial Development Authority
of Birmingham ("CDA'') in February 2011. Per the agreement, the CDA issued revenue bonds
totaling $71,790,000 under a trust indenture with a financial institution (the 'Trustee"). The
proceeds from the issuance will be used to finance the costs of acquiring, constructing and
equipping the Birmingham Westin Hotel project and the Entertainment District.

The Birmingham Westin Hotel project was completed and the title was transferred to the
Authority in February 2012 along with title to the Entertainment District project which is still
under development. The city of Birmingham will make payments in April and October on the
bond debt to the Trustee from the tax proceeds received on the behalf of the Authority. The note
payable follows the debt maturity schedule as follows:

Year Principal Interest Annual Monthly Accrued

Maturity Amount Rate Interest Interest Interest
2011-A

4/1/2023 $ 1,875,000 5.00% 93,750 7,813 $ 39,063

4/1/2024 1,970,000 5.00% 98,500 8,208 41,042
4/1/2025 2,070,000 5.00% 103,500 8,625 43,125
4/1/2026 2,170,000 5.00% 108,500 9,042 45,208
4/1/2027 2,280,000 5.00% 114,000 95,000 47,500
4/1/2028 2,395,000 5.00% 119,750 9,979 49,895
4/1/2029 2,515,000 5.25% 132,038 11,003 55,016
4/1/2030 2,645,000 5.25% 138,863 11,572 57,859
4/1/2031 2,785,000 5.25% 146,213 12,184 60,922
4/1/2041 37,525,000 5.50% 2,063,875 171,990 859,948

$ 58,230,000 $ 1,299,578

Year Principal Interest Annual Monthly Accrued

Maturity Amount Rate Interest Interest Interest
2011-B

4/1/2018 $ 1,400,000 6.00% 84,000 7,000 $ 35,000

4/1/2019 1,485,000 6.00% 89,100 7,425 37,125
4/1/2020 1,575,000 6.00% 94,500 7,875 39,375
4/1/2021 1,670,000 6.00% 100,200 8,350 41,750
4/1/2022 1,770,000 6.00% 106,200 8,850 44,250

$ 7,900,000 $ 197,500

23
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 7 - NOTES PAYABLE (CONT'D)

Activity during 2017 related to long-term debt principal obligations is as follows:

Balance at Balance at
August 31, August 31, Due Within
2016 Additions Payments 2017 One Year
Notes payable
Commercial Development Authority of the City
of Birmingham, Series 2011-A $ 58,230,000 $ - $ - $ 58,230,000 $ -
Commercial Development Authority of the City
of Birmingham, Series 2011-B 9,180,000 - (1,280,000) 7,900,000 1,400,000

Total notes payable $ 67,410,000 $ - $ (1,280,000) $ 66,130,000 $ 1,400,000

Activity during 2016 related to long-term debt principal obligations is as follows:

Balance at Balance at
August 31, August 31, Due Within
2015 Additions Payments 2016 One Year
Notes payable
Commercial Development Authority of the City
of Birmingham, Series 2011-A $ 58,230,000 $ - $ - $ 58,230,000 $ -
Commercial Development Authority of the City
of Birmingham, Series 2011-B 10,340,000 - (1,160,000) 9,180,000 1,280,000

Total notes payable $ 68,570,000 $ - $ (1,160,000) $ 67,410,000 $ 1,280,000

NOTE 8 - OPERATING LEASE

On January 15, 1997, the Authority entered into a lease-lease back arrangement to finance the
cost of certain improvements to the Civic Center Facility ("the Facility"). Under the
arrangement, the Authority created a Trust and leased ("the Headlease") the Facility to a limited
liability corporation, which in turn leased ("the Sublease") the Facility to the Authority's Trust.
The Trust granted the Authority the exclusive right and responsibility for opening the Facility.

The terms of the Headlease and the Sublease contained provisions, which allow the lessee to
prepay the basic rent, which began on January 2, 1997, and continues through January 2, 2022,
and the renewal option rent, which begins on January 2, 2022, and continues through January 2,
2037. On January 15, 1997, the Sublessee exercised its option to prepay the basic and renewal
option rent. Simultaneous with the execution of the Headlease, the Authority entered into other
agreements which are part of the lease-lease back transaction.

Under the Sublease agreement, the Sublease has an option to purchase the Facility at a price
equal to the Facility's cost multiplied by 105%. Management of the Authority anticipates
executing the option purchase is unlikely.

To finance the Headlease rent payment and lease term renewal payment, the Headlessee entered
into a loan agreement with Hollandsched Bank- Unie, NV ("the Loan Participant"). As security
for the loan, the Loan Participant was granted a first priority security interest, mortgage lien in
the Facility, the Hotels and office complex facilities of the Headlessee and the Authority.

24
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 8 - OPERATING LEASE (CONT'D)

Additional financing for the Headlease and Sublease basic rent payment and term renewal
payment was provided by NationsBank Credit Commercial Corporation ("the Investment
Participant") in exchange for all of the tax benefits of the lease transaction.

Accordingly, the Trust entered into a tax indemnification agreement with the Investment
Participant. Under the agreement, the Trust and the Authority would indemnify the Investment
Participant for any loss of tax benefits resulting from a failure to perform certain provisions of
the various agreements subject to certain limitations and exclusions.

As a result of the lease-leaseback transaction, all rent payments received upon the exercise of the
lease prepayment option were recorded as unearned income to be recognized annually on a
straight-line basis. The Authority recognizes $243,377 each year and did so during the year
ended August 31, 2017. At August 31, 2017 and 2016, the related liability was $3,894,025 and
$4,137,402, respectively.

NOTE 9 - COMPENSATED ABSENCES

Full-time employees of the Authority accrue annual vacation at the rate of one day per month
during the first fifteen years of service; one and one-half days thereafter; and two days per month
after twenty-five years of service. Employees are eligible to take earned vacation time after six
months of service.

The maximum amount of vacation an employee may carry-over to the next year is forty days.
Upon voluntary separation of employment from the Authority, employees will be compensated
for a maximum of forty days of unused vacation. Amounts earned but not yet used totaled
$504,806 and $492,591 at August 31, 2017 and 2016 and are included in accrued expenses on
the Statements of Net Position.

Full-time and part-time employees of the Hotels who have completed the requisite vesting
periods accrue Paid Time Off ("PTO") that is equally divided between two types; Vacation PTO
and Holiday/Sick PTO. The rate of accrual is based on years of service and is accrued at a fixed
rate per hour worked. The maximum amount of PTO an employee may carryover to the next
year is also based on years of service. Upon voluntary separation of employment from the Hotel
after a minimum one year of service, the terminating employee is compensated for all vested and
available Vacation PTO. Terminating employees are not compensated for remaining
Holiday/Sick PTO. All PTO amounts earned but not yet used totaled $592,094 and $692,388 at
August 31, 2017 and 2016, respectively, and are included in accrued expenses on the Statements
of Net Position.

25
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 10 - PENSION AND SAVINGS PLAN

The Authority is the sponsor of a defined contribution pension and savings plan ("the Plan") for
the benefit of all employees who have completed one half year of continuous service and have
attained the age of 21. The Authority contributes 7% of annual compensation of eligible
employees to the Plan. Employees participating in the Plan may make after-tax contributions
ranging up to 10% of their compensation. Participants are immediately vested in their voluntary
contributions plus earnings thereon. Vesting in the employer contribution account is based on
years of service. Participants are fully vested after seven years of service. The Authority's policy
is to fund pension cost accrued. Total pension expense for the years ended August 31, 2017 and
2016 was $413,317 and $399,021, respectively.

The Hotel has a defined contribution pension plan (the "401k") which provides that eligible
employees may defer payments of taxes on a portion of their salary by making contributions to
the 401k through payroll deductions. Individual employee benefits under the 401k are based
upon the amount accumulated for each eligible employee as a result of the Hotel's contributions,
up to four percent of the employees' contributions, and any voluntary contribution made by the
employee. The total pension expense for the years ended August 31, 2017 and 2016 was
$256,792 and $215,937, respectively.

NOTE 11 - CONTINGENCIES

The Authority is involved in various other lawsuits. The lawsuits are in the early stages of
litigation, and no gain or loss contingency can be estimated. Consequently, no financial
statement accruals have been recorded. In the opinion of the Authority's legal counsel, the
potential, adverse impact of these lawsuits would not have a material effect on the financial
statements.

NOTE 12 - RELATED PARTY

The Sheraton Birmingham Hotel entered into a management agreement with the Sheraton
Operating Corporation, a related party, as of September 1, 2011. Sheraton Operating Corporation
received management fees of $3,154,895 and $2,794,571 for the years ended August 31, 2017
and 2016, respectively. At August 31, 2017 and 2016, Sheraton Birmingham Hotel had accounts
payable due to the Sheraton Operating Corporation in the amounts of $373,539 and $435,240,
respectively. Those amounts are included in accounts payable on the Statements of Net Position.

The Westin Birmingham Hotel entered into a management agreement with the Sheraton
Operating Corporation, a related party. Sheraton Operating Corporation received management
fees of $1,606,648 and $1,613,941 for the years ended August 31, 2017 and 2016, respectively.
At August 31, 2017 and 2016, Westin Birmingham Hotel had accounts payable due to the
Sheraton Operating Corporation in the amounts of $152,967 and $110,239, respectively. Those
amounts are included in accounts payable on the Statements of Net Position.

26
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY
NOTES TO FINANCIAL STATEMENTS

NOTE 13 - SUBSEQUENT EVENTS

The Authority has evaluated subsequent events through, January 26, 2018, which is the date the
financial statements were available to be issued and concluded that, other than the event
described in the preceding paragraph, no events or transaction occurred during that period
requiring recognition or disclosure.

NOTE 14 - RISK MANAGEMENT

The Authority is exposed to various risks of losses related to torts; theft of, damage to and
destruction of assets; errors and omissions, injuries to employees, and natural disasters. The
Authority has purchased commercial insurance for all risk above minimal deductible amounts. In
addition, all tenants and users of the Authority are required to have commercial insurance
coverages naming the Authority as additional insured.

No liability is recorded at August 31, 2017, for any outstanding claims or for any potential
claims incurred but not reported as of that date. Settled claims have not exceeded these
commercial coverages by any material amounts during the year ended August 31, 2017.

NOTE 15 - MANAGEMENT REVIEW

Management of the Authority has reviewed the financial statements and related notes on January
26, 2018.

27
[THIS PAGE INTENTIONALLY LEFT BLANK]
 APPENDIX C

Information About the City

 INFORMATION ABOUT THE CITY

TABLE OF CONTENTS

Page

CITY GOVERNMENT AND ADMINISTRATION ............................................................................................................... C-1

General.................................................................................................................................................................. C-1
Certain City Executive, Administrative and Legislative Officials ........................................................................ C-1
OPERATING DEPARTMENTS ........................................................................................................................................ C-2
SERVICES , DEPARTMENTS AND AGENCIES OF THE CITY ............................................................................................ C-4
General.................................................................................................................................................................. C-4
Office of the City Clerk ........................................................................................................................................ C-5
Department of Finance ......................................................................................................................................... C-5
Police Department ................................................................................................................................................ C-6
Fire Department .................................................................................................................................................... C-6
Park and Recreation Board ................................................................................................................................... C-6
Birmingham Zoo................................................................................................................................................... C-7
Other City Departments ........................................................................................................................................ C-7
Independent Boards and Authorities ..................................................................................................................... C-7
CITY LABOR RELATIONS ............................................................................................................................................ C-9
CITY FINANCIAL SYSTEM ........................................................................................................................................... C-9
Budget System .................................................................................................................................................... C-10
Accounting System ............................................................................................................................................. C-11
Comparative Statements ..................................................................................................................................... C-12
Comparison of Budget to Actual - General Fund ............................................................................................... C-14
Budget................................................................................................................................................................. C-17
City Pension Obligations .................................................................................................................................... C-17
Historical Funding Progress for City Pension Obligations Unfunded Actuarial Liability .................................. C-18
Other Post-Employment Benefits ....................................................................................................................... C-19
CITY GENERAL FUND REVENUES ............................................................................................................................. C-20
Ad Valorem Taxes .............................................................................................................................................. C-20
Sales and Use Taxes ........................................................................................................................................... C-20
Occupational Taxes ............................................................................................................................................ C-21
License and Permit Revenues ............................................................................................................................. C-21
Intergovernmental Revenue ................................................................................................................................ C-21
AD VALOREM TAXES ............................................................................................................................................... C-21
General................................................................................................................................................................ C-21
Classification of Taxable Property...................................................................................................................... C-21
Assessment Ratio Adjustment ............................................................................................................................ C-22
Rate Adjustments ................................................................................................................................................ C-22
Ceiling on Ad Valorem Taxes ............................................................................................................................ C-22
Ad Valorem Tax Rates ....................................................................................................................................... C-24
Homestead Exemption ........................................................................................................................................ C-24
Tax Increment Financing District ....................................................................................................................... C-25
Significant Property Tax Litigation .................................................................................................................... C-25
Assessment and Collection ................................................................................................................................. C-25
Additional Ad Valorem Tax Information ........................................................................................................... C-26
Ad Valorem Tax Revenue .................................................................................................................................. C-26
SALES AND USE TAXES ............................................................................................................................................ C-27
General................................................................................................................................................................ C-27
Sales and Use Tax Revenue ................................................................................................................................ C-28
OCCUPATIONAL TAX ................................................................................................................................................ C-28
General................................................................................................................................................................ C-28
Occupational Tax Revenue ................................................................................................................................. C-29
LICENSE AND PERMIT REVENUES ............................................................................................................................. C-29
General................................................................................................................................................................ C-29
Business License and Permit Revenues .............................................................................................................. C-30
CITY DEBT MANAGEMENT ....................................................................................................................................... C-30
General Obligation Bond Debt Service .............................................................................................................. C-31
General Obligation Warrants Debt Service ........................................................................................................ C-31
Authorized But Unissued Debt; Future Debt Issuance ....................................................................................... C-31
General Obligation Bonds .................................................................................................................................. C-31
General Obligation Warrants .............................................................................................................................. C-33
Tax Increment Financing Warrants .................................................................................................................... C-33
Commercial Development Authority of the City of Birmingham 2011 Funding Agreement............................. C-33
Funding Agreement for Expansion of Birmingham-Jefferson Convention Complex ......................................... C-34
Public Athletic, Cultural and Entertainment Facilities Board Funding Agreement ............................................ C-34
Birmingham Zoo Obligations ............................................................................................................................. C-35
Economic Development Incentive Obligations .................................................................................................. C-35
Derivatives Transactions..................................................................................................................................... C-37
Other Debt Obligations ....................................................................................................................................... C-37
Constitutional Debt Limitation ........................................................................................................................... C-38
Debt Ratios ......................................................................................................................................................... C-40
Debt Service ....................................................................................................................................................... C-41
ECONOMIC AND DEMOGRAPHIC INFORMATION ........................................................................................................ C-43
General................................................................................................................................................................ C-43
Population ........................................................................................................................................................... C-43
Employment Statistics ........................................................................................................................................ C-44
Per Capita Personal Income ................................................................................................................................ C-47
Education ............................................................................................................................................................ C-48
Housing and Construction .................................................................................................................................. C-49
Bank Deposits ..................................................................................................................................................... C-51
Airport Traffic .................................................................................................................................................... C-52
LITIGATION .............................................................................................................................................................. C-52
UNITED STATES BANKRUPTCY CODE ....................................................................................................................... C-53

Governmental Services Provided by the City and Others............................................................................ C-4

Appropriations from General Fund ............................................................................................................. C-5
City of Birmingham, Alabama General Fund Condensed Statement of Revenues, Expenditures and Changes
in Fund Balance ............................................................................................................................................... C-13
City of Birmingham, Alabama Combined General Bond Debt Reserve Fund and General Bond Debt
Service Fund Condensed Statement of Revenues, Expenditures and Changes in Fund Balance .................... C-14
City of Birmingham, Alabama General Fund Comparative Statement of Revenues, Expenditures and
Changes In Fund Balance—Budget and Actual—Budgetary Basis ................................................................ C-15
City of Birmingham, Alabama General Fund Comparative Statement of Revenues, Expenditures and
Changes In Fund Balance—Budget and Actual—Budgetary Basis ................................................................ C-16
City of Birmingham, Alabama General Fund Budget ............................................................................... C-17
City of Birmingham, Alabama Unfunded Actuarial Liability for Retirement and Relief Plan ................. C-18
City of Birmingham, Alabama Unfunded Actuarial Liability for Fireman’s & Policeman’s Supplemental
Plan .................................................................................................................................................................. C-19
General Fund Revenue Sources ............................................................................................................... C-20
Ad Valorem Tax Rates ............................................................................................................................ C-24
Ad Valorem Tax Revenues...................................................................................................................... C-26
Historic Sales and Use Tax Revenues ..................................................................................................... C-28
Historic Occupational Tax Revenues ...................................................................................................... C-29
Historic Business License and Permit Revenues ..................................................................................... C-30
Outstanding General Obligation Bonds ................................................................................................... C-32
Outstanding General Obligation Warrants............................................................................................... C-33
City of Birmingham, Alabama Computation of Legal Debt Margin ....................................................... C-39
Statement of Debt to Assessed Value, and Debt Per Capita .................................................................... C-41
Debt Service Requirements ..................................................................................................................... C-42
Population Trends .................................................................................................................................... C-43
Comparative Employment Trends ........................................................................................................... C-44
Largest Employers in the Birmingham-Hoover MSA ............................................................................. C-45
Birmingham-Hoover MSA Historic Distribution of Non-Agricultural Employment .............................. C-46
Comparison of Per Capita Income ........................................................................................................... C-47
Household and Family Income ................................................................................................................ C-48
Institutions of Higher Education in Jefferson County ............................................................................. C-49
Educational Levels .................................................................................................................................. C-49
Birmingham MSA Housing Units ........................................................................................................... C-50
New Privately-Owned Residential Building Permits City of Birmingham ............................................. C-50
New Privately-Owned Residential Building Permits Birmingham-Hoover MSA .................................. C-51
Deposits in FDIC-Insured Institutions ..................................................................................................... C-51
Birmingham-Shuttlesworth International Airport Passengers Arriving & Departing.............................. C-52
 CITY GOVERNMENT AND ADMINISTRATION

General

Incorporated in 1871, Birmingham is governed by an elected Mayor and an elected City Council.

The City Council is the legislative body of the City, and the Mayor is the City's chief executive officer. The
City has been governed since 1963 under a mayor-council form of government established pursuant to Act No. 452
adopted at the 1955 Regular Session of the Legislature of Alabama, as amended. The Mayor and members of the City
Council are elected by the voters of the City for terms of four years. On October 10, 1989, all City Council members
were elected for the first time from single member districts. The Mayor appoints, without confirmation of the City
Council, the City Attorney, the Director of Finance and other key administrative officials. Officials appointed prior
to May 11, 1989, following a one-year probationary period, are subject to removal only for cause pursuant to a civil
service system administered for Jefferson County and the municipalities therein by the Jefferson County Personnel
Board. Officials appointed subsequent to May 11, 1989, serve at the pleasure of the Mayor after certification of their
professional qualifications by the Jefferson County Personnel Board.

The organization of the Birmingham city government is illustrated in the organization chart below, under
"OPERATING DEPARTMENTS." The Mayor is the chief administrative officer of the City and makes all personnel
appointments and removals subject to the civil service law. The Council exercises the legislative powers of the City
and makes appointments to most of the independent and quasi-independent boards and agencies with respect to which
the City has appointive power.

Certain City Executive, Administrative and Legislative Officials

Executive

RANDALL L. WOODFIN is Mayor of the City. Mayor Woodfin was sworn in as the 30th mayor of Birmingham,
Alabama on November 28, 2017. His current term expires in November 2021. Mayor Woodfin is a Birmingham
native and graduated with a Juris Doctor degree from Cumberland School of Law. He has worked as both an attorney
and in various positions for the City of Birmingham, including former president of the Birmingham Board of
Education.

Administrative

J. THOMAS BARNETT, JR., Director of Finance, was first appointed in July 2010 and reappointed by Mayor
Woodfin in December 2017. Mr. Barnett has over thirty years' experience in public finance with various firms. Mr.
Barnett received a Bachelor’s Degree in Accounting and Finance and a Master’s Degree in Finance from the
University of Alabama. Mr. Barnett has announced that he will retire in the first quarter of the current fiscal year. His
replacement has not been selected.

Legislative

The terms of office for the current members of the City Council expire in November 2021. Brief biographical
information regarding the current members of the City Council is provided below:

VALERIE A. ABBOTT, representing District 3, is currently President of the Council. President Abbott is Chair
of the Budget and Finance Committee, Administration/Education Committee and Committee of the Whole. She holds
a Bachelor's Degree from the School of Architecture & Fine Arts at Auburn University and a Master's Degree in Public
& Private Management from Birmingham-Southern College. Presently serving a fifth consecutive term, President
Abbott was first elected to the Birmingham City Council in 2001.

JAMES “JAY” ROBERSON, JR., representing District 7, is currently President Pro Tempore of the Council.
President Pro Tempore Roberson is Chair of the Utilities/Technology Committee. He holds a Bachelor of Arts Degree
in Telecommunications from Alabama A&M University and is serving his third term.

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 LASHUNDA SCALES, representing District 1, is Chair of the Governmental Affairs/Public Information
Committee. Councilor Scales holds an Associate Degree in Applied Science from Jefferson State Community College
and attended Stillman College. She is presently serving her third term.

HUNTER WILLIAMS, representing District 2, is Chair of the Public Safety Committee. Councilor Williams
holds a degree in Finance from Southern Methodist University. He is serving his first term.

WILLIAM PARKER, representing District 4, is Chair of the Parks, Recreation and Cultural Arts Committee.
Councilor Parker holds a degree from Talladega College. In November 2013, the Birmingham City Council appointed
Parker to represent the residents of District 4 during an unexpired term. He is now serving his second elected term.

DARRELL O’QUINN, representing District 5, is Chair of the Transportation Committee. Councilor O’Quinn
holds both a Bachelor’s Degree in Zoology and a Doctor of Veterinary Medicine from Louisiana State University and
a Ph.D. in Cellular and Molecular Pathology from the University of Alabama at Birmingham. He is serving his first
term.

SHEILA TYSON, representing District 6, is Chair of the Public Improvements and Beautification Committee.
A native of Birmingham, she served in the United States Army and graduated from the U.S. Army Quartermaster
School with a degree in Business and Accounting. Councilor Tyson is serving her second term.

STEVEN W. HOYT, representing District 8, is Chair of the Planning and Zoning Committee. Councilor Hoyt
holds a Bachelor of Arts Degree in Social Science and a Minor in Sociology from Miles College. He was first elected
to the Birmingham City Council in 2005 and is serving his fourth term.

JOHN R. HILLIARD, representing District 9, is Chair of the Economic Development Committee. Councilor
Hilliard is a Birmingham native and received a degree in Business Administration from Alabama State University.
He is serving his first term.

OPERATING DEPARTMENTS

The chart on the following page illustrates the organization of the departments of the City.

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 City of Birmingham, Alabama
Organization Chart

Citizens of Birmingham

Mayor City Council

Community Municipal
City Clerk Development Fire Court Other Financially
Independent Boards, Commissions and Accountable Boards
Associations with Extensive Budgetary
and Administrative Support

Birmingham Airport Authority

Birmingham Parking Authority
Arlington Public, Athletic, Cultural &
Equipment Planning Birmingham Museum of Art Entertainment Facilities Board
Management Finance Police Engineering and Birmingham Park and Recreation
Permits Birmingham Public Library
Sloss Furnaces
Southern Museum of Flight

Information Office Traffic

Management of the Engineering Public Works
Services City Attorney KEY

Indicates appointive authority

and management oversight

Indicates administrative and

budgetary support only
Innovation and Crossplex
Human
Economic Auditorium at Fair Park General Government
Resources
Opportunity
Public Safety

Culture & Recreation

Other Financially Accountable Boards

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 SERVICES , DEPARTMENTS AND AGENCIES OF THE CITY

General

The major governmental services provided by the City, Jefferson or Shelby County, the State and certain
independent agencies are shown on the chart below. The City believes that the scope of governmental services
required to be provided by the City is more limited than that of other cities of its size, because Jefferson County or
Shelby County and the State have primary responsibility for providing many services customarily provided in certain
other states by municipal governments. As a consequence, the City believes that it is less susceptible than many other
cities to large increases in operating expenditures and is better able to control its expenditures.

Governmental Services Provided by the City and Others

Independent
City Counties State Agency
Fire protection Exclusive
Solid waste disposal Exclusive
Storm water sewers Exclusive
Police protection(1) Primary Shared Shared
Street maintenance & repair(2) Primary Shared
Recreation(3) Primary Shared
Sanitary sewers(4) Shared Primary Primary
Courts(5) Shared Shared Primary
Road construction(6) Shared Primary
Health(7) Shared Primary
Public transportation(8) Shared Shared Primary
Aviation(9) Shared Primary
Water service(10) Primary
Education(11) Shared Shared Primary
Social Welfare Shared Shared

Note (1): The City, Jefferson County, Shelby County and State have coextensive law enforcement jurisdiction and the
University of Alabama at Birmingham has certain police powers on its campus in the City.
Note (2): The State is responsible for maintaining state and federal highways in the City.
Note (3): The City funds recreation programs including pools, museums and sports facilities. The Mayor represents the City
on the Birmingham-Jefferson Civic Center Authority, which operates a coliseum, theaters, an exhibition hall and
hotel. The City Council appoints members of The Park and Recreation Board of the City of Birmingham.
Note (4): Jefferson County constructs and maintains the entire sewage collection and treatment system in Jefferson County.
Note (5): The City operates a misdemeanor court system.
Note (6): The City builds local traffic arteries only.
Note (7): Jefferson County, the City and other cities in Jefferson County contribute to the Jefferson County Health Department
on a formula basis. Jefferson County operates a public, tax-supported hospital. Shelby County does not operate a
hospital.
Note (8): A metropolitan bus system, operated by the Birmingham-Jefferson County Transit Authority, is funded by federal
funds, matched by Jefferson County and municipal funds on a formula basis.
Note (9): Birmingham-Shuttlesworth International Airport is operated by the Birmingham Airport Authority, the governing
body of which is nominated by the Mayor and elected by the City Council of the City. The annual operating budget
and the capital improvement budget are subject to approval by the City Council.
Note (10): See “SERVICES, DEPARTMENTS AND AGENCIES OF THE CITY—Independent Board and Authorities - The Water Works
Board of the City of Birmingham” herein.
Note (11): The Birmingham Board of Education, the governing body of which is presently elected by the voters, operates
schools with local ad valorem taxes and state and federal funds. The City assists in borrowing for major capital
purposes. See “ SERVICES, DEPARTMENTS AND AGENCIES OF THE CITY—Independent Boards and Authorities -
Birmingham Board of Education” herein.

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 The City has limited or no responsibility for funding the operating or capital costs of social welfare or health.
The responsibility for operating the sanitary sewer system in the portion of the City located in Jefferson County is
borne by Jefferson County, with Jefferson County funding the costs of constructing and operating sewage treatment
plants, pumping stations, large sewage mains, and maintaining collector mains.

While the City has no statutory responsibility for funding the costs of operating the City’s public school
system, it appropriated approximately $707,471, $1,289,971, $1,862,464, $1,894,971, $1,802,507, $1,894,971,
$1,894,971, $1,894,971, $1,894,471, $1,149,000, $2,380,000 and $2,380,000 for school purposes for the 2006, 2007,
2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 fiscal years, respectively. In prior years, the City
has issued general obligation bonds or warrants of the City for the purpose of funding major school system capital
projects, although the City has no current plans for any such issuance. See “ SERVICES, DEPARTMENTS AND AGENCIES
OF THE CITY—Independent Boards and Authorities - Birmingham Board of Education” herein.

The City appropriates funds from its General Fund to certain activities or agencies for which it does not have
primary responsibility. The most significant appropriations of this type are summarized as follows:

Appropriations from General Fund

Appropriated
Fiscal Year
Ended
June 30, 2017

Birmingham-Jefferson County Transit Authority $10,800,000

Jefferson County Personnel Board 3,600,000
Birmingham Housing Authority 39,565

During the Regular Session of 1945, the Legislature of Alabama enacted legislation providing for the
Jefferson County Personnel Board and requiring participating municipalities (including the City) to pay a
proportionate share of the cost of the civil service system for participating municipalities in Jefferson County.

During the Regular Session of 1977, the Legislature of Alabama enacted legislation providing for annual
appropriations to the Birmingham-Jefferson County Transit Authority from Jefferson County and certain
municipalities (including Birmingham) in the County served by the transit system.

Also at the Regular Session of 1977, the Legislature of Alabama enacted legislation providing for annual
appropriations to the Jefferson County Board of Health from Jefferson County and all municipalities in the County.
These appropriations are in addition to other tax revenues allocated by law to the Jefferson County Board of Health,
and the amounts of the appropriations are fixed by the Jefferson County Commission based on the relative populations
of the governmental jurisdictions from whom funds are appropriated, subject to limitations on total appropriations
relating to ad valorem tax collections.

Office of the City Clerk

The City Clerk is secretary to the City Council and custodian of all official City records. The City Clerk also
serves as secretary to the Public Athletic, Cultural and Entertainment Facilities Board, Election Commission of the
City, The Industrial Development Board of the City of Birmingham, The Commercial Development Authority of the
City of Birmingham and The Historical Preservation Authority of the City of Birmingham.

Department of Finance

The Department of Finance employs approximately 105 people and is administered by the Director of
Finance, who is appointed by the Mayor. The principal duties of the Director of Finance are established by statute
and include the following: budget preparation; budget administration; investments; capital financing; insurance and

C-5
risk management; contract supervision; disbursements; accounting; audit; collection of taxes, fees and other revenues;
and the purchasing of all materials, supplies, equipment and services.

The divisions of the Department of Finance are as follows:

General Accounting maintains account records for all of the City’s separate governmental funds. This
division is responsible for accounts payable, accounts receivable, payroll and fixed assets.

Budget Division prepares and administers the annual operating and capital budgets. This division conducts
a detailed review of the budget requests of each City department and makes budget recommendations to the Mayor.
Following adoption of the official budget, this division reviews and controls expenditures to assure that funds are
expended pursuant to the budget.

Cash and Investment Management oversees the City’s cash collection and its investment portfolio.

Tax and License Division administers the occupational tax, business license taxes and the City sales and use
tax. Approximately 25,000 licenses are issued each year and approximately 24,000 tax returns are processed each
month.

Purchasing Division procures all supplies, materials, equipment and services used by City agencies. This
division processes requisitions, prepares purchase orders, drafts bid specifications and purchase contract documents,
and pays bills from suppliers. This division also maintains a warehouse and a print shop.

Pension & Payroll Administration oversees all payroll processes for approximately 4,091 active employees
and approximately 3,415 pensioners. The division is also a one-stop clearinghouse for pension benefit-related
services, education and information.

Police Department

The Birmingham Police Department is a modern police department utilizing current law enforcement
techniques and equipment and is headed by the Chief of Police. It is manned by approximately 822 sworn officers
and approximately 224 civilian personnel and operates four precincts, six substations and the Tactical Unit.
Operations of the department are divided among four Deputy Chiefs; a Deputy Chief of Administration and
Operations; a Deputy Chief of Patrol; a Deputy Chief of Investigation and a Deputy Chief of Support Operations. The
Birmingham Police Department maintains training facilities for new recruits and current police personnel.

Fire Department

The City maintains a modern fire-fighting department housed in 32 fire stations throughout the City. There
are 32 fire companies maintained and manned by approximately 635 firefighters and approximately 61 civilian
personnel. The department maintains its own training school for new personnel and for retraining of personnel. It
operates 18 emergency units trained to give emergency medical care and medical transport services, and a fire
prevention bureau and mans 2 hazardous material response teams. The City’s fire department is the primary source
for all emergency transport services in the City and charges fees for the same.

Park and Recreation Board

Most park and recreation services in the City are provided by The Park and Recreation Board of the City of
Birmingham (the “Park and Recreation Board”), a five-member board appointed by the City Council. The budget of
the Park and Recreation Board is subject to approval by the City Council.

The Park and Recreation Board has approximately 325 employees and operates Legion Field, the City’s
football stadium; a high school football stadium; Birmingham Botanical Gardens; 2 golf courses; 18 recreation centers;
over 100 tennis courts; and numerous swimming pools and athletic fields. The Park and Recreation Board also
operates numerous parks encompassing more than 2,000 acres.

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Birmingham Zoo

An intergovernmental agreement has been signed among the City, Jefferson County, the City of Homewood
and the City of Mountain Brook for the funding of the renovation of the Birmingham Zoo. Historically, the zoo has
been funded only by the City of Birmingham and the revenues generated from its operation have not been sufficient
to make the needed improvements and upgrades. The listed governments have agreed to assist with funding and have
agreed to the privatization of the operations of the zoo. The City has signed an agreement with Birmingham Zoo,
Incorporated (the “Zoo Corporation”) to lease and operate the zoo. The Zoo Corporation is responsible for the day-
to-day operations of the zoo and for all fund-raising activities of the zoo. The City has committed $1,500,000 per year
through fiscal year 2019 and $500,000 per year during fiscal years 2020 through 2034 for the zoo’s operating and
capital needs. These payments are subject to annual appropriation. The City also agreed to reimburse up to $180,000
per year through fiscal year 2019 from taxes generated by the zoo in order to promote the facility as a tourist attraction.

Other City Departments

The City’s Community Development Department, Department of Innovation and Economic Opportunity and
Department of Planning, Engineering and Permits are responsible for planning and promoting the further development
of the City. The Community Development Department conducts the City’s planned activities and works with
neighborhood citizens’ advisory councils to establish priorities for public works activities and other government
programs, as well as developing federal assistance and grant projects. The Department of Innovation and Economic
Opportunity and the Community Development Department were established to promote additional industries and
business in the City and to assist and promote the upgrading and expansion of the City’s housing stock.

The Department of Planning, Engineering and Permits administers the City’s buildings and construction
codes, inspects weighing and measuring devices, provides staff support for urban planning, zoning and rezoning
activities, maintains City Hall and is responsible for construction of streets, sidewalks, viaducts, storm water sewers
and other public works. The Department of Planning, Engineering and Permits coordinates the City’s annexation
activities. Currently, the Mayor’s policy is one of consideration of requests for annexation.

The Legal Department advises the Mayor, the City Council and City departments and agencies on legal
matters, represents the City in litigation and prosecutes misdemeanor cases in the City’s municipal court. The Public
Works Department collects garbage, operates the City landfills and maintains streets and storm sewers and has
responsibility for plantings, beautification projects and maintaining the trees and City property throughout the City.
The Traffic Engineering Department installs and maintains traffic control devices, including signs, signals, parking
meters and street lights. The City’s municipal court has five full time judges who hold trials on traffic offenses, certain
zoning violations and certain misdemeanors. The municipal court assesses and collects fines, fees and court costs.

Independent Boards and Authorities

The following boards, authorities and other agencies are independent of the City, but are governed by boards
of directors appointed by the City Council, except the Birmingham Board of Education, whose members are elected.
Many of these entities receive voluntary financial and administrative support from the City, others are financially self-
sufficient or receive limited funding.

The Water Works Board of the City of Birmingham. Water service to all residents of the City is provided
by the Water Works Board of the City of Birmingham (the “Water Board”). The Water Board is a nine-member board
that is appointed by the City Council. The budget of the Water Board is not approved by the City Council. The Water
Board operates a water works and distribution system that serves approximately 600,000 customers in Jefferson,
Blount, St. Clair, Walker and Shelby Counties.

Birmingham Board of Education. The Birmingham Board of Education (“Board of Education”) is an

agency of the State of Alabama under the general supervision and financial jurisdiction of the Alabama State
Department of Education.

Under State law, operations of the Board of Education are independent of the Mayor and Council. The Board
of Education is funded independently of the City from ad valorem tax revenues and state appropriations, and the Board

C-7
of Education independently adopts an operating budget for the school system. The Board of Education has the power
to issue warrants payable out of certain taxes levied for its benefit. In prior years, the City has issued general obligation
bonds or warrants of the City for the purpose of funding major school system capital projects, although the City does
not currently have any plans for such an issuance.

In June, 2012, the State Board of Education took control of the Board of Education for financial as well as
management reasons. The Board faced a significant financial crisis due in large part to declining revenues from the
State as a result of declining student enrollment in the Board’s school system. Under the strict oversight and control
of the State Board of Education, the Board engaged in a process of eliminating jobs, closing schools and selling
unneeded property to address its continuing financial difficulties. Control of the school system has now been returned
to the Board.

Birmingham Airport Authority. Birmingham-Shuttlesworth International Airport (“BIA”) is operated by

Birmingham Airport Authority, a seven-member board appointed by the City Council. The Executive Director of
Birmingham Airport Authority is appointed by the Authority’s board. By agreement between the City and
Birmingham Airport Authority, Birmingham Airport Authority’s annual operating budget and the capital
improvement budget are subject to approval by the City Council.

BIA is located five miles northeast of downtown Birmingham, providing convenient access to air
transportation for residents of the City and surrounding areas. BIA is served by 5 major airlines, including American
Airlines, Delta Airlines, Southwest Airlines, United and Vacation Express, as well as commuter airlines affiliated with
the listed carriers. BIA operates 13 gates serving an average of approximately 120 daily flights. BIA also operates a
5,700 space parking facility.

Cultural Boards and Authorities. Members of the board of the Birmingham Museum of Art, the
Birmingham Public Library and Birmingham Civil Rights Institute are appointed by the City Council, and the budgets
of these agencies are subject to approval by the City Council. The Mayor serves as the City’s representative on the
board of the Birmingham-Jefferson Civic Center Authority.

The Birmingham Museum of Art houses a substantial and growing collection of paintings, artifacts and other
art objects, and operates an art education program. The museum completed a $19 million expansion and renovation
in 1993. The building program included a 50,000-square-foot addition, a multi-level sculpture garden and a total
renovation of the existing building.

The Birmingham Civil Rights Institute is a 58,000 sq. ft. facility housing a museum devoted to preserving
the history of the civil rights movement through oral history, historical photographs, sculpture, artifacts, paintings,
and other art objects and educational programs.

The Birmingham Public Library consists of a central library and 20 branch libraries. Construction of a central
facility located in downtown Birmingham was completed in 1984.

The Birmingham-Jefferson Civic Center Authority (the “Authority”) offers a 16,800 seat arena with facilities
for concerts, sports and other activities; exhibition halls with 220,000 square feet of exhibition space and 100,000
square feet of meeting areas; a 2,800 seat concert hall; a theater seating 1,000; a 10-story office building with
conference space and video communication suite; and a 756 room Sheraton hotel and a 300 room Westin hotel; an
entertainment district with restaurants and retail space. The Center also includes a 1,500-space parking deck and is
home to the Alabama Sports Hall of Fame. For additional information about the Authority’s facilities and planned
upgrades to such facilities, see APPENDIX A to this Official Statement.

The Public Athletic, Cultural and Entertainment Facilities Board (the “PACE Board”) is a five member board
that was created to construct and maintain a new 8,500 seat minor league baseball stadium, the home of the
Birmingham Barons minor league baseball team, which is located on real property owned by the City and leased to
the PACE Board. The PACE Board has entered into a lease with the Birmingham Barons that expires in 2042.
Construction on the project was completed in April, 2013, with the Barons’ first home game held on April 10, 2013.
Financing for construction was provided in part by the issuance of the PACE Board’s Series 2011-A and 2011-B

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Bonds, in the aggregate original principal amount of $64,000,000, as well as an increase in the City’s Lodging Tax.
See “CITY DEBT MANAGEMENT—Public Athletic, Cultural and Entertainment Facilities Board Funding Agreement”.

The Commercial Development Authority of the City of Birmingham (the “CDA”), whose members are
appointed by the City Council, promotes commercial development and expansion through the issuance of revenue
bonds for financing of commercial projects. In 2011, the CDA issued bonds to finance a multi-use development in
the downtown area of the City, which includes a four-star convention hotel (now identified with the Westin brand)
and related meeting rooms, restaurant and exercise facilities, and approximately 60,000 square feet of retail and dining
space.

The McWane Center, a consolidation of the activities of the Red Mountain Museum and Discovery Place (a
children’s museum), opened in downtown Birmingham during the summer of 1998. It is a state-of-the-art science and
technology center that includes a 290 seat IMAX Dome theater and a 180,000 square foot building holding various
educational and interactive exhibits, a science presentation theater, a multi-purpose classroom, a restaurant and
administrative offices. A 355-space parking deck is located adjacent to these structures. The City has in recent years
appropriated money to the McWane Center as an operating subsidy. The City appropriated $159,104 to the McWane
Center for each of the fiscal years ended June 30, 2013, June 30, 2014, June 30, 2015, June 30, 2016, June 30, 2017
and June 30, 2018. The City may continue to appropriate money to the McWane Center in future fiscal years, but any
such appropriations are discretionary.

Other Boards and Agencies. The Industrial Development Board of the City of Birmingham, whose members
are appointed by the City Council, promotes industrial expansion through the issuance of revenue bonds for new and
expanding industrial plants. The Public Park and Recreation Board of the City of Birmingham, whose members are
appointed by the City Council, promotes recreational, cultural and educational development of the City by issuing
revenue bonds to finance qualifying projects in the City. The Public Educational Building Authority of the City of
Birmingham, whose members are appointed by the City Council, promotes public education in the City by facilitating
the issuance of revenue bonds to finance qualifying educational projects. The City of Birmingham Downtown
Redevelopment Authority, whose members are appointed by the City Council, promotes the revitalization and
redevelopment of the central business district of the City. The Birmingham Parking Authority, whose members are
appointed by the City Council, promotes the development of off-street parking facilities by issuing revenue bonds to
finance qualifying parking facilities in the City. The Birmingham-Jefferson County Transit Authority is governed by
a nine-member board, five of whom are appointed by the City Council, and operates a bus system in the City and in
areas surrounding the City. The Historical Preservation Authority of the City of Birmingham, whose members are
appointed by the City Council, promotes the renovation and improvement of historic districts and buildings.

In September, 2010, Railroad Park opened in the City’s downtown. Railroad Park is a 19 acre green space
that celebrates the City’s industrial and artistic heritage. Railroad Park is a joint effort between the City and the
Railroad Park Foundation.

CITY LABOR RELATIONS

The City is not subject to collective bargaining agreements. The City does not negotiate with employee
organizations, but does hold general information meetings with such organizations. These employee organizations
include: Fraternal Order of Police (Birmingham Lodge No. 1), Laborers International Union (Local 1317),
International Fire Fighters Association and Birmingham Association of City Employees. The City maintains a number
of defined benefit pension plans covering substantially all employees. See Note III of the Notes to the financial
statements of the City included in the City’s comprehensive annual financial report (“CAFR”) in APPENDIX D of this
Official Statement for a discussion of the City’s pension plans.

CITY FINANCIAL SYSTEM

The City maintains a financial reporting system which provides timely and accurate reports of receipts and
expenditures. The City’s financial statements are audited annually, as required by law, by independent accountants.

C-9
The report of such accountants with respect to certain of the City’s financial statements for the fiscal year ended
June 30, 2017, is included in the City’s CAFR which is attached as APPENDIX D to this Official Statement. The
Finance Department of the City endeavors to make audited financial information available upon request to the holders
of the City’s securities, creditors and other interested parties in a timely fashion. A “Certificate of Achievement for
Excellence in Financial Reporting” was awarded to the City by the Government Finance Officers Association of the
United States and Canada (the “GFOA”) for the comprehensive annual financial report for the fiscal year ended June
30, 2016, which is the thirty-ninth consecutive year the City has received such award. The certificate evidences
compliance by the City with generally accepted accounting principles and applicable legal requirements. A Certificate
of Achievement is valid for one year.

In preparing its financial statements, the City is required to follow and comply with the rules and regulations
of the Governmental Accounting Standards Board (“GASB”). All applicable aspects of GASB’s rules and regulations
have been fully implemented by the City. The City’s CAFR for the fiscal year ended June 30, 2017 has been prepared
pursuant to GASB’s rules and regulations.

The City’s financial system is an integrated, centralized base for all budgetary and accounting information
for all offices, departments, agencies, boards, bureaus and activities of the City. The system begins with the budget
and progresses into the encumbering of all obligations and disbursement of all funds. An accounting is provided for
all revenues and expenditures, regardless of source of charge. The financial system enables management to produce
timely monthly reports.

The City’s financial systems include a cash investment management system which enhances the City’s
capability to fully invest idle funds through the concept of pooled cash. The Budgeting System connects the budget to
the City’s payroll and financial reporting system which allows the various departments flexibility to develop, prepare
and send all budget information on-line. In addition to accounting control and budgetary control, cost control is
provided for in both capital projects and operating expenditures analyses.

Budget System

The City budget consists of the General Fund Budget, the Capital Budget, the State and Federal Grant Budget,
the Debt Service Budget and the Budget Message. It represents a complete financial plan for the City and reflects the
projection of all receipts and disbursements from all sources, including all revenues, all expenditures and the surplus
or deficit in the General Fund and all special funds of the City.

The General Fund Budget, the State and Federal Grant Budget and the Debt Service Budget are developed
by the Director of Finance under the direction of the Mayor. Such budgets are based on annual work programs setting
forth the nature, volume and cost of work to be performed as submitted by the head of each office, department, board
and other agency of the City. Estimated revenues are detailed as to source, and estimated expenditures as to program
or project. The Mayor may hold hearings with regard to the proposed budget. No later than May 20 in each year, the
Mayor submits to the City Council the proposed City budgets for the ensuing fiscal year.

The Budget Message, issued by the Mayor, explains the proposed budgets in fiscal terms and in terms of
work to be performed. It outlines the proposed financial policies of the City for the ensuing fiscal year and indicates
any major changes in financial policies and in expenditures, appropriations and revenues as compared with the fiscal
year currently ending and sets forth the reasons for such changes.

Upon submission of the budgets by the Mayor to the City Council, the City Council is required to hold a
public hearing. After the conclusion of the public hearing, the City Council may insert new items of expenditure or
may increase, decrease or eliminate items of expenditure in the General Fund Budget, except that no item of
expenditure for debt service, or any other item required to be included by law, may be reduced or eliminated. The City
Council may not alter the estimates of receipts contained in the General Fund Budget except to correct omissions or
mathematical errors. The City Council is prohibited by statute from adopting a General Fund Budget in which the
total of expenditures exceeds the receipts and available surplus, unless at the same time it adopts measures for
providing additional revenue in the ensuing fiscal year sufficient to make up the difference.

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 Appropriations in addition to those contained in the original General Fund Budget ordinance may be made
by the City Council by not less than five affirmative votes, but only on the recommendation of the Mayor and only if
the Director of Finance certifies in writing that there is available in the General Fund an unencumbered and
unappropriated sum sufficient to meet such appropriations.

The Capital Budget is the City’s plan to receive and expend funds during the ensuing fiscal year for capital
improvement projects and the means of financing thereof. The City Council is required to adopt a Capital Budget prior
to the beginning of the fiscal year in which the budget is to take effect. Amendments to the Capital Budget may be
made by the City Council by not less than five affirmative votes, but only upon the recommendation of the Mayor and
only if funds are available for any budget increases.

The City’s budget report for the fiscal year beginning July 1, 2016, was awarded the Government Finance
Officers Association Award for Distinguished Budget Presentation. In order to receive this award, a governmental
unit must publish a document that meets the program criteria as a policy document, as an operations guide, as a
financial plan and as a communications device.

Accounting System

The City maintains an accounting system that includes government-wide and fund financial information, the
essential features of which are described under Notes I.B. and I.C. of the Notes to Financial Statements in APPENDIX
D of this Official Statement.

Both the government-wide and fund financial statements (within the basic financial statements) categorize
primary activities as either governmental or business type. In the fund financial statements, financial transactions and
accounts of the City are organized on the basis of funds. The fund statements are presented on a current financial
resources measurement focus and modified accrual basis of accounting. This is the manner in which these funds are
normally budgeted. The City’s fiduciary funds are presented in the fund financial statements by type.

The following is a brief description of the specific major funds used by the City in fiscal year 2017:

General Fund. The General Fund is the City’s primary operating fund and accounts for all financial
resources except for those required to be accounted for in other funds.

General Bond Debt Reserve Fund. The General Bond Debt Reserve Fund accounts for the receipt
of ad valorem taxes earmarked for debt service on voter-approved bonds.

General Bond Debt Service Fund. The General Bond Debt Service Fund accounts for the payment
of principal and interest on general obligation bond debt. Moneys are transferred from the General Bond Debt
Reserve Fund to the General Bond Debt Service Fund at times and in amounts sufficient to pay principal and
interest on the City’s general obligation bonds as such amounts become due.

Birmingham Fund. The Birmingham Fund is considered a Special Revenue Fund and is used to
account for the proceeds the City received from the sale of the Industrial Water Board. As of May 31, 2017,
the market value of the assets in this fund was approximately $91 million.

Capital Improvement Fund. The Capital Improvement Fund accounts for funds form
miscellaneous sources used for various capital improvement projects.

The 2015-A Bonds Fund. The 2015-A Bonds Fund is used to account for various capital projects
financed by these bonds.

Annual Appropriation Lease – 2016 Fund. The Annual Appropriation Lease – 2016 Fund is used
to account for the proceeds and expenditures of the 2016 Lease.

The City reports the following proprietary fund as a major proprietary fund:

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 The Enterprise Fund – E911 Communications District accounts for the operation of the Enhanced
Universal Emergency Number Service (E911).

Comparative Statements

The following condensed statements have been compiled from the CAFRs of the City for the fiscal years
ended June 30, 2013 through 2017. These statements show the revenues, expenditures and changes in fund balance
for the General Fund and the General Bond Debt Reserve Fund. Bonded debt service of the City (but not warrants)
may be paid from moneys deposited in the City’s General Bond Debt Reserve Fund. See “CITY DEBT MANAGEMENT—
General Obligation Bond Debt Service” herein. The General Fund represents the primary source from which the City
pays debt service on its outstanding general obligation warrants.

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 City of Birmingham, Alabama
General Fund
Condensed Statement of Revenues, Expenditures and Changes in Fund Balance

For the Years as Indicated

(In thousands)

2013 2014 2015 2016 2017

Revenue
Taxes $248,960 $256,260 $265,219 $280,308 $290,095
Licenses and permits 86,709 87,010 91,101 85,581 80,625
Intergovernmental revenues 11,074 12,896 16,140 13,139 14,423
Charges for services 12,514 12,112 15,895 15,030 16,231
Fines and forfeitures 2,750 2,445 2,253 2,318 1,960
Investment income 67 344 274 671 256
Other operating revenue 10,762 5,878 6,977 7,983 6,692
Total revenues 372,836 376,945 397,859 405,030 410,282

Expenditures
Current:
Public safety 163,936 174,909 175,578 187,071 191,778
Street and sanitation 46,415 50,506 42,749 46,974 47,986
Cultural and recreational 35,346 36,051 36,644 38,756 43,815
General government 101,111 104,145 112,535 113,325 111,826
Total current operations 346,808 365,611 367,506 386,126 395,405

Debt Service:
Principal 8,828 10,899 9,154 9,779 12,883
Interest and fees 5,946 5,040 4,932 4,778 3,812
Total debt service 14,774 15,939 14,086 14,557 16,695

Capital Outlays 1,549 1,752 612 11,782 697

Total expenditures 363,131 383,302 382,203 412,465 412,797

Excess (deficiency) of revenues over

(under) expenditures 9,705 (6,357) 15,656 (7,435) (2,515)

Other financing uses (sources) (8,322) (7,566) (2,518) 4,173 (1,101)

Net change in fund balance 1,383 (13,923) 13,138 (3,262) (3,616)

Fund balance, beginning of year

(restated in 2017) 92,114 93,497 79,574 92,712 89,449

Fund balance, end of year $93,496 $79,574 $92,712 $89,450 $85,833

__________________

Note: Revenues, expenditures and changes in fund balances on these condensed statements are reported on a modified
accrual basis of accounting.
Source: Audited financial statements of the City for fiscal years ended June 30, 2013 through 2017.

The audited financial statements for the fiscal year ended June 30, 2017 report that the fund balance for the
General Fund as of June 30, 2017, was $85,833,000. This amount represents a decrease of $3,617,000 from the audited
General Fund balance of $89,450,000 as of June 30, 2016.

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 City of Birmingham, Alabama
Combined General Bond Debt Reserve Fund and General Bond Debt Service Fund
Condensed Statement of Revenues, Expenditures and Changes in Fund Balance

For The Years As Indicated

(In thousands)

2013 2014 2015 2016 2017

Revenue
Taxes $27,977 $30,330 $29,576 $31,383 $31,703
Interest and net gain on sale of
investments (216) (9) 83 231 108
Intergovernmental 288 0 79 0 0
Other operating revenues 0 0 0 0 2

Total revenues 28,049 30,321 29,738 31,614 31,813

Expenditures 34,190 31,023 31,026 29,059 23,241

Excess (deficiency) of revenues

over (under) expenditures (6,141) (702) (1,288) 2,555 8,572

Other financing uses 6 (128) 0 0 0

Net change in fund balance (6,135) (830) (1,288) 2,555 8,572

Fund balance, beginning of year 29,659 23,524 22,694 21,406 23,961

Fund balance, end of year $23,524 $22,694 $21,406 $23,961 $32,533

___________________

Source: Audited financial statements of the City for fiscal years ended June 30, 2013 through 2017.

The audited financial statements for the fiscal year ended June 30, 2017 report that the fund balance for the
General Bond Debt Reserve Fund (including funds in the amount of $4.765 million being held in the General Bond
Debt Service Fund for payments scheduled for dates after June 30, 2017), was $32.53 million. This amount represents
an increase of approximately $8.57 million from the General Bond Debt Reserve Fund balance of $23.965 million as
of June 30, 2016. For the fiscal year ended June 30, 2017, the General Bond Debt Reserve Fund received revenue
from the General Bond Tax of approximately $24.33 million and from the School Bond Tax of approximately $7.40
million.

Comparison of Budget to Actual - General Fund

Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure
of funds are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of
formal budgetary integration in the General Fund. The statements on the following pages present General Fund
revenues, expenditures and changes in fund balance - budget and actual - for fiscal years ended 2015 and 2016.

The following statement has been compiled from the CAFRs of the City for the fiscal years ended June 30,
2015 and 2016. It provides a comparison for the General Fund of revenues, expenditures and changes in fund balance
on a budgetary basis.

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 City of Birmingham, Alabama
General Fund
Comparative Statement of Revenues, Expenditures and Changes
In Fund Balance—Budget and Actual—Budgetary Basis

For the years ended June 30, 2015 and 2016

(In thousands)

2015 2016
Over Over
(Under) (Under)
Budget Actual Budget Budget Actual Budget
Revenues:
Taxes $264,882 $265,219 $ 337 $274,718 $280,308 $5,590
Licenses and Permits 87,708 91,101 3,393 88,394 85,581 (2,813)
Intergovernmental revenues 14,185 16,140 1,955 12,590 13,139 549
Charges for services 13,186 15,895 2,709 14,667 15,030 363
Fines and forfeitures 2,873 2,253 (620) 2,313 2,318 5
Investment Income 320 274 (46) 120 671 551
Other operating revenues 6,780 6,977 197 10,936 7,983 (2,953)
Total revenues $389,934 $397,859 $7,925 $403,738 $405,030 $1,292

Expenditures:
Public safety $172,621 $175,578 ($2,957) $181,150 $187,071 ($5,922)
Environmental and street 46,388 42,749 3,639 46,825 46,974 (149)
Cultural and recreational 37,072 36,643 429 40,903 38,756 2,147
General government 117,953 112,535 5,418 119,693 113,325 6,369
Debt Service 14,236 14,086 150 15,169 14,557 612
Capital Outlays 608 612 (4) 873 11,782 (10,909)
Total expenditures $388,878 $382,203 $6,675 $404,613 $412,465 ($7,852)

Excess revenues over expenditures $1,056 $15,656 $14,600 ($875) ($7,435) ($6,560)

Other financing sources (uses) (1,057) (2,518) (1,461) (6,915) 4,173 11,088

Excess of revenues over expenditures and

other financing uses ($1) $13,138 $13,139 ($7,790) ($3,262) $4,528

Fund balance, beginning of the year 79,574 79,574 - 92,712 92,712 -

Fund balance, end of year $79,573 $92,712 $13,139 $84,922 $89,450 $4,528
_____________

Source: Dollars in “actual” columns derived from audited financial statements of the City for the years ended June 30, 2015
and 2016.
Note: This statement is prepared on a basis consistent with accounting principles generally accepted in the United States
of America (modified accrual basis).

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 The table below presents revenues, expenditures and encumbrances - budget and actual - for the General
Fund for the fiscal year ended June 30, 2017 (in thousands). The information in the table is derived from the City’s
CAFR for the fiscal year ended June 30, 2017.

City of Birmingham, Alabama

General Fund
Comparative Statement of Revenues, Expenditures and Changes
In Fund Balance—Budget and Actual—Budgetary Basis

For the year ended June 30, 2017

(In thousands)

2017
Over
(Under)
Budget* Actual Budget
Revenues:
Taxes $286,269 $290,095 $ 3,826
Licenses and Permits 89,467 80,625 (8,842)
Intergovernmental revenues 13,460 14,423 963
Charges for services 18,167 16,231 (1,936)
Fines and forfeitures 2,072 1,960 (112)
Investment Income 200 256 56
Other operating revenues 7,762 6,692 (1,070)
Total revenues $417,397 $410,282 ($7,115)

Expenditures:
Public safety $190,332 $191,778 ($1,446)
Environmental and street 47,125 47,986 (861)
Cultural and recreational 46,195 43,815 2,380
General government 123,723 111,826 11,897
Debt Service 16,324 16,695 (371)
Capital Outlays 821 697 124
Total expenditures $424,520 $412,797 $11,723

Excess revenues over expenditures ($7,123) ($2,515) $4,608

Other financing sources (uses) (1,130) (1,101) 29

Excess of revenues over expenditures and

other financing uses ($8,253) ($3,616) $4,637

Fund balance, beginning of the year 89,449 89,449 -

Fund balance, end of year $81,196 $85,833 $4,637

________________

Source: Dollars in “actual” column derived from audited financial statements of the City for the year ended June 30, 2017.
Note: This statement is prepared on a basis consistent with accounting principles generally accepted in the United States
of America (modified accrual basis).
* The amounts in this column represent the final budget amounts after adding numerous budget amendments to the
original budget.

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Budget

The chart below presents a condensed report of the City’s General Fund budget for the fiscal year ending
June 30, 2019.

City of Birmingham, Alabama

General Fund Budget

Fiscal Year Ending June 30, 2019

Revenues:
Taxes $309,890,000
Licenses & Permits 85,112,358
Fines and Fees 1,775,000
Intergovernmental revenues 13,056,000
Charges for services 15,844,544
Investment Income 200,000
Other operating revenues 10,248,869
Total revenues $436,126,771

Expenditures:
Public safety $193,513,969
Environmental & Street 44,708,560
Cultural and recreational 46,864,576
General government 130,870,700
Debt Service 20,143,966
Capital Outlays 25,000
Total expenditures $436,126,771

City Pension Obligations

The City maintains three defined benefit pension plans. Each of these pension plans was established by state
law and is administered by a separate board of managers. The funding methods and determination of benefits payable
were established by the legislative acts creating such plans and provide that the pension plans’ funds are to be
accumulated from employee contributions, employer contributions, and income from the investment of accumulated
funds. The cost of administering the plans is funded by the City.

The membership of the two plans listed below is currently open, and benefits are funded by contributions
from employees, the City, and income from the investment of accumulated funds:

City of Birmingham Retirement and Relief System – This system covers all eligible civil service
employees, elected officials, and appointed employees. Membership is mandatory for all qualified
employees and is effective upon employment. Elected officials and appointed employees have the option of
participating in the plan. The plan is closed to Health Department new hires. The City contributed 7.25%
during 2017 and participating employees, not including Health Department participants, contribute 7.00% of
compensation for each year, exclusive of overtime and subject to statutory limits, and effective July 1, 2018,
the City contributions increased to 8.50% of compensation for each year. Health Department participants
contribute 6.00%. These contributions are based on statutory authorization. Current membership as of
June 30, 2017, was 3,852 active members, 421 inactive members, and 3,017 retirees or beneficiaries currently
receiving benefits.

City of Birmingham Firemen’s and Policemen’s Supplemental Pension System – This system
covers sworn firemen and policemen and provides retirement benefits for employees who retire with 20 years
of service prior to their eligibility for the Retirement and Relief System. Membership is mandatory for such
personnel and is effective upon employment. Participants contribute 5.22% of compensation for the year,

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 exclusive of overtime and subject to statutory limits. Effective July 1, 2018, the City contributes 6.05% to
the Plan annually. The required contributions are determined based on statutory authorization. Current
membership as of June 30, 2017, was 1,439 active members, 12 inactive members and 388 retirees or
beneficiaries currently receiving benefits.

The membership of the following plan listed below is closed, and the plan is currently fully funded:

City of Birmingham Unclassified Employees Pension and Relief System – This system covers
laborers not hired under civil service. Employees contribute $10.00 bi-weekly. The City is required by City
ordinance to contribute a sum, computed as a percentage of payroll, to fund the annual cost of the unfunded
liability over 30 years. There are currently three active members and 10 retirees or beneficiaries currently
receiving benefits. The membership of this plan is closed.

Historical Funding Progress for City Pension Obligations Unfunded Actuarial Liability

As of the June 30, 2017 actuarial valuation, the City of Birmingham Retirement and Relief System had an
unfunded actuarial accrued liability of $378.2 million, and the City of Birmingham Firemen’s and Policemen’s
Supplemental Pension System had an unfunded actuarial accrued liability of $55.5 million. For additional analysis of
the historic funding progress and contribution history regarding the City’s pension plans, see Tables 8 and 9 below,
and see Note IV.H. to the City’s audited financial statements contained in the CAFR for the fiscal year ended June 30,
2017 in APPENDIX D hereto. The City is studying its pension plans in an effort to reduce the unfunded liability,
including additional funding.

City of Birmingham, Alabama

Unfunded Actuarial Liability for Retirement and Relief Plan

Actuarial
Fiscal Year Recommended Actual
Ended Unfunded Employer Employer Percentage of ARC
June 30 Actuarial Liability Contributions Contributions Contributed

2018 $378,187,376 $30,063,990 N/A --

2017 329,600,182 30,564,212 $14,040,165 45.9%
2016 325,430,778 29,898,918 13,837,061 46.3%
2015 318,419,864 30,398,187 14,464,552 47.6%
2014 328,474,728 30,553,712 14,039,103 45.9%
2013 303,041,753 20,516,938 13,591,846 66.2%
2012 265,974,021 18,904,668 13,676,554 72.3%
2011 200,363,609 18,147,790 13,772,490 75.9%
2010 172,486,943 21,118,910 13,224,808 62.6%
2009 97,706,129 17,050,689 12,770,110 74.9%
2008 57,043,354 14,818,900 12,061,584 81.4%
2007 47,913,534 14,173,353 12,006,508 84.7%
2006 56,625,302 13,742,543 11,398,732 82.9%
2005 36,873,337 12,875,198 10,881,632 84.5%
2004 10,437,405 11,290,871 11,347,715 100.5%
2003 -20,520,018 9,756,787 10,697,621 109.6%
2002 -46,092,627 8,580,579 10,537,461 122.8%

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 City of Birmingham, Alabama
Unfunded Actuarial Liability for Fireman’s & Policeman’s Supplemental Plan

Actuarial
Fiscal Year Recommended Actual
Ended Unfunded Employer Employer Percentage of ARC
June 30 Actuarial Liability Contributions Contributions Contributed

2018 $55,524,512 $5,276,401 N/A --

2017 52,885,394 5,092,012 $4,354,660 85.5%
2016 51,652,710 4,960,548 4,364,213 88.0%
2015 62,619,598 6,038,436 4,212,776 69.8%
2014 62,737,241 5,839,810 4,090,689 10.0%
2013 60,749,586 4,899,785 4,039,735 82.4%
2012 61,985,955 4,922,812 4,561,000 92.7%
2011 61,373,822 4,912,926 3,988,000 81.2%
2010 56,258,951 5,043,635 3,945,000 78.2%
2009 47,646,730 4,381,216 4,127,000 94.2%
2008 27,639,663 3,072,635 3,405,000 110.8%
2007 24,519,559 2,888,088 3,599,000 124.6%
2006 21,018,601 2,630,520 3,463,000 131.6%
2005 22,463,519 2,647,128 3,244,000 122.5%
2004 22,125,196 2,570,134 3,260,000 126.8%
2003 23,126,630 2,722,342 3,039,000 111.6%
2002 22,834,000 2,756,102 2,936,000 106.5%

Other Post-Employment Benefits

The City provides postretirement health care benefits to retired employees who are eligible for pension
benefits by subsidizing a portion of the retirees’ health insurance premiums. Dental and life insurance is also available
to retirees, but the City does not subsidize retirees’ dental or life insurance premiums. Expenditures for post-retirement
health care costs are made and recognized monthly.

The City's annual other postemployment benefit (OPEB) expense has been calculated based on the annual
required contribution (ARC), an amount actuarially determined in accordance with GASB Statement No. 45. Effective
for fiscal years beginning after June 15, 2017, OPEB will be calculated based on the ARC actuarially determined in
accordance with GASB Statement No. 75. Total claim payments for fiscal year 2017 were approximately $2,056,000
net of participants' contributions. The City's unfunded actuarial accrued OPEB liability as of June 30, 2015, the most
recent actuarial valuation date, was $144.6 million. See Note IV.H to the City's audited financial statements contained
in the CAFR for the fiscal year ended June 30, 2017 in APPENDIX D hereto for additional information regarding the
City's OPEB liability.

The City has funded OPEB expense on a pay-as-you-go basis. There are no assets held in trust or otherwise
set aside for payment of future benefits.

C-19
 CITY GENERAL FUND REVENUES

The principal General Fund revenue sources for the years ended June 30, 2015, 2016 and 2017 are
summarized in the following table (in thousands):

General Fund Revenue Sources

Fiscal Year Ended June 30

2015 2016 2017
Amount Percent Amount Percent Amount Percent

Property (ad valorem) taxes $ 23,419 5.89% $ 25,490 6.29% $ 25,607 6.24%

Sales and use taxes (1) 151,919 38.18% 160,897 39.72% 165,321 40.30%

Occupational taxes 81,013 20.36% 84,722 20.92% 89,870 21.90%

Licenses and permits (2) 91,101 22.90% 85,581 21.13% 80,625 19.65%

Lease Rental Tax 6,368 1.60% 6,475 1.60% 6,643 1.61%

Lodgings Tax 2,499 0.63% 2,716 0.68% 2,655 0.65%

Intergovernmental revenue 16,140 4.06% 13,139 3.24% 14,423 3.52%

Charges for services 15,955 4.01% 15,030 3.71% 16,231 3.96%

Fines and forfeitures 2,491 0.63% 2,318 0.57% 1,960 0.48%

Investment income 274 0.07% 671 0.17% 256 0.06%

Other revenue 6,678 1.68% 7,983 1.97% 6,692 1.63%

TOTAL $397,859 $405,022 $410,283

_____________________

Source: Audited financial statements of the City for the fiscal years ended June 30, 2015, 2016 and 2017.
Note (1): The City increased the general sales and use tax rates from three percent to four percent effective for the period
beginning on January 1, 2008 and ending on December 31, 2013. At its meeting on February 5, 2013, the City
Council voted unanimously to extend the general sales tax rate increase through December 31, 2018 and extend the
use tax rate increase with no expiration. At its meeting on April 10, 2018, the City Council extended the general
sales tax rate increase with no expiration.
Note (2): The City increased the business license tax levied by the City on non-regulated businesses by approximately 100%
beginning January 1, 2008; the City has subsequently reduced the levy on certain classes of businesses operating in
the City.

Ad Valorem Taxes

In fiscal year ended June 30, 2017, the City received for its General Fund ad valorem tax proceeds in the
approximate amount of $25,607,000 or approximately 6.24% of General Fund revenues. Information describing
property taxes is set forth under the heading “AD VALOREM TAXES” herein.

Sales and Use Taxes

In fiscal year ended June 30, 2017, the City received for its General Fund sales and use tax revenues in the
approximate amount of $165,321,000 or approximately 40.30% of General Fund revenues. Information describing
sales and use taxes is set forth under the heading “SALES & USE TAXES” herein.

C-20
Occupational Taxes

In the fiscal year ended June 30, 2017, the City received for its General Fund occupational license tax
revenues in the approximate amount of $89,870,000 or approximately 21.90% of General Fund revenues. Information
describing the City’s occupational license tax is set forth under the heading “OCCUPATIONAL TAXES” herein.

License and Permit Revenues

In the fiscal year ended June 30, 2017, the City received for its General Fund revenues for issuance of licenses
and permits in the approximate amount of $80,625,000 or approximately 19.65% of the City’s General Fund revenues.
Information describing the City’s license and permit revenues is set forth under the heading “LICENSES AND PERMIT
REVENUES” herein.

Intergovernmental Revenue

Shared State revenues include the following taxes or revenues that are collected by the State, a portion of the
proceeds of which are required by law to be paid to the City: bank excise tax, motor vehicle licenses, and State liquor
store profits. Shared revenues from local government units consist principally of taxes collected by Jefferson County
and paid in part to the City under State statutes requiring a sharing of the proceeds of the following taxes: gasoline
tax, tobacco tax, beer excise tax and county road tax.

AD VALOREM TAXES

General

The levy and collection of ad valorem taxes in Alabama are subject to the Alabama Constitution, which,
among other things, fixes the percentages of market value at which property can be assessed for taxation, limits the
tax rates that can be levied against property and places a ceiling on the aggregate ad valorem taxes that can be levied
by all taxing authorities on any property in any tax year. The amount of an ad valorem tax in Alabama is computed
by multiplying the applicable tax rate by the assessed value of the taxable property. The assessed value of taxable
property is a specified percentage (the “assessment ratio”) of its fair and reasonable market value or, in certain
circumstances, its current use value. Ad valorem tax rates are stated in terms of mills per dollar of assessed value.
Each mill represents a tax equal to one-tenth of one percent of the assessed value of such property.

Classification of Taxable Property

Amendment No. 373 to the Alabama Constitution divides all taxable property into the following four classes
valued for taxation according to the assessment ratios shown below:

Class I: All property owned by utilities 30%

Class II: All property not otherwise classified 20%

Class III: Agricultural, forest and single-family owner-occupied residential 10%

property and historic buildings and sites

Class IV: Private passenger automobiles and pickup trucks owned and 15%
operated by an individual for personal or private use

Amendment No. 373 permits the owner of Class III property to elect to have such property appraised at its “current
use value” rather than its “fair and reasonable market value.” “Current use value” has been defined statutorily as the
value of such property based on the use being made of it on December 1 of the preceding year, without taking into
consideration the prospective value such property might have it if were put to some other possible use.

C-21
Assessment Ratio Adjustment

The Alabama Legislature has no power to adjust assessment ratios pertaining to local (as distinguished from
state) taxes but does have the power to approve or disapprove an adjustment proposed by a local taxing authority. The
governing body of any county, municipality or other local taxing authority may increase or decrease the assessment
ratio with respect to any class of property subject to the following conditions: (i) the governing body of such county,
municipality or other taxing authority must hold a public hearing on the proposed adjustment before authorizing the
adjustment, (ii) the Legislature must adopt an act approving the adjustment, and (iii) a majority of the electors of such
county, municipality or other taxing authority must approve the adjustment in a special election. In addition, the
Legislature has placed the following restrictions on the adjustment of assessment ratios:

(1) If the total assessed value of all property of a single class located within a taxing authority’s
jurisdiction exceeds 50% of the total assessed value of all taxable property located within the jurisdiction of
such authority, then the assessment ratio with respect to that class of property may be decreased by no more
than 5% from the ratio otherwise prescribed for such class;

(2) If the total assessed value of all properties of a single class located within the jurisdiction
of a local taxing authority is less than 20% of the total assessed value of all taxable property located within
such jurisdiction, then the assessment ratio with respect to that class of property may be increased by no more
than 5% from the ratio otherwise prescribed for such class; and

(3) If the total assessed value of all property of a single class located within the jurisdiction of
a local taxing authority exceeds 75% of the total assessed value of all taxable property located within such
jurisdiction, then (i) the assessment ratio with respect to that class of property may be decreased by no more
than 5% from the ratio otherwise prescribed for such class, and (ii) the prospective assessment ratio for all
other classes of property may be increased by no more than 5% from the ratio otherwise prescribed for such
classes.

The governing body of the City has not sought to adjust the assessment ratio applicable to any class of taxable property
nor does the City have any present plan for any such adjustment.

Rate Adjustments

Amendment No. 373 authorizes any county, municipality or other local taxing authority to decrease any ad
valorem tax at any time, provided that such decrease does not jeopardize the payment of any bonded indebtedness
secured by such tax. Amendment No. 373 also permits a county, municipality or other local taxing authority to increase
the rate at which any ad valorem tax is levied, but only if (i) the governing body of such county, municipality or other
taxing authority holds a public hearing on the proposed increase before authorizing the increase, (ii) the Legislature
adopts an act approving the increase, and (iii) a majority of the electors of such county, municipality or other taxing
authority subsequently approves the increase in a special election.

Ceiling on Ad Valorem Taxes

Amendment No. 373 also limits the total amount of state, county, municipal and other ad valorem taxes that
may be imposed on any class of property in any one tax year. This limitation is expressed in terms of a specific
percentage of the fair and reasonable market value of such property. The applicable percentages to the four classes of
property are as follows:

Class I - 2%
Class II - 1-1/2%
Class III - 1%
Class IV - 1-1/4%

If the total amount of tax otherwise payable with respect to a class of property would exceed the maximum tax limit,
the millage rate of each separate tax to which such property is subject must be reduced in the same proportion that the
millage levied by or for the benefit of each taxing authority bears to the total millage levied by or for the benefit of all

C-22
applicable taxing authorities. This provision becomes operative as to the several classes of property only if the total
tax rate exceeds the following:

Class I - 66-2/3 mills

Class II - 75 mills
Class III - 100 mills
Class IV - 83-1/3 mills

The tax rate for Class I property for the portion of the City located in Jefferson County exceeds the above referenced
rate and is equal to 72 ½ mills. See “AD VALOREM TAXES—Ad Valorem Tax Rates.”

C-23
Ad Valorem Tax Rates

Ad valorem taxes on property in the jurisdiction of the City are currently levied at the following rates (in
mills):

Ad Valorem Tax Rates

Jefferson Shelby
County County

State of Alabama 6.50 mills 6.50 mills

Jefferson and Shelby Counties

County Tax:
General Fund (no limit as to time) 5.60 5.00
Road Fund (shared with City) 2.10 2.50
Building and Bridge Fund (no limit as to time) 5.10 N/A
Sewer Fund (no limit as to time) 0.70 N/A
Total 13.50 7.50
County Schools:
General School Fund 5.40 5.00
General School Fund 2.10 4.00
General School Fund 0.70 7.00
Total (shared with City schools based on average daily attendance) 8.20 16.00

Total Jefferson and Shelby Counties 21.70 23.50

City of Birmingham

Municipal Tax:
General Municipal purposes (no limit as to time) 9.00 9.00
Debt service (no limit as to time) 9.20 9.20
Public school use (expires September 30, 2021) 4.20 4.20
Debt service of school bonds (expires September 30, 2021) 2.80 2.80
Public school operation (expires September 30, 2021) 2.80 2.80
Library (no limit as to time) .50 .50
Total 28.50 28.50
Special School Taxes:
Public school uses (School District Levy)
(expires September 30, 2045) 3.00 N/A
Public school uses (School District Levy)
(expires September 30, 2021) 5.70 N/A
Public school uses (School District Levy)
(expires September 30, 2021) 7.10 7.70
Total 15.80 7.70
Total City of Birmingham 44.30 36.20

TOTAL TAX 72.50 66.20

Homestead Exemption

Prior to 1982, Alabama law did not provide a homestead exemption that reduced the assessed valuation of
owner-occupied, single-family residential property for purposes of municipal taxation, except in the case of persons
who were totally disabled or who were 65 years of age or older and had an annual taxable income of $7,500 or less.

C-24
Reacting ‘to the increase in ad valorem taxes which was anticipated to result from the statewide property reappraisal
program conducted during 1982, the Legislature of Alabama in 1982 enacted a law which authorized the governing
body of any municipality, county or other local taxing authority to grant by resolution or ordinance a homestead
exemption which, when added to any other homestead exemption applicable to the same ad valorem tax levy, will not
exceed $4,000 in assessed value or 160 acres in area. Since no other homestead exemptions for purposes of municipal
taxation are provided by existing law except in the special cases of persons who are totally disabled or who are 65
years of age or older, the effect of this law was to empower the governing body of any municipality to reduce at any
time the assessed value of owner-occupied, single-family residential property located in such municipality by up to
$4,000 per housing unit. Using the authority granted by this law, the governing body of the City has adopted an
ordinance which, during the tax year ending September 30, 1989, provided an exemption of $1,000 for each housing
unit that qualifies as a homestead under the laws of Alabama. The governing body of the City may at any time adjust,
rescind or reinstate any homestead exemption provided pursuant to the law.

Tax Increment Financing District

On September 29, 1998, the City established a Tax Increment Financing District (“TIF”), which was later
enlarged on March 18, 2000 to include an area of approximately 344 city blocks contiguous to City Hall. The
Ordinance establishing the TIF anticipates that all tax increments permitted by the Tax Increment Act (Code of
Alabama 1975, § 11-99-1, et seq.) will be captured by the City for the purpose of paying the cost of public projects
within the TIF including the cost of financing. These tax increments will equal the incremental increase in ad valorem
taxes on property within the TIF since September 29, 1998. The City has taken the position that no incremental ad
valorem taxes that constitute General Bond Tax, School Bond Tax, any educational taxes or library taxes will be
diverted from their intended use. See “CITY DEBT MANAGEMENT—Tax Increment Financing Warrants” herein.

Significant Property Tax Litigation

The levy, assessment and collection of ad valorem taxes in the State of Alabama have, since 1970, been
subject to significant litigation, which has resulted in substantial changes in Alabama’s property tax system affecting
ad valorem tax receipts of the various taxing authorities and districts. The City does not believe that Jefferson or
Shelby Counties (the “Counties”) are now a party to any such litigation that relates to ad valorem taxes levied by the
Counties, as distinguished from litigation that relates to ad valorem taxes levied by counties generally. There can be
no assurance, however, that other litigation concerning the Alabama property tax system in general, or that of Jefferson
or Shelby Counties in particular, will not be initiated or resolved in such a manner as to affect adversely the levy or
collection of ad valorem taxes by the Counties, including any ad valorem taxes levied for the use and benefit of the
City.

Assessment and Collection

For that part of the City which is located in Jefferson County, ad valorem taxes on taxable properties, except
motor vehicles and public utility properties, are assessed by the Jefferson County Tax Assessor and collected by the
Jefferson County Tax Collector. Ad valorem taxes on motor vehicles in that part of the City located in Jefferson
County are assessed and collected by the Jefferson County Revenue Director, and ad valorem taxes on public utility
properties are assessed by the State Department of Revenue and collected by the Jefferson County Tax Collector.

For the part of the City located in Shelby County, ad valorem taxes on taxable properties, except motor
vehicles and public utility properties, are assessed and collected by the Shelby County Property Tax Commissioner.
The Shelby County License Office assesses and collects ad valorem taxes on motor vehicles in that part of the City
located in Shelby County, and ad valorem taxes on public utility properties are assessed by the State Department of
Revenue and collected by the Shelby County Tax Collector.

City ad valorem taxes are collected in advance, rather than in arrears. For example, taxes due October 1, 2017
refer to the tax year beginning on October 1, 2017 and ending September 30, 2018. In both Jefferson and Shelby
Counties, ad valorem taxes are due and payable on October 1 and delinquent after December 31, in each year (except
with respect to motor vehicles, which have varying due dates), after which penalty and interest are required to be
charged. If real property taxes are not paid by the June 15 following the due date, a tax sale is required to be held.

C-25
Additional Ad Valorem Tax Information

For additional ad valorem tax information including the assessed value and estimated true value of all taxable
property, the amount of taxes levied and collected and the largest taxpayers, see the CAFR at Tables C-3, C-7 and C-
8, respectively. In addition, Table B-2 of the CAFR includes the total ad valorem tax revenues collected in the City
for the fiscal years 2008 to 2017, prior to deposit of such revenues in the Debt Service Fund, Board of Education Fund
and General Fund, and allocation for public library purposes. Table 12 below shows just the portion of the total ad
valorem tax revenues that are deposited in the City’s General Fund.

Ad Valorem Tax Revenue

The following table shows historic ad valorem tax revenues of the City that were available for deposit in the
General Fund for the fiscal years indicated:

Ad Valorem Tax Revenues

Fiscal Year Total

Ended Amount
June 30 Collected*

2001 $16,785,704
2002 18,542,000
2003 18,939,684
2004 22,525,000
2005 23,639,000
2006 26,168,000
2007 27,561,000
2008 28,554,000
2009 30,273,000
2010 26,150,000
2011 23,626,000
2012 23,181,000
2013 22,001,800
2014 23,907,500
2015 23,418,813
2016 25,490,000
2017 25,607,187
____________________
Source: Amounts are derived from audited financial statements of the City for the fiscal years ended June 30, 2001 through
2017.
* Prior to 2010, the portion of ad valorem tax revenues due to be paid, by statute, to the Jefferson County Board of
Health (“Board of Health”) and the Birmingham-Jefferson County Transit Authority (the “Transit Authority”) were
included in the total amount of property taxes collected as revenue on the City’s financial statements and were also
deducted as an expense. Prior to and after 2010, the amounts owing to the Board of Health and the Transit Authority
were and continue to be remitted directly to Transit Authority and Board of Health by the County’s Tax Collector.
As a result of a change in accounting procedures, the City no longer treats the portion of the ad valorem tax revenues
due the Transit Authority and the Board of Health as an item of revenue and expense on the City’s financial
statements. Accounting for the amounts due the Transit Authority on the City’s financial statements ceased
beginning in 2010 and accounting for the amounts due the Board of Health ceased beginning in 2011. The ad
valorem tax revenue due the Transit Authority after the accounting procedure change and not included in the
“Property (ad valorem) tax” calculation above was $3,483,527, $3,947,279, $3,144,824, $4,009,941, $2,891,796,
$3,659,782, $3,632,112 and $3,808,438 for 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017, respectively. The
ad valorem tax revenue due the Board of Health after the accounting procedure change and not included in the
“Property (ad valorem) tax” calculation above was $1,534,510, $1,159,722, $1,172,297, $1,164,355, $1,208,827,
$1,222,015 and $1,260,629 in 2011, 2012, 2013, 2014, 2015, 2016 and 2017, respectively. Accordingly, the actual
total property (ad valorem) taxes collected by the City for 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 were
$29,633,225, $29,107,565, $27,485,823, $27,184,038, $27,963,651, $28,287,422, $30,344,127 and $30,676,254,
respectively.

C-26
 SALES AND USE TAXES

General

The City levies and collects a privilege or license tax, commonly called a sales tax, against persons, firms or
corporations engaged in the business of selling at retail, or otherwise consuming any tangible personal property, or
conducting places of amusement within the corporate limits of the City. The City also levies a use tax on the storage,
use or other consumption in the City of tangible personal property where no tax was collected on the initial sale. The
sales tax and use tax are imposed at equal rates.

The City’s sales and use taxes are currently levied at a rate of four percent. This rate took effect on January
1, 2008 and is in effect indefinitely with no expiration. Most municipalities in the Birmingham area, including Hoover,
Homewood, Vestavia Hills, Irondale, Trussville, Fultondale, Leeds, Fairfield and Gardendale, all located adjacent or
in close proximity to the City, levy a sales tax at a general rate of four percent. Mountain Brook, another municipality
located in close proximity to the City, levies a sales tax at a general rate of three percent. The sales and use taxes
applicable to agricultural machinery, mining and manufacturing machinery and passenger automobiles are levied at
lower rates. The ordinance levying the sales and use taxes incorporate by reference exemptions and regulations under
the statewide sales and use tax act. The sales and use tax is collected monthly by the City. Under applicable judicial
precedents, such taxes may not be levied at rates that are confiscatory or unreasonable.

C-27
Sales and Use Tax Revenue

The following table shows historic sales and use tax revenues of the City for the fiscal years indicated:

Historic Sales and Use Tax Revenues

Fiscal Year Total

Ended Amount
June 30 Collected*

2001 $106,341,206
2002 103,695,000
2003 101,834,000
2004 100,608,000
2005 107,271,000
2006 109,085,000
2007 109,665,000
2008 129,732,000
2009 131,904,000
2010 127,197,000
2011 131,162,000
2012 134,869,000
2013 140,832,000
2014 145,394,000
2015 151,919,000
2016 160,897,000
2017 165,321,000

____________________

Source: Amounts are derived from audited financial statements of the City for the fiscal years ended June 30, 2001 through
2017.
* The City increased the general sales and use tax rates from three percent to four percent effective for the period
beginning on January 1, 2008 and ending on December 31, 2013. At its meeting on February 5, 2013, the City
Council voted unanimously to extend the general sales tax rate increase through December 31, 2018, and extend the
use tax rate increase with no expiration. At its meeting on April 10, 2018, the City Council extended the general
sales tax rate increase with no expiration.

OCCUPATIONAL TAX

General

The City imposes an income-based tax (an “occupational tax”) upon all persons engaging in or following any
trade, occupation or profession within the City as an employee. This tax applies to all persons whether or not such
employee is a resident of the City. The City’s occupational tax is an amount equal to one percent of such employee’s
“gross receipts.” The City’s occupational tax ordinance defines “gross receipts” to include any payment made to an
employee by an employer, including salary or wages, bonuses, incentive pay, overtime pay, non-cash compensation
and other compensation and benefits, but does not include amounts deferred in a section 401(k) plan or 403(b)
qualified plan. The City’s occupational tax ordinance excludes certain occupations requiring a City license under the
City’s business license ordinance from paying the City’s occupational tax. See “LICENSE AND PERMIT
REVENUES - General” herein. Employers in the City are required to deduct the tax from each payment due an
employee and must remit the same monthly directly to the City.

C-28
Occupational Tax Revenue

The following table shows historic occupational tax revenues of the City for the fiscal years indicated:

Historic Occupational Tax Revenues

Fiscal Year Total

Ended Amount
June 30 Collected

2001 $62,091,468
2002 63,051,000
2003 64,522,000
2004 65,537,000
2005 69,346,000
2006 72,297,000
2007 75,269,000
2008 76,918,000
2009 76,325,000
2010 73,008,000
2011 74,909,000
2012 77,703,000
2013 77,844,000
2014 78,654,000
2015 81,013,000
2016 84,722,000
2017 89,870,000

____________________

Source: Amounts are derived from audited financial statements of the City for the fiscal years ended June 30, 2001 through
2017.

LICENSE AND PERMIT REVENUES

General

Under general authority of Alabama law, the City charges fees for licenses and permits for certain persons
engaged in and carrying on certain exhibitions, trades, businesses, vocations, occupations and professions in the City.
The licenses or permits for such activities must be paid for or taken out annually by such persons. The City’s business
license ordinance levies varying license fees on different occupations, businesses or professions. The amount of the
license or permit fees varies according to the type of business or occupation licensed or permitted. In addition, the
City levies separate license fees on persons engaged in the business of the sale or delivery of any alcoholic beverage
or liquor at varying rates. Those enumerated occupations, businesses or professions (including those involving
alcoholic beverages) are therefore exempt from the City’s occupational tax. See “OCCUPATIONAL TAX—General”
herein. However, persons working in licensed occupations as employees pay the City’s occupational tax but not license
fees. Business license fees are collected by the City.

The City also imposes fees for the issuance of permits allowing persons to engage in certain activities, which
are, in general, construction or inspection-related. These permits include items such as building permits, elevator
permits, plumbing permits and excavation permits. The City issues permits through its Department of Planning,
Engineering and Permits.

C-29
 The City increased the business license tax levied by the City on non-regulated businesses by approximately
100% beginning January 1, 2008; the City has subsequently reduced the levy on certain classes of businesses operating
in the City.

Business License and Permit Revenues

The following table shows historic business license and permit revenues of the City for the fiscal years
indicated:

Historic Business License and Permit Revenues

Fiscal Year Total

Ended Amount
June 30 Collected*

2001 $50,430,393
2002 51,743,000
2003 50,759,000
2004 52,776,000
2005 55,622,000
2006 60,564,000
2007 65,349,000
2008 91,063,000
2009 87,525,000
2010 78,556,000
2011 79,984,000
2012 87,671,000
2013 86,709,000
2014 87,010,000
2015 91,101,000
2016 85,581,000
2017 80,625,000

____________________

Source: Amounts are derived from audited financial statements of the City for the fiscal years ended June 30, 2001 through
2017.
* The City increased the business license tax levied by the City on non-regulated businesses by approximately 100%
beginning January 1, 2008; the City has subsequently reduced the levy on certain classes of businesses operating in
the City.

CITY DEBT MANAGEMENT

The principal forms of indebtedness that the City is authorized to incur include general obligation bonds,
general obligation warrants, general obligation bond anticipation notes, revenue anticipation notes, gasoline tax
anticipation bonds and various revenue anticipation bonds and warrants relating to enterprises. In addition, the City
has the power to enter into certain leases which constitute a charge on the general credit of the City, to guarantee
obligations of certain public corporations and to enter into certain funding agreements with regard to the obligations
of other public agencies. General obligation warrants, certain revenue anticipation bonds, warrants and notes and
capitalized lease obligations may be issued or incurred without voter approval.

C-30
General Obligation Bond Debt Service

Although general obligation bonds of the City are payable from any or all taxes and revenues of the City that
are not otherwise pledged or restricted to a specific use, the City has a long-standing debt management policy under
which it budgets annually and sets aside certain tax proceeds and other moneys in separate funds (i.e., the Bond Fund)
for the payment of debt service on its general obligation bonds. The proceeds from a 9.2 mill ad valorem tax for
general bond debt service (the “General Bond Tax”) and a 2.8 mill ad valorem tax for school bond debt service (the
“School Bond Tax”), both authorized by the Alabama Constitution, are customarily paid into the Bond Fund. The
School Bond Tax expires on September 30, 2021, and the proceeds of the School Bond Tax can only be used to pay
debt service on bonds issued for school construction purposes. The General Bond Tax is levied without limit as to
time, and the proceeds of the General Bond Tax can, under existing law, be used only for payment of debt service on
the City’s general obligation bonds heretofore or hereafter issued.

The Bond Fund balance as of June 30, 2018 was $36,705,681. The maximum annual debt service on the
City’s general obligation bonds as of June 30, 2018 is estimated to be $28,587,977 occurring in the fiscal year ending
June 30, 2019. The City has projected that the proceeds of the General Bond Tax and the School Bond Tax, together
with the proceeds of such taxes currently held in the Bond Fund, will continue to be sufficient to provide for debt
service on its outstanding general obligation bonds. This projection is based on a number of assumptions, including
bond interest rates, rate of increase of ad valorem tax collections, and investment earnings, that the City considers
reasonable; however, the future availability of sufficient funds in the Bond Fund cannot be guaranteed. The bonds
being issued by the BJCC and secured by the BJCC Funding Agreement described below are not secured by the City’s
Bond Fund, and proceeds of the General Bond Tax and the School Bond Tax cannot be used to make the payments
due under the BJCC Funding Agreement.

General Obligation Warrants Debt Service

Debt service on the City’s general obligation warrants (the issuance of which need not be approved by
referendum) is paid from all revenues of the City legally available therefor, which excludes revenues paid into the
Bond Fund. Therefore, debt service on general obligation warrants of the City are payable from revenues such as ad
valorem taxes not deposited in the Bond Fund, sales taxes, occupational taxes, business license taxes and any other
revenues of the City deposited in the City’s General Fund.

Authorized But Unissued Debt; Future Debt Issuance

The City has no authorized but unissued debt, other than short-term obligations incurred in the ordinary
course of its operations.

In the first quarter of the City’s 2019 fiscal year, the City expects to issue (i) its general obligation refunding
bonds (the “Series 2018-A Bonds”) in the approximate principal amount of $40 million to refund certain outstanding
general obligation bonds and (ii) its general obligation warrants (the “Series 2018-B Warrants”) in the approximate
principal amount of $40 million to finance certain public works projects. The issuance of the Series 2018-A Bonds
and the Series 2018-B Warrants has not yet been authorized by the City.

General Obligation Bonds

The following table lists the outstanding principal amount of all general obligation bonds of the City as of
June 30, 2018:

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 Outstanding General Obligation Bonds

Principal
Issue Outstanding

Taxable General Obligation Bond Series 2016-TMC $ 2,431,216

General Obligation Refunding Bonds Series 2016-D 12,120,000

General Obligation Refunding Bonds Series 2016-C 16,040,000

General Obligation Refunding Bonds, Series 2016-A 4,950,000

General Obligation Bonds (Federally Taxable), Series 2015-B 15,430,000

General Obligation Bonds, Series 2015-A1 38,052,000

General Obligation Bonds, Series 2015-A2 23,205,000

General Obligation Refunding Bonds Series 2014-A 44,980,000

General Obligation Refunding Bonds Series 2015-WFB 15,055,000

General Obligation Refunding Bonds, Series 2013-A 67,164,335

General Obligation Bonds, Series 2013-B 2,690,000

General Obligation Capital Improvement and Refunding Bonds, Series

2007-A 46,385,000

TOTAL $288,502,551

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General Obligation Warrants

The following table lists the outstanding principal amount of all general obligation warrants of the City as of
June 30, 2018:

Outstanding General Obligation Warrants

Principal
Issue Outstanding

General Obligation Warrants Series 2017-CTB $ 500,000

General Obligation Warrants Series 2017-BBVA 450,000

General Obligation Warrants Series 2016-EPI 13,617,500

General Obligation Refunding Warrants, Series 2014-B 37,795,000

General Obligation Warrants, Series 2014 PNC3 260,000

General Obligation Warrants, Series 2014-PNC 1,490,000

General Obligation Warrants, Series 2012-CBT 500,000

General Obligation Warrants, Series 2012-RB 3,645,000

General Obligation Recovery Zone Economic Development Warrants,

Series 2010-B (Taxable) 39,115,000

General Obligation Refunding Warrants, Series 2009-A 9,100,000

TOTAL $106,472,500

Tax Increment Financing Warrants

On December 17, 2014, the City issued its Tax Increment Financing District No. I Revenue Warrant Series
2014, outstanding in the aggregate principal amount of $13,719,000 as of June 30, 2018 (the “TIF Warrants”). The
TIF Warrants were issued to refund certain prior tax increment secured obligations. The TIF Warrants bear interest
at fixed interest rates, and mature on September 1, 2028.

The TIF Warrants are limited obligations of the City payable solely from and secured by a pledge of that
amount of the revenue produced in each year from the levy of certain local ad valorem taxes by the City and Jefferson
County in the Tax Increment District (generally the downtown city center) which is in excess of the amount of such
revenue produced from the levy of such taxes in such District in the year in which such District was established (1998),
less commissions required by law to be paid to the Tax Assessor and Tax Collector of Jefferson County. See “AD
VALOREM TAXES—Tax Increment Financing District” herein. The City has also entered into a general obligation
funding agreement (the “TIF Funding Agreement”) with the trustee for the TIF Warrants to provide additional security
for such warrants. Pursuant to the TIF Funding Agreement, if the TIF revenues are insufficient to make the required
debt service payments on the TIF Warrants when due, the City has agreed to cover any shortfall in the debt service
payments. The City’s obligation under the TIF Funding Agreement is a general obligation of the City.

Commercial Development Authority of the City of Birmingham 2011 Funding Agreement

The Commercial Development Authority of the City of Birmingham issued bonds (the “CDA Bonds”) to
finance a multi-use development in the downtown area of the City. As of June 30, 2018, the outstanding principal

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amount of the CDA Bonds is $64,730,000. The development includes a four-star convention hotel of approximately
300 guest rooms and related meeting rooms, restaurant and exercise facilities, approximately 60,000 square feet of
storefront space for lease to food service and entertainment facilities, and related streets and public infrastructure, all
adjacent to the civic center complex, for use by the Birmingham-Jefferson Civic Center Authority (the “BJCC”). The
hotel, which opened in January 2013, is operated as the Westin Hotel Birmingham, and the entertainment space is
currently 100% leased. BJCC owns and operates the facilities financed by the CDA Bonds. The Mayor of the City is
a member of the board of directors of the BJCC. The City and BJCC have entered into a funding agreement (the
“CDA City Funding Agreement”) pursuant to which the City has agreed to make payments to the Authority at times
and in amounts sufficient to pay the debt service on the CDA Bonds. The City has pledged as a source of payment
and security for its obligations under the CDA City Funding Agreement the following amounts received in each fiscal
year: (i) $3,000,000 of the Occupational Tax, and (ii) 2/3rds of the proceeds of the Lodging Tax levied at the rate of
3.00%. The CDA City Funding Agreement is a full faith and credit general obligation of the City and calls for annual
payments through fiscal year 2041 of approximately $4,995,000.

Funding Agreement for Expansion of Birmingham-Jefferson Convention Complex

BJCC is issuing its bonds in six separate series to finance two major capital projects that will significantly
expand the BJCC’s capabilities, including the construction of a flexible use, open air stadium and the renovation of
BJCC’s existing arena and convention and meeting space (the “BJCC Expansion Projects”). The City has agreed to
provide funds to BJCC for the payment of debt service on one series of the BJCC bonds. The Authority and the City
will enter into a funding agreement (the “BJCC Funding Agreement”) pursuant to which the City will be obligated to
make payments to the Authority in the amount of $3,000,000 per year for a period of 30 years (the “City
Contributions”) for the purpose of providing a share of the funding for the BJCC Expansion Projects. The City
Contributions will be made in 60 equal semi-annual installments of $1,500,000 each due on April 20 and October 20
of each year, with the first installment due on the 20th day of October, 2018.

The City’s obligation to make the City Contributions is a general obligation of the City, secured by the full
faith and credit of the City. The City expects to make the City Contributions from proceeds of the City’s occupational
tax, but the City’s obligation to make the City Contributions does not include a special pledge of the City occupational
tax or any other tax revenues collected by the City.

Public Athletic, Cultural and Entertainment Facilities Board Funding Agreement

On December 15, 2011, the City entered into a Funding Agreement with the Public Athletic, Cultural and
Entertainment Facilities Board of the City of Birmingham (“PACE Board”). The Funding Agreement provides for
the funding and development of an 8,500-seat minor league baseball stadium, to be the home of the Birmingham
Barons, the City’s minor league baseball team, and a Negro League baseball museum located in the downtown area
of the City. In order to provide funding for the construction of the facilities, the City increased its Lodging Tax by
3.5% effective January 15, 2011, and the PACE Board issued its Series 2011-A and 2011-B bonds (the “PACE
Bonds”) in the principal amount of $64,000,000, which are outstanding in the principal amount of $54,850,000 as of
June 30, 2018. The Funding Agreement pledges the increase in the Lodging Tax (3.5%) and certain revenue from the
operations of the baseball stadium to pay debt service on the PACE Bonds. The Funding Agreement is a general
obligation of the City and has a term equal to the term of the PACE Bonds, which mature on October 1, 2041. The
PACE Bonds are subject to mandatory tender on December 14, 2026. If the PACE Bonds are tendered on such date,
the City expects to meet its purchase obligation through one or more refinancing options that it customarily employs,
including the issuance of long-term debt through a public offering or a direct loan from a financial institution. There
can be no assurance that such refinancing options will be available to the City when the need arises.

Crossplex – In April, 2017, the Commercial Development Authority of the City of Birmingham issued $14
million of bonds to fund Crossplex Village, a development in the western area of Birmingham. The development will
include a hotel, restaurants and a Starbucks training facility. The project is located on land owned by the City that is
adjacent to the Birmingham Crossplex, a natatorium, indoor track facility and arena. The bonds are expected to be
repaid from rents paid by tenants to the developer. The City entered into a funding agreement whereby the City will
pay the debt service if the project’s rent payments are insufficient to cover the debt service. The bonds have a 25-year
term. The project was partly capitalized by New Market Tax Credits. The City expects that the developer will
refinance the project after the expiration of the New Market Tax Credits.

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 The PACE Board has also entered into a lease with the Birmingham Barons, which expires on December 31,
2041. Construction of the baseball stadium has been completed and the Barons held their first home game in the new
stadium on April 10, 2013.

Birmingham Zoo Obligations

The City has approved the contribution of $1,500,000 in each year for a period of ten years, commencing in
the fiscal year ended June 30, 2010, and thereafter the contribution of $500,000 in each year for a period of 15 years,
to the Birmingham Zoo to pay the costs of operations and capital projects, including certain new exhibits.

Economic Development Incentive Obligations

The City has entered into agreements in recent years with other entities for economic development purposes.
Pursuant to these agreements, the City will make payments over stated periods of years for the development of various
projects and facilities that the City believes will promote the tax and revenue base of the City and increase employment
opportunities in the City. The City’s economic development office generally expects, based upon the information
provided to it and upon certain assumptions, that these other agreements will result in greater tax revenues for the City
than the City is obligated to pay under such agreement, and in certain cases, the City’s obligations are capped at an
amount not to exceed the tax revenues it actually receives.

The approximate aggregate outstanding obligation of the City under these other agreements is $78,610,000.
These obligations are limited obligations of the City payable generally as rebates of taxes received by the City from
the private entity. Certain of these obligations are not subject to the City’s constitutional debt limitation. See “CITY
DEBT MANAGEMENT—Constitutional Debt Limitation” for additional information.

Serra Automobile Dealerships Development Agreement - In May of 2013, through a business retention and
expansion program, the City agreed to provide an annual rebate of sales taxes generated, not exceeding $753,000
annually, until a total rebate of $5,271,000 has been provided. The remaining balance is $1,506,000.

Limbaugh Toyota Redevelopment Agreement - Based upon the agreement, the City agreed to support an
expansion of the business by deeding certain real property to the Company and to make six annual payments of
$315,000 and one payment of $310,000, totaling $2,200,000 during the first seven years of the agreement after
completion of construction; and to rebate 25% of New Sales Tax Revenue in 2020 through 2022. The first payment
was due on October 31, 2015 and the remaining balance is $940,000.

Trinity/Daniel Agreement (the “Agreement”) - In October, 2008, the City entered into a Project Agreement
with the owner of Trinity Medical Center, a full-service in-patient hospital, currently located in Birmingham
(“Trinity”). Affiliates of Daniel Corporation, a real-estate development firm, (“Daniel”) were also parties to the
Agreement. The Agreement provides incentives for the hospital to relocate to the fast growing Highway 280 area of
the City. Daniel proposed to build ancillary buildings and a hotel. The move required Trinity to secure a Certificate
of Need from the State licensing board. The CON was granted and years of litigation ensued, brought by competing
hospitals. In March, 2013, the Alabama Supreme Court settled the matter and Trinity began its construction project
which is now complete and is expected to cause the City to retain approximately 2,300 employees and Daniel projected
that its development would generate approximately 600 employees.

The Agreement obligated the City to rebate various taxes during construction periods and during operational
periods to both Trinity and Daniel. The rebate requirements are summarized below. The summary is not intended to
be a reproduction of the entire agreement. Other provisions may apply. The City has advised Trinity and Daniel that
it does not have the authority to rebate ad-valorem taxes that are earmarked for specific uses, whether by the
Constitution and Statutes of the State and/or by the referendums approving the taxes. In addition to the City’s 9 mill
general ad-valorem tax, the Agreement contemplates the rebate of the 9.2 mill Bond Debt Service Tax and the .5 mill
Library Tax, all three of which are ear-marked, in whole or in part, for specific uses:

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 Trinity:
During Construction:
Trinity Receives:
100% sales and use taxes
100% non-educational ad-valorem taxes
Operational Period:
Trinity Receives: Years 1-10 Years 11-20
Non-educational ad-valorem taxes 80% 40%
Occupational tax 80% 40%

Daniel:
During Construction:
Daniel Receives:
100% sales and use taxes
100% non-educational ad-valorem taxes
Operational Period:
Daniel Receives: Years 1-20
Non-educational ad-valorem taxes 90%
Occupational tax 90%

The term of the Agreement is 23 years from the commencement of construction. The total amount payable
to Trinity and to Daniel during the operating periods will not exceed $40,000,000 and $15,000,000, respectively. The
remaining balance is $37,847,072. Daniel has not begun a project. The amount rebated to Trinity during fiscal year
2017 was $1,963,059. In 2016, the City issued a bond in the amount of $2,431,216, with total principal and interest
payments of $8,496,200, to Trinity as partial payment of the City’s incentive obligations.

The Children's Hospital of Alabama ("TCHA") Agreement ("Agreement") - On May 13, 2008, the City
entered into an incentive agreement with the Children's Hospital of Alabama relating to the construction of a
replacement hospital in the medical district of the City. The agreement provides that the City will rebate certain
construction related permits/taxes during construction and then rebate occupational taxes which exceed a baseline
according to the following formula: years 1-4: 50%; years 5-12: 80%; and years 13-20: 50%. The occupational tax
baseline is the amount of occupational tax paid to the City for the twelve-month period ending September 30, 2007.
The term of the Agreement is the earlier of May 13, 2028 or when the total amount rebated by the City equals
$20,000,000. The remaining maximum obligation is approximately $15,063,466. The new hospital's cost was
approximately $375,000,000 and the old facility has been converted into research space. The new hospital opened in
March, 2011.

Firestone Flowers, LLC – In November, 2014 the City entered into a Project Funding Agreement to
incentivize Firestone to complete the redevelopment of a half block in the City center, at a cost of approximately $30
million to include a five-story building which includes a Publix Supermarket, approximately 85 apartment units and
a parking deck to provide approximately 270 off-street parking spaces to accommodate the Publix and the apartments.
The City agreed to rebate 65% of the actual projects sales tax revenue for years 1 and 2, beginning October 1, 2018
and 60% of sales tax revenue for years 3-10, but not more the $6,450,000 during the term. Should the Firestone, or
affiliates, relocate the Publix to another location outside of the City during the reimbursement term, Firestone must
repay any rebates received to the City.

Edwards Chevrolet Company, Inc. – In April, 2013 the City entered into an Incentive Agreement with
Edwards, under which Edwards would modernize its show-room in the Central Business District. The City agreed to
rebate 50% of Edward’s sales tax (generated after any other incentive plan) during a period of seven years from the
project completion date. Should Edwards close or relocate to outside of the City during the term and for three years
thereafter, Edwards must repay any rebated amounts to the City. The maximum amount subject to rebate during the
term is $1,200,000. $254,792 was rebated to Edwards during fiscal year 2018. The remaining balance is $250,000.

Festival Center Birmingham, LP – In July, 2014 the City entered into a Project Agreement with Festival
whereby Festival would refurbish a 286,000 square foot shopping center that had become blighted and highly vacant.
The City agreed to share in the costs of the redevelopment by rebating the lessor of 50% of sales tax generated, or

C-36
$356,800. The rebates are limited to the sales tax generated with a maximum of $1,784,000 over a five year period
from the Completion Date. $356,058 was rebated to Festival during fiscal year 2018. The remaining balance is
$779,604.

New Car Franchise Dealers – In 2009, the City entered into an incentive agreement with Franchise Dealers
for new cars. For those existing Franchise Dealers, the City agreed to rebate sales taxes in the amount of any sales tax
rate on new cars in excess of 1%. The current rate is 2%, so the effective rebate is 1%. This rebate is reduced by ¼%
of used car sales. The rebate is payable quarterly, based on Franchise Dealer sales tax filings. The agreement ends in
2039. The amount of the rebate during fiscal year 2017 was $1,781,302.

IRC-MAB – In January, 2017 the City entered into a Project Agreement under which this company would
develop a retail shopping center in the Lakeshore Parkway area of the City, including a 45,000 square foot
supermarket. For seven years, after the Completion Date, the City agreed to rebate the lesser of $500,000 or 50% of
sales tax during years 1-5 and then rebate the lesser of $400,000 or 40% of sales tax during years 6-7, all not exceeding
$3,300,000. No rebate was provided to the developer during fiscal year 2018.

Lakeshore Parkway Retail, LP – In May, 2017, the City entered into a Project Agreement under which this
developer would construct an approximately 156,000 square foot addition to the Wildwood Shopping Center and
attempt to fill existing vacant spaces. For a period of five years from the Completion Date, the City will rebate the
lesser of 50% of sales tax or $960,000, not exceeding $4,800,000. No rebate was provided to the developer during
fiscal year 2018.

Urban Community Development Consortium – In April, 2017, the City entered into an agreement under
which this developer would construct a hotel, restaurant row and Starbucks training facility at the City’s Crossplex
sports completion venue. For a period of seven years after the Completion Date, the City will rebate the lesser of 50%
of sales tax or $465,000, not exceeding $3,255,000. No rebate was provided to the developer during fiscal year 2018.

Derivatives Transactions

The City is not a party to any interest rate swaps or other derivatives transactions and has no present plans to
enter into interest rate swaps or other derivatives transactions in the future. However, the City has the authority to
enter into such transactions from time to time at its discretion.

Other Debt Obligations

The City has entered into a lease/purchase agreement in the amount of $3,046,510 representing an energy
savings program with Philips Lighting North America Corporation, whereby Philips will install energy saving lights
in City owned public parking decks and will guarantee certain levels of energy cost savings. The lease requires
quarterly payments, ending on August 27, 2025.

The City has entered into a lease/purchase agreement in the amount of $6,999,950 with Motorola Solutions,
Inc., dated September 15, 2015, for mobile communication equipment for the Public Safety Department; the lease
requires annual payments of $999,993 per year for seven (7) years.

On August 4, 2016, the City entered into an Equipment Lease/Purchase Agreement in the amount of
$43,930,275. The Agreement requires quarterly payments beginning on August 4, 2018 and continuing until February
4, 2036, subject to annual appropriation. These funds will be used to replace heating, ventilation and air conditioning
equipment; roofs; water fixtures and other energy saving measures. The resulting energy cost savings is expected to
be sufficient to cover the lease payments. Energy savings are guaranteed by Trane, Inc.

On August 31, 2016, the City entered into an Equipment Lease/Purchase Agreement in the amount of
$17,487,893. The Agreement requires quarterly payments beginning on August 31, 2018 and continuing until August
31, 2033, subject to annual appropriation. These funds will be used to replace heating, ventilation and air conditioning
equipment; roofs; water fixtures and other energy saving measures. The resulting energy cost savings is expected to
be sufficient to cover the lease payments. Energy savings are guaranteed by Trane, Inc.

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Constitutional Debt Limitation

The City’s present constitutional debt limit is an amount equal to twenty percent (20%) of the assessed value
of the taxable property therein. However, the following, among other types of indebtedness, are, under existing law,
not chargeable against the City’s constitutional debt limit: obligations issued for the purpose of acquiring, providing
or constructing schools, water works or sewers; obligations incurred for street or sidewalk improvements where the
costs thereof, in whole or in part, are to be assessed against the property abutting such improvements; subject to certain
conditions, tax anticipation notes; certain obligations to make contributions towards the debt service of other public
entities; revenue securities issued for the purpose of extending, enlarging or improving water, electric, gas or sewer
systems and payable solely from the revenues of one or more of such systems; and certain other obligations exempt
under specific constitutional provisions.

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 The following calculation reflects the City’s estimated legal debt margin as of June 30, 2018:

City of Birmingham, Alabama

Computation of Legal Debt Margin

Net assessed value of real and personal property (as of June 30, 2018) after
exemptions and including motor vehicles (1) $3,299,241,623

Debt limit (20% of assessed value) 659,848,324

Aggregate outstanding indebtedness (2) 397,977,375

Less:
Estimated outstanding indebtedness not chargeable
against the debt limit (3) (49,650,000)

Balance in the Bond Fund (4) (36,705,681)

Aggregate indebtedness chargeable against debt limit 311,621,694

Legal Debt Margin $348,226,630

_________________

Note (1): As reported by the Jefferson County Tax Assessor, Jefferson County Department of Revenue (motor vehicles),
Shelby County Property Tax Commissioner and Shelby County License Officer (motor vehicles).
Note (2): Includes the aggregate principal amount of general obligation bonds, general obligation warrants, TIF Warrants,
Economic Development Incentive Obligations ($834,640), and the Birmingham Zoo Obligations ($9,000,000), all
as of June 30, 2018. Does not include any other obligation of the City and does not reflect principal payments made
on any obligation after June 30, 2018. Does not include the obligations of the City incurred pursuant to Amendment
No. 772 to the Constitution of Alabama, as amended, including the Series 2013-B, 2015-TMC and 2015-B bonds
and the BJCC Funding Agreement.
Note (3): Not less than the stated amount was issued for schools, water works or sewers and is not chargeable against the
City’s constitutional debt limit.
Note (4): Market value as of May 31, 2018 as reported by the City’s Finance Department.

Amendment No. 772 to the Constitution of Alabama authorizes the counties and municipalities within the
State to use public funds for certain purposes intended to further the economic development of such political
subdivisions. Amendment No. 772 authorizes any county or municipality to (i) acquire real property, buildings, plants,
factories, facilities, machinery and equipment of any kind and to improve and develop such properties for use as sites
for industry of any kind or as industrial parks, (ii) lease, sell, grant, exchange or otherwise convey all or any part of
any real property, buildings, plants, factories, facilities, machinery and equipment or any industrial park project to any
individual, firm, corporation or other entity, public or private, for the purpose of constructing developing, equipping
and operating industrial, commercial, research or service facilities of any kind or (iii) lend its credit to, or grant public
funds and things of value for the benefit of, any individual, firm, corporation or other entity, public or private, for the
purpose of promoting the economic and industrial development of such political subdivision.

Amendment No. 772 also authorizes counties and municipalities to issue bonds, warrants, notes and other
evidences of indebtedness and to use the proceeds thereof in furtherance of the powers discussed in the paragraph
immediately above, subject to the limitation that the aggregate principal amount of obligations issued for such
purposes may not exceed fifty percent (50%) of the assessed value of taxable property in such county or municipality.
Amendment No. 772 provides that the bonds, warrants, notes or other evidences of indebtedness may be secured by
the full faith and credit of the issuer or may be limited as to the source of payment.

The issuance of bonds, warrants, notes and other evidences of indebtedness pursuant to Amendment No. 772
is not subject to the City’s twenty percent constitutional debt limit. In recent years, pursuant to, and in accordance

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with, Amendment No. 772, the City has delivered agreements with various entities for economic development
purposes as provided in Amendment No. 772, whereby the City agrees to rebate, over a stated period of years, to the
other parties to such agreements, certain percentages of the proceeds of various City taxes received by the City from
the construction and operation by such other parties of the facilities described in such agreements. The obligations of
the City under such agreements (the “Amendment No. 772 Obligations”) (i) are not general obligations of the City
and (ii) are limited obligations of the City payable solely from the tax proceeds specified in such agreements, and
produced solely from the facilities and projects described in such agreements, when and if such tax proceeds are
actually received by the City, except for the funding agreements with the Commercial Development Authority of the
City of Birmingham, the Public Athletic, Cultural and Entertainment Board of the City of Birmingham and the BJCC,
each of which is a general obligation of the City. The economic development office of the City, based on certain
assumptions which it believes to be reasonable, has projected the total tax revenues to be received by the City from
each of the facilities for which such a tax rebate agreement is in effect, will exceed the amount of the City tax proceeds
to be rebated pursuant to such agreement.

The City has obligations outstanding under Amendment No. 772 in the aggregate amount of approximately
$280,351,658. These obligations are limited obligations of the City payable generally as rebates of taxes received by
the City from the private entity in the approximate amount of $78,610,000. Other agreements include: (i) funding
agreements to cover bonds issued by the Commercial Development Authority of the City of Birmingham (currently
outstanding in the principal amount of $64,730,000), the Public Athletic and Entertainment Board of the City of
Birmingham (currently outstanding in the principal amount of $54,850,000, which the City pays from its special
lodging tax and stadium lease receipts) and the BJCC (expected to be issued in the approximate principal amount of
$46,100,000), each of which is a general obligation of the City, (ii) the City’s General Obligation Bonds: Series 2013-
B, 2015-TMC and 2015-B, outstanding in the total amount of $20,551,216, and (iii) the Commercial Development
Authority of the City of Birmingham Funding Agreement for Crossplex Village in the amount of $14,000,000. The
City treats the obligations thereof under Amendment No. 772 (i) as exempt from the general constitutional debt
limitation and (ii) as subject to the special constitutional debt limit under Amendment No. 772.

Debt Ratios

The following table shows the City’s ratio of debt to assessed value and debt per capita, as of June 30 for the
fiscal years indicated (including motor vehicles):

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 Statement of Debt to Assessed Value,
and Debt Per Capita

Ratio of
Net Outstanding Outstanding
Fiscal Year Assessed Outstanding Debt to Debt
Ended Population (1) Value Debt (2) Assessed Value Per Capita

2006 242,820 $2,567,735,000 $474,029,000 18.46% $1,952

2007 242,820 2,631,971,182 558,692,000 21.23% 2,301
2008 242,820 2,810,565,632 531,991,000 18.62% 2,191
2009 242,820 2,937,624,552 532,371,000 16.94% 2,192
2010 242,820 2,880,265,253 442,317,912 13.90% 1,822
2011 242,820 2,826,110,356 458,115,159 16.21% 2,159
2012 212,237 2,755,748,375 486,466,310 17.65% 2,292
2013 212,237 2,689,227,218 523,188,481 19.45% 2,465
2014 212,237 2,804,674,640 493,053,233 17.58% 2,323
2015 212,237 2,868,624,760 462,402,601 16.12% 2,179
2016 212,237 2,893,627,248 503,560,227 17.40% 2,373
2017 212,237 3,101,825,069 536,238,361 17.29% 2,527
______________________

Note (1): Population for 2006 through 2010 is from U.S. Census Bureau population estimates; population for 2011 through
2017 is from the 2010 federal decennial census data.
Note (2): Includes the outstanding principal amount of the City’s general obligation bonds and general obligation warrants,
net of amounts held in the Bond Fund.
Source: U.S. Census Bureau; City’s Finance Department.

Debt Service

The following table sets forth the City’s general obligation debt service requirements:

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 Debt Service Requirements
Fiscal General General Total
Year Obligation Obligation General
Ended Bonds (2)(3) Warrants (1)(2)(3) Obligations (2) (3)
2018 $ 28,095,020 $ 21,641,304 $ 49,736,324
2019 28,587,978 15,053,508 43,641,486
2020 25,169,253 13,789,267 38,958,520
2021 23,658,342 12,985,604 36,643,946
2022 22,291,245 12,935,737 35,226,982
2023 23,839,746 12,902,270 36,742,016
2024 21,618,110 9,721,505 31,339,615
2025 21,778,705 9,654,844 31,433,549
2026 24,370,893 9,596,614 33,967,507
2027 24,420,930 8,023,141 32,444,071
2028 24,468,366 8,023,355 32,491,721
2029 24,509,265 6,857,253 31,366,518
2030 24,562,428 6,475,766 31,038,194
2031 24,614,338 4,545,572 29,159,910
2032 24,678,953 4,548,825 29,227,778
2033 24,746,814 4,550,519 29,297,333
2034 11,972,814 2,607,597 14,580,411
2035 12,112,245 2,607,423 14,719,668
2036 12,649,463 2,609,444 15,258,907
2037 12,434,453 2,608,473 15,042,926
2038 12,429,894 2,609,510 15,039,404
2039 12,429,730 2,609,805 15,039,535
2040 12,451,455 2,606,635 15,058,090
2041 12,439,069 - 12,439,069
2042 12,443,075 - 12,443,075
2043 12,456,470 - 12,456,470
2044 5,997,506 - 5,997,506
2045 6,003,058 - 6,003,058
Total $527,229,618 $179,563,971 $706,793,589
______________________
Note (1): The American Recovery and Reinvestment Act of 2009 Act added Sections 54AA, 1400U-1, 1400U-2 and 6431 to the
Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which provide for the issuance of Recovery
Zone Economic Development Bonds to finance capital expenditures for governmental projects and allow the issuer, upon
meeting certain requirements, to receive a payment directly from the United States Treasury for a percentage of the
interest due on the Recovery Zone Economic Development Bonds on each interest payment date (a “Subsidy Payment”).
The percentage of the interest constituting the Subsidy Payment on Recovery Zone Economic Development Bonds has
been set in Section 6431 of the Internal Revenue Code at forty-five percent (45%). The United States Treasury may offset
any Subsidy Payment to which the City is otherwise entitled against any other tax liability of the City payable to the
United States Treasury, such as withholding or payroll taxes, or other penalties or interest that may be owed at any time
to the United States Treasury. Amounts are net of anticipated Subsidy Payments. Assumes the anticipated Subsidy
Payments are received in full by the City without offset. The Subsidy Payments continue to be reduced as a result of the
sequester of a portion of the federal budget imposed by the Budget Control Act of 2011; the sequestration order was
signed by President Obama and took effect on March 1, 2013 (the City received full Subsidy Payments due during the
City’s 2013 fiscal year) and provides for across-the-board spending cuts in discretionary items in the federal budget. The
annual Subsidy Payment ranges from approximately $1,099,960 in 2013 to $79,065 in 2040. The subsidy is paid in
semiannual amounts for February 1 and August 1 interest payments. The City estimates that 6.6% of the Subsidy
Payments otherwise due to the City for 2018, in connection with the City’s General Obligation Recovery Zone Economic
Development Warrants, Series 2010-B (Taxable), will be withheld as a result of the sequester.
Note (2): The City pays its general obligation bonds from dedicated ad valorem tax revenue receipted in its Bond Reserve Fund.
Note (3): Does not include any funding agreement obligations of the City. For debt service requirements on these obligations, see
Schedules F-2 through F-4 to the CAFR included as APPENDIX D to this Official Statement.

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 ECONOMIC AND DEMOGRAPHIC INFORMATION

General

Birmingham is the most populous city in Alabama, with a 2010 Census population of 212,237. The City is
the county seat of Jefferson County (population 658,466) and is located in north central Alabama within 200 miles of
Atlanta, Nashville, Memphis and Montgomery. In 2000, the Birmingham MSA was expanded to include additional
counties and was officially designated the Birmingham-Hoover MSA by the federal Office of Management and
Budget. The seven Birmingham-Hoover MSA counties are: Bibb, Blount, Chilton, Jefferson, Saint Clair, Shelby and
Walker. Jefferson County, which had a population of 658,466 in 2010, is the center of the seven-county Birmingham-
Hoover Metropolitan Statistical Area (MSA)*, which covers approximately 5,310 square miles. The total population
of the 7 counties now comprising the Birmingham-Hoover MSA was 1,128,047 in 2010. Birmingham is the principal
health care, financial, transportation, distribution and wholesale and retail center of the State. The Medical Center of
the University of Alabama at Birmingham and the facilities of Birmingham’s other hospitals serve as a State and
regional center for health care.

The economic and demographic information included in this section demonstrates generally that the
population of the City is declining but that population in surrounding areas is growing and that other economic
statistics for the City and adjacent areas indicate a stable economy. In the early- to mid-1980s, the City conducted an
aggressive annexation campaign, increasing the area of the City from approximately 101 to 160 square miles, which
added approximately 1,500 new residents. Much of the land annexed by the City was undeveloped or commercial.
Currently, however, there is no proactive pursuit of annexation.

Population

The Birmingham-Hoover MSA (“the MSA”) has experienced steady population growth over the years.
Although the City of Birmingham’s population has declined since 1960, the MSA’s population has grown steadily.
The suburban counties of Blount, Shelby and St. Clair are some of the fastest growing counties in the State. It is
anticipated that the City of Birmingham will continue to serve as an employment, service and cultural center for
residents of the suburban areas. The following table summarizes historical population trends for Birmingham,
Jefferson County, the Birmingham-Hoover MSA, and the State of Alabama.

Population Trends

Jefferson Birmingham- State of

Year Birmingham County Hoover MSA Alabama
2017 210,710 659,197 1,149,807 4,874,747
2010 212,237 658,466 1,128,047 4,779,736
2000 242,820 662,047 1,052,238 4,447,100
1990 265,968 651,527 956,858 4,040,389
1980 286,799 671,324 884,040 3,893,888
1970 300,910 644,991 794,083 3,444,165
1960 340,887 634,864 772,044 3,266,740
1950 326,037 558,928 708,721 3,061,743
___________________
Sources: Birmingham Regional Chamber of Commerce and U.S. Census Bureau; 2017 estimate as of July 1.

*
The Birmingham Standard Metropolitan Statistical Area (SMSA) was established in 1967, and originally included Jefferson,
Shelby and Walker Counties. St. Clair County was added to the SMSA in 1973. Blount County was added in 1983, at which time
the official federal government designation became the Birmingham Metropolitan Statistical Area (MSA). Walker County was
removed from the Birmingham MSA in 1993. The MSA was re-defined in 2003 as the Birmingham-Hoover MSA, and three
Counties were added: Bibb, Chilton and Walker.

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Employment Statistics

In the past, the Birmingham area economy has (along with the economies of other industrial urban areas)
been adversely affected by the nationwide reduction in activity and employment in the industrial sector. However, the
local economy statistics has become increasingly diversified. The following table presents comparative
unemployment statistics:

Comparative Employment Trends

Annual Averages (in thousands)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
City of Birmingham
Labor Force 98.9 98.0 96.2 96.3 94.5 94.2 93.0 92.6 92.5 91.7
Employed 92.2 85.5 83.9 85.2 85.8 86.4 85.7 86.0 86.0 86.9
Unemployed 6.7 12.5 12.3 11.1 8.7 7.8 7.3 6.6 6.5 4.8
Unemployment Rate 6.8% 12.8% 12.8% 11.5% 9.2% 8.3% 7.8% 7.1% 7.0% 5.3%

Jefferson County, AL
Labor Force 311.6 307.0 318.5 319.7 316.5 315.4 312.2 310.8 311.1 309.1
Employed 294.8 274.0 285.6 289.9 293.0 294.4 292.6 293.0 293.3 296.0
Unemployed 16.8 33.0 32.9 29.7 23.4 21.0 19.6 17.9 17.9 13.1
Unemployment Rate 5.4% 10.8% 10.3% 9.3% 7.4% 6.7% 6.3% 5.8% 5.7% 4.2%

Birmingham-Hoover
Labor Force 533.1 526.4 539.8 543.1 540.2 540.6 536.0 535.4 537.7 534.6
Employed 506.2 472.5 486.8 495.5 502.5 506.5 504.0 506.0 508.2 513.0
Unemployed 26.8 53.9 53.0 47.6 37.7 34.0 32.0 29.3 29.5 21.6
Unemployment Rate 5.0% 10.2% 9.8% 8.8% 7.0% 6.3% 6.0% 5.5% 5.5% 4.0%

State of Alabama
Labor Force 2,176.5 2,163.0 2,196.0 2,202.7 2,176.3 2,174.0 2,161.6 2,157.3 2,173.2 2,168.4
Employed 2,053.5 1,924.7 1,964.6 1,990.4 2,003.3 2,017.0 2,015.1 2,020.6 2,045.6 2,073.1
Unemployed 123.0 238.3 231.5 212.3 173.1 157.0 146.5 131.4 127.6 95.3
Unemployment Rate 5.7% 11.0% 10.5% 9.6% 8.0% 7.2% 6.8% 6.1% 5.9% 4.4%

United States
Labor Force 154,287 154,142 153,889 153,617 154,975 155,389 155,922 157,130 159,187 160,320
Employed 145,362 139,877 139,064 139,869 142,469 143,929 146,305 148,834 151,436 153,337
Unemployed 8,924 14,265 14,825 13,747 12,506 11,460 9,617 8,296 7,751 6,982
Unemployment rate 5.8% 9.3% 9.6% 8.9% 8.1% 7.4% 6.2% 5.3% 4.9% 4.4%
____________________

Source: Bureau of Labor Statistics

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 Largest Employers in the Birmingham-Hoover MSA

2017
Local
Name Industry Employees
University of Alabama at Birmingham Research university and medical center 23,000
Regions Financial Corp. Financial services 9,000
Children's of Alabama Healthcare 4,755
AT&T(1) Telecommunications 4,517
St. Vincent's Health System Healthcare 4,476
Brookwood Baptist Health Healthcare 4,459
BlueCross and BlueShield of Alabama Insurance 3,105
Alabama Power Company(2) Utilities 3,092
Birmingham VA Medical Center Healthcare 2,440
BBVA Compass Financial services 2,285

Note (1): Employees, 2016 data.

Note (2): Jefferson and Shelby County employees only.
Source: Birmingham Business Journal, 2018 Book of Lists

The following chart presents comparative employment statistics by type of employment in the Birmingham
MSA. The data includes all full and part-time non-agricultural wage and salary employees, but excludes proprietors,
self-employed persons, workers in private households and unpaid family workers.

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 Birmingham-Hoover MSA Historic Distribution of Non-Agricultural Employment

(Jobs in Thousands)

Sector 1990 2000 2010 2015 2018**

Goods-Producing 87.2 88.7 61.8 66.4 67.9

Mining & Logging 2.9 3.2 3.0 2.9 2.6
Construction 27.4 32.3 24.2 25.3 25.9
Manufacturing 56.9 53.2 34.7 38.1 39.4
Durable Goods 36.6 35.4 24.3 27.3 27.7
Nondurable Goods 20.2 17.8 10.5 10.8 11.7

Service-Producing 344.1 431.0 434.8 455.6 469.7

Transportation, Warehousing & Utilities 20.6 20.7 20.7 22.8 22.3
Retail & Wholesale Trade 77.6 93.2 84.7 87.4 86.3
Information 14.3 14.6 9.5 8.2 7.2
Financial Activities 32.9 41.0 39.5 42.3 42.1
Professional and Business Services 40.6 64.2 60.2 65.2 69.9
Education and Health Service 43.6 55.1 65.5 70.2 72.8
Leisure and Hospitality 27.0 39.5 42.5 48.9 55.1
Other Services 19.5 27.3 27.6 28.7 30.0
Government 68.0 75.5 84.5 82.0 84.0

Total* 431.2 519.7 496.6 522.0 537.6

________________

* Totals may not add due to rounding.

** Preliminary; April, 2018.
Source: Bureau of Labor Statistics

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 Since 1970 Jefferson County has transformed from a manufacturing-based to a service-based economy.
Nationwide recessions in 1973-74, 1980 and 1982-83 caused significant declines in durable goods manufacturing,
particularly in the steel industry. Over time, the local economy has diversified as a result of significant growth in fields
such as health services and health sciences research.

The area’s 21 hospitals and numerous specialized health care facilities have turned Birmingham into a major
medical center. The University of Alabama at Birmingham, the area’s largest employer, is home to a world-renowned
patient-care and research medical center. The Kirklin Clinic, opened in June 1992 by the University of Alabama Health
Services Foundation, has enhanced Birmingham’s reputation in healthcare. Birmingham is Alabama’s center for
advanced technology, with high-technology firms involved in industries such as telecommunications, engineering,
aerospace design and computer services, in addition to health care. Southern Research Institute, located on
Birmingham’s Southside, is the largest nonprofit independent research laboratory located in the Southeast. The
University of Alabama at Birmingham is ranked in the top 30 universities receiving federal research and development
funds and in funding received from the National Institutes of Health.

Per Capita Personal Income

Per Capita Personal Income is defined as the personal income of a given area divided by the resident
population of the area. Personal income is measured before deduction of income and other personal taxes, but after
deduction of personal contributions for social security, government retirement, and other social insurance programs.

The following table provides a comparison of per capita personal income among Jefferson County, the
Birmingham-Hoover MSA, the State and the United States:

Comparison of Per Capita Income

% of % of % of
Jefferson National Birmingham- National National
Year County Average Hoover MSA Average Alabama Average United States
2016 $ 49,386 100% $ 45,795 93% $38,896 79% $49,204
2015 48,542 100% 45,115 93% 38,214 79% 48,429
2014 46,366 100% 43,256 93% 36,879 79% 46,486
2013 44,628 100% 41,625 94% 35,778 80% 44,489
2012 45,122 102% 41,821 94% 35,482 80% 44,283
2011 43,248 102% 40,141 95% 34,708 82% 42,463
2010 42,245 105% 38,950 97% 33,697 84% 40,278
2009 40,596 103% 37,793 96% 32,685 83% 39,376
1999 28,931 101% 27,318 95% 23,274 81% 28,627
1989 17,744 95% 16,852 90% 14,965 80% 18,653
1979 8,682 94% 8,199 89% 7,234 79% 9,212
1969 3,408 87% 3,193 81% 2,827 72% 3,930
__________________

Source: Bureau of Economic Analysis, U.S. Dept. of Commerce.

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 Information regarding household and family income in the City for 2010 (from the 2010 Census) is as
follows:

Household and Family Income

Number Percent

Households 87,228 100.0

Less than $10,000 15,003 17.2
$10,000 to $14,999 8,374 9.6
$15,000 to $24,999 14,044 16.1
$25,000 to $34,999 11,601 13.3
$35,000 to $49,999 14,393 16.5
$50,000 to $74,999 13,171 15.1
$75,000 to $99,999 3,751 4.3
$100,000 to $149,999 4,100 4.7
$150,000 to $199,999 1,396 1.6
$200,000 or more 1,483 1.6
Median household income $30,212 N/A

Families 48,750 100.0

Less than $10,000 6,825 14.0
$10,000 to $14,999 2,535 5.2
$15,000 to $24,999 7,410 15.2
$25,000 to $34,999 7,605 15.6
$35,000 to $49,999 8,190 16.8
$50,000 to $74,999 8,629 17.7
$75,000 to $99,999 2,633 5.4
$100,000 to $149,999 2,730 5.6
$150,000 to $199,999 1,024 2.1
$200,000 or more 1,121 2.3
Median family income $34,971 N/A

Per capita income $18,507 N/A

Median earnings:
Male full-time, year-around workers $33,863 N/A
Female full-time, year-around workers $30,403 N/A
_______________

Source: U.S. Census Bureau

Education

The Birmingham public school system included approximately 24,000 students in approximately 44 schools.

The County is home to several colleges and universities, business schools and junior colleges and trade
schools. The largest institution is the University of Alabama at Birmingham (UAB), which includes University
College, the Graduate School and the UAB Medical Center. The UAB complex, featuring a wide range of
undergraduate, graduate and professional programs, is the third largest educational institution in Alabama, with a total
enrollment of approximately 20,902. The UAB Medical Center consists of the schools of medicine, dentistry, nursing,
optometry and public health and the School of Community and Allied Health. UAB is the largest employer in the
County, and one of the largest in the State of Alabama.

C-48
 Institutions of Higher Education in Jefferson County

Approximate
Name Type Enrollment

Four-Year
Birmingham School of Law Private 390
Birmingham-Southern College Private 1,346
Herzing University Private N/A
Miles College Private 1,873
Samford College Private 5,206
University of Alabama at Birmingham* State Supported 20,902

Two-Year
Jefferson State Junior College State Supported 7,899
Lawson State Community College State Supported 3,172
Virginia College Private 2,000
_____________________

*Includes advanced professional degree students, such as residents and interns.

Sources: Birmingham Business Alliance; UAB Facts & Figures, Office of Institutional Effectiveness and Analysis; The
Birmingham Business Journal, 2018 Book of Lists.

The following table compares education levels for the 2017 population over age 25:

Educational Levels

Percent of Population
Percent of Population With Completed
High School Graduates Bachelor’s Degree or More

City 86.1% 25.5%

Birmingham MSA 87.5 29.3
State of Alabama 85.1 24.5
United States 87.4 31.1
_____________________

Source: ESRI, 2017 Estimates.

Housing and Construction

The City has aggressively promoted renovation and construction of housing within the City. Programs which
have stimulated housing are as follows: The City Grant plus 2356 Housing Assistance Program, for construction of
single-family units; the City Rebate Grant Program, for home maintenance and improvements; and the City Rental
Rebate Assistance Program, for multifamily housing improvements for low- and moderate-income persons.

C-49
 The following table provides comparative information on housing units in the City, Jefferson County and
Shelby County in 1970, 1980, 1990, 2000 and 2010.

Birmingham MSA Housing Units

Housing Units Percent Change

1970- 1980- 1990- 2000-
2010 2000 1990 1980 1970 1980 1990 2000 2010

City of Birmingham 108,981 111,927 117,691 114,503 105,370 8.7% 2.8% (4.9%) (2.6%)
Jefferson County 300,552 288,162 273,097 259,805 212,937 22.0 5.1 5.5 4.3
Shelby County 80,970 59,302 39,201 24,644 12,144 102.9 59.1 51.3 36.5
Birmingham-Hoover
MSA 502,776 395,925 376,897 340,968 263,146 29.6 10.5 5.0 27.0
___________________

Source: U.S. Census Bureau.

Recent residential construction activities in the City and the Birmingham-Hoover MSA are summarized in
the following tables.

New Privately-Owned Residential Building Permits

City of Birmingham

Single-Family Multi-Family (Two or more families)

Permits Construction Permits Construction
Year Issued Cost Issued Units Cost

2008 132 $24,723,795 18 312 $23,204,909

2009 75 13,541,203 21 62 6,108,792
2010 110 18,861,792 7 347 35,716,750
2011 121 21,706,831 2 105 7,151,833
2012 88 17,220,866 31 857 64,275,126
2013 80 19,852,216 26 481 48,288,233
2014 76 17,203,631 23 929 87,808,445
2015 36 10,457,536 7 742 71,120,558
2016 77 17,126,457 12 610 63,831,641
2017 105 20,768,318 6 123 16,695,899

__________________

Source: U.S. Census Bureau.

C-50
 New Privately-Owned Residential Building Permits
Birmingham-Hoover MSA

Single-Family Multi-Family (Two or more families)

Permits Construction Units Construction
Year Issued Cost (000s) Permitted Cost (000s)

2008 2,325 $415,270 1,034 $110,242

2009 1,683 282,759 124 10,473
2010 1,563 275,049 367 37,360
2011 1,795 346,975 589 41,806
2012 1,847 410,574 1,454 97,756
2013 2,016 486,654 760 72,138
2014 2,318 520,115 1,046 94,852
2015 3,733 585,974 1,319 118,064
2016 2,730 645,696 582 79,772
2017 2,677 653,095 N/A N/A
___________________

Source: U.S. Census Bureau; N/A = data not available.

Bank Deposits

The following table depicts deposits in FDIC-insured institutions for the past several years in the
Birmingham-Hoover MSA, Jefferson County, Shelby County and the State.

Deposits in FDIC-Insured Institutions

($000s)

2013 2014 2015 2016 2017

Alabama $86,102,000 $88,903,000 $91,442,226 $97,111,546 $100,424,571

Jefferson County 24,771,000 27,498,000 28,563,336 31,679,102 31,800,628
Shelby County 2,622,000 2,665,000 2,760,437 3,053,687 3,194,184
Birmingham-Hoover MSA 30,175,000 32,907,000 34,051,124 37,501,960 37,863,773
___________________

Source: Federal Deposit Insurance Corporation.

C-51
Airport Traffic

The following table provides current and historical information regarding Birmingham-Shuttlesworth
International Airport traffic:

Birmingham-Shuttlesworth International Airport

Passengers Arriving & Departing

Number of
Year Passengers

2008 3,110,767
2009 2,934,317
2010 2,950,429
2011 2,902,086
2012 2,864,058
2013 2,686,393
2014 2,624,665
2015 2,695,399
2016 2,652,233
2017 2,705,014
__________________

Source: Birmingham Chamber of Commerce; Birmingham Airport Authority.

LITIGATION

There is not now pending or threatened any litigation restraining, enjoining or in any manner questioning or
affecting: the creation, organization or existence of the City; the title of the present members of the City Council or
other officers of the City to their respective offices; the validity of the BJCC Funding Agreement, or the proceedings
and authority under which the BJCC Funding Agreement was approved.

The City of Birmingham is litigating a number of diesel fuel tax refund cases pursuant to the Railroad
Revitalization and Regulatory Reform Act (i.e. the “4-R Act”). These cases had been placed on the administrative
dockets of several state and federal courts pending a resolution of CSXT v. Department of Revenue of Alabama in the
United States Northern District of Alabama.

After the Eleventh Circuit Court of Appeals remanded the CSXT v. Department of Revenue of Alabama case,
the federal trial court held a four-day trial to determine if the State of Alabama discriminated against the railroad and
whether the State assessed “roughly equivalent” taxes on competitors. On March 29, 2017, the Court ruled in favor of
the defendants. CSXT timely appealed to the Eleventh Circuit, which reversed the judgment against the defendants
and ordered the federal trial court to enter declaratory and injunctive relief in favor of the defendants. However, the
federal trial court issued an order on June 11, 2018, staying further proceedings while the parties decide whether any
petitions for writ of certiorari will be filed.

CSX Transportation, Inc. v. City of Birmingham, CV2010-901772, CSX claims a refund under the Railroad
Revitalization and Regulatory Reform Act for sales and use taxes paid for diesel fuel purchases for years 2004, 2005,
2006 and through October 2007. Refund sought $3,124,475.20. Pre-judgment interest of $3,405,677.97 sought. Total
refund sought is $6,530,153.17. Case under stay.

CSX Transportation, Inc. v. City of Birmingham, CV2012-904061, CSX claims a refund under the Railroad
Revitalization and Regulatory Reform Act for sales and use taxes paid for diesel fuel purchases from November 2007
through November 2008. Refund sought $2,222,384.50. Pre-judgment interest of $2,133,489.12 sought. Total refund
sought is $4,355,873.62. Case under stay.

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 CSX Transportation, Inc. v. City of Birmingham, CV2013-904854, CSX claims a refund under the Railroad
Revitalization and Regulatory Reform Act for sales and use taxes paid for diesel fuel purchases from December 2008
to January 2011. Refund sought $2,830,194.49. Pre-judgment interest of $1,443,399.19 sought. Total refund sought
is $4,273.593.68. Case under stay.

BNSF Railroad v. City of Birmingham, CV2010-903064, BNSF claims a refund under the Railroad
Revitalization and Regulatory Reform Act for sales and use taxes paid for diesel fuel purchases from February 2005
through February 2008. Refund sought is $1,745, 579.67. Pre-judgment interest of $1,832,858.65 sought. Total
refund sought is $3,578,438.32. Case under stay.

BNSF Railroad v. City of Birmingham, CV2013-901031, filed in State Court and motions for summary
judgment have already been argued; however, the judge is holding his ruling pending resolution of federal case that
is now remanded to the federal trial court. BNSF claims a refund under the Railroad Revitalization and Regulatory
Reform Act for sales and use taxes paid for diesel fuel purchases from March 2008 through June 2009. Refund sought
is $1,005,326.95. Pre-judgment interest of $894,740.97 sought. Total refund sought is $1,900,067.92. Case under
stay.

BNSF Railroad v. City of Birmingham, CV2014-903876, filed in State Court. BNSF claims a refund under
the Railroad Revitalization and Regulatory Reform Act for sales and use taxes paid for diesel fuel purchases from July
2009 through April 2011. Refund sought is $1,290,020.53. Pre-judgment interest of $1,148,119.26 sought. Total
refund sought is $2,438,139.79. Case under stay.

Norfolk Southern Railway Company v. City of Birmingham, CV 2015 901133, filed in Montgomery,
Alabama. Total refund sought was $2,513,989.07 In September, 2017 the City reached a settlement agreement with
Norfolk Southern Railway Company with respect to all cases and tax refund claims after discovering that the
Company’s location generating the taxes at issue was not located in the corporate limits of the City. The City refunded
approximately $1,600,000 to Norfolk.

Additionally, the City is a defendant in numerous suits and has been notified of numerous claims against it
arising from alleged defective sidewalks and streets, alleged negligence relating to motor vehicles and other matters
relating to the normal operation of a municipality such as employment and contract disputes, as well as suits and
claims arising from the alleged denial of civil rights. Section 11-93-1 et seq. of the Code of Alabama of 1975, as
amended, places a limit of $100,000 with respect to the City’s liability for any bodily injury or death resulting from a
negligent or wrongful act of one of the City’s agents, officers, or employees. That provision further places a limit of
$300,000 with respect to the City’s liability for personal injuries and deaths arising from a single occurrence. The
Supreme Court of Alabama has upheld the constitutionality of this statute. The City does not carry liability insurance
to cover such suits and claims but believes that any liability resulting from such suits and claims will be covered
adequately by funds of the City which will be available to discharge such liability without impairing its ability to
perform any of its other obligations.

UNITED STATES BANKRUPTCY CODE

The rights and remedies of the Authority under the Funding Agreement are subject to the provisions of
Chapter 9 of Title 11 of the United States Code (Bankruptcy).

The United States Bankruptcy Code permits, under certain specific circumstances (but only after
authorization by the legislature or by a governmental officer or organization empowered by state law to give such
authorization), a political subdivision or public agency or instrumentality of a state - such as the City - to file a petition
for relief in the Federal Bankruptcy Court for the district in which such public body is located, if (among other things)
it is insolvent or unable to meet its debts as they mature, and it desires to effect a plan to adjust its debts. Bankruptcy
proceedings by the City could have adverse effects on its ability to make payments under the BJCC Funding
Agreement, including (a) delay in the enforcement of the Authority’s remedies, (b) subordination of the Authority’s
claims or charges to claims of those supplying goods and services to the City after the initiation of bankruptcy
proceedings and to the administrative expenses of bankruptcy proceedings, (c) subordination of liens; (d) avoidance

C-53
of liens or preferential transfers; (e) the issuance, with the approval of the Court, of certificates of indebtedness having
priority over pre-existing obligations; and (f) imposition without the Authority’s consent of a reorganization plan
reducing or delaying or extinguishing payments under the BJCC Funding Agreement. The effect of these and other
provisions of the Bankruptcy Code cannot be predicted with any certainty and may be significantly affected by judicial
interpretation.

Prospective purchasers of the BJCC’s Series 2018D Bonds should understand that Alabama law presently
authorizes the City and other incorporated municipalities in Alabama to file such petitions for relief.

C-54
 APPENDIX D

Comprehensive Annual Financial Report of the City

For the Fiscal Year Ended June 30, 2017
[THIS PAGE INTENTIONALLY LEFT BLANK]
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2017
CITY OF BIRMINGHAM, ALABAMA
OFFICE OF THE DIRECTOR OF FINANCE
J. THOMAS BARNETI, JR.
 City of Birmingham, Alabama
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 2017

TABLE OF CONTENTS

Page(s)
INTRODUCTORY SECTION
Officials of the City of Birmingham, Alabama 1
Letter of Transmittal 2-7
Certificate of Achievement for Excellence in Financial Reporting 8
Organization of the City of Birmingham 9

FINANCIAL SECTION
Independent Auditor's Report 10-12
Management's Discussion and Analysis 13-22
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 23-24
Statement of Activities 25
Fund Financial Statements:
Balance Sheet - Governmental Funds 26
Reconciliation of Governmental Fund balance Sheet 27
Statement of Revenues, Expenditures, and Changes in Fund Balances- 28
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the Statement
of Activities 29
Statement of Revenues, Expenditures, and Changes in Fund Balances-
Budget and Actual, General Fund 30
Statement of Net Position-Proprietary Funds 31
Statement of Revenues, Expenses, and Changes in Net Assets-
Proprietary Funds 32
Statement of Cash Flows-Proprietary Funds 33
Statement of Fiduciary Net Position 34
Statement of Changes in Fiduciary Net Position 35
Combining Statement of Net Position-Nonmajor Component Units 36
Combining Statement of Activities-Nonmajor Component Units 37
Notes to the Financial Statements 38-96
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios - Pension Plan 97-106
Schedule of Employer Contributions - Pension Plans 97-106
Schedule of Funding Progress - OPEB 107
Other Supplementary Information
St~tement of Revenues, Expenses, and Changes in Net Assets-
Proprietary Funds 108
Combining Statement of Fiduciary Net Position - Pension Trust 109
Combining Statement of Fiduciary Changes - Pension Trust 110
Schedule of Revenues, Expenditures, and Changes in Fund Balances-
Budget and Actual, General Fund 111
Combined Balance Sheet-Nonmajor Governmental Funds 112
Combining Balance Sheet - Nonmajor Governmental Funds 113-118
Combined Statement of Revenues, Expenditures, and Changes in Fund
Balances - Nonmajor Governmental Funds 119
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Nonmajor Governmental Funds 120-124
 City of Birmingham, Alabama
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 2017

TABLE OF CONTENTS

STATISTICAL SECTION
Financial Trends
Net Position by Components for Last Ten Fiscal Years 125
Changes in Net Position for Last Ten Fiscal Years 126-127
Fund Balances for Last Ten Fiscal Years 128-129
Changes in Fund Balances for Last Ten Fiscal Years 130-131

Revenue Capacity
Sales and Use Tax Revenues 132
Sales and Use Tax Revenues to Total Taxes 133

Debt Capacity
Ratios of Outstanding Debt by Type for Ten Fiscal Years 134
Ratios of General Bonded Debt Outstanding for Last Ten Fiscal Years 135
Assessed Value and Estimated True Value of All Taxable Property 136
Direct and Overlapping Debt for Last Seven Fiscal Years 137
Property Taxes-Direct and Overlapping Governments 138
Estimated Legal Debt Margin 139-140
Property Taxes Levied and Collected 141
Principal Property Taxpayers 142

Demographic and Economic Information

Demographic and Economic Statistics for Last Ten Fiscal Years 143
Principal Employers - Current Fiscal Year and Prior Ten Years Ago 144
Metropolitan Birmingham Employers - By Industry 145

Operating Information
Full-time Equivalent City Government Employees by Function/Program 146
Capital Asset Statistics by Function/Program 147
E911 Call Center Statistics 148
Permit Valuation'S and Counts 149
Police Department Statistics 150
Municipal Court Statistics 151

Debt Service Schedules 152-175

INTRODUCTORY SECTION

• List of City Officials

• Finance Director's Letter of Transmittal

• Certificate of Achievement-
Government Finance Officers Association

• City of Birmingham Organization Chart

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 OFFICIALS OF THE CITY OF BIRMINGHAM

MAYOR
WILLIAM A. BELL, SR.

CITY COUNCIL
Johnathan Austin, President, District #5
Steven W. Hoyt President Pro-Tern, District #8

LaShunda Scales, District #1 Kim Rafferty, District #2

Valerie A. Abbott, District #3 William Parker, District #4
Sheila Tyson, District #6 Jay Roberson, District #7
Marcus Lundy, District #9

DEPARTMENT HEADS
AUDITORiUM ............................................................................................................................................Kevin Arrington, Director
CITY CLERK ............................................................................................................................................... Lee Frazier, City Clerk
CITY COUNCIL .....................................................................................................................Cheryl A. Kidd, Council Administrator
COMMUNITY DEVELOPMENT ............................................................................................................................ John Colon, Director
EQUIPMENT MANAGEMENT ....................................................................................................................... Cedric Roberts, Director
FINANCE ......................................................................................................................................J. Thomas Bamett, Jr., Director
FIRE ......................................................................................................................................................Charles E. Gordon, Chief
HUMAN RESOURCES ....................................................................................................................................... Peggy Polk, Director
INFORMATION MANAGEMENT SERVICES ...................................................................................................... Srikanth Karra, Director
LAW .............................................................................................................................Robert A. Jones, Jr., Acting City Attorney
MAYOR'S OFFiCE ...................................................................................................................... Jarvis Patton, Chief of Operations
MUNICIPAL COURT ........................................................................................................................ Andra Sparks, Presiding Judge
PLANNING, ENGINEERING AND PERMITTING .....................................................................................................Andre Bittas, Director
POLICE ..............................................................................................................................................................A.C. Roper, Chief
PUBLIC WORKS ...................................................................................................................................... Alfred Menifield, Director
TRAFFIC ENGINEERING ..................•.......................................................................................... Gregory Dawkins, Traffic Engineer

BOARD DIRECTORS
ARLINGTON ................................................................................................................................................ Steve Moode, Director
LIBRARY ............................................................................................................................................. Sandi Lee, Interim Director
MUSEUM OF ART ......................................................................................................................Dr. Graham C. Boettcher, Director
PARKS AND RECREATION .............................................................................................................................. Kevin Moore, Director
SLOSS FURNACES ....................................................................................................................................John W. Nixon, Director
SOUTHERN MUSEUM OF FLIGHT ........................................................................................................ Dr. Brian J Barsanti, Director

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 CITY OF BIRMINGHAM
DEPARTMENT OF FINANCE
A-100 CITY HALL
710 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203-2227

WILLIAM A. BELL, SR. TELEPHONE (205) 254-2205 AARON L. SAXTON

MAYOR FAX (205) 254-2937 DEPUTY DIRECTOR

J. THOMAS BARNETT, JR. BARBARA D. MCGRUE

FINANCE DIRECTOR DEPUTY DIRECTOR

November 13,2017

To the Mayor
City Council Members
Citizens of the City of Birmingham

The City of Birmingham's Comprehensive Annual Financial Report ("CAFR") for

fiscal year 2017, is hereby submitted. This report represents the official comprehensive
publication of the City's financial position at June 30, 2017. Responsibility for the accuracy,
completeness, and fairness of the data, including all disclosures, rests with management 0
the City of Birmingham. The basis of reliance for the financial statements is a
comprehensive framework of internal control. Because the cost of internal control should
not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute,
assurance that the statements are free of any material misstatements.

In compliance with the City's Mayor-Council Act, the submitted financial statements
were subjected to an independent audit. Banks, Finley, White & Co. has issued an
unqualified opinion on the City of Birmingham's financial statements for the year ended
June 30, 2017. Their report is located at the front of the fmancial section ofthe CAFR.

Additionally, the City of Birmingham is responsible, as a recipient of federal and state

assistance, for maintaining an adequate internal control structure to ensure compliance with
applicable laws and regulations related to those programs. The City is required to undergo
an annual single audit in conformity 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 the audit
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance).
 Information regarding the single audit, which includes the Schedule of
Expenditures of Federal Awards, findings and recommendations, and the auditor's
reports on the internal control structure and compliance with applicable laws and
regulations is included in a separate report and is available on the City's web-site
www.birminghama1.gov , Open Data, Finance.

Immediately following the auditor's report is the City's Management Discussion

and Analysis (MD&A) which provides, in a narrative format, an introduction, overview,
and analysis of the basic financial statements. This letter of transmittal should be read in
conjunction with the MD&A.

CITY PROFILE AND REPORTING ENTITY

The City of Birmingham was incorporated in 1871 and is centrally located in the
State of Alabama. It operates under a mayor-council form of government. The Mayor is
elected at large and serves a four year term. The Council is composed of nine members,
elected by district and each serves a four year term.

Included in this report is an organizational chart showing the twenty-three

departments responsible for the administration and operation of the City of Birmingham.
These departments provide valuable services to the citizens such as police and fire
protection, maintenance and construction of highways and streets, recreational and
cultural activities, sanitation services, and libraries and museums. This report includes
the financial operations of three legal entities for which the City is financially
accountable. The financial operations of the Birmingham Airport Authority and the
Birmingham Parking Authority are discretely presented component units. See Note 1A.
The Public, Athletic, Cultural and Entertainment Facilities Board is a blended component
unit and results of its operations are shown in the non-major Special Revenue funds
combining statements.

Birmingham's diverse economy, once highly dependent on the iron and steel
industry, benefits today from a diversified group of businesses, including finance,
healthcare, technology and construction. Projects that are planned, under construction and
recently completed are contributing to the economy. These projects are increasing tax
revenues and providing jobs which will continue to have a positive impact on the
Birmingham-Hoover Metro Area's unemployment rate, which was 4.4% during the
month of July, 2017. The State of Alabama's unemployment rate was 4.5% during the
same period compared to 4.3% for the United States.

The City is experiencing substantial development and re-development.

Multi-family development is taking place over a wide area of the City, with new
construction and with repurposing and redevelopment of existing buildings.
Approximately 1,400 multifamily units have recently opened in the City Center area and
approximately another 1,000 multifamily units are currently under design/construction in
the City Center area. Two new hotel projects are in design or under construction, four
having recently opened. A new Publix Supermarket opened in the center of downtown

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and is serving as a catalyst for additional development. The entire block across from the
Publix is now under development for retail and apartments. Another Publix anchored
retail center is under construction in the western area of the City. Top Golf is nearing
completion of construction of a golf entertainment facility adjacent to the Birmingham
Jefferson Civic Center and the Uptown Entertainment District. It is expected to open this
winter and they are in the process of hiring 500 workers.

Alabama Power Company continues construction of the repurposing of a former

steam plant, in the heart of the City, adjacent to Railroad Park. The facility will be an
event and entertainment venue with additional park space, covering a two block area,
adding to the City's revitalization efforts.

The Kiwanis Club of Birmingham, in celebration of its 100th anniversary, is

currently constructing $4,000,000 of improvements at the City's iconic Vulcan statue.
Vulcan sits high atop Red Mountain, overlooking downtown Birmingham. Vulcan was
Birmingham's entry in the 1904 World's fair and is the Country's largest cast iron statue.
The project will include a new plaza, to be known as the Kiwanis Centennial Plaza at
Vulcan Park. A two mile walking and biking trail will connect Vulcan Park with the
Jones Valley Trail System, which runs for 27 miles through the City and also connects
with the Red Rock Ridge System for 300 miles in Jefferson County. The project also
includes a new lighting system for Vulcan which will provide colored light shows above
downtown.

The construction of a transportation hub in the central downtown area is nearing

completion. The facility will house the Birmingham-Jefferson Transit Authority's metro
bus system, Greyhound and Amtrak. A large portion of the funding was provided by a
Federal grant.

After securing State legislation, the City has incorporated a Land Banking
Authority which has the power to accept tax-delinquent properties, clear title and
repurpose the property to productive uses. It is designed to assist neighborhood
redevelopment in the City, especially depressed neighborhoods. Sustainability of
neighborhoods and providing retail shopping opportunities throughout the City is vitally
important to the growth of Birmingham's economy. Many neighborhood projects are
currently planned, or underway, to improve the quality oflife for the City's citizens.

The Birmingham Crossplex, a natatorium, indoor track facility and arena, located
approximately 4 miles to the west of the City Center, hosts track and field, volleyball,
wrestling and aquatic competition. These first-class athletic facilities are drawing events
from national, regional, conference and state athletic organizations. The Birmingham
Crossplex was awarded eleven NCAA division I, II and III championship events during
the 2014 bids and the Crossplex was recently awarded thirteen championships in the
2016 round of bids. The development of a large track of adjacent city-owned property is
in the construction phase. When completed, it will initially include restaurants, retail,
and a hotel. Additional development is planned for the site.

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 In the industrial sector, automotive supplier Kamtek Inc. recently opened a $60
million expansion in the City that will add 200 new jobs to its existing manufacturing
facility, which currently employs 700. CMC/SMI Steel is investing more than $46
million in its existing plant. This technology project will help the Company be more
competitive globally. Autocar has acquired an existing facility on Pinson Valley
Parkway, which is partially in the City. With renovations the facility is expected to
require an investment of approximately $120 million. The Company manufactures heavy
duty trucks. This project is expected to add 746 jobs with an average salary of $58,000.
Mercedes-Benz International announced plans for a $1 billion expansion to start
producing electric vehicles at its Tuscaloosa County plant. They plan to build a 1 million
square foot battery plant and a new global logistics center in neighboring Bibb County.
Combined, the projects will create more than 600 jobs.

The City has contracted with Trane U.S., Inc. to make City facilities more energy
efficient. Trane will perform this work. The City entered into leases to cover $61.4
million of projects, including; lighting upgrades in 117 buildings, water upgrades in 119
buildings, building envelope improvements for 59 buildings, transformer upgrades for 12
buildings, plug load management systems for 16 buildings, energy and HVAC controls
for 108 buildings, HVAClMechanical upgrades in 45 buildings and roof replacements in
31 buildings. Energy savings from the project are expected to be sufficient to cover the
lease payments and are guaranteed by Trane.

The City's major pension fund, the Retirement and Relief System, continued the
trend of an increasing unfunded actuarial accrued liability for long-term benefits. The
trend continued from the early 2000's, when benefits were increased substantially.
Investment returns were below target rates of return during the period. As of July 1,2016
the unfunded actuarial accrued liability of the Plan was approximately $330 million, up
from $325 million in 2015 and the Plan had a funded ratio of 75.5%, up from 75.3% the
previous year. The Governmental Accounting Standards Board ("GASB"), the institution
which sets accounting standards for governmental entities, issued new accounting rules
governing disclosure information for pensions. The new rule requires the City's actuary
to estimate "Net Pension Liability," which is an estimation of all accrued pension benefit
payments using specified assumptions, less the assets in the plan available for those
benefits. The total accrued pension liability is computed using a blended discount rate,
combining the System's target rate of return with a tax-exempt bond interest rate
specified by GASB. The bond rate for 2017 is 3.58%, which is significantly less than the
investment target rate of return of 7.50%. The blended rate is 5.43%. The City's Net
Pension Liability for the Plan, computed according to GASB methodology, was $684
million, down from $1 billion in 2016. The decrease was primarily due to the increase in
the market interest rate used to compute the present value of the liability from last year to
this year. The blended discount rate increased from 4.13% in 2016 to 5.43% in 2017.
The present value is inversely related to the movement in interest rates. The remaining
amount of the decrease was due to actual investment income outperforming the plan's
assumed rate of return for fiscal year 2017. The City is required to present the Net
Pension Liability as a liability of the City,' similar to the presentation of debt. This

5
presentation is in the Government-wide Financial Statements, which creates the excess of
liabilities over assets for the City as a whole. While the Plan is currently able to meet all
of its obligations and its funding level compares favorably with many plans around the
Country, the City and the Pension Board were successful in getting State legislation
passed which should improve the funding of the plan. The new Statute requires the City
to contribute an additional .25% of payroll in fiscal 2018, an additional 1.25% in 2019
and an additional .50% in 2021 to the Retirement and Relief System. The Statute also
allows the City to increase contributions above these amounts without further legislative
action. For newly hired employees after July 1, 2017, benefits were reduced.

At July 1, 2016, the unfunded actuarial liability for the Fire & Police
Supplemental Pension System was $52.9 million, up from $51.7 million, the prior year.
The City's Net Pension Liability for the Plan, computed according to the new GASB
methodology, was $56.7 million, down from $57.2 million the previous year. The City's
proposed 2018 budget includes an additional .59% of payroll increase in funding for the
Fire & Police Supplemental System. Individual financial reports for both plans are
available on the City's web-site, at www.birminghamal.gov under Open Data, Finance

The City is a defendant in several lawsuits claiming refunds of taxes previously

paid to the City, and interest on those claimed refunds. A total adverse ruling in these
cases could have a material impact on the City's financial condition. The City is
vigorously defending its positions in these cases.

During fiscal year 2016 the City entered into a settlement agreement with the
Developer/Contractor for its baseball stadium and agreed to make payments, totaling $2.6
million, from the Special Lodgings tax, after debt service, to the Developer/Contractor.
The payments were scheduled through 2021. Due to the growth of the tax, subsequent to
2017 year-end the City made the final payment to the Developer/Contractor in the
amount of$816,982.56.

During the year, the City experienced an operating deficit of approximately $3.6
million in its General Fund. This was less than the budgeted deficit of $5.4 million.
Revenues were under the original budget by approximately $5 .7 million, mainly the
result of lower business license tax. Sales and use tax revenue increased by 3.7% over
the previous year. Occupational tax gained 6.7%, lease/rental tax increased 2%, permits
gained 17%, and fines and forfeitures decreased 15%. Business license revenue declined
9%, which was primarily due to increased collection efforts the prior year, which
collected amounts owed from previous years. Expenses were under the original budget
by approximately $7.8 million due, in large part, to a decline in health care utilization. At
the end of 2017, the City's Unassigned General Fund Balance was approximately $83.9
million and the Birmingham Fund, a special reserve fund, ended the year with a fund
balance of approximately $89.1 million, an increase of $1.3 million the previous year.

The City's healthcare plan is self-funded and the City accounts for its employee
and retiree healthcare plans in an internal service, proprietary fund. Employee and retiree

6
contributions are receipted as revenue in the fund. The City's planned contribution is
recorded as revenue and any excess claims are paid by the City's General Fund by
transfer into the fund. During the fiscal year costs were less than budgeted. The City'S
proposed 2018 budget maintains employee premiums at the same level as 2017. During
the year, the City contributed $34.6 million for employee healthcare and prescription
drug costs and $2.1 million for retiree costs.

An actuarial study reported that the City's unfunded actuarial accrued liability for
Other Post Employment Obligations ("OPEB"), primarily healthcare, increased from the
June 30, 2013 valuation of $139 million to $161 million on June 30, 2015. The City's
Net OPEB obligation, computed according to GASB methodology was $65.8 million at
June 30,2017.

The Government Finance Officers Association of the United States and Canada
("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting
for the City's CAFR for the fiscal year ended June 30, 2016. The Certificate of
Achievement is a prestigious national award presented to state and local governments for
publishing an easily readable and efficiently organized CAFR whose contents conform to
program standards and complies with generally accepted accounting principles and
applicable legal requirements. The Certificate is valid for a period of one year. The City
of Birmingham has received the award for the last 38 consecutive years. We believe our
current CAFR continues to conform to Certificate of Achievement program requirements,
and we are submitting it to the GFOA for consideration.

The City of Birmingham's budget report for the fiscal year beginning July 1,
2016, was awarded the Government Finance Officer's Association Award for
Distinguished Budget Presentation. In order to receive this award, a governmental unit
must publish a document that meets program criteria as a policy document, as an
operations guide, as a financial plan, and as a communications device. The City believes
its current budget report also meets the above criteria, and we are submitting it to the
GFOA for consideration.

Preparation of this document was made possible by the dedicated efforts of the
staff of the Finance Department and City Administration. I wish to express my
appreciation to them and other department employees who contributed to the publication
of this report, with particular thanks to the entire General Accounting staff. Additional
information, including the City'S Operating and Capital Budgets can be accessed at
www.birminghamal.gov under Open Data, Finance Department.

Respectfully submitted,

J. Thomas Barnett, Jr.

Director of Finance

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Government Finance Officers Association

Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to

City of Birmingham
Alabama

For its Comprehensive Annual

Financial Report
for the Fiscal Year Ended

June 30, 2016

Executive Director/CEO

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 City of Birmingham, Alabama
Organization Chart

Citizens of Birmingham

Mayor ---------------------------------------------------------------------------------------------j City Council

I
I------------------------!
I I
Community Municipal
City Clerk Development Fire Court Other Financially
Independent Boards, Conrnissions and Accountable Boards
Associations with Extensive Budgetary
and Administrative Support

Birmingham Airport hithorily

I I Birmingham Parking hithorily
Arlington Public, Athletic, CuHural &
Equipment Planning Birmingham MJseum of Art Entertainment FacilHies Board
Management Finance Police Engineering and Birmingham Park and Recreation
Penmltting Birmingham Public Ubrary
Sloss Fumaces
Southem Mlseum of Flight

I I
Information Traffic
Management Law Engineering Public Works
Services KEY

Indicates appointive authority

--- and management oversight

I -----------
Indicates administrative and
budgetary support only
Human Crossplex

--
Resources AudRorium at Fair Park General Government

Public Safety

-
Culture &Recreation

Other Financially Accountable Boards

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FINANCIAL SECTION
• Independent Auditor's Report

• Management's Discussion and Analysis

• Basic Financial Statements

• Notes to the Financial Statements··

• Required Supplementary Information

This page intentionally left blank.
BANKS, FINLEY,
WHITE & co.
CJiRTIII.IBD PUBUCACCOUNrANTS

INDEPENDENT AUDITOR'S REPORT

To the Honorable Mayor and

Members of the City Council of
the City ofBinningham, Alabama

We have audited the accompanying financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information, and the respective budgetary comparison for the General
Fund of the City of Birmingham, Alabama, ("the City"), as of and for the year ended June 30, 2017,
and the related notes to the financial statements, which collectively comprise the City's basic
financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.

Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not
audit the financial statements of the Birmingham Parking Authority, a component unit of the City,
which represents 1.0%, 1.3%, and 10.2% of the assets, net position, and revenues respectively of the
aggregately discretely presented component units. Those financial statements were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the
amounts included for such discretely presented component units, is based solely on the report of the
other auditors. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion.

10

()17 THIRlY·,sEVFNTH STREET SOUTH· BIRMINGHAM. AL 35222 • (205) 326-6660

To the Honorable Mayor and
Members of the City Council of
The City of Birmingham, Alabama
Page 2

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 ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.

Opinions
In our opinion, based on our audit and the report of other auditors, the tinancial statements referred
to above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, the aggregate discretely presented component units, each
major fund, the aggregate remaining fund information, and the respective budgetary comparison for
the General Fund of the City, as of June 30, 2017, 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.

Other Matten
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis (pages 13-22), schedule of changes in the plans' net pension
liability and related ratios (pages 97-106), schedule of employer contributions (pages 97-106) and
the schedule of funding progress-OPEB (page 107) 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.

11
To the Honorable Mayor and
Members of the City Council of
The City of Binningham, Alabama
Page 3

Other Information
Our audit was conducted for the purpose of fonning opinions on the financial statements that
collectively comprise the City's basic financial statements. The introductory section, combining and
individual nonmajor fund financial statements, schedule of revenues, expenditures, and changes in
fund balances-budget and actual for the general fund, 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 the schedule of revenues,
expenditures, and changes in fund balances-budget and actual for the general fund 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 infonnation 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 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 financia1 statements and, accordingly, we do not express an opinion or
provide any assurance on them.

November 9, 2017

12
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 MANAGEMENT'S DISCUSSION AND ANALYSIS

This narrative overview and analysis of the financial activities of the City of Birmingham for the
fiscal year ended June 30, 2017, is offered by management of the City to the readers of the financial
report. Please read it in conjunction with the letter of transmittal presented on pages 2-7 and the financial
statements beginning on page 23.

Financial Highlights

-Total net position, which is for the City of Birmingham decreased by $64 million during the past fiscal
year.

-The liabilities of the City of Birmingham exceeded its assets at the close of June 30, 2017, by $413
million, primarily due to net pension liability.

-The City of Birmingham's governmental funds reported combined ending fund balances of $344.5 million
as of June 30, 2017, an increase of $14 million over the prior fiscal year, reflecting the addition of
capitalized leases and the receipt of those capital funds.

Overview of Financial Statements

Following this discussion, the City of Birmingham's basic financial statements are presented.
There are three components to these financial statements.
1. Government-wide financial statements
2. Fund financial statements
3. Notes to the financial statements

1. The government-wide financial statements give readers a broad overview of the finances of
the City of Birmingham in a manner similar to a private-sector business. They are composed of two
individual statements - the statement of net position and the statement of activities.

The statement of net position, presented on pages 23 & 24, reports all of the City of Birmingham's
assets and deferred outflows and liabilities and deferred inflows, with the difference between the two
reported as net position.

The statement of activities presented on page 25 shows the changes in the City of Birmingham's
net assets during the fiscal year ended June 30, 2017. This statement is prepared on the full accrual
basis of accounting, meaning that all changes to net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related in or out cash flows.

The government-wide statements show separately the governmental activities and the business-
type activities. The governmental activities are those supported mainly by taxes and intergovernmental
revenues. The City of Birmingham's activities (functions) include public safety, streets and sanitation,
culture and recreation, and general government. The business-type activity for the City is supported by
user charges which are intended to cover all, or a significant portion, of the activity costs. The City of
Birmingham's business-type activity is the operation of the Emergency Communications District, better
known as E-911.

13
 2. Fund financial statements report the City's operations in more detail than what is presented in
the government-wide financial statements. Fund financial statements include the statements for
governmental, proprietary, and fiduciary funds.

Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide statements. Different Funds are used to segregate
resources due to legal constraints as to use and to account for specific activities. The focus for reporting
the activities on the fund financial statements is on near-term inflows and outflows of spendable resources
as well as balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating the City's near-term financing needs.

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 balance included in this report provide reconciliations to facilitate this
comparison between governmental funds and governmental activities.

In fiscal year 2017, the City of Birmingham reported as major funds the General Fund, the
Birmingham Fund, the Debt Reserve Fund, The Debt Service Fund, the Annual Appropriation Lease-
2016 Fund, the 2015-A Bonds Fund, and the Capital Improvement Fund. The other City funds are
reported aggregately as non-major funds. Individual fund data for each of these non-major governmental
funds is provided in the form of combining statements found on pages 112 through 124 of this report.

The City of Birmingham adopts an annually appropriated budget for its general fund. A budgetary
comparison statement has been provided for the general fund to demonstrate compliance with the
budget. The basic governmental fund financial statements can be found on pages 26 and 28 of this
report.

Proprietarv fund statements provide the same type of information as the government-wide
financial statements, only in more detail. The City maintains one enterprise fund, the Emergency
Management Communications District (E-911). The City also maintains one internal service fund that
provides self-insured health benefits to the City's employees and retirees. The basic proprietary fund
financial statements can be found on pages 31 through 33 of this report.

Fiduciarv funds are used to account for resources held for the benefit of parties external to the
City of Birmingham. Fiduciary funds, accounting for the City's three pension plans, are not reflected in
the government-wide financial statements because the resources are not available to support the City's
own programs. The accounting used for fiduciary funds is similar to that used for proprietary funds. The
basic fiduciary statements can be found on pages 34 through 35 of this report.

3. Notes to the financial statements are provided to give the reader additional information that is
essential to understanding the data presented in the government-wide and fund financial statements.

Other required supplementary information is also presented in this report concerning the City's
progress in funding its obligation to provide pension and health care benefits to its employees. This
required supplementary information can be found in the notes to the financial statements for the pension
funds beginning on page 97 of this report.

14
The following table summarizes the major features of the basic financial statements of the City of Birmingham.

Table of Financial Statements

Fund Financial Statements

Government- Governmental Proprietary Fiduciary Funds

wide Financial Funds Funds
Statements
Scope Entire City Activities of the Activities of the City Activities for which
government City that are not that operate similar the City acts as
(except fiduciary proprietary or to businesses trustee for someone
funds} fiduciary else's resources
Required .Statement of .Balance sheet .Statement of net .Statement of
financial net position .Statement of position fiduciary net position
statements .Statement of revenues, .Statement of .Statement of
activities expenditures, revenues, expenses, changes in fiduciary
and changes in and changes in net net position
fund balance position
.Statement of cash
flows
Accounting basis Accrual Modified accrual Accrual accounting Accrual accounting
and accounting and accounting and and economic and economic
measurement economic current financial resources focus resources focus
focus resources focus resources focus
Type of All assets and Only assets All assets and All assets and
asset/liability liabilities, both expected to be liabilities, both liabilities, both short-
information financial and liquidated and financial and capital, term and long-term
capital, and liabilities that and short-term and
short-term and come due during long-term
long-term the year or soon
thereafter; no
capital assets
nor long-term
debt included
Type of All revenues and .Revenues for All revenues and All revenues and
inflow/outflow expenses during which cash is expenses during the expenses during the
information the year, received during year, regardless of year, regardless of
regardless of or soon after the when cash is when cash is
when cash is end of the year received or paid received or paid
received or paid .Expenditures
when goods or
services have
been received
and payment is
due during the
year or soon
thereafter

15
Government-Wide Condensed Financial Information

Net position represents the difference between the City of Birmingham's total assets and its total
liabilities. Changes in the net position can be a useful measuring tool to gauge performance over time.
The City's net position that is invested in capital assets net of related debt reflects its investment in capital
assets (e.g., land, buildings, machinery and equipment, infrastructure), less any related outstanding debt
used to acquire those assets. The City uses these capital assets to provide services to its citizens;
consequently, these assets are not available for 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 this debt
must be provided from other revenue sources since the capital assets themselves cannot be liquidated
to satisfy these liabilities.

The City of Birmingham's restricted net position of approximately $135.2 million is subject to
various legal restrictions regarding use and by federal and state grant requirements. The City's total net
position decreased by approximately $64 million in fiscal year 2017. For additional details on the
reconciliation between the two basis, see page 29 of this report.

16
 The following table presents a condensed statement of the City's net position at June 30, 2017 and 2016:

CONDENSED STATEMENT OF NET POSITION

June 30,2017 and 2016
(in thousands)

Governmental Business-Type Totals

Activities Activities

2017 2016 2017 2016 2017 2016

Current and other assets $712,418 $833,883 $4,161 $4,950 $716,579 $838,833
Capital assets, net 675,703 614,622 4,344 4,386 680,047 619,008

Total assets 1,388,121 1,448,505 8,505 9,336 1,396,626 1,457,841

Current and other

liabilities 82,751 80,133 220 858 82,971 80,991
Long-term liabilities 1,718,602 1,717,320 351 351 1,718,953 1,717,671

Total liabilities 1,801,353 1,797,453 571 1,209 1,801,924 1,798,662

Net position:
Net investment in capital assets 241,975 180,892 18 18 241,993 180,910
Restricted 135,178 146,904 135,178 146,904
Unrestricted (790,385) (676,744) 7,916 8,109 (782,469) (668,635)

Net position ($413,232} ($348,948} $7,934 $8,127 ($405,298} ($340,821}

17
 CONDENSED STATEMENT OF CHANGES IN NET POSITION
For Years Ended June 30,2017 and 2016
(in thousands)

Changes in Net Position

Governmental Business-Type
Activities Activities Totals
2017 2016 2017 2016 2017 2016
REVENUES:
Program revenues:
Charges for services $114,569 $125,841 $4,167 $7,595 $118,736 $133,436
Operating grants 20,125 15,382 20,125 15,382
Capital grants
General revenues:
Sales and use tax 165,321 160,897 165,321 160,897
Occupational tax 89,870 84,722 89,870 84,722
Property tax 59,139 58,570 59,139 58,570
Unrestricted grants and
Contri butions 27,974 24,125 27,974 24,125
Investment earnings 8,521 1,940 12 18 8,533 1,958
Other 7,800 20,152 1 7,801 20,153

Total revenues 493,319 491,629 4,179 7,614 497,499 499,243

EXPENSES:
Program expenses:
General government 200,826 252,118 200,826 252,118
Public safety 221,095 218,603 4,372 6,561 225,468 225,164
Streets and sanitation 66,911 65,638 66,911 65,638
Culture and recreation 48,144 42,080 48,144 42,080
Interest on long-term debt 20,624 19,441 20,624 19,441

Total expenses 557,600 597,880 4,373 6,561 561,973 604,441

Change in net position (64,283) (106,249) (193) 1,052 (64,4 76) (105,197)

Beginning net position (348,949} (242,699} 8,127 7,075 (340,822} (235,624}

Ending net position ($413,232} ($348,948) $7,934 $8,127 ($405,298}($340,821}

18
Fund Analysis

Changes in fund balances for the City's major governmental funds for the fiscal year ended June
30,2017, are as follows:

Beginning Balance Increase

Ending Balance
(Decrease)
General Fund $ 89,450 $ (3,617) $ 85,833
Bond Debt Reserve 23,965 3,803 27,768
Bond Debt Service (4) 4,769 4,765
Capital Improvement Fund 10,688 (5,928) 4,760
Birmingham Fund 87,803 1,305 89,108
2015-A Bonds 64,526 (6,917) 57,609
Annual Approp. Lease-2016 28,301 28,301
$ 276,428 $21,716 $298,144

Governmental Funds

The focus of the reporting of the City's governmental funds is to provide information regarding
near-term inflows, and balances of spendable resources. Such information is useful in assessing the
City's financing requirements. Unassigned fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year.

The Fund Balance of the General Fund decreased due to an operating deficit for fiscal year
2017. The deficit was less than the budgeted deficit. The Fund Balance of the General Bond Debt
Reserve increased due to increased tax collections. The Capital Improvement Fund Balance
decreased due to expenditures from the Fund for on-going projects. The Birmingham Fund Balance
increased due to improved investment earnings in excess of expenditures from the fund. The 2015-A
Bonds Balance decreased due to disbursements of that series of bonds. The Annual Appropriation
Lease-2016 increased due to the implementation of the leases and the receipt of the fund for the
project.

The Statement of Revenues, Expenditures, and Changes in Fund Balances provide additional
details for the changes in specific funds. This statement can be found on page 28.

Budget Variances in the General Fund

During the fiscal year, revisions were made to the original budget adopted by the City due to
changes in projected revenues. Amendments were also made in the projected expenditures, as needed
throughout the year.

19
 Capital Assets and Long-Term Debt Activity

Capital Asset Activity

At June 30, 2017, the City of Birmingham reported approximately $676 million in net capital
assets, including its infrastructure, for governmental activities. The City's Emergency Management
Communication District reported approximately $4.3 million in net capital assets. The notes to the
financial statements, on pages 58 through 60, provide more information on capital assets, including the
changes that occurred during the fiscal year.

A. Capital Assets

Capital asset activity for the year ended June 30, 2017 was as follows (in thousands):

June 30, June 30,

2016 Increases Decreases 2017

Governmental activities:
Capital assets,
nondepreciable:
Land $ 154,408 $ 325 $ - $ 154,733
Construction in progress 135,216 68,150 3,737 199,629
Land, infrastructure projects 16,647 16,647
Total nondepreciable capital
assets 306,271 68,475 3,737 371,009

Capital assets, depreciable:

Buildings and capital facilities 331,765 2,679 334,444
Furniture and other
equipment 178,163 15,244 5,992 187,415
Infrastructure 220,337 220,337
Total depreciable capital
assets 730,265 17,923 5,992 742,196
Less accumulated
depreciation:
Buildings and capital facilities 122,952 4,617 85 127,484
Furniture and other
equipment 149,093 8,744 1,117 156,720
Infrastructure 149,869 3,429 153,298
Total accumulated
depreciation 421,914 16,790 1,202 437,502
Net depreciable capital
assets 308,350 1,133 4,790 304,694
Governmental activities,
net capital assets $ 614,622 $ 69,608 $ 8,527 $ 675,703

20
 June 30, June 30,
2016 Increases Decreases 2017
Business-type activities:
Construction in progress $ - - -37
- $ 241 $ _____ $ ___2_78_
Total nondepreciable capital
assets 37 241 278

Buildings and other capital

facilities 1,025 1,025
Furniture and other equipment 7,254 7,254
Total depreciable capital
assets 8,279 8,279

Less accumulated depreciation:

Buildings and other capital
facilities 522 13 535
Furniture and other equipment 3,406 272 3,678
Total accumulated
depreciation 3,929 284 4,213
Net depreciable capital assets 4,350 (284) 4,065

Business-type activities,
net capital assets $ ==4,==38=6= $ (43) $====-= $==4,==34=4=

Long-term Debt Activity

At June 30, 2017, the City of Birmingham had approximately $542 million of outstanding debt,
consisting of its bonds and warrants (including blended component unit debt); of this amount,
approximately $490 million is considered long-term. The notes to the financial statements, on pages 61-
67, include additional details for the City's long-term debt activity.

Governmental Activities 2017 2016

Long Term Debt $ 542,236 $ 513,291
Capitalized Leases 69,140 9,470
$ =~....;;6...;.1~1,.,;;.37;.,.;6;.., $ _==5;,,;;;2;;;;;;,2':.;,.76~1;..,

The City's bond ratings are AA, Aa2, AA- and AA by Standard & Poor's, Moody's Investors
Service, Fitch Ratings and Kroll Bond Ratings, respectively. The City's broad and diverse economy and
consistently strong financial performance are the bases for these ratings.

The City's general fund is typically used to liquidate long-term liabilities with the exception of bond
debt service, which is paid from the City's Bond Reserve Fund, and the PACE bonds, which are paid
from The Special Lodgings Tax and Stadium Lease Revenues.

On July 7,2016, the City issued $23,990,000 General Obligation Refunding Bonds, Series 2016-
A to provide funds for the current refunding of the City's Series 2006-A Bonds, dated December 21, 2006
that were outstanding and that matured in 2017, 2018, 2020, 2023 and 2024. The referenced 2006-A

21
bonds were redeemed on October 1, 2016, in accordance with their terms. Net Present value savings
was approximately $1 million, or 3.8% of the principal amount of bonds refunded.

On August 4,2016, the City entered into an Equipment Lease/Purchase Agreement in the amount
of $43,930,275. The Agreement requires quarterly payments beginning on August 4, 2018 and
continuing until February 4, 2036, subject to annual appropriation. These funds will be used to replace
heating, ventilation and air conditioning equipment; roofs; water fixtures and other energy saving
measures. The resulting energy cost savings is expected to be sufficient to cover the lease payments.
Energy savings are guaranteed by Trane, Inc.

On August 31, 2016, the City entered into an Equipment Lease/Purchase Agreement in the
amount of $17,487,893. The Agreement requires quarterly payments beginning on August 31,2018 and
continuing until August 31, 2033, subject to annual appropriation. These funds will be used to replace
heating, ventilation and air conditioning equipment; roofs; water fixtures and other energy saving
measures. The resulting energy cost savings is expected to be sufficient to cover the lease payments.
Energy savings are guaranteed by Trane, Inc.

On September 9, 2016, the City issued $13,617,500 General Obligation Equipment and
Improvement Warrants. Proceeds will be used to purchase Fire, Police, Information Management and
Public Works equipment and to make improvements to the City's Botanical Gardens.

On November 10, 2016, the City issued its Series 2016-C and 2016-0 Bonds to currently refund
a like amount of its Series 2014-C and 2014-0 Bonds, resulting in a net present value savings of
$2,080,037, or 4.3% of the principal amount of bonds refunded.

On June 29, 2017, the City issued $500,000 General Obligation Warrants and $450,000 General
Obligation Warrants. The proceeds will be used to fund a landfill design study and improvements to the
Legion Field stadium.

Economic Factors Affecting the City of Birmingham and the 2017 Budget Information

The City considered several factors in preparing the City's budget for the 2017 fiscal year. For
one, the U. S. economy is now growing at a slow rate. Because much of the City's revenue is consumer
driven (sales, use, occupational and business license taxes), slow economic growth translates directly
into slow growth for a major portion of the City's revenue. Therefore, the City continues to monitor
expenses closely and stands ready to adjust its budget as needed.

Availability of Information

The City's current and previous Operating and Capital Budgets, previous CAFRs, Single Audits
and this CAFR are available on the City's website at www.birminghamal.gov ,Access/Open Data,
Finance.

Request for Information

This financial report is designed to give a general overview of the City of Birmingham's finances.
Questions concerning any of the information may be sent to the following:

Director of Finance
710 North 20 th Street, Suite A-100
Birmingham, AL 35203

22
This page intentionally left blank.
Basic Financial Statements
 City of Birmingham, Alabama
Statement of Net Position
June 30, 2017
(amounts expressed in thousands)
Primary Government
Governmental Business-Type
Activities Activities Total Component Units
Assets
CURRENT ASSETS:
Unrestricted assets:
Cash and investments $ 291,780 $ 3,961 $ 295,741 $ 37,468
Cash with escrow agent 38,656 38,656
Receivables:
Accrued interest 327 327
Accrued taxes receivable 30,552 30,552
Accounts (net of uncollectibles) 3,401 3,401 981
Notes (net of uncollectibles) 6 6
Loans 87 87
Due from other governments 4,272 4,272
Inventories 1,890 1,890 293
Prepaid items 608 608 612
Due from component unit 264 264
Other current assets 393 393
Restricted assets:
Cash and cash equivalents 200 200 46,822
Investments 25,927
Accounts and grants receivable 1,343
Accrued interest receivable
TOTAL CURRENT ASSETS 372,236 4,161 376,397 113,447
NONCURRENT ASSETS:
Other assets:
Net pension asset 242 242
Capital assets:
Land 171,380 171,380 186,620
Buildings and capital facilities 334,444 1,025 335,469 278,928
Furniture and other equipment 187,415 7,254 194,669 68,616
Accumulated depreciation (284,204) (4,213) (288,417) (223,661)
Infrastructure 220,337 220,337 218,127
Accumulated depreciation, infrastructure (153,298) (153,298)
Construction in progress 199,629 278 199,907 9,960
TOTAL NONCURRENT ASSETS 675,945 4,344 680,289 538,590

Total Assets: 1,048,181 8,505 1,056,686 652,037

Deferred outflows of resources 339,940 339,940 13,191

Total Assets and Deferred Outflows of Resources 1,388,121 8,505 1,396,626 665,228

The notes to the financial statements are an integral part of this statement
23
 City of Birmingham, Alabama
Statement of Net Position
June 30, 2017
(amounts expressed in thousands)
Primary Government
Governmental Business-Type
Activities Activities Total Component Units
Liabilities
CURRENT LIABILITIES:
Payable from unrestricted assets:
Accounts and vouchers payable 9,935 2 9,937 1,384
Contracts payable 425 42 467
Contracts payable - retainage 1,297 1,297
Accrued payroll and payroll taxes payable 6,685 6,685 178
Due to primary government 298
Estimated claims payable 11,436 11,436
Other liabilities 7,258 7,258
Unearned Revenue 59
Interest payable 5,246 5,246
Capitalized leases 1,748 176 1,924
Compensated absences 4,527 4,527 40
Bonds and warrants payable 34,194 34,194
Payable from restricted assets:
Contracts payable 292
Accrued interest payable 4,786
Current portion of revenue bonds payable 7,086
TOTAL CURRENT LIABILITIES 82,751 220 14,123
LONG TERM LIABILITIES:
Capitalized leases 69,140 351
Compensated absences 13,765 758
Bonds and warrants payable, net 508,042 175,558
Closure and postclosure costs 15,901
Workers' compensation claims payable 13,983
OPEB liability 65,828
Net pension liability 740,648 24,900
TOTAL LONG TERM LIABILITIES 1,427,307 351 201,216

Total Liabilities: 1,510,058 571 215,339

Deferred inflows of resources 291,295 9,189

Net Position
Invested in capital assets, net of related debt 241,975 18 356,840
Restricted for:
Restricted for debt service 88,618
Restricted for future projects 46,560
Unrestricted (790,385)
Total Net Position: $ (413,232) $

The notes to the financial statements are an integral part of this statement
24
 City of Birmingham, Alabama
Statement of Activities
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Program Revenues Net (Expense) Revenue and Changes in Net Position

Primary Government

Charges for Operating Grants Governmental Business-Type

Functions/Programs Expenses Services and Contributions Activities Activities Total Component Units
Primary Government
Governmental Activities
Public safety $ 221,095 $ 22,009 $ 10,053 $ (189,034) $ $ (189,034) $
Street and sanitation 66,911 379 (66,532) (66,532)
Cultural and recreational 48,144 1,970 (46,175) (46,175)
General government 200,826 90,211 10,072 (100,543) (100,543)
Interest on Long Term Debt 20,624 (20,624) (20,624)
Total Governmental Activities 557,600 114,569 20,125 (422,908) (422,908)

Business-Type Activities:
Emergency Management Communication District 4,372 4,167 (205) (205)
Total Business-Type Activities 4,372 4,167 (205) (205)
Total Primary Government: $ 561,972 $ 118,736 $ 20,125 (422,908) (205) (423,113)

Component Units
Birmingham Airport Authority 46,252 43,829 4,937 2,515
Birmingham Parking Authority 5,540 5,618 77
Total Component Units: $ 51,792 $ 49,447 $ 4,937 2,592

Sales and use tax 165,321 165,321

Occupational tax 89,870 89,870
Property tax 59,139 59,139
Grants and contributions-unrestricted 27,974 27,974
Unrestricted investment earnings 8,521 12 8,533 231
Other 7,800 7,800 442
Total General Revenues, Special Items,
and Transfers: 358,625 12 358,637 673
Change in Net Position: (64,283) (193) (64,476) 3,265
Net Position - Beginning of Year as originally
stated (348,949) 8,127 (340,822) 438,964
Restatement (1,529)
Net Position - Beginning of Year Restated (348,949) 8,127 (340,822) 437,435
Net Position - Ending: $ (413,232) $ 7,934 $ (405,298) $ 440,700

The notes to the financial statements are an integral part of this statement
25
 City of Birmingham, Alabama
Balance Sheet
Governmental Funds
June 30, 2017
(amounts expressed in thousands)

Annual Other Total

Capital Appropriation Governmental Governmental
General Debt Reserve Debt Service Improvement Fund Birmingham Fund 2015-A Bonds Lease-2016 Funds Funds
Assets
Cash and investments $ 65,335 $ 27,547 $ 4,765 $ 4,941 $ 88,864 $ 58,009 $ $ 53,968 $ 303,429
Cash with fiscal agent 28,301 10,347 38,648
Receivables:
Accrued interest 22 24 2 244 24 11 327
Accrued taxes 29,963 197 391 30,551
Accounts (net of uncollectibles) 3,204 10 3,214
Notes (net of uncollectibles) 6 6
Loans 87 87
Due from other governments 3,761 511 4,272
Due from component units 264 264
Inventories 1,890 1,890
Prepaid Items 608 608
Other 393 393
Total Assets: $ 105,446 $ 27,768 $ 4,765 $ 4,943 $ 89,108 $ 58,033 $ 28,301 $ 65,325 $ 383,689

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts 16,392 $ 16,392
Accounts and vouchers payable $ 5,174 $ $ $ 24 $ $ 319 $ $ 1,165 $ 6,682
Contracts payable 425 425
Contracts payable-retainage 88 105 1,104 1,297
Accrued payroll and payroll taxes payable 6,685 6,685
Unearned revenue 135 243 378
Other liabilities 7,194 70 44 7,308
Total Liabilities: 19,613 182 424 18,948 39,167

Fund Balances:
Nonspendable:
Inventory 1,890 1,890
Prepaid items 608 608
Spendable:
Restricted:
Debt Service 27,768 3,750 31,518
Capital Projects 4,761 64,526 51,283 120,570
Other 770 770
Assigned:
Debt Service 1,015 1,015
Committed to:
Stabilization 89,108 89,108
Neighborhood Improvements 8,336 8,336
Community Development
Other Purposes
Unassigned 83,335 (6,917) 28,301 (14,016) 90,703
Total Fund Balances: 85,833 27,768 4,765 4,761 89,108 57,609 28,301 46,373 344,518
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 105,446 $ 27,768 $ 4,765 $ 4,943 $ 89,108 $ 58,033 $ 28,301 $ 65,321 $ 383,685

The notes to the financial statements are an integral part of this statement
26
 City of Birmingham, Alabama
Reconciliation of the Governmental Funds Balance Sheet
To the Statement of Net Position
June 30, 2017
(Amounts expressed in thousands)

Fund Balance - Total governmental funds $ 344,518

Amounts reported for governmental activities in

the statement of net assets are different
because:

Deferred revenues are not recognized until available in the funds. 403

Deferred items related to debt issuance used in governmental

are not current financial resources and therefore are not
reported in the governmental funds balance sheet. 6,458

Deferred outflows and inflows of resources related to pensions are applicable to future
periods and, therefore, are not reported in the governmental funds. 42,186

Capital assets used in governmental activities are not current

financial resources and therefore are not reported in the
balance sheet.

Governmental capital assets $ 1,113,205

Accumulated depreciation (437,502) 675,703

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

period and therefore, they are not reported in the
governmental funds balance sheet.

Bonds and warrants payable (524,370)

Interest accretion on capital appreciation bonds (17,866)

Capitalized leases (70,888)

Compensated absences (18,292)

Accrued interest payable (5,246)

Landfill closure cost (15,901)

OPEB liability (65,828)

Workers' Compensation claims payable (13,983)

Estimated claims payable (11,436)

Net pension obligation (net) (740,406) (1,484,216)

An Internal Service Fund is used by management to charge the

cost of certain activities to individual funds. The assets and
liabilities of the Internal Service Fund are included in the governmental
activities in the Statement of Net Position. 1,716

Net position of governmental activities $ (413,232)

The notes to the financial statements are an integral part of this statement.
27
 City of Birmingham, Alabama
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

CapHaI Annual Other Total

Improvement Appropriation Governmental Governmental
General Debt Reserve Debt Service Fund Birmingham Fund 201S-A Bonds Lease-2016 Funds Funds
Revenues
Taxes 290,095 31,703 5,676 327,474
Licenses and permits 80,625 80,625
Intergovernmental 14,423 33,349 47,772
Charges for services 16,231 274 16,505
Fines and forfeitures 1,960 1,139 3,099
Investment income 256 100 41 7,634 205 15 262 8,521
Other operating revenues 6,692 2,280 8,974
Total Revenues: 410,282 31,803 10 41 7,634 205 15 42,980 492,970

Expenditures
Current Expenditures:
Public safety:
Police 97,255 1,179 98,434
Fire 63,434 45 63,479
Planning Engineering and Permits 13,070 1,709 14,779
Traffic Engineering 11,334 11,334
Municipal Court 6,685 1,919 8,604
Street and sanitation:
Public Works 47,986 3,157 682 51,825
Nondepartmental 970 970
Cultural and recreational:
Park and Recreation 17,089 12 196 17,297
Library 14,574 14,580
Arlington Historical Home 754 754
Boutwell Auditorium 1,532 1,532
Museum of Art 3,558 3,558
Sloss Furnace 1,029 1,029
Southern Museum of Flight 797 797
State Fairgrounds 4,482 182 4,664
Nondepartmental
General government:
Finance 11,182 233 11,415
Equipment Management 14,956 14,956
Information Management Services 13,252 13,252
City Clerk 1,015 1,015
Community Development 914 9,396 10,310
Council Office 3,236 3,236
Legal 9,578 9,578
Mayors Office 9,244 254 9,498
Personnel 6,772 6,772
Nondepartmental 41,677 13 7,741 2,094 83 1,745 53,353
Municipal Court 159 159
Debt Service:
Principal 12,883 13,943 7,078 33,904
Interest and fees 3,812 9,285 3,775 16,872

Capital Outlay:
Capital outlays 697 2,832 3,870 33,132 37,005 77,536
Total Expenditures: 412,797 23,241 10,573 2,094 7,122 33,132 66,539 555,498
Excess (Deficiency) of Revenues Over (Under)
Expenditures: (2,515) 31,803 (23,231) (10,532) 5,540 (6,917) (33,117) (23,559) (62,528)

Other financing sources (uses)::

Issuance of debt 14,680 14,680
Proceeds from capital lease 61,418 61,418
Transfers in 4,433 28,000 4,718 3,982 41,133
Transfers out (5,534) (28,000) (113) (4,234) (3,252) (41,133)
Total Other financing sources (uses):: (1,101) (28,000) 28,000 4,605 (4,234) 61,418 15,410 76,098
Net Change in Fund Balances: (3,616) 3,803 4,769 (5,927) 1,306 (6,917) 28,301 (8,150) 13,570
Fund Balances - Beginning 89,449 23,965 (4) 10,687 87,804 64,526 54,521 330,948
Fund Balances - Ending: 85,833 27,768 4,765 4,760 89,110 57,609 28,301 46,372 344,518

The notes to the financial statements are an integral part of this statement
28
 City of Birmingham, Alabama
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
For the Year Ended June 30, 2017
(Amounts expressed in thousands)

Net increase in fund balances - total governmental funds $ 13,570

Governmental funds report capital outlays as expenditures. In the

statement of activities, however, these costs are allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount by which capital outlays exceeded depreciation Capital Outlay 76,671
in the current period. Depreciation (15,588) 61,083

The repayment and refunding of principal of long-term debt and capital leases
uses current resources of governmental funds but has no effect on net assets. 33,802

Issuance of new debt (75,913)

Interest accretion on capital appreciation bonds (4,868)

Some expenses reported in the statement of activities do not

require the use of current financial resources and are not reported
as expenditures in governmental funds:
Change in compensated absences (1,219)
Change in closure and post closure costs (426)
Change in estimated claims (395)
Amortization of premium and discount 3,138
Amortization of deferred charges (2,662)
Change in interest payable (1,016)
Change in workers compensation 2,404
Change in OPES (15,546)
Pension expense, current year increase/(decrease) (77,667) (93,389)

Revenue not recognized until future years 1,244

An Internal Service Fund is used by management to charge the cost

or certain activities to individual funds. The net revenue (expense) of the
Internal Service Fund is reported with governmental activities. 188

Increase (Decrease) in net position of governmental activities $ (64,283)

The notes to the financial statements are an integral part of this statement.
29
 City of Birmingham, Alabama
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2017
(amounts expressed in thousands)
Budgeted Amounts

Variance with
Final Budget -
Original Final Actual Amounts Positive (Negative)
Revenues
Taxes $ 286,168 $ 286,269 $ 290,095 $ 3,826
Licenses and permits 89,467 89,467 80,625 (8,842)
Intergovernmental 12,374 13,460 14,423 963
Charges for services 18,167 18,167 16,231 (1,936)
Fines and forfeitures 2,072 2,072 1,960 (112)
Investment income 200 200 256 56
Other operating revenues 7,756 7,762 6,692 (1,070)
Total Revenues: 416,204 417,397 410,282 (7,115)

Expenditures
Current Expenditures:
Public safety: 190,475 190,332 191,778 (1,446)
Street and sanitation: 46,606 47,125 47,986 (861)
Cultural and recreational: 46,129 46,195 43,815 2,380
General government: 121,524 123,723 111,826 11,897

Debt Service:
Principal 11,257 12,604 12,883 (279)
Interest and fees 3,720 3,720 3,812 (92)

Capital Outlay:
Capital outlays 1,368 821 697 124
Total Expenditures: 421,079 424,520 412,797 11,723
Excess (Deficiency) of Revenues Over (Under)
Expenditures: (4,875) (7,123) (2,515) 4,608

Other financing sources (uses):: (547) (1,130) (1,101 ) 29

Net Change in Fund Balances: (5,422) (8,253) (3,616) 4,637
Fund Balances - Beginning 89,449 89,449 89,449
Fund Balances - Ending: $ 84,027 $ 81,196 $ 85,833 $ 4,637

The notes to the financial statements are an integral part of this statement
30
 City of Birmingham, Alabama
Statement of Net Position
Proprietary Funds
June 30, 2017
(amounts expressed in thousands)
Business-type Activities Governmental Activities

Enterprise Fund-E911 Internal Service

Communications District Fund
Assets
Current assets:
Cash and investments $ 3,961 $ 4,753
Total Current assets: 3,961 4,753
Restricted assets:
Cash and cash equivalents 200
Accounts and grants receivable 187
Total Restricted assets: 200 187
Property, plant, and equipment:
Buildings and systems 1,303
Machinery and equipment 6,443
Furniture and fixtures 811
Less accumulated depreciation (4,213)
Total Property, plant, and equipment: 4,344
Total Assets: 8,505 4,940

Liabilities
Current liabilities:
Accounts payable 44 3,224
Capitalized leases 176
Total Current liabilities: 220 3,224
Long Term liabilities:
Capitalized leases 351
Total Long Term liabilities: 351
Total Liabilities: 571 3,224

Net Position
Invested in capital assets 18
Unrestricted 7,916 1,716
Total Net Position: $ 7,934 $ 1,716

The notes to the financial statements are an integral part of this statement
31
 City of Birmingham, Alabama
Statement of Revenues, Expenses, and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Business-type Activities Governmental Activities

Enterprise Fund-E911 Internal Service

Communications District Fund
Operating Revenues
Service fees $ 4,167 $
Employer contributions:
City contributions to employee health insurance 34,610
Employee contributions:
Employee health deductions 10,021
Rebates:
Prescription drug rebate 256
Retiree health insurance and city contributions 4,018
Total Operating Revenues: 4,167 48,905

Operating Expenses
Public safety 2,633
General and administrative:
Enterprise 650
Internal Services:
Blue Cross Claims 27,161
Express Scripts Claims 13,360
Stop Loss Premium 850
Admin Fees - BCBS 1,476
Express Scripts Fees 50
Behavioral Health Fees 785
Blue Cross Claims - Retirees 1,821
Express Script Claims - Retirees 2,969
Stop Loss Premium - Retirees 54
Admin Fees - BCBS Retirees 147
Express Script Fees - Retirees 44
Repairs and maintenance 805
Depreciation 284
Total Operating Expenses: 4,372 48,717
Operating Income (Loss): (205) 188

Nonoperating Revenues (Expenses)

Interest income 12
Total Nonoperating Revenues (Expenses): 12
Income (Loss) Before Contributions and Transfers: (193) 188
Change in Net Position: (193) 188
Total Net Position - Beginning 8,127 1,528
Total Net Position - Ending: $ 7,934 $ 1,716

The notes to the financial statements are an integral part of this statement
32
 - City of Birmingham, Alabama
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2017
(in thousands)

Business-type Governmental
activities activities

Enterprise Fund - E911 Internal Service Fund -

Communications District Healthcare Plan

Cash flows from operating activities:

Cash received from customers $ 4,167 $ 48,904
Cash payments to suppliers (4,622) (48,905)
Cash payments to employees (105)
Change in accounts receivable (187}
Net cash from operating activities (560) (188)

Cash flows from (used for) capital financing activities:

Acquisition of capital assets (241)

Cash flows from investing activities:

Interest received 12

Net increase (decrease) in cash and cash equivalents (789) (188)

Cash and investments, beginning of year 4,950 4,941
Cash and investments, end of year $ 4,161 $ 4,753

Reconciliation of operating loss to net cash used by

operating activities:
Operating income (loss) (205) 188

Adjustments to reconcile operating gain (loss)

to net cash used by operating activities:
Depreciation 284
Change in accounts receivable (188)
Change in accounts payable (639} (188}
Net cash from operating activities $ (560} $ (188}

The notes to the financial statements are an integral part of this statement
33
 City of Birmingham, Alabama
Statement of Fiduciary Net Position
June 30, 2017
(amounts expressed in thousands)

Pension Trust
Funds
Assets
Cash and cash equivalents $ 33,937
Receivables: 13,431
Investments, at fair value: 1,050,985
Total Assets: 1,098,353

Liabilities
Accounts payable and other 639
Total Liabilities: 639

Net Position
Held in trust for future pension benefits 1,097,714
Total Net Position: $ 1,097,714

The notes to the financial statements are an integral part of this statement
34
 City of Birmingham, Alabama
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Pension Trust
Funds
Additions
Additions:
Contributions:
Employer Contributions $ 20,922
Plan member contributions 18,399
Investment income:
Investment earnings 118,089
Securities lending 1,050
Security litigation 13
Other income 394
Total Additions: 158,867
Total Additions: 158,867

Deductions
Deductions:
Benefits 95,088
Refunds of contributions 2,658
Administrative expenses 1,709
Investment expenses 3,399
Total Deductions: 102,854
Total Deductions: 102,854
Change in Net Position: 56,013
Net Position - Beginning 1,041,701
Net Position - Ending: $ 1,097,714

The notes to the financial statements are an integral part of this statement
35
 City of Birmingham, Alabama
Combining Statement of Net Position
Nonmajor Component Units
June 30, 2017
(amounts expressed in thousands)

Birmingham Birmingham Total Nonmajor

Airport Authority Parking Authority Component Units
Assets and Deferred Outflows of Resources
Assets:
CURRENT ASSETS:
Unrestricted assets:
Cash and investments $ 34,431 $ 3,037 $ 37,468
Receivables:
Accounts (net of uncollectibles) 873 107 980
Inventories 293 293
Prepaid items 520 92 612
Restricted assets:
Cash and cash equivalents 46,822 46,822
Investments 25,927 25,927
Accounts and grants receivable 1,343 1,343
Accrued interest receivable 1 1
TOTAL CURRENT ASSETS 110,210 3,236 113,446
NONCURRENT ASSETS:
Other assets:
Capital assets::
Land 183,489 3,131 186,620
Buildings and capital facilities 278,928 278,928
Furniture and other equipment 67,199 1,417 68,616
Accumulated depreciation (222,574) (1,087) (223,661)
Infrastructure 218,127 218,127
Construction in progress 9,960 9,960
TOTAL NONCURRENT ASSETS 535,129 3,461 538,590

Total Assets: 645,339 6,697 652,036

Deferred outflows of resources 13,191 13,191

Total Assets and Deferred Outflows of Resources: 658,530 6,697 665,227

Liabilities, Deferred Inflows of Resources, and Net Position

Liabilities:
CURRENT LIABILITIES:
Payable from unrestricted assets:
Accounts and vouchers payable 1,311 73 1,384
Accrued payroll and payroll taxes payable 178 178
Due to primary government 298 298
Unearned Revenue 59 59
Compensated absences 40 40
Payable from restricted assets:
Contracts payable 292 292
Accrued interest payable 4,786 4,786
Current portion of revenue bonds payable 6,930 156 7,086
TOTAL CURRENT LIABILITIES 13,319 804 14,123
LONG TERM LIABILITIES:
Compensated absences 529 229 758
Bonds and warrants payable, net 175,557 175,557
Net pension liability 24,900 24,900
TOTAL LONG TERM LIABILITIES 200,986 229 201,215

Total Liabilities: 214,305 1,033 215,338

Deferred inflows of resources 9,189 9,189

Net Position:
Invested in capital assets, net of related debt 353,535 3,305 356,840
Restricted for:
Restricted for debt service 24,042 24,042
Restricted for future projects 18,903 18,903
Unrestricted 38,556 2,359 40,915
Total Net Position: 435,036 5,664 440,700
Total Liabilities, Deferred Inflows of Resources, and Net
Position: $ 658,530 $ 6,697 $ 665,227

The notes to the financial statements are an integral part of this statement
36
 City of Birmingham, Alabama
Combining Statement of Activities
Nonmajor Component Units
For the Year Ended June 30, 2017
(amounts expressed in thousands)
Program Revenues Net (Expense) Revenue and Changes in Net Position

Charges for Operating Grants Birmingham Birmingham

Functions/Programs Expenses Services and Contributions Airport Authority Parking Authority Total
Nonmajor Component Units
Birmingham Airport Authority:
Birmingham Airport Authority 46,251 $ 43,829 $ 4,937 2,515 $ $ 2,515
Total Birmingham Airport Authority 46,251 43,829 4,937 2,515 2,515

Birmingham Parking Authority:

Birmingham Parking Authority 5,540 5,618 77 77
Total Birmingham Parking Authority 5,540 5,618 77 77
Total Nonmajor Component Units $ 51,791 $ 49,447 $ 4,937 2,515 77 2,592

Unrestricted investment earnings 239 (8) 231

Other 442 442
Total General F:evenues, Special
Items, and Transfers: 681 (8) 673
Change in Net Position: 3,196 69 3,265
Net Position - Beginning of Year as
originally stated 433,369 5,595 438,964
Restatement (1,529) (1,529)
Net Position - Beginning of Year Restated 431,840 5,595 437,435
Net Position - Ending: $ 435,036 $ 5,664 $ 440,700

The notes to the financial statements are an integral part of this statement
37
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

I. Organization and Summary of Significant Accounting Policies

A. Reporting Entity

The City of Birmingham, located in Alabama, is a municipal corporation that was incorporated
on December 19, 1871. The City operates under a Mayor-Council form of government as
provided by Act No. 425 of the Alabama Legislature (The Mayor-Council Act) and is comprised
of a Mayor elected at large and a nine-member council that is elected by district.

The financial statements of the City have been presented in conformity with accounting
principles accepted in the United States of America (GMP) as applied to governmental units.
The Governmental Accounting Standards Board (GAS B) is the accepted standard-setting
body for establishing governmental accounting and financial reporting principles.

The accompanying financial statements present the City and its component units, entities for
which the City of Birmingham is considered to be financially accountable (the City is able to
impose its will on the organization or there is a potential for the organization to provide specific
benefits or specific burdens on the City). The City's discretely presented component units are
presented in total in a separate column in the government-wide financial statements to
emphasize that they are legally separate from the City.

Blended Component Unit

The Public Athletic, Cultural and Entertainment Facilities Board of the City of Birmingham (the
PACE) is a five-member board appointed by the City. The PACE imposes specific financial
burdens on the City. Although legally separate, the PACE is blended as a governmental fund
component unit into the City because the structure of the PACE meets the GASB Statement
61 criteria for blending. The criteria assessed and determined to result in blending is that the
PACE's total debt outstanding is expected to be repaid entirely with resources of the City.

A separate financial report for the PACE is not prepared.

Discretely presented component units

The Birmingham Airport Authority (BM) is a seven-member board appointed by the City and
is a public corporation organized under the provisions of the Code of Alabama. The Authority
is responsible for the operations of the Birmingham-Shuttlesworth International Airport.
Because the City of Birmingham appoints the BM's governing body, leases the airport to the
Authority, and retains financial oversight pursuant to the lease, the Authority is included as a
component unit in these financial statements. The BM's fiscal year ends June 30.

The BM reimburses the City for the cost of providing security and fire protection services to
the Airport. Amounts charged by the City for the fiscal year ended June 30, 2017, totaled
$4,520,505.

The Birmingham Parking Authority (BPA) is a three-member board appointed by the City and
operates parking facilities in the City and also acts as a financing agent for certain other

38
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

parking facilities. The Authority is included as a component unit in these financial statements.
The BPA's fiscal year ends June 30.

The Birmingham Emergency Communication District (BECD) is a non-profit corporation

formed under the provisions of the Code of Alabama on January 31 S t, 2017, and is governed
by a board of commissioners composed of the members of the Birmingham City Council. The
District is responsible for providing emergency telephone services to citizens and others within
the geographical area of the Corporation. Because the governing bodies of the BECD and
the City are comprised of the same members and the nature and significance of its relationship
with the City, the District will be included as a component unit in future financial statements.
The BECD's fiscal year ends September 30.

Complete financial statements for each component unit may be obtained at the following
administrative offices:
Birmingham Airport Authority Birmingham Parking Authority
5900 Airport Highway 1732 5th Avenue North
Birmingham, Alabama 35222 Birmingham, Alabama 35203
Financial statement date: June 30, 2017 Financial statement date: June 30, 2017

Birmingham Emergency Communication District

711 19th Street North
Birmingham, Alabama 35203
Financial statement date: September 30, 2017

Related Organizations

The City of Birmingham is also responsible for appointing a voting majority of the boards of
other organizations, but the City's financial accountability for these organizations does not
extend beyond making the appointments. The City appoints a voting majority of the
Birmingham-Jefferson County Transit Authority (BJCTA) and the Birmingham Housing
Authority (BHA). In fiscal year 2017, the City provided funding to the BJCTA in the amount of
$10,800,000 and $39,565 to the BHA These organizations are related organizations that
have not been included within the City's financial statements.

B. Government-wide and Fund Financial Statements

The government-wide financial statements of the City consist of the statement of net position
and the statement of activities for all of the nonfiduciary activities of the City and its three
component units (BECD will be presented in future years). The effect of interfund activity has
been removed from these statements. The statements report separately the governmental
activities from the business-type activities. Governmental activities are normally supported
by taxes and intergovernmental revenues, whereas business-type activities rely on fees and
charges for support. The City, as the primary government, is shown separately from its two
legally separate discretely presented component units. The City's blended component unit is
presented combined with the primary government activity.

39
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function; program revenues include (a) charges to customers who
purchase, use, or directly benefit from goods, services, or privileges provided by a given
function, and (b) grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function. General revenues include taxes and other items
not included in program revenues.

Included in this report are separate financial statements for governmental funds, proprietary
funds (including the internal service fund), and fiduciary funds, even though the latter are
excluded from the government-wide financial statements. The City reports its major individual
governmental funds as separate columns in the fund financial statements.

An internal service fund (which provides services primarily to other funds of the government)
is presented, in summary form, as part of the proprietary fund financial statements. Since the
principal users of the internal services are the City's governmental activities, the financial
statements of the internal service fund are consolidated into the governmental activities
column when presented at the government-wide level. The costs of these services are
charged to the appropriate functional activity.

Surpluses or deficits in the internal service funds are allocated back to customers at the
government-wide level statement of activities. There are no reconciling items between the
business-type activities column at the government-wide level and the proprietary fund
statements at the fund level because the internal service fund does not provide services to
the City's enterprise fund.

c. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The accounting and financial reporting treatment applied to a fund is determined by its
measurement focus. The government-wide financial statements, the proprietary fund financial
statements, and the fiduciary fund financial statements are all reported using the economic
resources measurement focus and the accrual basis of accounting. Under this focus and
basis, revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of when the cash is received or expended.

Property taxes are recognized as revenues in the year of their levy; grants and similar items
are recognized as revenue when all the eligibility requirements of the providers have been
met.

All governmental funds are accounted for using the current financial resources measurement
focus and the modified accrual basis of accounting. Under the modified accrual basis of
accounting, revenues are recorded when they are both measurable and available. The City
of Birmingham considers revenues to be available if they are collected within 60 days of the
end of the current fiscal period; the major sources of accrued revenue are the various business
and ad valorem taxes the City collects as well as grant revenues. Expenditures are recorded
when the liability is incurred, consistent with accrual accounting. Debt service expenditures,
claims and judgments, as well as expenditures related to compensated absences are
recorded only when payment is due.

40
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The preparation of financial statements, in conformity with generally accepted accounting

principles, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, contingent liabilities and the reported amount of revenues
and expenditures/expenses during the reporting period. Actual results could differ from those
estimates.

Subsequent events were evaluated through the date the financial statements were issued.

For the purposes of the statement of cash flows, highly liquid investments with a maturity of
three months or less when purchased are considered to be cash equivalents.

The City of Birmingham reports the following major governmental funds:

The General Fund is the City's primary operating fund and accounts for all financial
resources except those required to be accounted for in other funds.
The General Bond Debt Reserve Fund accounts for the receipt of property taxes earmarked
for debt service on bonds by constitutional and authorizing initiatives and issued pursuant to
a voter referendum.
The Birmingham Fund is considered a Special Revenue Fund and accounts for proceeds
the City received from the sale of the Industrial Water Board. The Birmingham fund is
considered a reserve fund set aside for use in emergency situations and/or as revenue
shortages or budgetary imbalances occur. Funds may be appropriated as follows: (a)
Operating Budget Amendments or other appropriations for any fiscal year, not exceeding
5% of the five year average market value of the fund, by majority council vote; (b) Any other
additional amount for any lawful purpose with majority Council vote and a declaration of
extraordinary circumstance.
The Capital Improvement Fund accounts for funds from miscellaneous sources used for
various capital improvement projects which are not financed by debt issuance.

The 2015-A Bonds Fund is used to account for capital expenditures of bond proceeds.

The City of Birmingham reports the following proprietary fund as a major proprietary fund:
The Emergency Management Communications District accounts for the operation of the
Enhanced Universal Emergency Number Service (E911). This proprietary fund formed as
a non-profit corporation under the provisions of the Code of Alabama on January 31 st, 2017;
therefore, the EMCD operations as a proprietary fund reflected in these financial statements
are for the period July 1, 2016 to January 31,2017.

The Internal Service Fund provides self-insured health benefits to the City's employees and
retirees. The fund collects deductions from employees and the City contributes a portion of
the cost as well. Additionally, if there are any shortages, the City covers this cost.

The Pension Funds account for the activities of the City's three pension plans.
The accompanying financial statements reflect the elimination of interfund activity with the
exception of the charges to the City's proprietary fund. These amounts are shown on the
statement of net position as internal balances.

41
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The operating revenues of the proprietary fund include charges to customers for the operation
of the 911 telephone service. Nonoperating revenues include investment earnings. The
operating expenses of the proprietary fund are those expenses incurred in the normal
operations of providing the 911 services, as well as depreciation of the capital assets.

The operating revenues of the City's internal service fund are fees from the City and City
employees for health care benefits. The operating expenses of the internal service fund are
for health care and prescription drug claim payments.

D. Assets, Liabilities, and Deferred Outflows/Inflows of Resources and Net Position,

or Fund Balance

1. Deposits and Investments - Cash and cash equivalents include amounts in demand
deposits as well as short-term investments with a maturity date within three months of
the date acquired by the City. State statutes authorize the City to invest certain funds
in U. S. government obligations, U. S. government agency obligations, U.S. corporate
stock, U.S. debt, State of Alabama obligations, county obligations, and other municipal
obligations. The City invests its funds in accordance with State law.

All investments, including those of the City's component units, are reported at fair
value, market value, or best available estimates. Short-term investments are reported
at cost which approximates market value. Securities traded on a national or
international exchange are valued at the last reported sales price reported by such
exchange. All investments have established markets to determine their fair value.

2. Receivables and Payables - The City shows "due to/from other funds" at the end of the
fiscal year to show any current outstanding balances from lending/borrowing
arrangements between funds.

The City shows receivables at June 30,2017, consisting of the following:

Business -
Governmental Type Total Primary
Activities Activities Government

Taxes Receivable $ 31,146,584 $ 31,146,584

Customers and Other 10,164,739 10,164,739

Other Governments 4,535,606 4,535,606
Gross Receivable 45,846,929 45,846,929
Less: allowance for
Uncollectible (6,951,031 } (6,951,031}
Net Receivable $ 38,895,899 $ 38,895,899

42
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Taxes Receivable - All property taxes levied by the State of Alabama, the City,
Jefferson and Shelby Counties, are assessed by the Jefferson and Shelby County Tax
assessors and collected by their tax collectors. The property tax calendars specify the
following actions and dates:
Levy (assessment date) September 30
Lien date September 30
Due date October 1
Collection dates October 1 to December 31
Delinquent date January 1

The City of Birmingham receives a 4% sales tax for the sale of tangible goods within
the City limits and a 1% occupational tax on wages of persons employed within the
City limits. These tax collections are remitted to the City on a monthly basis. All
amounts remitted within the fiscal period are included in revenue; taxes due within the
fiscal year but remitted to the City after year-end are accrued in both the government-
wide and fund financial statements.

3. Inventories and Prepaid Items - Inventories are valued on the average cost basis.
Inventory consists of expendable supplies held in the General Fund for consumption.
The cost is recorded as an expenditure at the time individual items are used
(consumption method). Payments made to vendors for services that will benefit
periods beyond June 30, 2017 are recorded as prepaid items.

4. Restricted assets - Certain assets of the Birmingham Airport Authority (component

unit) are restricted by the terms of federal grants and programs. These particular funds
are restricted for designated capital projects.

5. Capital assets - Capital assets include property, buildings, furniture, other equipment,
and infrastructure. Capital assets are reported in the applicable governmental or
business-type activities columns in the government-wide financial statements. Capital
outlays are recorded as expenditures of the governmental funds. Capital assets, other
than infrastructure, are defined by the City as items with an estimated useful life of three
years or more and an individual cost in excess of $5,000. Capital assets are recorded
at cost where historical cost is available or at estimated historical cost if actual cost is
not available. Donated capital assets are recorded at their acquistion value at time of
donation. The costs of normal repairs and maintenance that do not add to the value of
the asset, or materially extend useful lives, are expensed. Upon sale or retirement of
capital assets, the cost and related accumulated depreciation are eliminated from the
respective accounts and any resulting gain or loss is included in the results of
operations.

Capital assets are depreciated using the straight-line method over the following
estimated useful lives:
ASSETS YEARS
Buildings, capital facilities 50
and improvements

43
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Furniture and equipment 3-20

Infrastructure 25 -50

The City recognizes the intrinsic value of historical works and collections. As such,
the City has adopted a policy that these items will not be considered capital items and
subject to depreciation. This policy covers the historical works and collections housed
at the City's various museums. Should the sale of any of these items occur, the City
is committed to using the funds generated from the sale to purchasing other similar
collectibles.

6. Compensated absences - City of Birmingham employees earn vacation leave at

graduated rates based on the employee's length of service (one day per month of
service, initially), and up to 40 days of unused leave may be carried over to the following
year. Vacation pay is accrued when incurred in the government-wide financial
statements. The City does not have a policy for vested sick pay, thus no liability for
accumulated unpaid sick leave is accrued.

7. Long-term obligations - Long-term debt and other long-term obligations are reported in
the government-wide financial statements. Bond premiums and discounts are deferred
and amortized over the life of the bonds. Bonds payable are reported net of the
applicable bond premiums and discounts. As per GASB 65, bond issuance costs, other
than insurance cost, are expensed in the period incurred. Prepaid insurance cost
should be reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, any bond premiums and issuance costs have been
recognized in the current period. The face amount of the new debt issued and the
premiums received are reported as other financing sources; issuance costs are
reported as debt service expenditures.

8. Equity classification - In the government-wide statements, equity is classified as net

position and displayed in three components: a. Net investment in capital assets
(consists of capital assets including restricted capital assets, net of accumulated
depreciation and reduced by the outstanding balances of any bonds, mortgages, notes,
or other borrowings that are attributable to the acquisition, construction, or improvement
of those assets); b. Restricted net position (consists of net position with constraints
placed on the use either by (1) external groups such as creditors, grantors, contributors,
or laws or regulations of other governments; or (2) law through constitutional or
enabling legislation); c. Unrestricted net position - all other net position that does not
meet the definition of "restricted" or "net investment in capital assets".

In the fund financial statements, governmental funds report aggregate amounts for five
classifications of fund balances on the constraints imposed on the use of these
resources. The nonspendable fund balance classification includes amounts that
cannot be spent because they are either (a) not in spendable form-prepaid items or
inventories; or (b) legally or contractually required to be maintained intact.

The spendable portion of the fund balance comprises the remaining four
classifications: restricted, committed, assigned, and unassigned.

44
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Restricted fund balance - This classification reflects the constraints imposed on

resources either (a) externally by creditors, grantors, contributors, or laws or
regulations of other governments; or (b) imposed by law through constitutional
provisions or enabling legislation.

Committed fund balance - These amounts can only be used for specific purposes
pursuant to constraints imposed by ordinances of the City Council, the
government's highest level of decision making authority. Those committed
amounts cannot be used for any other purpose unless the City Council removes,
or changes the commitment by taking the same action it employed to impose the
commitment. This classification also includes contractual obligations to the extent
that existing resources in the fund have been committed for use in satisfying those
contractual requirements.

Assigned fund balance - This classification reflects the amounts constrained by

the City's "intent" to be used for specific purposes, but are neither restricted nor
committed. The City Council and Finance Director have the authority to assign
amounts to be used for specific purposes. Assigned fund balances include all
remaining amounts (except negative balances) that are reported in governmental
funds, other than the General Fund, that are not classified as nonspendable and
are neither restricted nor committed.

Unassigned fund balance - This fund balance is the residual classification for the
General Fund. It is also used to report negative fund balances in other
governmental funds.

The City Council has established a stabilization arrangement for the Birmingham
Fund. Under this arrangement, it is the City's intent to maintain a reserve fund set
aside for emergency situations and/or as revenue shortages or budgetary
imbalances occur. Funds may be appropriated as follows: (a) Operating Budget
Amendments or other appropriations for any fiscal year, not exceeding 5% of the
five year average market value of the fund, by majority Council vote; (b) Any other
additional amount for any lawful purpose with majority Council vote and a
declaration of extraordinary circumstance.

When both restricted and unrestricted resources are available for use, it is the City's
policy to use resources, in the following order and as needed: restricted resources,
unrestricted resources, committed or assigned resources, and finally unassigned
resources.

9. Deferred outflows/inflows of resources - The statement of net position will sometimes

report separate sections for deferred outflows and inflows of resources.

The separate financial statement element, deferred outflows of resources, represents

a consumption of net position that applies to a future period(s) and so will not be
recognized as an outflow of resources (expense/expenditure) until then. The City
currently has two items that qualify for reporting in this category. The first is the deferred
loss on refunding debt. A deferred loss results from the difference in the carrying value
of refunded debt and its reacquisition price. This amount is deferred and amortized over

45
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

the lesser of the life of the refunded or refunding debt. The second one is related to
pensions resulting from changes in actuarial assumptions and City contributions
subsequent to the measurement date that will be recognized as a reduction of net
pension liability in subsequent years.

The statement of financial position will also report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period(s)
and so will not be recognized as an inflow of resources (revenue) until that time. At this
time, the City has transactions that meet the definition of deferred inflows of resources
which are related to changes in actuarial assumptions for pensions.

10. Recently issued pronouncements

The GASB issued Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefit Plans Other Than Pensions-replaces Statement No. 45
(GASB 75). This statement requires governments to report a liability on the face of
the financial statements for the OPEB that they provide. The requirements of GASB
75 are effective for fiscal years beginning after June 15, 2017 (fiscal year 2018). The
City is currently evaluating the impact that GASB 75 may have on its financial
statements.

The GASB issued Statement No. 83, Certain Asset Retirement Obligations was issued
to establish criteria for determining the timing and pattern of recognition of a liability
and a corresponding deferred outflow of resources for AROs. The requirements of
GASB 83 are effective for fiscal years beginning after June 15, 2018. The City is
currently evaluating the impact GASB 83 may have on its financial statements.

The GASB issued Statement No. 84, Fiduciary Activities was issued to establish
criteria for identifying fiduciary activities of all state and local governments. The
requirements of GASB 84 are effective for fiscal years beginning after December 15,
2018. The City is currently evaluating the impact GASB 84 may have on its financial
statements.

The GASB issued Statement No. 85, Omnibus 2017 was issued to address practice
issues that have been identified during implementation and application of certain
GASB Statements. The requirements of GASB 85 are effective for fiscal years
beginning after June 15, 2017. The City is currently evaluating the impact GASB 85
may have on its financial statements.

The GASB issued Statement No. 86, Certain Debt Extinguishment Issues was issued
to improve consistency in accounting and financial reporting for in-substance
defeasance of debt by providing guidance for transactions in which cash and other
monetary assets acquired with only existing resources-resources other than the
proceeds of refunding debt-are placed in an irrevocable trust for the sole purpose of

46
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

extinguishing debt. The requirements of GASB 86 are effective for fiscal years
beginning after June 15, 2017. The City is currently evaluating the impact GASB 86
may have on its financial statements.

The GASB issued Statement No. 87, Leases was issued to increase the usefulness of
governments' financial statements by requiring recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized
as inflows of resources or outflows of resources based on the payment provisions of
the contract. The requirements of GASB 87 are effective for fiscal years beginning
after December 15, 2019. The City is currently evaluating the impact GASB 87 may
have on its financial statements.

II. Stewardship, Compliance, and Accountability

A. Budgetary Information

The annual budget for the City of Birmingham's General Fund is adopted on a basis consistent
with generally accepted accounting principles. Budgets for the Special Revenue and Capital
Projects Funds are adopted on an individual project basis. Budgets are prepared for the Debt
Service Fund based on general obligation bond resolutions.

On or before May 20, the Mayor submits to the City Council a proposed General Fund
operating budget for the upcoming fiscal year commencing July 1. The proposed budget
includes proposed expenditures and the means of financing them. Subsequently, a public
hearing is held to obtain taxpayer comments; and prior to July 1, the official budget is enacted
through passage of an ordinance.

The City's budget is prepared by fund, function, and department. The individual departments
are authorized by the Mayor to make transfers of appropriations within their departments;
however, any revisions that alter the total expenditures of any fund or transfer between
departments must be approved by City Council. The legal level of budgetary control is the
department level. This year's General Fund budget was amended as needed throughout the
year by City Council action, provided that adequate funds '.vere availab!e at the time of the
amendments.

Encumbrance accounting is used in governmental funds. All general fund purchase orders
lapse at year end and are reestablished along with their appropriations as needed in the new
fiscal year. All purchase orders in capital projects and special revenue funds do not lapse and
appropriations are reappropriated in the next fiscal year.

B. Fund Deficits of Non-Major Funds

Deficits in net position/fund balance of non-major funds at June 30, 2017 are as follows:
Special Revenue Funds
Grants Fund $15,612,828
Correction Fund 10,296
HUD Block Grant Fund 1,245,678

47
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The deficit in the Grants Fund and the HUO Block Grant Fund resulted from expenses incurred
for projects that were not reimbursed by Grantors at June 30,2017. These deficits will be resolved
when grant reimbursements are received in the future. The deficit in the Correction Fund was a
result of expenditures exceeding revenues in that fund.

III. Detailed Notes on Fiduciary Funds

Fiduciary Funds include assets of the City of Birmingham Retirement and Relief System, the
City of Birmingham Firemen's and Policemen's Supplemental Pension System, and the City of
Birmingham Pension Plan for Unclassified Employees. For purposes of this note, these plans
are hereafter referred to as "Pension Plans".

A. Deposits and Investments

Deposits - At June 30, 2017, the carrying amount of the Pension Plans' demand deposits,
certificates of deposits, and money market investments in all funds was $34,648,551.

Financial institutions utilized as depositories by the City must provide evidence of its designation
by the Alabama State Treasurer as a qualified public depository under the Security of Alabama
Funds Enhancement Act (SAFE). The depository (OPO) is required to hold collateral for all its
public depositories on a pooled basis in a custody account established by the State Treasurer as
SAFE administrator. In the unlikely event a public entity should suffer a deposit loss due to OPO
insolvency or default; a claim form would be filed with the State Treasurer who would use the
SAFE pool collateral or other means to reimburse the loss.

Investments

The following schedule of investments, displays the fair value of assets held in each fund type,
as well as the valuation approaches, and inputs used in determining fair value. Oebt and equity
securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active
markets for those securities. Debt securities classified in Level 2 of the fair value hierarchy are
valued using matrix pricing techniques. Matrix pricing is used to value securities based on the
securities' relationship to benchmark quoted prices. Alternative investments classified in Level 3
are valued using discounted cash flow techniques, comparable transactions, and publicly quoted
companies methods.

48
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The valuation method for investments measured at the net asset value (NAV) per share (or its
equivalent) is presented on the following table.

Investments Measured at the NAV

MeSlrow
. . I -Mu IfI-manager1M uIfI-S tra tegy F un d 0 fh elge
mancla d f un dS
Redemption
Frequency
Fund Fair Value (if Currently Eligible) Redemption Notice Period
Retirement &
,
Relief $78,563,027 Quarterly 95 days

Fire & Police

Supplemental $4,020,346 Quarterly 95 days

Mesirow Financial Multi-manager/Multi-strategy Fund of hedge funds. This type includes

investment in 53 managed hedge funds that pursue multiple strategies to diversify risks and
reduce volatility. The fund's strategy allocation is shown in the chart below.

49
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

STRATEGY ALLOCATION AS OF 7/112017

Mesir6W'I~itJJti~"iMUiti-Sfi8t8lWi=linii:LP. . ...
STRATEGY %
.
Ct.dji·~--···~·····~·····
28.98
long I Short Credit 4.41
long-Biased Credit 14.68
Sovereign Credit 1.22
Structured Credit 8.67

Event Equity
Merger Arb
Multi-Strategy Event 4.48
Reinsurance 3.02

long-Biased Equity 4.17

loose Neutral Equity 4.54
Opportunistic Equity 13.85
Short-Biased Equity 2.20

Diversified Global Macro 7.56

MuItiSiftl18'·
, .> BY..•.• . 6.:12.··.·
Multi-Strateg __- -__- - - - - -__------"!':6~.":"12~
17~44
Multi-Strategy Relative Value 10.79
Strict Market Neutral 4.59
Volatility Arbitrage 2.05
~~~~~~~~--~------------~~--~
Liqilid~tinoJna8h 4.4(1
liquidating 2.79
Cash 1.61

Blackstone Real Estate Income Fund II (BREIF)

Redemption
Frequency
Fund Fair Value (if Currently Eligible) Redemption Notice Period
Fire & Police
Supplemental $1,714,493 Quarterly 95 days

50
 City of Birmingham , Alabama
Notes to the Financial Statements
June 30, 2017

Strategy Overview
BREIF seeks to generate long-term total retum, with an emphasis on current
income, by primarily investing in a broad range of real estate debt
investments. At least 80% of BREIF's Managed Assets will be invested in
liquid investments in public and private real estate debt, including, but not
limited to, c011llllercial mOltgage backed securities ("CMBS"), mOltgages,
loans, mezzanine and other fon11s of debt and equity interests in
collateralized debt obligation vehicles CCDOs"), collateralized loan obligation
vehicles ( 'CLOs"), real estate investment tJ.11StS ( 'REITs"), listed vehicles and
other entities that invest ill real estate debt as one of their core businesses.

BREIF Portfolio Snapshot

Data as of July 31, 2017
Avg Price $91.85 Derivatives %
Avg Coupon 5.2% Portfolio Leverage"

Avg Loan to Value 59.1% Total Investments

Hedged Duration' 0.2 ) earS Top 10 AUM % 28.2%

Avg Maturity 4.7Ye.'U·s Non-US %

Ratings Distribution 3
60%

4° %

20%

0%
AorHigher BBB BB Below BB Not Rated

51
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Retirement & Relief System

The investment policy for the Retirement and Relief System does limit investment maturities as a
means of managing its exposure to fair value losses arising from increasing interest rates.

Investments Highly Sensitive to Interest Rate Changes

The Pension Plan invests in mortgage-backed securities, representing collateralized mortgage

obligations (CMO) with a fair value of $2,660,765. Mortgage-backed securities are based on cash
flows from the collection of mortgages. Prepayments arise when, for example, mortgage holders
redeem their mortgages early. The investor's investment is returned early, or in extreme cases
not returned at all. Mortgage-backed securities may be considered to be investments with terms
that may cause their fair values to be highly sensitive to interest rate changes.

Credit Risk

Credit risk exists when there is a possibility the issuer or other counterparty to an investment may
be unable to fulfill its obligations. GASB statement Number 40 requires disclosure of credit quality
ratings for investments in debt securities as well as investments in external investment pools,
money market funds, bond mutual funds, and other pooled investments of fixed-income securities.

Investments may be aggregated by rating category within the disclosure. Ratings are set by
nationally recognized statistical rating organizations (Fitch Ratings, Moody's Investors Service,
and Standard & Poor's). In cases where an investment is unrated, a disclosure noting that the
investment is unrated is required.

The City's fiduciary fund investments included the following bonds at June 30, 2017:

Retirement & Relief System

Description Rating Fair Value

U.S. Govt Agency Discount

Notes, Bonds M $ 92,034,848

U.S. Corporate Bonds: AM $ 2,419,380

M 13,668,848
A 47,010,923
BBB 29,488,841
BB 22,452,030
B 12,193,633
CCC $ 48,543
127,282,198
$ 219,317,046

52
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Concentration of Credit Risk

A concentration in credit risk exists when investments in anyone type represents 5 percent or
more of total investments and must be disclosed. Excluded from this requirement are
investments issued or explicitly guaranteed by the U.S. government and investments in mutual
funds, external investment pools and other pooled investments.

There were no investments held at June 30,2017, which represented 5 percent or more of total
investments.

Securities Lending Transactions

Under the provisions of State statutes, the City of Birmingham Retirement and Relief System
lends securities to broker-dealers and other entities (borrowers) for collateral that will be returned
for the same securities in the future. One of the City's custodial banks manage the securities
lending program and received both cash and domestic bonds as collateral. The collateral
securities cannot be pledged nor sold by the Retirement and Relief System unless the borrower
defaults. Collateral securities are initially pledged at 102% of the market value of the securities
lent and this collateral is adjusted weekly to maintain the 102% level. The Retirement and Relief
System authorizes the lending of domestic bonds and equity securities. The cash collateral is
invested in commingled short-term fixed income accounts. The Retirement and Relief System,
as a program participant, assumes the risk that (a) the overnight investment rate will not equal or
exceed the rebate rate, (b) a loss of principal in the overnight investment, and (c) the collateral
will not be sufficient if called upon to replace the securities loaned. The market value of collateral
held and the market value (USO) of securities on loan for the client as of June 30, 2017 was
$205,229,611 and $200,071,208 respectively.

Firemen's and Policemen's Supplemental Pension System

The investment policy for the Firemen's and Policemen's Supplemental Pension System does
limit investment maturities as a means of managing its exposure to fair value losses arising from
increasing interest rates.

Investments Highly Sensitive to Interest Rate Changes

The Pension Plan invests in mortgage-backed securities, representing collateralized mortgage

obligations (CMO) with a fair value of $116,575, and U.S. government agency obligations with a
fair value of $994,042. Mortgage-backed securities are based on cash flows from the collection
of mortgages. Prepayments arise when, for example, mortgage holders redeem their mortgages
early. The investor's investment is returned early, or in extreme cases not returned at all.
Mortgage-backed securities may be considered to be investments with terms that may cause their
fair values to be highly sensitive to interest rate changes.

53
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Credit Risk

Credit risk exists when there is a possibility the issuer or other counterparty to an investment may
be unable to fulfill its obligations. GASB statement Number 40 requires disclosure of credit quality
ratings for investments in debt securities as well as investments in external investment pools,
money market funds, bond mutual funds, and other pooled investments of fixed-income securities.

Investments may be aggregated by rating category within the disclosure. Ratings are set by
nationally recognized statistical rating organizations (Fitch Ratings, Moody's Investors Service,
and Standard & Poor's). In cases where an investment is unrated, a disclosure noting that the
investment is unrated is required.

The City's fiduciary fund investments included the following bonds at June 30, 2017:

Firemens & Policemens Supplemental Pension

Description Rating Fair Value

U.S. Govt Agency Discount
Notes, Bonds AA $ 2,051,018

U.S. Corporate Bonds: AM 101,197

AA 478,281
A 1,592,146
BBB 2,437,737
BB 945,034
B 2,252,234
7,806,629
$ 9,857,647

IV. Detailed Notes on Funds Other than Fiduciary Funds and

Proprietary Funds
A. Deposits and Investments

Deposits

At June 30, 2017, the carrying amount of the City's demand deposits, certificates of deposits, and
money market investments in all funds was $200,917,261 and the bank balance was
$224,887,172.

54
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Financial institutions utilized as depositories by the City must provide evidence of its designation
by the Alabama State Treasurer as a qualified public depository (OPD) under the Security of
Alabama Funds Enhancement Act (SAFE). The depository (OPD) is required to hold collateral
for all its public depositories on a pooled basis in a custody account is established by the State
Treasurer as SAFE administrator. In the unlikely event a public entity should suffer a deposit loss
due to OPD insolvency or default; a claim form would be filed with the State Treasurer who would
use the SAFE pool collateral or other means to reimburse the loss.

Investments

The following schedule of investments, displays the fair value of assets held in each fund type,
as well as the valuation approaches, and inputs used in determining fair value. Debt and equity
securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active
markets for those securities. Debt securities classified in Level 2 of the fair value hierarchy are
valued using matrix pricing techniques. Matrix pricing is used to value securities based on the
securities' relationship to benchmark quoted prices. Alternative investments classified in Level 3
are valued using discounted cash flow techniques, comparable transactions, and publicly quoted
companies methods.

At June 30, 2017 the City of Birmingham had the following investments:

55
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Investments Highly Sensitive to Interest Rate Changes

The City invests in mortgage-backed securities, in the Birmingham Fund, representing U.S.
government agency obligations with a fair value of $1,069,994. Mortgage-backed securities are
based on cash flows from the collection of mortgages. Prepayments arise when, for example,
mortgage holders redeem their mortgages early. The investor's investment is returned early, or
in extreme cases not returned at all. Mortgage-backed securities may be considered to be
investments with terms that may cause their fair values to be highly sensitive to interest rate
changes.

56
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Credit Risk

Credit risk exists when there is a possibility the issuer or other counterparty to an investment may
be unable to fulfill its obligations. GASB statement Number 40 requires disclosure of credit quality
ratings for investments in debt securities as well as investments in external investment pools,
money market funds, bond mutual funds, and other pooled investments offixed-income securities.
Investments may be aggregated by rating category within the disclosure. Ratings are set by
nationally recognized statistical rating organizations (Fitch Ratings, Moody's Investors Service,
and Standard & Poor's). In cases where an investment is unrated, a disclosure noting that the
investment is unrated is required.

The City's investments included the following bonds at June 30, 2017:

BIRMINGHAM FUND

Description Rating Fair Value

U.S. Govt Agency Discount
Notes, Bonds AA $ 13,558,961

U.S. Corporate Bonds: AAA 446,869

AA 4,133,569
A 8,179,637
BBB 7,823,152
20,583,227
$ 34.142.188

BOND RESERVE FUND

Description Rating Fair Value

U.S. Govt Agency Obligations
And U.S. Treasuries AA $ 5,804,929
$ 5,804,929

The City, at this time, does not have a formal credit risk policy.

Concentration of Credit Risk

A concentration in credit risk exists when investments in anyone corporate credit represents 5
percent or more of total investments and must be disclosed. Excluded from this requirement
are investments issued or explicitly guaranteed by the U.S. government and investments in
mutual funds, external investment pools and other pooled investments.

There were no single corporate credit investments held at June 30, 2017, which represented 5
percent or more of total investments.

57
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

B. Capital Assets

Capital asset activity for the year ended June 30, 2017 was as follows (in thousands):

June June
30, 30,
2016 Increases Decreases 2017
Governmental activities:
Capital assets, nondepreciable:
Land $ 154,408 $ 325 $ - $ 154,733
Construction in progress 135,216 68,150 3,737 199,629
Land, infrastructure projects 16,647 16,647
Total nondepreciable capital
assets 306,271 68,475 3,737 371,009

Capital assets, depreciable:

Buildings and capital facilities 331,765 2,679 334,444
Furniture and other equipment 178,163 15,244 5,992 187,415
Infrastructure 220,337 220,337
Total depreciable capital assets 730,265 17,923 5,992 742,196
Less accumulated depreciation:
Buildings and capital facilities 122,952 4,617 85 127,484
Furniture and other equipment 149,093 8,744 1,117 156,720
Infrastructure 149,869 3,429 153,298
Total accumulated depreciation 421,914 16,790 1,202 437,502

Net depreciable capital assets 308,350 1,133 _ _--=-4L:. . ,7.: . :90=__ 304,694
Governmental activities,
net capital assets $ 614,622 $ 69,608 $ ==,;;;.8,~52;;;;7= $ 675,703

In 1999, the City entered into an operating lease with a non-profit organization to lease zoo
property for a nominal amount annually. The first lease period was for 25 years with two 25 year
incremental extensions at the discretion of the City. Any zoo property purchased (excluding
animals) by the lessee during the term of this lease is City property. The additions for the current
year are as follows: construction in progress $38,091; land 27,049; buildings and capital facilities
$939,395; and furniture and other equipment $174,625 for a total increase in zoo fixed assets of
$1,179,160. Accumulated depreciation was increased by $1,579,576 related to these assets.

The Public, Athletic, Cultural, and Entertainment Board is public corporation that was created in
August of 2011. The PACE's structure qualifies as a blended component unit of the City. The

58
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

PACE owns certain buildings and capital facilities, such as the Regions Field and the Negro
Southern League Baseball Museum.

The following table applies to the E911 Fund:

June 30, June 30,

2016 Increases Decreases 2017
Business-type activities:
Construction in progress $ 37 $ 241 $ $ 278
Total nondepreciable capital
assets 37 241 278

Buildings and other capital

facilities 1,025 1,025
Furniture and other equipment 7,254 7,254
Total depreciable capital
assets 8,279 8,279

Less accumulated depreciation:

Buildings and other capital
facilities 522 13 535
Furniture and other equipment 3,406 272 3,678
Total accumulated
depreciation 3,929 284 4,213
Net depreciable capital assets 4,350 (284) 4,065

Business-type activities,
net capital assets $ 4,386 $ {43} $ - $ 4,344

59
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Depreciation expense was charged to the following functions (in thousands):

Governmental activities:
Public safety, including depreciation of infrastructure assets $ 7,633
Streets and sanitation 2,548
Cultural and recreation 2,974
General government 3,635
Total depreciation - governmental activities $==16=,==79=0=

Business-type activities:

E-911 operations $ 284

C. Interfund Balances I Transfers

During the course of normal operations, the City has numerous transactions between funds to
provide services, construct assets, service debt, etc. Their transactions are generally reported
as interfund transfers. No expectation of repayment between funds is expected related to these
interfund transfers. The composition of interfund transfer amounts for the year ended June 30,
2017, is as follows (in thousands):

Transfers General Debt Capital Non-Major

Out Fund Service Projects Funds Totals
General
Fund $ - $ - $ 4,618 $ 916 $ 5,534
Debt
Reserve 28,000 28,000
Capital Imp
Fund 113 113
Birmingham
Fund 4,234 4,234
Non-Major
Funds 87 100 3,065 3,252
$ 4,434 $ 28,000 $ 4,718 $ 3,981 $ 41,133

60
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

D. Long-term Debt

General obligation bonds

The City issues general obligation bonds to provide funds for the acquisition andlor construction
of capital assets. The bonds are direct obligations of the City and the full faith and credit of the
City is pledged against the bonds. The bonds outstanding at June 30, 2017, are as follows (in
thousands):

Bond Seriesllnterest Rate Maturity

2007-A; 4%-5% 12/01/2032 $ 48,905
2013-A; 1.36%-5% 03/01/2043 67,164
2013-B; 4% 03/01/2034 2,690
2014-A; 3%-5% 12/112032 44,980
2015WFB; 4.574% 11/01/2023 17,975
2015B; 1.881% - 4.533% 03/01/2045 15,430
2015A-1; 5% 03/01/2045 38,052
2015A-2; 2% - 5% 03/01/2035 23,205
2016-A 04/01/2023 15,095
2016-C; 4.27% 04/01/2022 16,040
2016-0; 3.89% - 3.92% 12/01/2024 12,120
2016TMC; 11.75% 03/01/2036 2,431
Total $ 304,087
Accreted Interest
2013-A 03/01/2043 $ 14,066
2015A-1 03/01/2045 3,087
2016TMC 03/01/2036 713
$ 321.953

Annual debt service requirements to maturity for general obligation bonds are as follows (in
thousands):
June 30, Principal Interest
2018 $15,585 $12,510
2019 16,314 12,274
2020 11,180 13,989
2021 10,040 13,618
2022 9,073 13,218
2023 - 2027 56,610 59,418
2028 - 2032 79,390 43,444
2033 - 2037 45,056 28,860
2038 - 2042 41,542 20,652
2043 - 2045 19,298 5,159
$304.087 $223,143

61
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

General obligation warrants and revenue warrants

The City issues general obligation warrants for the same purposes as general obligation
bonds. Warrants are also direct general obligations of the City, for which it pledges its full faith
and credit. Under State statute, general obligation warrants can be issued without an election
and must be issued for a period of maturity of not longer than thirty years. Revenue warrants
are tax increment financing district warrants in which ad valorem taxes are collected to fund the
debt service. The original amounts of warrants issued was $208,800,000. The warrants
outstanding at June 30, 2017, are as follows (in thousands):

Series/Interest Rate Maturity

2009-A; 3%-4.5% 06/01/2026 $ 10,295
2010-A; 2%-4.5% 02/01/2018 9,890
2010-B; 4.2%-7% 02/01/2040 39,115
2012-RB; 3.99% 08/01/2025 4,025
2012-CTB; 4.375% 08/01/2022 585
2014-PNC; 1.55% 04/01/2020 2,215
2014-PNC2; 1.15% 03/01/2018 1,155
2014-B; 3%-5% 03/01/2033 39,740
2014-PNC3; 1.54% 10/01/2018 515
2016 Equipment & Public Improvement, 1.28-1.50% 08/01/2022 13,618
2017 Compass variable 06/22/2019 450
2017 Citizens 06/22/2019 500
Total City Warrants $ 122,103

Revenue Warrants:
2014 Tax Increment Financing: 2.89% 09/01/2028 $ 14,853

Total Warrants and Revenue Warrants $ 136,956

Annual debt service requirements to maturity for the City's general obligation warrants and
revenue warrants are as follows (in thousands):

June 30, Principal Interest

2018 $16,764 $4,877
2019 10,766 4,287
2020 9,785 4,005
2021 9,274 3,712
2022 9,515 3,421
2023 - 2027 37,184 12,715
2028 - 2032 24,113 6,338
2033 - 2037 12,295 2,688
2038 - 2040 7,260 566
$136,956 $ 42,608

62
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

PACE Bonds:

Series/Interest Rate Maturity

2011-A (PACE) 4.00% (see Table F-3) 10/01/2041 $49,090
2011-B (PACE) 4.00% (see Table F-3) 10/01/2041 7,510
2016 (PACE) 3.00% (see Table F-5) 04/01/2020 240
$ 56,840

Annual debt service requirements to maturity for the PACE bonds are as follows (in thousands):
June 30, Principal Interest
2018 $1,845 $1,887
2019 1,920 1,825
2020 1,905 1,762
2021 1,930 1,698
2022 1,995 1,632
2023 - 2027 10,980 7,523
2028 - 2032 8,915 9,138
2033 - 2037 11,775 6,205
2038 - 2042 15,575 2,324
$ 56.840 $ 33,994

* The PACE is a public corporation that was created in August of 2011. The PACE's structure
qualified as a blended component unit of the City upon its creation. The PACE holds debt
related to the construction of a baseball stadium and beginning bonds and warrants payable
includes an adjustment of $62,920,000. PACE is a Blended Component Unit. See Table F-3
for a detail of this debt.

63
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Total outstanding bonds and warrants payable (in thousands):

Bonds payable $ 304,087
Warrants payable 122,103
Revenue warrants 14,853
PACE Bonds payable 56,840
$ 497,883
Less current maturities ( 34,194)
Unamortized premium and discount 26.488

Total bonds and warrants payable (noncurrent) $ 490,177

Changes in long-term liabilities (in thousands):

Due
Balance Balance Within
July 1, June 30, One
Governmental activities: 2016 Addition Reduction 2017 Year
Bonds and warrants
payable $ 545,438 $ 70,038 $ (91,105) $ 524,371 $ 34,194
Capitalized leases 11,317 61,418 (1,847) 70,888 1,748
Worker's compensation
claims 16,388 (2,404) 13,983
Compensated absences 17,072 1,219 18,292 4,527
Closure and postclosure
costs 15,475 426 15,901
OPEB liability 50,282 15,546 65,828
Total $ 655,972 $ 148,647 $ {95,356} $ 709,263 $ 40,469

The City's general fund is typically used to liquidate long-term liabilities with the exception of bond
debt service, which is paid from the City's Bond Debt Reserve Fund, and the PACE bonds, which
are paid from The Special Lodgings Tax and Stadium Lease Revenues.

On July 7,2016, the City issued $23,990,000 General Obligation Refunding Bonds, Series
2016-A to provide funds for the current refunding of the City's Series 2006-A Bonds, dated
December 21, 2006 that were outstanding and that matured in 2017, 2018, 2020, 2023 and
2024. The referenced 2006-A bonds were redeemed on October 1,2016, in accordance with
their terms. Net Present value savings was approximately $1 million, or 3.8% of the principal
amount of bonds refunded.

On August 4, 2016, the City entered into an Equipment Lease/Purchase Agreement in the
amount of $43,930,275. The Agreement requires quarterly payments beginning on August 4,
2018 and continuing until February 4, 2036, subject to annual appropriation. These funds will
be used to replace heating, ventilation and air conditioning equipment; roofs; water fixtures and
other energy saving measures. The resulting energy cost savings is expected to be sufficient to
cover the lease payments. Energy savings are guaranteed by Trane, Inc.

64
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

On August 31, 2016, the City entered into an Equipment Lease/Purchase Agreement in the
amount of $17,487,893. The Agreement requires quarterly payments beginning on August 31,
2018 and continuing until August 31, 2033, subject to annual appropriation. These funds will be
used to replace heating, ventilation and air conditioning equipment; roofs; water fixtures and
other energy saving measures. The resulting energy cost savings is expected to be sufficient to
cover the lease payments. Energy savings are guaranteed by Trane, Inc.

On September 9, 2016, the City issued $13,617,500 General Obligation Equipment and
Improvement Warrants. Proceeds will be used to purchase Fire, Police, Information
Management and Public Works equipment and to make improvements to the City's Botanical
Gardens.

On November 10, 2016, the City issued its Series 2016-C and 2016-0 Bonds to currently refund
a like amount of its Series 2014-C and 2014-0 Bonds, resulting in a net present value savings
of $2,080,037, or 4.3% of the principal amount of bonds refunded.

On June 29,2017, the City issued $500,000 General Obligation Warrants and $450,000
General Obligation Warrants. The proceeds will be used to fund a landfill design study and
improvements to the Legion Field stadium.

E. Capitalized Leases

At June 30, 2017, approximately $665,006 in accumulated depreciation and approximately

$156,472 in current year depreciation expense has been recorded in the government-wide
financial statements related to assets costing $37,779,998 purchased under capital leases. The
current portion of the outstanding liability related to these capital leases at June 30, 2017 reported
in the government-wide financial statements totaled $1,748,166. The remaining long-term portion
of these capital lease obligations reported in the government-wide financial statements totaled
$69,139,882 at June 30, 2017.

The following schedule shows the future minimum lease payments at June 30, 2017:

Total Lease
Payment
2018 1,748,166
2019 7,675,646
2020 5,346,106
2021 5,456,972
2022 5,571,908
2023-2027 24,448,977
2028-2032 25,525,656
2033-2037 21,060,732
Total minimum lease payments 96,834,163
Less: Amounts representing interest (25,946,115)
Net minimum lease payments 70,888,048

65
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Business - Type Activities

The current portion of the outstanding liability related to the business-type activities capital leases
at June 30, 2017 totaled $175,667. The remaining long-term portion of these capital lease
obligations totaled $351,334 at June 30,2017.

The following schedule shows the future minimum lease payments at June 30, 2017:
Total lease
Fiscal Year Interest Principal Payment
2017 175,667 175,667
2018 175,667 175,667
2019 175,667 175,667
2020 and thereafter
Total $ $ 527,000 $ 527,000

F. Risk Management

The City of Birmingham is exposed to various risks of loss related to torts, theft, errors and
omissions, job-related illnesses and injuries, and natural disasters. Risk management is the
process of managing the City's activities to minimize the adverse effects of certain types of
losses and to obtain resources to provide for, or restore the economic damages of those losses.
The City manages its risk through self-insurance and through the purchase of insurance with a
commercial insurance carrier.

The City is self-insured for its Workers' Compensation liability. The city currently has in force an
excess workers compensation insurance policy, whereby the City retains the first $1,000,000 of
liability per claim and has a $2,000,000 corridor deductible. The City had a professional actuary
estimate its liability at June 30, 2017. This amount was calculated to be $13,983,243 and has
been accrued on the government-wide financial statements. The changes to the liability for
workers compensation claims are shown below (in thousands):

Current Year
Claims and
Beginning Changes in Claim Ending
June 30 Liability Estimates Payments Liability
2017 16,388 (2,405) 13,983
2016 19,030 (2,642) 16,388
2015 17,956 1,073 19,030
2014 17,209 747 17,956
2013 14,259 2,950 17,209
2012 14,265 (6) 14,258
2011 11,947 2,318 14,265
2010 2,836 9,111 11,947

66
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The City is also self-insured for its Employee Health Plan (the Plan). The Plan is accounted for in
an Internal Service Fund and is externally administered. Contributions for City employees and
their dependents are shared by the City and the employee. Liabilities of the fund are reported
when it is probable that a loss has occurred and the amount of the loss can be reasonably
estimated. Liabilities include an amount for claims that have been incurred, but not reported
(IBNRs). Stop-loss insurance is maintained for this program at $475,000 per individual. Claims
have exceeded insurance coverage the last four years. It is anticipated that all claims outstanding
as of June 30, 2017 will be paid during the next fiscal year.

Changes in claims liability for the last two years are as follows:

Beginning of
Fiscal year Incurred Claim End of Fiscal
Liabilit~ Claims Pa~ments Year Liabilit~
2016-2017 $ 2,510,000 $ 45,010,114 $ 45,358,114 $ 2,162,000
2015-2016 2,950,000 43,826,074 44,266,074 2,510,000

The City is a defendant in numerous suits and has been notified of numerous claims against it
arising from alleged defective sidewalks and streets, alleged negligence relating to motor vehicles
and other matters relating to the normal operation of a municipality such as employment and
contract disputes, as well as suits and claims arising from the alleged denial of civil rights. Section
11-93-1 et seq. of the Code of Alabama 1975, as amended, places a limit of $100,000 with respect
to the City's liability for any bodily injury or death resulting from a negligent or wrongful act of one
of the City's agents, officers, or employees. That provision further places a limit of $300,000 with
respect to the City's liability, in the aggregate, where more than two persons have claims or
judgments on account of personal injuries and deaths arising from a single occurrence. The
Supreme Court of Alabama has upheld the constitutionality of this statute. The City is self-
insured. Any liability resulting from a suit or claim is covered by funds of the City which are
available to discharge such liability without impairing the City's ability to perform any of its other
obligations. The City covers all legal claims out of its General Fund resources. Claims and
liabilities are recorded when it is probable that a loss has occurred, and the amount of that loss
can be reasonably estimated. At June 30, 2017, the estimated amount of these liabilities totaled
$11,436,473 and is considered a current liability. The liability is the City's best estimate based on
available information.

Below is a list of significant pending claims or litigation:

RAILROAD DIESEL FUEL TAX LITIGATION

The City of Birmingham is litigating a number of diesel fuel tax refund cases pursuant to the
Railroad Revitalization and Regulatory Reform Act (Le. the "4-R Act"). These cases have been
placed on the administrative dockets of several state and federal courts pending a resolution of
CSXT v. Department of Revenue of Alabama in the United States Northern District of Alabama.

67
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

After the Eleventh Circuit Court of Appeals remanded the CSXT v. Department of Revenue of
Alabama case, the federal trial court held a four-day trial to determine if the State discriminated
against the railroad and whether the State assessed "roughly equivalent" taxes on competitors.
On March 29, 2017, the Court ruled in favor of the defendants. CSXT timely appealed to the
Eleventh Circuit. The City expects the opinion to be issued in late 2017 or early 2018. In 2016,
the City moved to consolidate the cases filed in Jefferson County Circuit Court and move them
forward to trial. The railroads opposed the City's request. The state trial court, in Jefferson
County, granted the City's request to consolidate the cases but stayed all other motions, The
motions and cases remain stayed pending the Eleventh Circuit decision.

CSX Transportation, Inc. v. City of Birmingham, CV2010-901772, CSX claims a refund

under the Railroad Revitalization and Regulatory Reform Act for sales and use taxes paid for
diesel fuel purchases for years 2004, 2005, 2006 and through October 2007. Refund sought
$3,124,475. Pre-judgment interest of $3,405,677 sought. Total refund sought is $6,530,153.
Case under stay.

CSX Transportation, Inc. v. City of Birmingham, CV2012-904061, CSX claims a refund

under the Railroad Revitalization and Regulatory Reform Act for sales and use taxes paid for
diesel fuel purchases from November 2007 through November 2008. Refund sought $2,222,384.
Pre-judgment interest of $2,133,489 sought. Total refund sought is $4,355,873. Case under
stay.

CSX Transportation, Inc. v. City of Birmingham, CV2013-904854, CSX claims a refund

under the Railroad Revitalization and Regulatory Reform Act for sales and use taxes paid for
diesel fuel purchases from December 2008 to January 2011. Refund sought $2,830,194. Pre-
judgment interest of $1 ,443,399 sought. Total refund sought is $4,273.593. Case under stay.

BNSF Railroad v. City of Birmingham, CV2010-903064, BNSF claims a refund under the
Railroad Revitalization and Regulatory Reform Act for sales and use taxes paid for diesel fuel
purchases from February 2005 through February 2008. Refund sought is $1,745,579. Pre-
judgment interest of $1 ,832,858 sought. Total refund sought is $3,578,438. Case under stay.

BNSF Railroad v. City of Birmingham, CV2013-901 031, filed in State Court and motions
for summary judgment have already been argued; however, the judge is holding his ruling pending
resolution of federal case that is now remanded to the federal trial court. BNSF claims a refund
under the Railroad Revitalization and Regulatory Reform Act for sales and use taxes paid for
diesel fuel purchases from March 2008 through June 2009. Refund sought is $1,005,326. Pre-
judgment interest of $894,740 sought. Total refund sought is $1,900,067. Case under stay.

BNSF Railroad v. City of Birmingham, CV2014-903876, filed in State Court. BNSF claims
a refund under the Railroad Revitalization and Regulatory Reform Act for sales and use taxes
paid for diesel fuel purchases from July 2009 through April 2011. Refund sought is $1,290,020.
Pre-judgment interest of $1,148,119 sought. Total refund sought is $2,438,139. Case under
stay.

68
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Changes in the General Fund's claims liability amount in the last five fiscal years are as follows
(in thousands):

Beginning Changes in Claim Ending

June 30 Liability Estimates Payments Liability
2017 $ 11,042 $ 394 $ o $ 11,436
2016 15,211 (4,169) o 11,042
2015 15,211 o o 15,211
2014 17,139 (878) 1,050 15,211
2013 7,662 11,291 1,814 17,139
2012 1,589 7,901 1,828 7,662
2011 1,696 953 1,060 1,589

OTHER OBLIGATIONS

HUD 108 Loans

The City currently has $3,200,000 of guarantees outstanding under the U.S. Department of
Housing and Urban Development "HUD" 108 loan program for the Pizitz building development.
The City is currently repaying, with Community Development Block Grant funds 1999/2001 loans
with a balance of $255,000 for O'Brien's Seafood restaurant, which is in default. The City has
approved and submitted a $2,000,000 request for a loan to Inland Seafood Company. Under this
program HUD has made loans to borrowers for economic development projects. In addition to
collateral provided to HUD and the City by the borrowers, the City has guaranteed the obligations
by pledging its future HUD CDBG funds.

Birmingham Zoo Obligations

The City is obligated to make a contribution of $1,500,000 each year for a period of ten years,
commencing in the fiscal year ended June 30, 2010, and thereafter the contribution of $500,000
in each year for a period of fifteen years, to the Birmingham Zoo to pay the costs of operation and
capital projects, including certain new exhibits.

Tax Increment Financing Warrants

On December 17, 2014, the City issued its Tax Increment Financing District No.1 Revenue
Warrant Series 2014, outstanding in the amount of $14,853,000 as of June 30, 2017. The
Warrants were issued to currently refund the City's Tax Increment Finance District 1 Revenue
Warrant No. 1 and Tax Increment Finance District 1 Revenue Warrant No.2, both dated
November 6, 2009. The final maturity ofthe refunding warrants is September 1, 2028. The Series
2014 Warrants are tax-exempt warrants, with an interest rate of 2.89%.

The TIF Warrants are payable from, and secured by, a pledge of that amount of revenue produced
in each year from the levy of certain local ad-valorem taxes by the City and Jefferson County in

69
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

the Tax Increment District (generally the downtown city center) which is in excess of the amount
of such revenue produced from the levy of such taxes in such District in the year in which such
District was established (1998), less commission required by law to be paid to the Tax Assessor
and Tax Collector of Jefferson County. In addition to TIF revenues, the Warrants are payable from
a General Obligation Funding Agreement from the City, in any amount needed.

Public Athletic, Cultural and Entertainment Board of the City of Birmingham 2011 Funding
Agreement

The City increased its Lodgings Tax by 3.5%, effective January 15, 2011. The proceeds of the
tax increase are dedicated to the repayment of obligations issued by the PACE Board. The
Board's bonds funded the construction of a minor league baseball stadium, the home of the
Birmingham Barons, and were used to construct a Negro League baseball museum adjacent to
the stadium. On December 15, 2011, the City entered into a Funding Agreement with the Public
Athletic, Cultural and Entertainment Facilities Board of the City of Birmingham (the "Board"). The
Funding Agreement pledged the increased Lodgings Tax portion (3.5%) and certain revenue
from the operations of the baseball stadium to pay debt service on the Board's Series 2011 A and
Series 2011 B Bonds, issued to provide financing for the construction. The Bonds are currently
outstanding in the amount of $56,600,000, with annual debt service payments of approximately
$3,665,000, including interest at rates ranging from 3.09% to 4.87%. The Funding Agreement is
a general obligation of the City and has a term equal to the term of the Board's Series 2011A and
Series 2011 B Bonds, which mature on October 1, 2041, subject to mandatory tender on
December 14, 2026. The Baron's played their first game in the stadium on April 10, 2013.

Commercial Development Authority of the City of Birmingham 2011 Civic Center Hotel
Project Funding Agreement

The Bonds supported by this Funding Agreement, currently outstanding in the amount of
$66,130,000, were issued by The Commercial Development Authority of the City of Birmingham,
a public corporation of the City, to finance a four-star convention hotel of approximately 300 guest
rooms and related meeting rooms, restaurant and exercise facilities, approximately 60,000 square
feet of storefront space for lease to food service and entertainment facilities, and related streets
and public infrastructure, all adjacent to the civic center complex, in the downtown area of the
City, for use by the Birmingham - Jefferson Civic Center Authority (the "Civic Center Authority").
The Civic Center Authority, a public corporation, owns and operates the facilities financed by such
bonds. The Mayor of the City is a member of the board of directors of the Civic Center Authority.
The City has pledged, as a source of payment and security for its obligations under this Funding
Agreement, the following amounts received in each fiscal year: (i) $3,000,000 of the Occupational
Tax and (ii) 2/3rds of the proceeds of the Lodgings Tax levied at the rate of 3.00%. This Funding
Agreement is a full faith and credit general obligation of the City. The agreement calls for annual
payments through fiscal year 2041 of approximately $4,995,000. The hotel, which opened in
January 2013, is operated as the Westin Hotel Birmingham and the entertainment space is
currently 100% leased.

70
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Commercial Development Authority of the City of Birmingham Crossplex Village Project

Funding Agreement 2017

In April, 2017 the Commercial Development Authority issued $14,000,000 of bonds to fund the
construction costs of the first phase of a development in in the western area of Birmingham known
as Crossplex Village. The development includes a hotel, restaurants and a Starbucks training
facility. The City considers this project to be a major economic stimulus to the area. The project
is located on City owned land, which has been ground leased to a developer and is adjacent to
the City's state-of-the-art athletic competition facility known as the Birmingham Crossplex. The
bonds are expected to be repaid from rentals paid to the developer by tenants. In addition, the
City granted sales tax rebates to the developer. The rebated taxes will be held in reserve by the
bond trustee and applied to debt service if the developer's rentals fall short. The City entered into
a Funding Agreement whereby the City agreed to pay the debt service if the project does not
produce rentals and tax rebates sufficient to cover debt service. The bonds have a 25 year term.
The project was partially capitalized by New Market Tax Credits. The developer expects to
refinance the project after the expiration of the tax credits in approximately seven years. The
bonds may be accelerated by the lender if the City's credit rating drops below "A" by Standard &
Poors.

ECONOMIC DEVELOPMENT INCENTIVE OBLIGATIONS - TAX ABATEMENTS

From time-to-time the City enters into economic development incentive agreements with entities
that propose to locate businesses within the City, or expand businesses within the City, which are
expected to provide a stimulus to the City's economy and tax base. Generally, the agreements
provide for a rebate of taxes paid to the City according to formulas contained in the agreements.
Some agreements provide for a rebate of sales, use or occupational taxes based on the payment
of taxes above a base line and others provide for a sharing of the taxes (percentage rebates)
above certain amounts. The agreements have limited terms. The City generally expects to
receive increased revenue as a result of the agreements. These incentive agreements require
approval by the Mayor and City Council and are authorized by Amendment 772 of the Constitution
of Alabama. Some agreements provide for the repayment to the City of the rebated amount if the
entity ceases to operate its business for a certain length of time or fails to produce a certain level
of employment. The amount of taxes rebated during fiscal year 2017 was $5,489,312.
Occasionally, the City will agree to provide improvements to public infrastructure in the vicinity of
a project. Those projects that have a total estimated rebate, or other commitment, of $1 million
or more, are detailed below. The total estimated aggregate amount of these obligations is $84.2
million.

Serra Automobile Dealerships Development Agreement - Through a business retention and

expansion program, in May, 2013 the City agreed to provide an annual rebate of sales taxes
generated, not exceeding $753,000 during a year, until a total rebate of $5,271,000 has been
provided. The remaining balance is $2,259,000. $753,000 was rebated to Serra during fiscal
year 2017.

Limbaugh Toyota Redevelopment Agreement -In the Agreement, the City agreed to support an
expansion of the business by deeding certain real property to the Company and to make six
annual payments of $315,000 and one payment of $310,000, totaling $2,200,000 during the first

71
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

seven years of the agreement, after completion of construction; and to rebate 25% of New Sales
Tax Revenue in 2020 through 2022. The first payment was due on October 31, 2015 and the
remaining balance is $1,255,000. $315,000 was rebated to Limbaugh during fiscal year 2017.

Trinity/Daniel Agreement (the "Agreement") - In October, 2008 the City entered into a Project
Agreement with the owner of Trinity Medical Center, a full-service in-patient hospital, located in
Birmingham ("Trinity"). Affiliates of Daniel Corporation, a real-estate development firm, ("Daniel")
were also parities to the Agreement. The Agreement provided incentives for the hospital to
relocate to the, fast growing, Highway 280 area of the City. Daniel proposed to build ancillary
buildings and a hotel. The move required Trinity to secure a Certificate of Need from the State
licensing board. The CON was granted and years of litigation ensued, brought by competing
hospitals. In March, 2013 the Alabama Supreme Court settled the matter and Trinity began its
construction project which, when completed, was expected to cause the City to retain
approximately 2,300 employees and Daniel projected that it's development would generate
approximately 600 employees. The new Trinity hospital is now open and operating. The
Agreement obligates the City to rebate various taxes during construction periods and during
operational periods to both Trinity and Daniel. Generally, the rebate requirements are
summarized below, which summary is not intended to be a reproduction of the entire agreement.
Other provisions may apply. The City has advised Trinity and Daniel that it does not have the
authority to rebate ad-valorem taxes that are earmarked for specific uses, whether by the
Constitution and Statutes of the State and/or by the referendums approving the taxes. In addition
to the City's 9 mill general ad-valorem tax, the Agreement contemplates the rebate of the 9.2 mill
Bond Debt Service Tax and the .5 mill Library Tax, all three of which are ear-marked, in whole or
in part, for specific uses.

Trinity:
During Construction:
Trinity Received:
100% sales and use taxes
100% non-educational ad-valorem taxes
Operational Period:
Trinity Receives: Years 1-10 Years 11-20
Non-educational ad-valorem taxes 80% 40%
Occupational Tax 80% 40%

Daniel:
During Construction:
Daniel Receives:
100% sales and use taxes
100% non-educational ad-valorem taxes
Operational Period:
Daniel Receives: Years 1-20
Non-educational ad-valorem taxes 90%
Occupational tax 90%

The term of the Agreement is 23 years from the commencement of construction. The total amount
payable to Trinity and to Daniel during the operating periods will not exceed $40,000,000 and
$15,000,000, respectively. The remaining balance is $39,353,818. Daniel has not begun a
project. The amount rebated to Trinity during fiscal year 2017 was $1,963,059 during fiscal year

72
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

2016, the City issued a bond, in the amount of $2,431,216, with total principal and interest
payments of $8,496,200 to trinity as partial payment of the City's incentive obligations.

The Children's Hospital of Alabama ("TCHA) Agreement ("Agreement") - On May 13, 2008 the
City entered into an incentive agreement with the Children's Hospital of Alabama relating to the
construction of a replacement hospital in the medical district of the City. The agreement provides
that the City will rebate certain construction related permits/taxes during construction and then
rebate occupational taxes which exceed a baseline according to the following formula: years 1-
4: 50%; years 5-12: 80% and years 13-20: 50%. The occupational tax baseline is the amount of
occupational tax paid to the City for the twelve-month period ending September 30, 2007. The
term of the Agreement is the earlier of May 13, 2028 or when the total amount rebated by the City
equals $20 million. The new hospital's cost was approximately $375 million and the old facility
has been converted into research space. The new hospital opened in March, 2011. The
remaining maximum obligation balance is $15,625,862. The amount rebated to Children's during
fiscal year 2017 was $564,515.

Laboratory Corporation of America Holdings - In February, 2015 the City entered into a Project
Funding Agreement incentive to keep Lab Corp., and its large number of employees in the City.
The Agreement provides that upon completion of a major renovation and upgrade to its facilities,
the City will pay to Lab Corp. $3,050,000. This amount was paid during fiscal year 2017. The
Agreement contains a recapture formula should the company relocate prior to ten years from the
Completion Date.

Firestone Flowers, LLC -In November, 2014 the City entered into a Project Funding Agreement
to incentivize Firestone to complete the redevelopment of a half block in the City center, at a cost
of approximately $30 million to include a five-story building which will include a Publix
Supermarket, approximately 85 apartment units and a parking deck to provide approximately 270
off-street parking spaces to accommodate the Publix and the apartments. The City agreed to
rebate 65% of the actual projects sales tax revenue for years 1 and 2, beginning October 1, 2018
and 60% of sales tax revenue for years 3-10, but not more the $6,450,000 during the term. Should
the Firestone, or affiliates, relocate the Publix to another location outside of the City during the
reimbursement term, Firestone must repay any rebates received to the City.

Edwards Chevrolet Company, Inc. - In April, 2013 the City entered into an Incentive Agreement
with Edwards, under which Edwards would modernize its show-room in the Central Business
District. The City agreed to rebate 50% of Edward's sales tax (generated after any other incentive
plan) during a period of seven years from the project completion date. Should Edwards close or
relocate to outside of the City during the term and for three years thereafter, Edwards must repay
any rebated amounts to the City. The maximum amount subject to rebate during the term is $1.2
million. $251,093 was rebated to Edwards during fiscal year 2017. Remaining balance is
$491,176.

Festival Center Birmingham, LP - In July, 2014 the City entered into a Project Agreement with
Festival whereby Festival would refurbish a 286,000 square foot shopping center that had become
blighted and highly vacant. The City agreed to share in the costs ofthe redevelopment by rebating
the lessor of 50% of sales tax generated, or $356,800. The rebates are limited to the sales tax
generated with a maximum of $1,784,000 over a five year period from the Completion Date.
$356,800 was rebated to Festival during fiscal year 2017. Remaining balance is $1,070,400.

73
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

CR HO, LLC -In February, 2016 the City entered into a project agreement with Corporate Realty
to incentivize the construction of a new headquarters building for Healthsouth Corporation in the
City. The Company will relocate from another location in the City. The total incentive was
$1,932,000 for site development costs. The City has paid all of the amount from capital funds;
$966,000 was paid in fiscal year 2017.

New Car Franchise Dealers - In 2009, the City entered into an incentive agreement with
Franchise Dealers for new cars. For those existing Franchise Dealers, the City agreed to rebate
sales taxes in the amount of any sales tax rate on new cars in excess of 1%. The current rate is
2%, so the effective rebate is 1%. This rebate is reduced by %% of used car sales. The rebate
is payable quarterly, based on Franchise Dealer sales tax filings. The agreement ends in 2039.
The amount of the rebate during fiscal year 2017 was $1,781,302.

IRC-MAB -In January, 2017 the City entered into a Project Agreement under which this
company would develop a retail shopping center in the Lakeshore Parkway area of the City,
including a 45,000 square foot supermarket. For seven years, after the Completion Date, the
City agreed to rebate the lesser of $500,000 or 50% of sales tax during years 1-5 and then
rebate the lesser of $400,000 or 40% of sales tax during years 6-7, all not exceeding
$3,300,000. No rebate was provided to the developer during fiscal year 2017 .

. TopGolf USA Birmingham - In December, 2016 the City entered into a Project Agreement
under which Topgolf USA Birmingham, LLC will build a golf entertainment facility on a two block
site adjacent to the Birmingham-Jefferson Civic Center. For a period of eight years from the
Completion Date, the City will rebate the lesser of 30% of sales tax or $228,000, not exceeding
$1,500,000. No rebate was provided to the developer during fiscal year 2017.

Lakeshore Parkway Retail, LP -In May, 2017, the City entered into a Project Agreement under
which this developer would construct an approximately 156,000 square foot addition to the
Wildwood Shopping Center and attempt to fill existing vacant spaces. For a period of five years
from the Completion Date, the City will rebate the lesser of 50% of sales tax or $960,000, not
exceeding $4,800,000. No rebate was provided to the developer during fiscal year 2017.

Urban Community Development Consortium -In April, 2017, the City entered into an agreement
under which this developer would construct a hotel, restaurant row and Starbucks training facility
at the City's Crossplex sports completion venue. For a period of seven years after the Completion
Date, the City will rebate the lesser of 50% of sales tax or $465,000, not exceeding $3,255,000.
No rebate was provided to the developer during fiscal year 2017.

TAX ABATEMENT AGREEMENTS OF OTHER ENTITIES THAT REDUCE CITY OF

BIRMINGHAM TAX REVENUE

Disclosures made in this CAFR are subject to GASB Statement 77. The statement requires the
City to disclose tax abatements granted by other governmental entities that reduce the tax
revenue of the City. The two entities that grant such abatements are listed below. The Statement
requires the City to disclose the amount of the taxes abated during the fiscal year. For purposes
of this disclosure, the City chooses to disclose all known agreements to be better able to track
agreements from year-to-year.

74
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The City of Birmingham Downtown Redevelopment Authority

This authority grants the right for an applicant to be exempt from all, non-educational, sales and
use taxes imposed on building materials and equipment related to a project pursuant to Chapter
54A of Title 11 of the Code of Alabama 1975, as amended and Chapter 9B of Title 40 of the Code
of Alabama 1975, as amended. The members of the Authority are appointed by the City Council
of the City of Birmingham. In the case of sales and use tax abatements on construction materials,
the taxes abated are not received by the City, nor is there currently a reporting mechanism for the
City to receive such information. The State Department of Revenue provides a Purchasing Agent
appointment letter to abatees so that they can purchase materials tax-exempt. All outstanding
agreements of the Authority do not require abatees to provide information to the City. To comply
with the GASB Statement, the City has asked abatees to provide this information, but they have
not cooperated, except for resent agreements which require the reporting. The City has asked
the Authority to require this reporting in all future abatement agreements, beginning with fiscal
year 2018. The information presented below has been compiled, after reasonable attempts to
obtain the required information. The City makes no representation that this information is correct,
complete, or that individual circumstances have not changed subsequent to the application to the
Authority for abatements.

THE CllY OF BIRMINGHAM DOWNTOWN REDEVELOPMENT AUTHORllY . L ____~__----=+===~-=--=C===;--==__=..L-=]

I " , ' I
~---~-----.~-----f I ' ---------:--~~~--' _ _ _.L_~!
'--_________ .__1.______
, ____,_____1 _____,_'_. _ _ _ _, _ _ _ I Beginning of , End of : Estimated*: .. '
i ' , I I I , Abatement: Abatement .: Amount of :
Date of! Annual I Total i
Annual * Total 1 Project 1 Term , Term ,Taxes Abatedj
[..:..-==~~:-Co~p~ny-~=~-_=~~L_A.~ementl Ad-"'~C>rem
i
J
!
Ad-Valorer,!_i2.""'~ Use_: Sales ~use.. LJr1VestmentL£i.s.~1 Yea~_.~_.£iscal Y,,~.r-c.-!'i. 2017_'--1
I ' I . ' ' , ,
j I i : -!
_'_ _ _ _
'Parkside Residences, LLC Nov 2013i 130,000, 260,0001 2014 _~. __ 2021 __' 32,257,
'Birmingham Landmarkds, Inc. Mar 20141 ~ _ _ L_87,500: _175,000: ,2014 , _ 2016_._ _ 4B,509L,
:Cityville Venue atthe Ballpark LLC
'Empire Hospitality, LLC
AUM Birmingham, LLC
Jul 20141
__ '==-F'eb 2015:__ ==~=_'
Feb 20151
1
_.___ :
._L___..___
: 102,000:
175,000:
n,500,
. 403,933L ___ ~__ 2015 __I_~~_; ____ 179,1441 _I
352,000L_______
155,0001
: _ 2015J...._ 2017 ___ i___ 192,047'
; 2015 ' 2017' 84,5661'
_.J
Pilitl, LLC Feb 2015: 530,0001 1,059,656 1 __ L
2015 _..::__._2017 _ _ _ 578,1381~
Gen3 Properties, LLC Jan 20161 __,_'_ _ 70,0001 140,0001 ______: _ 2016 .__1_ 2018____ : _ _ _ 29,302; ,
'Sunbelt-G2BA, LLC __ . Oct 20151 185,000; 434,520) 2016 2018 _, ___ 739,419,** ~
:Central City Developers, LLC Apr 2016: ___ , _____ 60,0001 120,0001 __ 2016 --'_~_: 12,518:'
'FR BHAM, LLC ; Dec2015j 75,000, 187,100: 2016 2018 253,833:*'--:
-=-==-_:_
Highland AL part;e-~,!:,:C June 2017: _______L____ I ' 47,500,000: 2018 i 2021, 0::
Birmingham Hotels, LLC
Total Estimate*
.i..__ Aug 2017~ _____ j______
. _ _ _ _,_'_ _ _ _'--_ _ _ ~--_-~--.---I_ _ _ _
250,000" 250,000L.!?,900,000,,-__ 2018 __'_i 2021 __
I ___'__ I
O~
__ ~_2,149,733!__
-==:--
' _ I_ _ _ i_ _ _ ,_~~ __ ~ ~._~ _ _.,_!--__ .-----,~-~--~-:
oSee description above, ! i : , ' , ,'" , ,
,"*Actual amount r,,~rtedby~e abate~~--=--r===i--~-~-_ :======T::-====-T-=~======~==L~==-==:=======

The Industrial Development Board of the City of Birmingham

This Board grants abatements of non-educational ad-valorem and non-educational sales and use
taxes for qualified applicants, pursuant to Chapter 9B, Title 40, Code of Alabama 1975 and the
Tax Incentive Reform Act of 1992 for periods not exceeding ten years. The members of the Board
are appointed by the City Council of the City of Birmingham. These projects are expected to
increase the tax base of the City and provide additional jobs for City residents. The City does not
collect its ad-valorem taxes. The Tax Collectors of Jefferson and Shelby Counties are responsible
for such collection. When the lOB grants an abatement of certain millage, the Tax Collectors do
not collect this amount from abatees. These agreements typically abate ad-valorem taxes for ten
years, further complicating the access to the disclosure information. The City does not receive

75
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

tax collection information with respect to individual ad-valorem taxpayers. In the case of sales
and use tax abatements on construction materials, the taxes abated are not received by the City,
nor is there a reporting mechanism for the City to receive such information. The State Department
of Revenue provides a Purchasing Agent appointment letter to abatees so that they can purchase
materials tax-exempt. All outstanding agreements of the Board do not require abatees to provide
information to the City. The City has asked the Board to include such reporting requirements in
all future abatement agreements, beginning with fiscal year 2018. The information presented
below has been complied, after reasonable attempts to obtain the required information. The City
makes no representation that this information if correct, complete, or that individual circumstances
have not changed subsequent to the application to the Board for abatements.

76
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

,-.------~--------'-~~-~--.----~~---------~-------------~-~-~-~---~---~-------~------~-------~~~

Estimated City of Birmingham Non-Educational Tax Abatements by Other Governmental Entities

,--------~ ; -! i - i i i ~.: ~ _______~.___ -1

INDUSriiiAi:DMLOi>MENTSOARD-OFTHECllY OF BIRMINGHAM! ---,-----------'--,----'-----'-'--- ----

==~=_===~=~~______
_'_________________ ~ Date of Annual Total
__~__-=L~-~~=~t=-~-~---~-i ~:!~;~:~LA!ai~;~t~~~
Annual * Total Project Term Term 'Taxes Abated;
'~____ S:C>E'1'~~_ ___ Agreement : Ad-Valorem I Ad-Valorem i Sales & Use Sales & Us~llnvestmentlJiscal Year Fiscal Year FY 2017
,--------,---- -~--------.- ~-----~--~----'------+.-~~-t--- -~--t____---+---------;------~---: ---------+---------J
~-----------------~------L---~,---~ ' I '_______ '-- _ _ _ _ ,'
Johnson Bros Corp & Oscar Renda Jun 2017i 48,3201 483,200: 194,420! 1 9 4 , 4 2 0 1 _ - , - _ 2026 __-'-_______ ~
'Inland Fresh Seafood Corp. Jul 2017! 14,6621 146,6201 107,960i 107,960; 2026 °
'Integrated Medical Sys International, Apr 2017! -- 1,524! 15,2421 2,8001 28,0081 , 2026 --;-----'():
Z-Modular, LLC ______ Jun 20171 1,6841' 16,838: 2,082! 20,820!'-2026---:--:~=~-=--oi
'B.L. Harbert International, LLC*** _______ Nov 2016;__ 47,7231 477,2381 138,439\ 276,8781 , 2,026 _, _________1 °
Superior MasonProducts Sep 20161 29,4431 265,3121 20,182; 22,402! , __ 1--__ 2026 _________ ~_
Voestalpine Automotive Parts, Inc. Jun 2016, 26,5311 265,312i --92;893; 185,7861 _____ 2027 _______ 0'
'Evonik Corporation Jan 2016' 250,0001 2,500,0001-800,000'---1,765,0001 __ 2027 -L ______ o:
SMI Stee~_______ ___ May 2016! 203,098! 2,030,9801 400,0001 1,329,446j 2026 __--------Q'
Healthsouth corporation'c- __ Mar 2016~ ___ 83,4511 834,5091 400,000 1 891,6461 _~ 2026 __ ,__________():
:CR HQ LLC - Healthsouth project __;__ Mar 2016; 240,7651 2,407,6591 _ 300,000: 601,6751 _ 2026 ______ ,(J
'Allied Energy Company, LLC ____ Dec2016_!_ _ 22,916l-_,?29,161L____ 70,0001 __ 131,4991- 2025 _,~'_ , ____ 0,
'BMBR, LLC ___________, Feb 2016! 3,9821 39,821: 4,7501 9,735' 2025 ___ ~__ 2,000'
'Kamtek, Inc. ________ i__ ~g2015i ~771,491i, 17,714,916: 6,500,0001 13,175,7001 534,750,0001 2016 _, 2025 _" ____,,l,000,000!
P & R Metal, Inc. Nov 2015: 4,4311 44,3161 5,500: 25,475~0001 2016 L _ 2025 __ ~ ___ 5,5001
:Triton Health Systems, LLC. Dec 20151 12,2431 122,433~___ 55,000L_____ 116,285L_ 3,273,798l-~_~,,_ 2025 ___1____ 55,000:
WSSA Birmingham, LLC Dec 20151 14,959[ 149,5971 28,0001 56,8321 4,000,000: 2016 I 2025' 28,000!
'DSWlndustrialKnives ,Sep2015! 9,9481 99,4801 ' -__ 22,778: 2,660,000[ 2016 --2025 --~--- 15,000'
Marx Brothers, Inc.-~=-==~=~--s;p20i5: 1,8331 183,3301 _ 84,4361 4,900,0001 2016 : . -2025 , - - 40,000":
Cahaba Brewing Co. Sep 2015[ 4,172[ 41,7201 43,6171 2,260,000: "20i6------2025---- 20,000'
Water Sciences Technologies, LLC Mar 2015: 6,285: 62,8501 ,62,2161 1,750,000, 2016 c ____ lm5 _____ ~,OOO!

:L.B.FosterCompany ---- ,,~b2014L__ 35,7001 ", '--~'----18S,OOO!s;ooo:oOoT-2o16 .~_2025_____ 60,00Q;

Oxford Pharmaceuticals, Inc. ,_,___ ~_~ 20141 _ 108,159\ 1,081,589! 497,0171 29,460,0001 _ 2015 ,__ ~ 2024 __ ,_ __ 206,000:

.
'Data Perk, LLC _ _ _,____ Aug 2014! 13,2371 132,370L 45,844! 3,500,0001 2015 ! 2024 15,000'
1

:~::~~nl;~~r:t~~el~~:~~ments .-~~--- 1,683i~~:L __-~--c-= 8,205~ :~~! ~~~~ ~.~ ~ ~~~: -=~~-=_ 1,683:
Berman Brothers Iron & Metal Ju12014! 12,715: 127,1501 57,999: 6,200,000i 2015 2024' 13,000'
'Barber Motor Sports Jul2014i ____ ,_ 80,9921 5,245,000i 2015 : 2024 01
Cadence Bank _____________ Jan 2013i- __ ~_~,910i ______ ~-- 106,656' 2,900,000' 2014----2023 --,----5,400:
American Builders & Contractors Sup Dec 2013! 12,118~ 121,780: 41,5951 3,255,000~ 2014 ___L_ 2023 __ ! 12,2001
Hardy Corporation : Aug 20131---- 28,8091 288,0901 95,5461 7,500,OOOi 2014 2023 ____ ~,8OO!
Royal Cup, Inc. '''-- Apr 2013 1-- 86,423; 864,2701· : 399,960' 48,OOO,oooL~~ __ ;__ 2023 ___ 86,400; L __
'TrimTabBrewing-;---~------z;So6i- 25,0601 -----,,---- _____ c 605,816i 2014'-_~~_____ ~,500,
Friedken Realty - GSTT5, LP -- May 2013! --- 8,3801-'-- 83,8001 . - - - -,- 2,200,000i 2014 2023· 8,4001
)nduron Coatings Jan 20131 4,1901 41,9001 1,115,000; 2014 .___ ._2023___ .~_ 4,200,
'Good People Brewing Co, LLC_~~ 10,476! 104,7601 ,_______________ 600,000i 2013 , 2022. 10,5001
Bama Terminaling & Trading LLC Sep 20121 5,238: 52,3801 11,900,000: 2013 :--- 2022 5,2001 ---r-
'Kinetic Investments LLC i___Aug 2012[ __s,500L___ 55,0001,,________ i 1,460,000: - 2013 ---:-- 2022 - , - - . 5,500:
:Hibbett Sporting Goods, Inc. .~ __ ~ug 2012L__ 32,350i ___ 323,Sooi __ ______,,_,,~_==~_-~=:- 8,650,ooO~-- 201~~ __ 2022 --~---32,400i L_

·Soluables Therapeutics,IIlE"--__; Ju12012i 602i 6,0201 . ______. 160,000; 2013 --;_~= 2022 -==:==-- 6001
Accretive Health, Inc. - '!--lul 2012'-.-~r- 420,074:------- i 2,250,000i 2013 i 2022: 42,0001
Birming~~R~-c~v;;y--c---fui2oll;- 8~:::i--74,380: - - ···~·---;-1,987,907i-~--1--- 2022 ---;---],400;
'Community Health Services Feb 20111 818,467 1 _,____ 28,564,000, 2012 ____L __2021 _-'-_, 81,BOO:
:Southern Gas& Supplt___ : Nov 20101 4,282!, 42,8201_______' 4,595,0001 2011 '2020 ___ 4,300,
:ARC Alabama, L L C - - - --'MaY2oW!-----77,442i 774,4201 24,000,000i 2010-'---Z019 77,4001
Hardy Fabrications LLC ----------: May 20101-2:,1991 - - 21,990;--------- ----- 588,2001-- 2011 ------2020 -_::______2,2001
_Ameri~an Cast Iron Pie;C~_===~::===Mar 2010[__ =-_~,,056i - 2oo,560L==:-==--=~==_-:-:== _ _ ~_= 20g:-===__ ~020 . _L__ 20,100,
Integrated Medical Sys International: Dec 2009: 9,642' 96,4201 6,400,0001 2010 2019 _______ 9,6001
.Consolidated Pipe & Supply Co, Inc.:--- Dec 2009:-== 16,4~C 164,9901 --_====~===_ 4,350,000~ __ '?()11l_-=:=-
201S1__ =~_ 16,5001
Alabama Reclamation Co, LLC ! Ju12009! 52,172! 521,172; ______, __ ,,_____ 15,000,000: 2010 ___.. __}019 ,_, ____ 52,2<JQj
:On~al Steel, Inc. - - - - - - - - - - .-Nov2008:21;475i- 214,750: 5,750,000' 2009 __ . L _ 2018, ___'--___ 21,500;
Brookwood Pharmace-;rti~I~,,;z.--:M;;y2OO8i 133,5691 1,335,690:-------,--------~ 37,700,0001 2009 . ~ __2018 _ 133,6001
_Summit
___ Products
_ _ LLC
~___
, ___ Apr 2008 1________
- _c, ~
8,989i____ ' _
~
89,8851------ --1-----
_ _, - , __ ,_, _ _ ; ________ " 2,500,0001
_' _ _ 2009 ' _c, _ _ _
_ _ _ - ;_______ 2018
_ __ JlcQQQI -'--=:,'__
~nance Plus, In,£_,__ 2009 ____ 2018 _ ~ ___ ~500i
--~ --------~-----~~-
,Aug 2oo7! 10,476' 104,760; :
~. -~~-~=~-==_=[~_=_~-,~= ___ i__=====:[~~-----~~-:--~--~----!--~----,-'----
, . -- --,~-.-------.---
2,100,000;
- :
~r--~- ------~----1--·----- --~-~;---. ---~------'''-~ ------~--'
:
_____l______ i__._._ _ _ ~ ___.____ ~ ___ ~ _____
, _______ -----.:... __________ ~ _________,

,---------_._--._-- -
,Total Estimate** ____ ,,___ ,__
i
-.----------+--.~~-------~-,~--,--: ~--.---------,----~-
'
_' ______----,-~---- --------------
!-_______ ~ __ ~ ______, ,'~ ________,___,,_____,__ ,,_______ ,_____~J81,381,
,~ ___ ~ _________ ,, __ ,_____ ,___________

~*Act~al ~~~~ am"'!,l11: prov!cle~by abatee_______,____ -! _____ ,,_~,,_"' ,,_~~,

-u_ ____ _ _ "c_._, _ _ _ _ " __
__ _ _ , ,______ ' _ _

.~e,~escriJJ!ion above________ J, ______ "

77
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

G. Closure and Post Closure Cost

State and federal laws and regulations require the City to place a final cover on its landfill sites
when it stops accepting waste and to perform certain maintenance and monitoring functions at
the sites for thirty years after closure. Although closure and postclosure costs will be paid only
near or after the date that the landfill stops accepting waste, the City reports a portion of the
estimated closure and postclosure cost liability as a long-term liability. The liability is increased or
decreased each period based on landfill capacity used as of each balance sheet date.

The approximate $15,900,855 reported as closure and postclosure cost liability at June 30,2017,
represents the cumulative amount reported to date based on the use of approximately 95 percent
of the estimated capacity of the landfills. These amounts are based on what it would cost to
perform all closure and post-closure care in 2017. Actual costs may be higher due to inflation,
deflation, changes in technology, and/or changes in laws or regulations. Officials estimate the
landfills' remaining lives to be approximately four years.

H. Pension Plans

1. General Information

The City has three single employer defined benefit pension plans, the City of Birmingham
Retirement and Relief System (Retirement and Relief System Tier I and Tier II), the City of
Birmingham Firemen's and Policemen's Supplemental Pension System (Firemen's and
Policemen's System) and, the City of Birmingham Unclassified Employees' Pension & Relief
System (Unclassified Pension and Relief System) which provides pension benefits for
substantially all employees. Each of the three plans was established by state law and is
administered by a separate board of managers.

The funding methods and determination of benefits payable were established by the legislative
acts creating such plans and provide that the pension plan funds are to be funded from employee
contributions, employer contributions, and income from the investment of accumulated funds. The
cost of administering the plans is funded by the City. The City acts as the trustee for these plans.
Separate financial statements are presented in this report for the pension funds.

2. Plan Description

Retirement and Relief System - This system covers all eligible civil service employees,
appointed, elected, Airport Authority, E911, EMA employees, and Health Department.
Membership is mandatory for civil service and Airport Authority employees and is effective upon
employment. Appointed, elected and E911 employees have the option of participating in this plan
or in an alternative retirement plan. The plan is closed to Health Department new hires.

Firemen's and Policemen's Supplemental Pension System - This system covers sworn
firemen and policemen and provides retirement benefits for twenty years of service. Membership
is mandatory for such personnel and is effective upon employment.

78
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Unclassified Employees' Pension & Relief System - This system covers laborers not hired
under civil service.

3. Benefits Provided

Retirement and Relief System (Tier I Participants) - A participant hired prior to July 1, 2017,
may retire at (a) age 60 if they have completed 5 years of credited service, or (b) any age if he/she
has completed 30 years of credited service, and receive a pension benefit of 2.50% of final
average salary for each year of credited service. This amount cannot be greater than 75.0% of
the final average salary nor less than $400 per month. The service credit used to determine the
benefit amount may be increased by credit granted for unused sick leave (on a percent of possible
total basis). The final average salary is defined as the highest average compensation over any
36-month period of the employee's last ten years of participation. A participant may retire early
at age 55 if they have completed 25 years of credited service and will receive a benefit amount
equal to 1.85% of final average salary for each year of credited service.

Disability

A Tier I participant is eligible for disability benefits after 5 years of credited service. The benefit
amount is 2.00% of final average salary at disability for each year of credited services, payable
immediately. This amount cannot be greater than 60% of the final average salary nor less than
$400.

Extraordinary Disability

If a Tier I or Tier II participant become disabled as the result of a job-related injury, they may be
eligible for an extraordinary disability benefit regardless of years of service. The benefit begins
on the date the participant cease to receive a salary as a City employee, provided the Pension
Board has approved the application. The benefit amount is 70% of the participant's monthly
salary at the time of the accident.

Termination

To a Tier I participant terminating prior to eligibility for a pension from the plan, a lump sum of
contributions without interest is payable. Tier I participants terminating after 5 years of credited
service who leave their contributions in the Plan have a non-forfeitable right to a monthly pension
beginning at age 60. The form and amount of the pension are the same as the Normal pension.

Optional Benefit Forms

A participant retiring under the plan may choose, in lieu of an annuity for life, an optional form of
benefit including a joint and survivor annuity reduced as described above, a partial lump sum
option or a Social Security option. Optional forms will be calculated as the actuarial equivalent of
the life annuity form.

Death Benefits

If a Tier I participant dies prior to his attainment of eligibility for vesting or retirement, if not married,
a lump sum of contributions without interest is payable to the beneficiary. If an active vested Tier

79
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

I participant or vested inactive Tier I participant dies, 60% of the accrued pension benefit,
multiplied by the service percentage, is payable to the surviving spouse, if any, during their
remaining lifetime. The service percentage is as follows: 5 years - 50%; 6 years - 60%; 7 years
- 70%, 8 years - 80%; 9 years - 90%; 10 or more years - 100%. The spousal benefit is deferred
to the date the Tier I participant would have been age 60 or would have accrued 20 years of
credited service. The spouse may elect an immediate return of the participant's own contributions
in lieu of the annuity.

Deferred Retirement Option Plan (DROP)

A Tier I participant with 33 years of service or who is at least age 63 with 23 years of service may
elect up to a 36-month Back-DROP. The participant's monthly benefit will be calculated using
credited service and final average salary as of the Back-DROP date, and the participant will
receive a lump sum equal to the number of months dropped back times the retirement benefit,
accumulated with interest.

Retirement and Relief System (Tier II Participants) - A participant hired on or after July 1,
2017, may retire at (a) age 62 if they have completed 10 years of credited service, or (b) any age
if he/she has completed 30 years of credited service, and receive a pension benefit of 2.25% of
final average salary for each year of credited service. This amount cannot be greater than 67.5%
of the final average salary nor less than $400 per month. The service credit used to determine
the benefit amount may be increased by credit granted for unused sick leave (on a percent of
possible total basis). The final average salary is defined as the highest average compensation
over any 36-month period of the employee's last ten years of participation. A Tier II participant
may retire early at age 55 if they have completed 25 years of credited service and will receive a
benefit amount equal to 1.85% of final average salary for each year of credited service.

Disability

A Tier II participant is eligible for disability benefits after 10 years of credited service. The benefit
amount is 2.00% of final average salary at disability for each year of credited services, payable
immediately. This amount cannot be greater than 60% of the final average salary nor less than
$400.

Termination

To a Tier II participant terminating prior to eligibility for a pension from the plan, a lump sum of
contributions without interest is payable. Tier II participants terminating after 10 years of credited
service who leave their contributions in the Plan have a non-forfeitable right to a monthly pension
beginning at age 62. The form and amount of the pension are the same as the Normal pension.

Death Benefits

If a Tier II participant dies prior to his attainment of eligibility for vesting or retirement, if not married,
a lump sum of contributions without interest is payable to the beneficiary. If an active vested Tier
II participant or vested inactive Tier II participant dies, 60% of the accrued pension benefit,
multiplied by the applicable service percentage, is payable to the surviving spouse, if any, during
their remaining lifetime. The service percentage is as follows: 10 years - 50%; 11 years - 60%;

80
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

12 years - 70%, 13 years - 80%; 14 years - 90%; 15 or more years - 100%. The spousal benefit
is deferred to the date the Tier II participant would have been age 62 or would have accrued 20
years of credited service. The spouse may elect an immediate return of the participant's own
contributions in lieu of the annuity.

Optional Benefit Forms

A participant retiring under the plan may choose, in lieu of an annuity for life, an optional form of
benefit including a joint and survivor annuity reduced as described above, a partial lump sum
option or a Social Security option. Optional forms will be calculated as the actuarial equivalent of
the life annuity form.

Deferred Retirement Option Plan (DROP)

A Tier II participant with 33 years of service or who is at least age 63 with 23 years of service may
elect up to a 36-month Back-DROP. The participant's monthly benefit will be calculated using
credited service and final average salary as of the Back-DROP date and the employee will receive
a lump sum equal to the number of months dropped back times the retirement benefit,
accumulated with interest.

Firemen's and Policemen's Supplemental Pension System - A participant may retire after 20
years of credited service. A benefit equal to 50% of final average salary plus 0.5% of final average
salary for each year over 20 years is paid for the period prior to eligibility for 30-year retirement
under the Retirement and Relief Pension System. The final average salary is defined as the
highest average of basic salary earned during any 42 consecutive month period in the last 10
years prior to termination.

Disability

A participant is eligible for disability benefits after 10 years of credited service. A supplemental
benefit sufficient when added to the Retirement and Relief Plan disability allowance to total not
less than 25% nor more than 50% of final average salary is payable for the life of the participant.

Termination

If a participant terminates prior to eligibility for a pension from the Plan, a lump sum of his/her own
accumulated contributions, without interest, and is payable at termination.

Death Benefits

For an active participant who has at least 5 years of credited service, the survivor's benefit is
equal to 60% of final average salary, plus 5% for each child up to two children. No death benefit
is payable if a death benefit is payable from the Retirement and Relief Plan.

For a retired participant, the survivor's benefit is 60% of the monthly benefit plus 5% per
dependent child to a maximum of 70% of the participant's monthly benefit.

Deferred Retirement Option Plan (DROP)

81
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Participants with at least 26 years of credited service may elect up to a 36-month Back-DROP.
The participant's monthly benefit will be calculated using credited service and final average salary
as of the Back-DROP date, and the participant will receive a lump sum equal to the number of
months dropped back times the retirement benefit, accumulated with interest.

Unclassified Employees' Pension and Relief System - A participant may retire at age 62 if
they have completed 10 years of credited service. A participant will receive a monthly benefit
amount of $4.00 per year of Past Service (service before December 1, 1975) plus $20.00 per year
of Future Service. The minimum benefit of $500.00 per month will be paid for active participants
retiring after July 1, 1995. A participant may retire early at age 55 with 20 years of service, at least
3 of which are after the effective date of December 1, 1975, and will receive a benefit of the
accrued amount, reduced by 4/9 of 1% for each month of age under 62.

Disability

A participant is eligible for disability benefits after 15 years of credited service. The benefit amount
is the normal pension amount based on service accrued and is payable immediately.

Termination

To a participant terminating prior to eligibility for a pension from the plan, a lump sum of
contributions without interest is payable. Participants terminating after 10 years of credited service
who leave their contributions in the Fund have a non-forfeitable right to a monthly pension
beginning at age 62. The form and amount of the pension are the same as the Normal pension.
Since all active employees have at least 20 years of service now, there is no reduction for partial
vesting.

Death Benefits

If a participant dies prior to their attainment of eligibility for vesting or retirement, if not married, a
lump sum of contributions without interest is payable to the beneficiary. If an active vested
participant or vested inactive participant dies, 50% of the accrued pension benefit, reduced by the
Joint and Survivor factor, is payable to the surviving spouse, if any, during their remaining lifetime.
The Joint and Survivor factor is 10%, plus of 1% per year of spouse age more than 10 years
younger than the participant. The spouse benefit is deferred to the date the participant would have
been age 62. The spouse may elect an immediate return of the participant's own contributions in
lieu of the annuity.

Optional Benefit Forms

A participant retiring under the plan may choose, in lieu of an annuity for life, an optional form of
benefit including a joint and survivor annuity reduced as described above, a partial lump sum
option or a Social Security option. Optional forms will be calculated as the actuarial equivalent of
the life annuity form.

82
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

4. Contribytions

Retirement and Relief System - Prior to July 1, 2017, the City, Airport Authority, EMA and E911
participants each contributed one-half of the required contribution payable as a percent of
compensation for the year, exclusive of overtime and subject to statutory limits. The participants
and City contributions were equal to 7.0% and 7.0%, respectively, effective July 1, 2015, and
continuing through June 30, 2017. Effective July 1, 2017, however, the City contributions increase
to 7.25%. Effective July 1, 2018, the City contributions increase to 8.50%, and effective July 1,
2020, the City contributions increase to 9.00%. The participants will continue to contribute at the
rate of 7.0%. Health Department participants contribute 6.00%. The plan is funded by
contributions from participants, the City, Airport Authority, EMA, E911, Health Department and
income from the investment of accumulated funds.

Firemen's and Policemen's Supplemental Pension System - Participants contribute 5.22% of

compensation for the year, exclusive of overtime and statutory limits with the City contributing
5.24%. Further, effective July 1, 2017, the City will contribute annually an additional $500,000 to
the Plan. The plan is funded by contributions from employees, the City, and income from the
investment of accumulated funds.

Unclassified Employees' Pension and Relief System - Participants contribute $10.00 bi-
weekly. The City is required by City ordinance to contribute a sum, computed as a percentage of
payroll, to fund the annual cost of the unfunded liability over thirty years. The membership of this
plan is closed.

5. Membership Data

As of most recent measurement date of the net pension liability, membership data for the pension
plans are as follows:

Firemen's and Unclassified

Policeman's Employee's
Retirement Supplemental Pension &
and Relief Pension & Relief
System Relief System System

Measurement date June 30, 2017

Retirees and beneficiaries currently
receivina benefits 3,017 388 10
Inactive members entitled to benefits but
not yet receiving them including 307 future
pensioners currently receiving benefits from the
Supplemental System 421 12 0
~.ctive members 3,852 1,439 3
!Total participants 7,290 1,839 13

83
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Each of the plans have stand-alone financial reports. See page 22 for the addresses where the
reports can be obtained. They are also available on the City's website at www.birminghamal.gov,
Open Data, Finance.

6. Net Pension Liability

The net pension liability (NPL) is the difference between the "Total Pension Liability" (TPL) and
the plan's "fiduciary net position" (FNP). The total pension liability (TPL) is the present value of
pension benefits that are allocated to current members due to past service by entry age normal
actuarial cost method. The (TPL) includes benefits related to projected salary and service, and
automatic cost of living adjustments (COLA's). In addition, ad hoc Cola's are also included in
the (TPL) to the extent they are substantively automatic. The (FNP) is determined on the same
basis used by the pension plans. The City's net pension liability was measured as of June 30,
2017 and the total pension liability used to calculate the net pension liability was determined by
an actuarial valuation as of that date.

Firemen's
and Unclassified
Policeman's Employee's
Retirement Supplemental Pension &
and Relief Pension Relief
Net Pension Liability System System System
Measurement Date June 30, 2017
Total Pension Liability $1,745,211,041 $99,890,669 $533,001
Fiduciary Net Position 1,038,084,945 43,175,285 769,489
Net Pension Liability $707,126,096 $56,715,384 $(236,488)
Plan Fiduciary Net Position as a 59.48% 43.22% 144.37%
percentage of Total Pension
Liability

A schedule of Net Pension Liability, in addition to the information above, includes multi-year trend
information (beginning with FY 2015) and is presented in the Required Supplementary Information
section on page 86.

84
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

7. Schedule of Changes in Net Pension Liability

Changes in the City's net pension liability presented below are calculated on the same basis as
each of the plans. The Change in Net Pension Liability for Retirement and Relief System,
Firemen's and Policemen's Supplemental, and Unclassified Pension and Relief System pension
plans for the Fiscal Year ended June 30, 2017 are as follows:

Retirement and Relief System

Total Pension Plan Fiduciary Net Pension

Change in Net Pension Liability Liability Net Position Liability
Service Cost $61,202,895 $61,202,895
Interest on Total Pension Liability 81,787,344 81,787,344
Change in Benefit Terms
Difference Between Expected and (31,185,752) (31,185,752)
Actual Experience
Employer Contributions 16,554,808 (16,554,808)
Employee Contributions 14,030,922 (14,030,922)
Pension Plan Net Investment Income 109,852,441 (109,852,441 )
Assumption Changes (304,984,286) (304,984,286)
Benefit Payments, Including Refunds (83,864,528) (83,864,528)
Administrative Expense (284,778) 284,778
Net Change (277 ,044,327) 56,288,865 (333,333,192)
Net Pension Liability Beginning 2,022,255,368 981,796,080 1,040,459,288
Net Pension Liability Ending $1,745,211,041 1,038,084,945 $707,126,096

85
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The City is allocated a proportional share of 96.72% of the net pension liability of the Retirement
and Relief System, with the allocation based on July 1, 2016 valuation pay. This basis intended
to measure the proportion of each employer's long-term funding requirements. The City's
allocated share of the net pension liability is $683,932,360. The remaining liability of $23,193,736
is allocated to the Birmingham Airport Authority, a component unit of the City. The following table
presents the allocation between the reporting entity and the component unit.

2017
Pay in July
1,2015 Proportion Proportionate Proportionate
Actuarial of Net Share of Net Share of
Valuation Pension Pension Pension
Data Liabilit~ Liabilit~ Ex~ense
City of $193,643,689 96.72% $683,932,360 $94,302,643
Birmingham(without
Airport
Airport Authority 6,561,793 3.28% 23,193,736 3,198,022
Total $200,205,482 100.00% $707,126,096 $97,500,665

86
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Firemen's and Policemen's Supplemental Pension System

Plan Net
Total Pension Fiduciary Net Pension
Change in Net Pension Liabilit~ Liabilit~ Position Liability
Service Cost $6,244,629 $6,244,629
Interest on Total Pension Liability 7,076,281 7,076,281
Benefit Changes
Difference Between Expected and (687,720) (687,720)
Actual Experience
Employer Contributions 4,354,660 (4,354,660)
Employee Contributions 4,336,141 (4,336,141)
Contributions - Fire Tax 323,369 (323,369)
Pension Plan Net Investment 4,172,814 (4,172,814)
Income
Assumption Changes
Benefit Payments (14,185,871) (14,185,871 )
Administrative Expense (55,250} 55,250
Net Change (1,552,681) (1,054,137) (498,544)
Net Pension Liability Beginning 101,443,350 44,229,422 57,213,928
Net Pension Liability Ending $99,890,669 43,175,285 $56,715,384

Unclassified Employees' Pension & Relief System

Plan Net
Total Pension Fiduciary Net Pension
Change in Net Pension Liability Liabilit~ Position Liability
Service Cost $952 $952
Interest on Total Pension Liability 36,865 36,865
Difference Between Expected and
Actual Experience (72,043) (72,043)
Employee Contributions 780 (780)
Pension Plan Net Investment
Income 41,943 (41,943)
Assumption Changes 66,025 66,025
Benefit Payments (50,888) (50,888)
Administrative Expense (17,312} 17,312
Net Change (19,089) (25,477) 6,388
Net Pension Liability Beginning 552,090 794,966 (242,876}
Net Pension Liability Ending $533,001 769,489 $(236,488}

87
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

8. Discount Rate

Retirement and Relief System -The blended discount rate used to measure the total pension
liability is 5.43%. The projection of cash flows used to determine the discount rate assumed
contributions will continue to be made at 7.00% of compensation from plan members and 7.00%
of compensation from the City through June 30,2017, with City contributions increasing to 7.25%
beginning July 1, 2017, 8.50% beginning July 1, 2018, and 9.00% effective July 1, 2020. For this
purpose, only employer contributions that are intended to fund benefits of current plan members
and their beneficiaries are included. Projected employer contributions that are intended to fund
the service costs of future plan members and their beneficiaries are excluded, as are projected
employee contributions from future plan members. Based on these assumptions, the System's
fiduciary net position was not projected to be available to make all projected future benefit
payments of current plan members. Therefore, the long-term expected rate of return on the
System's investments was applied to the first 29 periods of projected benefit payments and a
3.58% municipal bond rate was applied to all periods thereafter to determine the total pension
liability. The 3.58% municipal bond rate was based on the S&P Municipal Bond 20 Year High
Grade Rate Index as of June 30,2017.

Firemen's and Policemen's Supplemental Pension System - The blended discount rate used
to measure the total pension liability is 7.50%. The projection of cash flows used to determine the
discount rate assumed contributions will continue to be made at 5.22% of compensation from plan
members, and 5.83% of compensation from the City effective July 1,2017. For this purpose, only
employer contributions that are intended to fund benefits of current plan members and their
beneficiaries are included. Projected employer contributions that are intended to fund the service
costs of future plan members and their beneficiaries are excluded, as are projected employee
contributions from future plan members. Based on these assumptions, the System's fiduciary net
position was not projected to be available to make all projected future benefit payments of current
plan members. Therefore, the long-term expected rate of return on the System's investments was
applied to all periods of projected benefit payments to determine the total pension liability.

Unclassified Employees' Pension & Relief System - The blended discount rate used to
measure the total pension liability is 5.00%. The projection of cash flows used to determine the
discount rate assumed no future contributions will be made, and employees will contribute $10
on a bi-weekly basis. Based on this assumption, the System's fiduciary net position was projected
to be available to make all projected future benefit payments of current plan members. Therefore,
the long-term expected rate of return on the System's investments was applied to all periods of
projected benefit payments to determine the total pension liability.

88
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

9. Sensitivity of the net pension liability to changes in the discount rate

The following presents the net pension liability for each of the City's plans, calculated using
the discount rate, as well as what the City's net pension liability would have been is it were
calculated using a discount rate that is 1-percent-point lower and 1-percent-point higher than the
current rate:

Sensitivity

Current
1% Decrease Discount Rate 1% Increase
{4.43%} {S.43%} {6.43%}
Retirement and Relief System $934,877,904 $707,126,096 $517,749,069

Current
1% Decrease Discount Rate 1% Increase
{6.S0%} {7.S0%} {B.SO%}
Firemen's and Policemen's $61,787,411 $56,715,384 $51,978,111
Supplemental Pension System

Current
1% Decrease Discount Rate 1% Increase
{4.00%} {S.OO%} {6.00%}
Unclassified Employees' Pension & $(195,443) $(236,488) $(271,848)
Relief System

89
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

10. Schedule of Deferred Outflows and Inflows of Resources

Deferred outflows of resources and deferred inflows of resources by source reported by the
City at June 30, 2017 for each plan are as follows:

Firemen's and Unclassified

Retirement and Relief Policemen's Supplemental Employees' Pension &
System Pension System Relief System

Deferred Deferred Deferred

Outflows of Deferred Outflows Deferred Outflows Deferred
Resources Inflow of of Inflow of of Inflow of
Resources Resources Resources Resources Resources Resources
Differences between
expected and actual $18,221,509 $25,135,714 - $(1,203,362)
Changes of
assumptions 290,251,164 245,817,333 243,594 (17,908,604)
Change in proportionate
share 1,230,801
Net difference between
projected and actual
earninQs 22,117,147 2,608,028 $40,099
Total $330,589,820 $272,183,848 $2,851,622 $(19, 111,966) $40,099

Amounts reported as deferred outflows of resources and deferred inflows of resources

related to pensions at June 30, 2017 will be recognized in pension expense as follows:

Firemen's
and Unclassified
Policemen's Employees'
Retirement Supplemental Pension &
and Relief Pension Relief
Years ended June 30, System System System

2018 $38,271,498 $(1,580,973) $18,113

2019 38,271,498 (1,580,973) 18,113
2020 33,047,700 (2,097,382) 4,649
2021 3,024,702 (2,902,884) (776)
2022 (54,209,426) (2,692,560)
Thereafter
(5,405,572)

90
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

11. Assumptions and Other Data

Firemen's and Unclassified

Policemen's Employees'
Schedule of Retirement and Supplemental Pension & Relief
Assum~tions Relief System Pension System System
Valuation Date July1,2016 July 1, 2016 July 1,2016
Actuarial Cost Method Entry Age Normal Entry Age Normal Aggregate Cost
Method
Amortization Method Level Percent of Level Percent of Level Percent of
Payroll Payroll Payroll
Amortization Period 30 Years 30 Years 30 Years
Asset Valuation 5 Year Smooth 5 Year Smooth 5 Year Smooth
Method

Investment Rate of 7.50% 7.50% 5.00%

Return
Inflation 2.50% 2.50% N/A
Salary increases 2.50%, plus age or 2.50%, plus 2.50%, plus age-
service-related service-related related salary scale
salary scale salary scale
Mortality Rates RP-2014 Blue Collar RP-2014 RP-2014
Healthy Mortality Blue Collar Blue Collar Healthy
Table Healthy Mortality Mortality Table
RP-2014 Disabled Table RP-2014 Disabled
Retiree Mortality RP-2014 Disabled Retiree Mortality
Table Retiree Mortality Table
Table

91
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

The actuarial assumptions used in the July 1, 2016 valuation were based on the results of an
experience study for the period July 1, 2010 to June 30, 2015. The long-term expected rate of
return on pension plan investments was determined using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. Best
estimates of arithmetic real rates of return for each major asset class included in the System's
target asset allocation as of June 30, 2017 are summarized in the following tables:

Retirement and
Relief System
Target
Asset Class Allocation Long-term Expected Real Rate of
Return
Large cap domestic 35% 6.9%
equity
Small and mid-cap
domestic equity 10% 7.8%
International equity 20% 6.7%
Fixed income (core) 10% 2.9%
Short-term high yield
fixed income 5% 4.9%
REITs 5% 5.5%
Hedge Funds 15% 3.7%
Total 100%

92
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Firemen's and
Policemen's
Supplemental
Pension System
Target
Asset Class Allocation Long-term Expected Real Rate of
Return
Large cap domestic 35% 6.9%
equity
Small and mid-cap 10%
domestic equity 7.8%
International equity 20% 6.7%
Intermediate fixed 10% 2.9%
income
Short-term high yield 5%
fixed income 4.9%
Alternative debt 3% 2.9%
strategy
Hedge Funds 17% 3.9%
Total 100%

Unclassified Employees' Pension &

Relief System
Target
Asset Allocation Long-term Expected Real Rate of
Class Return
Equity 60% 6.71%
Fixed 40% 2.11%
income
Total 100%

93
 City of Birmingham , Alabama
Notes to the Financial Statements
June 30, 2017

OTHER POSTEMPLOYMENT BENEFIT OBLIGATION

Annual Other Postemployment Benefit Obligation

The City's annual other postemployment benefit (OPEB) expense is calculated based on the
annual required contribution (ARC), an amount actuarially determined in accordance with
GASB Statement No. 45. The actuarial cost method used in this valuation to determine the
actuarial accrued liability and the ARC in the entry age normal, level dollar method. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover normal
cost each year and amortize any unfunded actuarial accrued liabilities over a period not to
exceed 30 years. The City has elected to amortize the unfunded actuarial accrued liability
over 30 years using a level dollar, closed amortization period. The remaining amortization
period at June 30, 2015 was 22 years. The discount rate used for the determination of the
expense for fiscal year 2015 is 3.80%. Total employer contributions for fiscal year 2017 were
approximately $2 million net of participants' and pension plans' contributions. The City's
annual OPES cost and net OPES obligation to the plan for the current year were as follows
(in thousands):

Annual required contribution $ 18,980

Interest on net OPEB obligation 1,911
ARC adjustment (3,288)
Annual OPEB Cost 17,603
Contributions Made (2,056)
Change in Net OPEB 15,547
Net OPES Obligation, beginning of year 50,281
Net OPEB Obligation, end of year $ 65,828

The City's annual OPEB cost, the percentage of annual OPEB cost contribution to the plan,
and the net OPEB obligation for fiscal year 2017 and the three preceding years are as
follows (in thousands):
Net OPEB Percentage
Fiscal Obligation AnnualOPEB
Year Annual Employer End of Cost
Ended OPEB Cost Contributions Year Contributed
2015 14,288 7,600 37,197 53.19%
2016 17,961 4,876 50,281 27.15%
2017 17,603 2,056 65,828 11.75%

Funded status

As of June 30, 2015, the most recent actuarial valuation date, the Plan was not funded. The
actuarial accrued liability for benefits equaled $161,029,745, resulting in an unfunded actuarial
accrued liability (UAAL) of $161,029,745. The covered payroll (annual payroll of active

94
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

employees covered by the Plan) equaled $190,001,968, and the ratio of the UAAL to the
covered payroll equaled 84.75%.

Actuarial Valuations

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Estimates
include assumptions about future employment, mortality, and the healthcare cost
trend. Amounts determined regarding the funded status of the plan and the annual required
contributions of the City are subject to continue revision as actual results are compared with
past expectations and new estimates are made about the future.

In the actuarial valuation dated June 30, 2015, the projected unit credit cost actuarial method
was used. Because the City funds its OPEB on a pay-as-you-go basis, the plan has no assets
(investments) legally held exclusively for paying the post-retirement medical benefits. Based
on the market value of assets method of asset valuation, the actuarial assumptions included
a 3.80% discount rate, which approximates the expected rate of return on non-pension
investments held by the City, including inflation at 2.50%. Actuarial assumptions also included
an annual medical cost trend rate of 8.0% initially, reduced to an ultimate rate of 5.0% for
costs after twelve years. The UML is being amortized as a level percentage of pay over thirty
years on an open basis.

Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the City and plan members) and include the types of benefits provided
at the time of each valuation. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the
calculations.

At June 30, 2015 plan valuation date, membership was as follows:

Current retirees, beneficiaries and dependents receiving
medical and prescription drug benefits or life insurance
coverage 2,302
Current active members 3,728
Total plan members 6,030

Health care trend measures the anticipated overall rate at which health plan costs are
expected to increase in future years. The rates shown below are "net" and are applied to the
net per capita costs shown above. The trend shown for a particular plan year is the rate that
must be applied to that year's cost to yield the next year's projected cost.

95
 City of Birmingham, Alabama
Notes to the Financial Statements
June 30, 2017

Rate (%)
Year Ending June 30, Medical Prescription Drug
2017 7.75% 11.25%
2018 7.50% 10.50%
2019 7.25% 9.75%
2020 7.00% 9.00%
2021 6.75% 8.25%
2022 6.50% 7.50%
2023 6.25% 6.75%
2024 6.00% 6.00%
2025 5.75% 5.25%
2026 5.50% 5.00%
2027 5.25% 5.00%
2028 & thereafter 5.00% 5.00%

I. Subsequent Events

In September, 2017 the City reached a settlement agreement with Norfolk Southern Railway
Company with respect to all cases and tax refund claims after discovering that the Company's
location generating the taxes at issue was not located in the corporate limits of the City. The
City refunded approximately $1.6 million to Norfolk.

96
REQUIRED SUPPLEMENTARY
INFORMATION
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30, 2017

Sc:hedule of Changes in the Plan's Net Pension Liability and Related Ratios

Retirement and Relief System 2017 2016 2015 2014

Total Pension Liability
Service Cost $ 61,202,895 $ 43,377,051 $ 36,945,277 $ 35,473,452
Interest 81,787,344 80,457,568 80,340,821 78,078,837
Changes of Benefit Terms (337,185)
Differences Between Expected and Actual
Experience (31,185,752) 19,757,884 11,335,035
Changes of Assumptions (304,984,286) 382,927,078 89,619,076
Benefit Payments, Including Refunds of Employee
Contributions (83,864,528) (78,753,617) (76,439,094) (72,124,342)
Net Change in Total Pension Liability (277,044,627) 447,428,779 141,801,115 41,427,947

Total Pension Liability - Beginning. 2,022,255,36 1,574,826,58 1,433,025,474 1,391,597,527

Total Pension Liability - Ending (a) $1,745,211,041 $ 2,022,255,368 $1,574,826,589 $ 1,433,025,474

Plan fiduciarY net ~osition

Contributions - Employer $ 16,554,808 $ 16,370,100 $ 14,464,552 $ 14,039,103
Contributions- Employee 14,030,922 13,843,088 12,227,545 11,984,752
Net Investment Income 109,852,441 4,081,529 43,686,697 143,936,432
Benefit Payments, Including Refunds of
Employee Contributions (83,864,528) (78,753,617) (76,439,094 ) (72,124,342)
Administrative Expense (284,778) (266,304) (178,807) (186,812)
Other
Net Change in Plan Fiduciary Net Position 56,288,865 (44,725,204 ) (6,239,107) 97,649,133

Plan Fiduciary Net Position - Beginning 981,796,080 1,026,521,284 1,032,760,391 935,111,258

Plan Fiduciary Net Position - Ending (b) 1,038,084,945 981,796,080 1,026,521,284 1,032,760,391
The Plan's Net Pension Liability - Ending (a)-(b) $ 707,126,096 $ 1,040,459,288 $ 548,305,305 $ 400,265,083

Plan Fiduciary Net Position as a PElrcentage

of the Total Pension Liability 59.48% 48.55% 65.18% 72.07%
Covered Employee Payroll $ 200,441,743 $ 197,758,400 $ 188,116,077 $ 184,380,800
The Plan's Net Pension Liability as a
Percentage of covered Employee Payroll 352.78% 526.13% 291.47% 217.09%

97
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30, 2017
Schedule of Investment Returns
Annual money-weighted rate ofreturn,
net of investment expense 11.79% 1.38% 4.68%

Notes to the above schedule:

Benefit changes: The only change in benefit provisions since GASB 67 implementation was an increase in the Retirement and Relief contribution rate
from 6.50% to 7.00%, reflected in the June 30, 2016 disclosure.
Change of assumptions: The discount rate for GASB reporting purposes increased from 4.13% as of June 30, 2016 to 5.43% as of June 30, 2017. A
detailed study of experience for the City's Retirement and Relief System for the five-year period ending June 30, 2015 was performed and the
recommendations of the experience study were approved by the Board in May, 2016. The following assumptions changes were reflected for the first time
in the June 30, 2016 disclosure:
~ The investment return assumption was increased from 7.00% to 7.50%.
~ The inflation assumption was lowered from 3.00% to 2.50%.
~ The payroll growth rate assumption (used for determining the amortization ofthe unfunded actuarial accrued liability) was lowered from 3.00%
to 2.50%.
~ The age-based salary scale assumption for General Employees was maintained, with the individual rates lowered. The salary scale assumption
for Fire and Police was restructured from an age-related to service-related set of rates, to reflect actual plan experience.
~ The administrative expense assumption was increased from $150,000 to $175,000.
~ The pre-retirement mortality assumption was changed from the sex-distinct RP-2000 Combined Health Mortality Table, with rates set forward
two years for both males and females, to the sex-distinct RP-2014 Blue Collar Employee Mortality Table with rates set forward two years for
males and four years for females. This table is projected generationally with Scale MP-2015.
~ The post-retirement mortality assumption for healthy annuitants was changed from the sex-distinct RP-2000 Combined Healthy Mortality
Table, with rates set forward two years for both males and females, to the sex-distinct RP-2014 Blue Collar Healthy Annuitant Mortality Table
with rates set forward two years for males and four years for females. This table is projected generationally with Scale MP-2015.
~ The mortality assumption for disable retires was changed from the sex-distinct RP-2000 Disabled Retiree Mortality Table, multiplied by 70%,
to the sex-distinct RP-2014 Disabled Retiree Mortality Table. This table is projected generationally with Scale MP-2015
~ Retirement rates were modified for all groups to better reflect actual experience and expected future patterns.
~ The BackDROP utilization assumption was lowered from 100% for all groups to 40% for General Employees, 90% for Firefighters and 70%
for Police Officers.
~ The turnover assumption for all groups was modified from a five-year select-and ultimate assumption based on age to an assumption based on
years of service. The rates reHect higher rates during earlier periods of employment. The rates for General Employees are higher than the rates
for Police and Fire. The ultimate rate was set to zero for Police and Fire employees with twenty or more years of service.
~ The disability rates were modified for all groups to better reflect actual experiences and expected future patterns. The on-the-job disability
assumption was lowered from 100% to 80% of all disabilities for Firefighters only.
~ The percent married assumption was lowered from 80% to 75%.

98
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

Health Department Employees 2017 2016 2015 2014

Total Pension Liability
Service Cost $ 49,939 $ 61,004 $ 64,181 $ 62,675
Interest 778,040 749,345 764,708 765,878
Changes of Benefit Terms
Differences Between Expected and Actual
Experience 70,755 (187,011) (202,192)
Changes of Assumptions (84,528)
Benefit Payments, Including Refunds of Employee
Contributions (901,200) (838,553) (853,769) (836,771)
Net Change in Total Pension Liability (2,466) (299,743) (227,072) (8,218)

Total Pension Liability - Beginning 10,824,469 11,124,212 11,351,284 11,359,502

Total Pension Liability - Ending (a) $ 10,822,003 $ 10,824,469 $ 11,124,212 $ 11,351,284

Plan fiduciary net position

Contributions - Employer $ 12,517 $ 12,474 $ 13,888 $ 14,707
Contributions- Employee 31,164 31,055 34,556 36,616
Net Investment Income 1,662,389 61,975 665,531 2,288,551
Benefit Payments, Including Refunds of Employee
Contributions (901,200) (838,553) (853,769) (836,771)
Administrative Expense
Other
Net Change in Plan Fiduciary Net Position 804,870 (733,049) (139,794) 1,503,103

Plan Fiduciary Net Position - Beginning 14,880,920 15,613,969 15,753,763 14,250,660

Plan Fiduciary Net Position - Ending (b) 15,685,790 14,880,920 15,613,969 15,753,763
The Plan's Net Pension Liability - Ending (a) - (b) $ (4,863,787) $ (4,056,451) $ (4,489,757) $ (4,402,479)

Plan Fiduciary Net Position as a Percentage

of the Total Pension Liability 144.94% 137.47% 140.36% 138.78%

Covered Employee Payroll $ 519,400 $517,583 $ 575,933 $ 610,267

The Plan's Net Pension Liability as a
Percentage of covered Employee Payroll -936.42% -783.73% -779.56% -721.40%

99
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30, 2017

Notes to the above schedule:

Benefit changes: There have been no changes to benefits provisions since the implementation ofGASB 67.
Change of assumptions: The following changes were reflected for the first time in the June 30, 2016 disclosure:
~ The investment retum assumption was increased from 7.00% to 7.50%, and the inflation assumption was lowered from 3.00% to 2.50%.
~ Individual salary scale rates were lowered at each age in conjunction with the decrease in the inflation assumption.
~ The pre-retirement mortality assumption was changed from the sex-distinct RP-2000 Combined Healthy Mortality Table, with rates set forward
two years for both males and females, to the sex-distinct RP-2014 Blue Collar Employee Mortality Table with rates set forward two years for
males and four years for females.
~ The post-retirement mortality assumption for healthy annuitants was changed from the sex-distinct RP-2000 Combined Health Mortality Table,
with rates set forward two years for both males and females, to the sex-distinct RP-2014 Blue Collar Healthy Annuitant Mortality Table with
rates set forward two years for males and four years for females.
~ The mortality assumption for disabled retires was changed from the sex-distinct RP-2000 Disabled Retiree Mortality Table, multiplied by 70%,
to the sex-distinct RP-2014 Disable Retiree Mortality Table.
~ All mortality tables are projeGted generationally with Scale MP-2015.

100
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

Schedule ofthe Employer's Contributions

Retirement and Relief System

2017 2016 2015 2014

Actuarially Determined Contributions $30,564,212 $29,898,918 $ 30,398,187 $ 30,553,712

Contributions in Relation to the

Actuarially Determined Contributions 16,554,808 16,370,100 14,464,552 14,039,103

Contribution Deficiency (Excess) 14,009.404 13,528,818 15,933,635 16,514,609

Covered Employee Payroll* 200,441,743 197,758,400 188,116,077 184,380,800

Contributions as a Percentage of
Covered Employee Payroll 8.26% 8,28% 7.69% 7.61%

Schedule ofthe Employer's Contributions

Health Department Employees

2017 2016 2015 2014
Actuarially Determined Contributions $ $ $ $

Contributions in Relation to the

Actuarially Determined Contributions 12,517 12,474 13,888 14,707

Contribution Deficiency (Excess) (12,5171 (12,4741 (13,8881 (14,7071

Covered Employee Payroll* 519,400 517,583 575,933 610,267

Contributions as a Percentage of
Covered Employee Payroll 2.41% 2.41% 2.41% 2.41%

Notes to Schedule:

*Payroll is estimated based on the actual employee contributions received and a 7.00% contribution rate, for Health Department Employees the rate is 6.00%.
Historical infonnation prior to implementation of GASB 67/68 is not required.

101
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

1. The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional
information as of the latest actuarial valuation follows.

Valuation date 7/1/16

Actuarial cost method Entry Age Normal Cost

Amortization method Level percent of payroll, using 2.5% annual increases

Remaining amortization period Rolling 30 years

Asset valuation method Market value of assets less unrecognized returns in each of the last five years. Unrecognized return
is equal to the difference between the actual market return and the expected return on the market
value, and is recognized over a 5 year period, further adjusted, if necessary, to be within 20% of the
market value.

Actuarial assumptions:

Investment rate of return 7.50%, including inflation, net of pension plan investment expense
Proj ected salary increase 2.50%, plus age-related salary scale based on participant group

Inflation rate 2.50%

Cost ofliving adjustments N/A

102
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

Sehedule of Changes in the Plan's Net Pension Liability and Related Ratios

Firemen's and Policemen's Supplemental Pension 2017 2016 2015 2014

System
Total Pension Liability
Service Cost $ 6,244,629 $ 8,428,083 $ 7,944,887 $ 7,504,493
Interest 7,076,281 6,601,838 6,642,762 6,517,060
Changes of Benefit Terms 627,885
Differences Between Expected and Actual Experience
(687,720) (16,324) (869,040)
Changes of Assumptions - (23,025,349) 365,390
Benefit Payments, Including Refunds of Employee
Contributions (14,185,871) (15,214,638) (11,943,335) (11,712,272)
Net Change in Total Pension Liability (1,552,681 ) (22,598,505) 2,140,664 2,309,281

Total Pension Liability - Beginning 101,443,350 124,041,855 121,901,191 119,591,910

Total Pension Liability - Ending (a) $ 99,890,669 $101,443,350 $ 124,041,855 $ 121,901,191

Plan fiduciary net position

Contributions - Employer $ 4,354,660 $ 4,364,213 $ 4,212,776 $ 4,090,689
Contributions- Employee 4,336,141 4,348,710 4,197,254 4,074,251
Contributions-Fire tax 323,369 404,462 362,196 209,691
Transfer from Limited Eremen's Pension 104,208
Net Investment Income 4,172,814 (445,516) 1,028,214 6,708,660
Benefit Payments, Including Refunds of Employee
Contributions (14,185,871) (15,214,638) (11,943,335) (11,712,272)
Administrative Expense (55,250) (72,692) (75,251) (36,850)
Net Change in Plan Fid.uciary Net Position (1,054,137) (6,615,461) (2,218,146) 3,438,377

Plan Fiduciary Net Position - Beginning 44,229,422 50,844,883 53,063,029 49,624,652

Plan Fiduciary Net Position - Ending (b) 43,175,285 44,229,422 50,844,883 53,063,029

The Plan's Net Pension Liability - Ending (a) - (b) $ 56,715,384 $57,213,928 $ 73,196,972 $ 68,838,162

Plan Fiduciary Net Position as a Percentage

of the Total Pension Liability 43.22% 43.60% 40.99% 43.53%

103
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017
Covered Employee Payroll $ 83,067,835 $83,308,621 $ 80,407,165 $ 78,050,785
The Plan's Net Pension Liability as a
Percentage of covered Employee Payroll 68.28% 68.68% 91.03% 88.20%

Schedule of Investment Returns

Annual money-weighted rate ofretum,
net of investment expense 10.51% .19% 2.20%

Notes to the above schedule:

Benefit changes: There were no plan changes reflected for the first time in the June 30, 2017 disclosure. In the June 30, 2016 disclosure, the Retirement and Relief contribution rate from 6.50%
to 7.00%, which impacted the transfers from this System to the Retirement and Relief System.
Change of assumptions: There were no assumption changes reflected for the first time in the June 30, 2017 disclosure. The following assumptions changes were reflected for the first time in
the June 30, 2016 disclosure:
~ The investment return assumption was increased from 7.00% to 7.50%.
~ The inflation assumption was lowere:d from 3.00% to 2.50%.
~ The payroll growth rate assumption (used for determining the amortization of the unfunded actuarial accrued liability) was lowered from 3.00% to 2.50%.
~ The salary scale assumption was restructured from an age-related to a service-related set of rates to reflect actual plan experience.
~ The pre-retirement mortality assumption was changed from the sex-distinct RP-2000 Combined Healthy Mortality Table, with rates set forward two years for both males and females,
to the sex-distinct RP-2014 Blue Collar Employee Mortality Table with rates set forward two years for males and four years for females. This table is projected generationally with
Scale MP-2015.
~ The post-retirement mortality assumption for healthy annuitants was changed from the sex-distinct RP-2000 Combined Healthy Mortality Table, with rates set forward two years
for both males and females, to the sex-distinct RP-20 14 Blue Collar Healthy Annuitant Mortality Table with rates set forward two years for males and four years for females. This
table is projected generationally with Scale MP-2015.
~ The mortality assumption for disabk retires was changed from the sex-distinct RP-2000 Disabled Retiree Mortality Table, multiplied by 70%, to the sex-distinct RP-2014 Disabled
Retiree Mortality Table. This table is projected generationally with Scale MP-2015.
~ Retirement rates were modified for all groups to better reflect actual experience and expected future patterns.
~ The BackDROP utilization assumption was lowered from 100% for both Fire and Police to 90% for Firefighters and 70% for Police Officers.
~ The turnover assumption was modified from a five-year select-and ultimate assumption based on age to an assumption based on years of service. The rates reflect higher rates
during earlier periods of employment. The ultimate rate was set to zero for Police and Fire employees with twenty or more years of service.
~ The disability rates were modified to better reflect actual experiences and expected future patterns. The on-the-job disability assumption was lowered from 100% to 80% of all
disabilities for Firefighters only.
~ The percent married assumption waf: lowered from 80% to 75%.

104
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

Schedule of the Employer's Contributions

Firemen's and Policemen's Supplemental Pension System

2017 2016 2015 2014

Actuarially Determined Contributions* $5,092,012 $4,960,548 $ 6,038,436 $ 5,839,810

Contributions in Relation to the

Actuarially Determined Contributions 4,354,660 4,364,213 4,212,776 4,090,689

Contribution Deficiency (Excess) 737,352 596.335 1.825.660 1.749.121

Covered Employee Payroll** 83,067,835 83,308,621 80,407,165 78,050,785

Contributions as a Percentage of
Covered Employee Payroll 5.24% 5.24% 5.24% 5.24%

Notes to Schedule:

*The actuarially determined contribution is equal to the total calculated contribution in the most recent actuarial valuation, minus the portion expected to
be covered by employee contributions.
**Payroll is estimated based on the actual employee contributions received and a 5.22% contribution rate.
Historical information prior to implen:entation of GASB 67/68 is not required.

105
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

2. The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional
information as of the latest actuarial valuation follows.

Valuation date 7/1/16

Actuarial cost method Entry Age

Amortization method Level percent of payroll, using 2.50% annual increases

Remaining amortization period Rolling 30 years

Asset valuation method Market value of assets less unrecognized returns in each of the last five years. Unrecognized return
is equal to the difference between the actual market return and the expected return on the market
value, and is recognized over a 5 year period, further adjusted, if necessary, to be within 20% of the
market value.

Actuarial assumptions:

Investment rate of return 7.50%, including inflation, net of pension plan investment expense
Proj ected salary increase 2.50%, plus age-related salary scale based on participant group

Inflation rate 2.50%

Cost of living adjustments N/A

106
 City of Birmingham, Alabama
Required Supplementary Information
Year ended June 30,2017

Schedule of Funding Progress-OPEB

(Amounts Expressed in Thousands)
Actuarial
Accrued Unfunded
Liability (Overfunded) UAAL as a
Actuarial (AAL)-Entry AAL Covered Percentage
Actuarial Valuation of Age (in (UAAL) (in Funded Payroll (in of Covered
Valuation Date Assets thousands) thousands) Ratio thousands) Payroll
7/1/2007 $ 97,801 $ 97,801 0.00% $ 168,940 57.89%
7/1/2009 $ 77,707 $ 77,707 0.00% $ 187,456 41.45%
7/1/2011 $ 64,475 $ 64,475 0.00% $ 178,835 36.05%
7/1/2013 $ 139,320 $ 139,320 0.00% $ 177,214 78.62%
7/1/2015 $ 161,030 * $ 161,030 0.00% $ 190,002 84.75%

*The actuarially accrued liability of $161,030,000 includes $107,560,000 for active members and $53,470,000 for retirees,
beneficiaries, dependents, and terminated vested members. This table presents multiyear trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

107
OTHER SUPPLEMENTARY INFORMATION
 City of Birmingham, Alabama
Statement of Revenues, Expenses, and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Governmental activities
Internal Service Internal Service
Funds - Healthcare Funds - Healthcare
Plan {Actives} Plan (Retirees} Total
Operating Revenues
City contributions to employee health insurance 34,610 2,057 36,667
City reimbursement excess claims paid
Employee contributions:
Employee health deductions 10,020 1,962 11,982
Rebates:
Stop loss rebate
Prescription drug rebate 256 256
Stop loss rebate - retirees
Prescription drug rebates - retirees
Total Operating Revenues: 44,886 4,019 48,905

Operating Expenses
General and administrative:
Insurance - Fringe Cost ACA Transition Ins 368 368
Insurance - Fringe Cost ACA Transition Ins - Retirees 301 301
Internal Services:
Blue Cross Claims 27,161 27,161
Express Scripts Claims 13,360 13,360
Stop Loss Premium 850 850
Admin Fees - BCBS 1,108 1,108
Express Scripts Fees 50 50
Behavioral Health Fees 785 785
Blue Cross Claims - Retirees 1,520 1,520
Express Script Claims - Retirees 2,969 2,969
Stop Loss Premium - Retirees 54 54
Admin Fees - BCBS Retirees 191 191
Total Operating Expenses: 43,682 5,035 48,717
Operating Income (Loss): 1,204 (1,016} 188

Nonoperating Revenues (Expenses)

Interest income
Total Nonoperating Revenues (Expenses):
Income (Loss) Before Contributions and Transfers: 1,204 (1,016) 188

Transfers
Change in Net Position: 1,204 (1,016) 188
Total Net Position - Beginning 2,298 (770} 1,528
Total Net Position - Ending: $ 3,502 $ (1,786} $ 1,716

The notes to the financial statements are an integral part of this statement
108
 City of Birmingham, Alabama
Combining Statement of Fiduciary Net Position
Pension Trust Funds
June 30, 2017
(amounts expressed in thousands)
Firemen &
Retirement & Policemen Unclassified Total Pension
Relief Supplemental Pension Trust Funds
Assets
Cash and cash equivalents $ 32,202 $ 966 $ 769 $ 33,937
Receivables:
Member loans 10,321 10,321
Interest and dividends 2,988 123 3,111
Total Receivables: 13,309 123 13,432
Investments, at fair value:
U.S. government obligations 92,035 2,051 94,086
Domestic corporate bonds 127,282 7,807 135,089
Domestic stocks 710,988 26,523 737,511
Alternative Investments 78,563 5,735 84,298
Total Investments, at fair value: 1,008,868 42,116 1,050,984
Total Assets: 1,054,379 43,205 769 1,098,353

Liabilities
Accounts payable and other 610 29 639
Total Liabilities: 610 29 639

Net Position
Held in trust for future pension benefits 1,053,770 43,175 769 1,097,714
Total Net Position: $ 1,053,770 $ 43,175 $ 769 $ 1,097,714

The notes to the financial statements are an integral part of this statement
109
 City of Birmingham, Alabama
Combining Statement of Changes in Fiduciary Net Position
Pension Trust Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)
Firemen &
Retirement & Policemen Unclassified Total Pension
Relief Supplemental Pension Trust Funds
Additions
Additions:
Contributions:
Employer contributions $ 16,567 $ 4,355 $ $ 20,922
Plan member contributions 14,062 4,336 18,399
Investment income:
Investment earnings 113,654 4,396 39 118,089
Securities lending 1,050 1,050
Security litigation 13 13
Other income 66 325 3 394
Total Additions: 145,412 13,412 43 158,867
Total Additions: 145,412 13,412 43 158,867

Deductions
Deductions:
Benefits 83,039 11,997 52 95,088
Refunds of contributions 1,727 931 2,658
Administrative expenses 376 1,316 17 1,709
Investment expenses 3,177 222 3,399
Total Deductions: 88,319 14,466 69 102,854
Total Deductions: 88,319 14,466 69 102,854
Change in Net Position: 57,093 (1,054) (26) 56,013
Net Position - Beginning 996,677 44,229 795 1,041,701
Net Position - Ending: $ 1,053,770 $ 43,175 $ 769 $ 1,097,714

The notes to the financial statements are an integral part of this statement
110
 City of Birmingham, Alabama
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Budgeted Amounts

Variance with Final

Budget - Positive
Original Final Actual Amounts (Negative)
Revenues
Taxes $ 286,168 $ 286,269 $ 290,095 $ 3,826
Licenses and permITs 89,467 89,467 80,625 (8,842)
Intergovernmental 12,374 13,460 14,423 963
Charges for services 18,167 18,167 16,231 (1,936)
Fines and forfeitures 2,072 2,072 1,960 (112)
Investment income 200 200 256 56
Other operating revenues 7,756 7,762 6,692 (1,070)
Total Revenues: 416,204 417,397 410,282 (7,115)

Expenditures
Current Expenditures:
Public safety:
Police 97,232 96,982 97,255 (273)
Fire 62,854 62,896 63,434 (538)
Planning Engineering and Permits 13,502 13,502 13,070 432
Traffic Engineering 10,503 10,488 11,334 (846)
Municipal Court 6,384 6,464 6,685 (221)
Street and sanITation:
Public Works 46,606 47,125 47,986 (861)
Nondepartmental
Cultural and recreational:
Park and Recreation 18,232 18,322 17,089 1,233
Library 15,604 15,614 14,574 1,040
Arlington Historical Home 824 837 754 83
Boutwell AudITorium 1,513 1,513 1,532 (19)
Museum of Art 3,583 3,614 3,558 56
Sloss Furnace 1,194 1,161 1,029 132
Southern Museum of Flight 831 831 797 34
State Fairgrounds 4,348 4,303 4,482 (179)
General government:
Finance 12,336 12,336 11,182 1,154
Equipment Management 15,003 15,001 14,956 45
Information Management Services 14,805 14,613 13,252 1,361
City Clerk 1,963 1,582 1,015 567
Community Development 944 1,031 914 117
Council Office 3,798 3,702 3,236 466
Legal 7,253 10,085 9,578 507
Mayors Office 9,623 9,662 9,244 418
Personnel 7,016 7,891 6,772 1,119
Nondepartmental 48,783 47,820 41,677 6,143
Debt Service:
Principal 11,257 12,604 12,883 (279)
Interest and fees 3,720 3,720 3,812 (92)

CapITal Outlay:
Capital outlays 1,368 821 697 124
Total Expenditures: 421,079 424,520 412,797 11,723
Excess (Deficiency) of Revenues Over (Under)
ExpendITures: (4,875) (7,123) (2,515) 4,608

Other financing sources (uses)::

Transfers in 4,234 4,434 4,433 (1)
Transfers out (4,781) (5,564) (5,534) 30
Total Other financing sources (uses):: (547) (1,130) (1,101) 29
Net Change in Fund Balances: (5,422) (8,253) (3,616) 4,637
Fund Balances - Beginning 89,449 89,449 89,449
Fund Balances - Ending: $ 84,027 $ 81,196 $ 85,833 $ 4,637

The notes to the financial statements are an integral part of this statement
111
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)
Total Nonmajor
Special Revenue Debt Service Capital Projects Governmental
Funds Funds Funds Funds
Assets
Cash and investments $ 17,058 $ 950 $ 35,958 $ 53,966
Cash with fiscal agent 781 9,568 10,349
Receivables: 1,003 7 1,010
Total Assets: $ 18,842 $ 950 $ 45,533 $ 65,325

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts 16,392 16,392
Accounts and vouchers payable 872 293 1,165
Contracts payable-retainage 207 897 1,104
Unearned revenue 243 243
Other liabilities 44 44
Total Liabilities: 17,758 1,190 18,948

Fund Balances:
Spendable: 6,561 950 44,343 51,854
Committed to:
Neighborhood Improvements 8,336 8,336
Community Development 137 137
Other Purposes 2,918 2,918
Unassigned: (16,868) (16,868)
Total Fund Balances: 1,084 950 44,343 46,377
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 18,842 $ 950 $ 45,533 $ 65,325

The notes to the financial statements are an integral part of this statement
112
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)

Special Revenue Funds

Neighborhood Highway Municipal Court

Allocation Grants Fund Improvement Fund Fuel Tax Fund Storm Water Fees Technology Correction Fund Judicial Admin
Assets
Cash and investments $ 8,585 $ $ 298 $ 2,601 $ 1,205 $ 54 $ $ 652
Cash with fiscal agent
Receivables:
Accrued interest 3
Accrued taxes 236 113 42
Accounts (net of uncollectibles) 9
Loans 87
Due from other governments
Total Assets: $ 8,676 $ 9 $ 534 $ 2,714 $ 1,247 $ 54 $ $ 652

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts 14,777
Accounts and vouchers payable 97 638 52 9 10 36
Contracts payable-retainage 207
Unearned revenue 243
Other liabilities 44
Total Liabilities: 340 15,622 96 9 10 36

Fund Balances:
Spendable:
Restricted:
Debt Service
Capital Projects 534 2,714 1,151
Other 616
Assigned:
Committed to:
Neighborhood Improvements 8,336
Community Development
Other Purposes 45
Unassigned: (15,613) (10)
Total Fund Balances: 8,336 (15,613) 534 2,714 1,151 45 (10) 616
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 8,676 $ 9 $ 534 $ 2,714 $ 1,247 $ 54 $ $ 652

The notes to the financial statements are an integral part of this statement
113
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)
Debt Service
Special Revenue Funds Funds

Municipal Court HUD Block Grant Special Lodging Land Bank Tax Increment
PACE Board Clerk Fund Fund Home Fund Tax Revenue Authority Total Financing
Assets
Cash and investments $ 6 $ 155 $ $ $ 2,872 $ 630 $ 17,058 $ 816
Cash with fiscal agent 781 781
Receivables:
Accrued interest 4
Accrued taxes 391
Accounts (net of uncollectibles) 10
Loans 87
Due from other governments 349 162 511
Total Assets: $ 787 $ 155 $ 349 $ 162 $ 2,873 $ 630 $ 18,842 $ 816

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts 1,590 25 16,392
Accounts and vouchers payable 4 26 872
Contracts payable-retainage 207
Unearned revenue 243
Other liabilities 44
Total Liabilities: 1,594 25 26 17,758

Fund Balances:
Spendable:
Restricted:
Debt Service 816
Capital Projects 787 604 5,790
Other 155 771
Assigned:
Committed to:
Neighborhood Improvements 8,336
Community Development 137 137
Other Purposes 2,873 2,918
Unassigned: (1,245) (16,868)
Total Fund Balances: 787 155 (1,245) 137 2,873 604 1,084 816
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 787 $ 155 $ 349 $ 162 $ 2,873 $ 630 $ 18,842 $ 816

The notes to the financial statements are an integral part of this statement
114
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)

Debt Service Funds Capital Projects Funds

Alabama Trust Public

Fund Total Improvement 1993 Bonds 1995 Bonds 1997 Bonds 1998-A Warrants 1998-B Warrants
Assets
Cash and investments $ 134 $ 950 $ 358 $ 64 $ 10 $ 313 $ 14 $ 24
Cash with fiscal agent
Receivables:
Accrued interest
Accrued taxes
Accounts (net of uncollectibles)
Loans
Due from other governments
Total Assets: $ 134 $ 950 $ 358 $ 64 $ 10 $ 313 $ 14 $ 24

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts
Accounts and vouchers payable 14
Contracts payable-retainage
Unearned revenue
Other liabilities
Total Liabilities: 14

Fund Balances:
Spendable:
Restricted:
Debt Service 134 950
Capital Projects 358 64 10 313 24
Other
Assigned:
Committed to:
Neighborhood Improvements
Community Development
Other Purposes
Unassigned:
Total Fund Balances: 134 950 358 64 10 313 24
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 134 $ 950 $ 358 $ 64 $ 10 $ 313 $ 14 $ 24

The notes to the financial statements are an integral part of this statement
115
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)

Capital Projects Funds

2001·A School 2006·C G.O. 2007·B G.O. 2007·AG. O.

1999·B Bonds 2000·A Warrants Warrants 2002 Bonds Warrants Warrants Bonds 2009·A Warrants
Assets
Cash and investments $ 8 $ 9 $ 35 $ 452 $ 39 $ 725 $ 6,471 $ 3
Cash with fiscal agent
Receivables:
Accrued interest 2
Accrued taxes
Accounts (net of un collectibles)
Loans
Due from other governments
Total Assets: $ 8 $ 9 $ 35 $ 452 $ 39 $ 725 $ 6,473 $ 3

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts
Accounts and vouchers payable 34 3 74 9
Contracts payable-retainage 8 101 48
Unearned revenue
Other liabilities
Total Liabilities: 34 8 3 175 57

Fund Balances:
Spendable:
Restricted:
Debt Service
Capital Projects 8 9 444 36 550 6,416 3
Other
Assigned:
Committed to:
Neighborhood Improvements
Community Development
Other Purposes
Unassigned:
Total Fund Balances: 8 9 444 36 550 6,416 3
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 8 $ 9 $ 35 $ 452 $ 39 $ 725 $ 6,473 $ 3

The notes to the financial statements are an integral part of this statement
116
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)

Capital Projects Funds C

2010-Recovery 2016
Zone Econ Dev 2014 PNC2 Historical 2016 A Refunding EquipandPublic
Warr 2013-A Bonds 2013-B Bonds Warrants Preservation Fund 2015-B Bonds Bonds ImprWarrants
Assets
Cash and investments $ 5,564 $ 13,274 $ 2 $ 8 $ $ 1,893 $ 14 $ 5,728
Cash with fiscal agent 9,568
Receivables:
Accrued interest 4
Accrued taxes
Accounts (net of uncoHectibles)
Loans
Due from other governments
Total Assets: $ 5.564 $ 13,278 $ 2 $ 8 $ 9,568 $ 1,894 $ 14 $ 5,728

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts
Accounts and vouchers payable 2 138 4 15
Contracts payable-retainage 12 728
Unearned revenue
Other liabilities
Total Liabilities: 14 866 4 15

Fund Balances:
Spendable:
Restricted:
Debt Service 14
Capital Projects 5,550 12,412 2 8 9,568 1,890 5,713
Other
Assigned:
Committed to:
Neighborhood Improvements
Community Development
Other Purposes
Unassigned:
Total Fund Balances: 5,550 12,412 2 8 9,568 1,890 14 5,713
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 5,564 $ 13,278 $ 2 $ 8 $ 9,568 $ 1,894 $ 14 $ 5,728

The notes to the financial statements are an integral part of this statement
117
 City of Birmingham, Alabama
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
(amounts expressed in thousands)

apital Projects Funds

Total Nonmajor
Governmental
2017 Loam; Total Funds
Assets
Cash and investments $ 950 $ 35,958 $ 53,966
Cash with fiscal agent 9,568 10,349
Receivables:
Accrued interest 7 11
Accrued taxes 391
Accounts (net of uncollectibles) 10
Loans 87
Due from other governments 511
Total Assets: $ 950 $ 45,533 $ 65,325

Liabilities, Deferred Inflows of Resources, and Fund Balances

Liabilities:
Bank overdrafts 16,392
Accounts and vouchers payable 293 1,165
Contracts payable-retainage 897 1,104
Unearned revenue 243
Other liabilities 44
Total Liabilities: 1,190 18,948

Fund Balances:
Spendable:
Restricted:
Debt Service 14 964
Capital Projects 950 44,329 50,119
Other 771
Assigned:
Committed to:
Neighborhood Improvements 8,336
Community Development 137
Other Purposes 2,918
Unassigned: (16,868)
Total Fund Balances: 950 44,343 46,377
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances: $ 950 $ 45,533 $ 65,325

The notes to the financial statements are an integral part of this statement
118
 City of Birmingham, Alabama
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)
Total Nonmajor
Special Revenue Debt Service Capital Projects Governmental
Funds Funds Funds Funds
Revenues
Taxes $ 3,846 $ 1,830 $ $ 5,676
Intergovernmental 31,553 1,797 33,350
Charges for services 274 274
Fines and forfeitures 1,139 1,139
Investment income 59 2 200 261
Other operating revenues 2,024 256 2,280
Total Revenues: 38,895 3,629 456 42,980

Expenditures
Current Expenditures:
Public safety: 4,819 33 4,852
Street and sanitation: 9 1,643 1,652
Cultural and recreational: 326 64 390
General government: . 10,672 1,112 11,784

Debt Service:
Principal 4,494 2,584 7,078
Interest and fees 2,774 983 18 3,775

Capital Outlay:
Capital outlays 15,866 85 21,053 37,004
Total Expenditures: 38,960 3,652 23,923 66,535
Excess (Deficiency) of Revenues Over (Under)
Expenditures: (65) (23) (23,467) (23,555)

Other financing sources (uses)::

Issuance of debt 14,680 14,680
Transfers in 3,982 3,982
Transfers out (3,252) (3,252)
Total Other financing sources (uses):: 730 14,680 15,410
Net Change in Fund Balances: 665 (23) (8,787) (8,145)
Fund Balances - Beginning 420 973 53,129 54,522
Fund Ba!ances - Ending: $ 1,085 ''"" 950 ct' 44,342 $ A~ '>77
-rV,,,,,,,.
'"

The notes to the financial statements are an integral part of this statement
119
 City of Birmingham, Alabama
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Special Revenue Funds

Neighborhood Highway Municipal Court

Allocation Grants Fund Improvement Fund Fuel Tax Fund Storm Water Fees Technology Correction Fund Fair Trial Tax Fund Judicial Admin
Revenues
Taxes $ $ $ $ $
Intergovernmental 7 19,346 2,842 1,325 1,467
Charges for services 84
Fines and forfeitures 69 25 659 200 156
Investment income 45
Other operating revenues 447 224
Total Revenues: 583 19,639 2,842 1,325 1,467 25 661 200 156

Expenditures
Current Expenditures:
Public safety:
Police 286 891 2
Fire 28 17
Planning Engineering and Permits 311 1,362
Municipal Court 311 41 1,319 169
Street and sanitation:
Public Works
Nondepartmental
Cultura! and recreational:
Park and Recreation 138
Library 6
State Fairgrounds 182
Nondepartmental
General government:
Finance 233
Community Development 175 2,323
Mayors Office 68
Nondepartmental 564
Municipal Court 159

Debt Service:
Principal 1,925 685
Interest and fees 776 45

Capital Outlay:
Capital outlays 38 14,786 4 10 52
Total Expenditures: 1,238 19,128 2,705 740 1,362 49 1,376 169 159
Excess (Deficiency) of Revenues OVer (Under)
Expenditures: (655) 511 137 585 105 (24) (715) 31 (3)

Other financing sources (uses)::

Issuance of debt
Transfers in 566
Transfers out (187)
Total Other financing sources (uses):: 379
Net Change in Fund Balances: (276) 511 137 585 105 (24) (715) 31 (3)
Fund Balances - Beginning 8,612 (16,124) 397 2,129 1,046 69 705 (31) 619
Fund Balances - Ending: 8,336 $ (15,613) $ 534 $ 2,714 1,151 45 (10) $ 616

The notes to the financial statements are an integral part of this statement
120
 City of Birmingham, Alabama
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 3D, 2017
(amounts expressed in thousands)

Special Revenue Funds Debt Service Funds

Municipal Court HUD Block Grant Special Lodging Land Bank Tax Increment Alabama Trust
PACE Board Clerk Fund Fund Home Fund Tax Revenue Authority Total Financing Fund Total
Revenues
Taxes $ $ $ $ $ 3,846 $ $ 3,846 $ 1,830 $ $ 1,830
Intergovernmental 5,022 1,544 31,553 1,797 1,797
Charges for services 190 274
Fines and forfeitures 30 1,139
Investment income 2 10 59 2 2
Other operating revenues 1,026 112 215 2,024
Total Revenues: 1,028 30 5,134 1,759 3,856 190 38,895 1,832 1,797 3,629

Expenditures
Current Expendilures:
Public safely:
Police 1,179
Fire 45
Planning Engineering and Permits 1,676
Municipal Court 79 1,919
Street and sanitation:
Public Works 9
Nondepartmental
Cultural and recreational:
Park and Recreation 138
Library 6
State Fairgrounds 182
Nondepartmental
General government:
Finance 233
Community Development 5,134 1,759 9,391
Mayors Office 68
Nondepartmental 58 199 821
Municipal Court 159

Debt Service:
Principal 1,884 4,494 1,195 1,389 2,584
Interest and fees 1,952 2,774 495 488 983

Capital Outlay:
Capital outlays 13 955 15,866 85 85
Total Expenditures: 3,907 79 5,134 1,759 956 199 38,960 1,775 1,877 3,652
Excess (Deficiency) of Revenues Over (Under)
Expenditures: (2,879) (49) 2,900 (9) (65) 57 (80) (23)

Other financing sources (uses)::

Issuance of debt
Transfers in 3,066 350 3,982
Transfers out (3,065) (3,252)
Total Other financing sources (uses):: 3,066 (3,065) 350 730
Net Change in Fund Balances: 187 (49) (165) 341 665 57 (80) (23)
Fund Balances - Beginning 601 204 (1,245) 137 3,038 263 420 759 214 973
Fund Balances - Ending: $ 788 $ 155 $ (1,245) $ 137 $ 2,873 $ 604 $ 1,085 $ 816 $ 134 $ 950

The notes to the financial statements are an integral part of this statement
121
 City of Birmingham, Alabama
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Capital Projects Funds

Public 2001·A School

Improvement '1993 Bonds 1995 Bonds 1997 Bonds 1998·A Warrants 1998·B Warrants 1999·B Bonds 2000·A Warrants Warrants
Revenues
Taxes $ $ $
Intergovernmental
Charges for services
Fines and forfeitures
Investment income 13 2
Other operating revenues 242 14
Total Revenues: 255 14 2

Expenditures
Current Expenditures:
Public safety:
Police
Fire
Planning Engineering and Permits
Municipal Court
Street and sanitation:
Public Works 18
Nondepartmental
Cultural and recreational:
Park and Recreation 20
Library
State Fairgrounds
Nondepartmental
General government
Finance
Community Development
Mayors Office
Nondepartmental 4
Municipal Court

Debt Service:
Principal
Interest and fees

Capital Outlay:
Capital outlays _ _ _-:-::- _ _ _ _ _ _ _ _ _ _---'1c:.4:-1 _ _ _ _--'-13::... _ _ _ _ _..:"-6 _ _ _ _---".,- _ _ _ _ _..I-'(1.L) _ _ _ _-=920..
Total Expenditures: 4 _ _ _ _1;.:8'- _ _ _ _ _ _ _ _ _ _ _ _.:..14:.::5_ _ _ _ _ _ _1:.::3'- _ _ _ _ _ _1:...:4'- _ _ _ _ _..:20:;0'- _ _ _ _ _--'-'(1.L) _ _ _ _ _9"'20..
Excess (Deficiency) of Revenues Over (Under)
Expenditures: 251 _ _ _.>..;(4:J..) _ _ _ _ _ _ _ _ _ _-->..:(1"-
43::.L) _ _ _ _ _(>..:.
13 ::.L) _ _ _ _ _(L:.
14 .:.L) _ _ _ _-.1::(2=0) _ _ _ _---'_ _ _ _ _---'("'92;L)

Other financing sources (uses)::

Issuance of debt
Transfers in
Transfers out
Total Other financing sources (uses)::
Net Change in Fund Balances: 251 (4) (143) (13) (14) (20) (92)
Fund Balances - Beginning 107 68 10 456 13 38 28 8 93
Fund Balances - Ending: $ 358 64 10 .,;$~==.,;3;,;1;;.,3 ~==== ~===.;;2;;,.4 ~===~8 ,.;.===,..,;;9;", =~===.,;1:..

The notes to the financial statements are an integral part of this statement
122
 City of Birmingham, Alabama
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Capital Projects Funds

2010-Recovery
2006·C G.O. 2007·B G.O. 2007·AG. O. Zone Econ Dev 2014 PNC2
2002 Bonds Warrants Warrants Bonds 2009·A Warrants Warr 2013·A Bonds 2013·B Bonds Warrants
Revenues
Taxes $ $ $ $
Intergovernmental
Charges for services
Fines and forfeitures
Investment income 3 4 32 21 79 2
Other operating revenues
Total Revenues: 4 32 21 79 2

Expenditures
Current Expenditures:
Public safety:
Police
Fire
Planning Engineering and Permits 4 11 17
Municipal Court
Street and sanitation:
Public Works 647
Nondepartmental
Cultural and recreational:
Park and Recreation 24 14
Library
State Fairgrounds
Nondepartmental 6
General government:
Finance
Community Development
Mayors Office
Nondepartmental 100 2 4 89
Municipal Court

Debt Service:
Principal
Interest and fees

Capital Outlay:
Capital outlays 173 344 1,890 46 1,248 9,071 299 350
Total Expenditures: 301 359 1,920 49 1,351 9,718 299 350
Excess (Deficiency) of Revenues Over (Under)
Expenditures: (298) (5) (355) (1,888) (49) (1,330) (9,639) (298) (348)

Other financing sources (uses)::

Issuance of debt
Transfers in
Transfers out
Total Other financing sources (uses)::
Net Change in Fund Balances: (298) (5) (355) (1,888) (49) (1,330) (9,639) (298) (348)
Fund Balances - Beginning 742 44 905 8,304 52 6,880 22,051 300 356
Fund Balances· Ending: 444 $ 39 $ 550 $ 6,416 $ 3 $ 5,550 12,412 $ 2 $

The notes to the financial statements are an integral part of this statement
123
 City of Birmingham, Alabama
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
(amounts expressed in thousands)

Capital Projects Funds

2016 Total Nonmajor
Historical 2016 A Refunding EquipandPublic Governmental
Preservation Fund 2015-B Bonds Bonds ImprWarrants 2017 Loans Total Funds
Revenues
Taxes $ $ $ 5,676
Intergovernmental 33,350
Charges for services 274
Fines and forfeitures 1,139
Investment income 20 14 200 261
Other operating revenues 256 2,280
Total Revenues: 20 14 456 42,980

Expenditures
Current Expenditures:
Public safety:
Police 1,179
Fire 45
Planning Engineering and Permits 33 1,709
Municipal Court 1,919
Street and sanitation:
Public Works 673 682
Nondepartmental 970 970 970
Cultural and recreational:
Park and Recreation 58 196
Library 6
State Fairgrounds 182
Nondepartmental
General government:
Finance 233
Community Development 9,394
Mayors Office 186 186 254
Nondepartmental 714 923 1,744
Municipal Court 159

Debt Service:
Principal 7,078
Interest and fees 18 18 3,775

Capital Outlay:
Capital outlays 205 7,173 21,053 37,004
Total Expenditures: 186 1,175 7,905 23,923 66,535
Excess (Deficiency) of Revenues Over (Under)
Expenditures: (166) (1,166) 14 (7,905) (23,467) (23,555)

Other financing sources (uses)::

Issuance of debt 114 13,617 950 14,680 14,680
Transfers in 3,982
Transfers out (3,252)
Total Other financing sources (uses):: 114 13,617 950 14,680 15,410
Net Change in Fund Balances: (166) (1,166) 128 5,712 950 (8,787) (8,145)
Fund Balances - Beginning 9,732 3,056 (114) 53,129 54,522
Fund Balances - Ending: 9,566 $ 1,890 14 $ 5,712 $ 950 44,342 $ 46,377

The notes to the financial statements are an integral part of this statement
124
Statistical Section
This portion of the City of Birmingham's comprehensive annual financial
report presents additional information to be used in conjunction with the
preceding statements to gauge the City's overall financial well-being.

Financial Trends
These schedules present information on how the City's financial
performance has changed over the past ten fiscal years.

Revenue Capacity
These schedules present information on the collection of the City's most
significant local revenue source.

Debt Capacity
These schedules present information on the City's outstanding debt and its
legal authority to issue additional debt in the future.

Demographic and Economic Information

These schedules present indicators ofthe City's demographic and economic
profile.

Operating Information
These schedules present data regarding the City's services and
infrastructure. Many measures of operating activity are presented in the
City's operating budget. Please refer to the City's website
at www.birminghamal.gov for additional information.

Debt/Funding Schedules
These schedules provide details relative to the City's obligations.
 City of Birmingham, Alabama
Net Position by Component
Last Ten Fiscal Years
(in thousands)

Table A-1

2008 2009 2010 2011 2012 2013' 2014 2015 2016 2017

Governmental activities:

Net investment in capital assets $74,322 $65,727 $72,325 $90,213 $133,210 $104,846 $210,160 $149,863 $180,892 $241,975
Restricted 277,817 2(;4,602 157,454 146,478 134,295 189,391 139,831 96,624 146,904 135,178
Unrestricted (78,863) (138,588) (51,384) (62,151) (85,574) (93,426) (127,030) (489,185) (676,744) (790,385)

Total governmental activities net position $273,276 $241,741 $178,395 $174,540 $181,931 $200,811 $222,961 ($242,698) ($348,948) ($413,232)

Business-type activities:

Net investment in capital assets 901 1,022 855 919 919 722 4,167 919 18 18
Unrestricted (464) (1,167) (1,522) 61 2,032 3,861 1,476 6,156 8,109 7,916

Total business-type activities net position 437 ~ (667) 980 2,951 4,583 5,643 7,075 8,127 7,934

Primary Government:

Net investment in capital assets 75,223 (;6,749 73,180 91,132 134,129 105,568 210,160 150,782 180,910 241,993
Restricted 277,817 264,602 157,454 146,478 134,295 189,391 139,831 96,624 146,904 135,178
Unrestricted (79,327) (89,755) (52,906) (62,090) (83,542) (89,565) (127,030) (483,029) (668,635) (782,469)

Total primary government net position $ 273,713 $ 241,596 $ 177,728 $ 175,520 $ 184,882 $ 205,394 $ 222,961 $ (235,623) $ (340,821) $ (405,298)

* - prior to restatement

Source: City Finance Department Data

125
 City of Birmingham, Alabama
Changes in Net Position
Last Ten Fiscal Years
(in thousands)

Table A-2

Fiscal Year Ended June 30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Expenses:
Governmental activities:
General government $ 88,799 $ 121,554 $ 163,581 $ 114,375 $ 126,871 $ 127,856 $ 122,310 232,450 252,118 200,826
Public safety 163,149 169,083 210,132 202,706 194,761 195,022 200,169 196,529 218,603 221,095
Streets & sanitation 93,821 121,848 59,822 54,553 56,109 53,055 78,093 61,527 65,638 66,911
Culture & recreation 43,895 36,132 41,907 40,024 42,705 42,927 40,667 40,987 42,080 48,144
Interest on long-term debt 27,643 25,381 21,473 19,861 17,381 14,933 17,896 39,195 19,441 20,624
Total governmental activities expenses 417,307 473,998 496,915 431,519 437,827 433,793 459,135 570,688 597,880 557,600

Business ..type activities:

E-911 Services 3,935 4,044 4,937 4,754 4,641 4,564 5,220 5,581 6,561 4,373

Total primary government expenses $421,242 $478,042 $501,852 $436,273 $442,468 $438,357 $464,355 $576,269 $604,441 $561,973

Program Revenues:
Governmental activities:
Charges for services
General government:
Business licenses & permits 85,721 91,493 82,726 90,139 97,443 97,495 94,336 180,661 103,430 101,305
Non-business licenses & permits 5,342 4,506 3,747 0 0 0 0 0 0 0
Public safety 14,739 17,502 21,488 17,778 17,011 15,893 16,884 20,253 20,624 16,802
Streets & sanitation 1,450 1,577 595 966 1,196 449 2,675 243 (77) 379
Culture & recreation 1,275 1,341 1,327 1,171 1,506 2,073 1,762 2,055 1,864 1,569
Operating grants and contributions 19,830 15,094 18,898 24,276 25,118 19,540 24,390 57,923 15,382 14,639
Capital grants and contributions 0 0 0 0 0 0 0 7,797 0 0
Total governmental activities program revenues 128,357 131,513 128,781 134,330 142,274 135,450 140,047 268,932 141,223 134,694

Business-type activities:
E-911 Services 3,308 3,447 4,517 6,392 6,608 6,196 6,272 7,003 7,595 4,167

Total primary government program revenues $131,665 $134,960 $133,298 $140,722 $148,882 $141,646 $146,319 275,935 148,818 138,861

126
 City of Birmingham, Alabama
Changes in Net Position
Last Ten Fiscal Years
(in thousands)

Table A-2

Fiscal Year Ended June 30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Net (Expense)/Revenue
Governmental activities ($288,950) ($342,485) $368,134 $297,186 $295,553 $298,343 $319,088 ($301,755) ($456,655) ($422,906)
Business-type activities (627) (597) 420 (1,638) 1,967 1,632 1,052 1,422 1,033 (205)
($289,577) ($343,082) $368,554 $295,548 $293,583 $296,711 $320,140 ($300,333) ($455,622) ($423,111)

General Revenues and Other Changes in Net Position:

Governmental activities:
Taxes:
Sales and use taxes $129,732 $131,904 $127,197 $131,162 $134,829 $140,832 $145,394 $151,919 $160,897 $165,321
Occupational taxes 76,918 76,325 73,008 74,909 77,703 77,844 78,654 81,013 84,722 89,870
Property taxes 62,698 61,663 56,699 51,369 55,656 50,367 55,842 54,808 58,570 59,139
Unrestricted grants and contributions 19,975 26,060 23,730 22,548 19,500 25,467 22,561 24,663 24,125 27,974
Investment earnings 10,684 (4,201) 8,233 13,560 5,067 8,362 11,977 5,988 1,940 8,521
Other 8,116 8,407 7,145 (217) 10,188 14,351 5,909 (3,218) 20,153 7,800
Total governmental activities 308,123 300,158 296,012 293,331 302,943 317,223 320,337 315,173 350,407 358,625

Business-type activities:
Investment earnings 68 15 11 4 7 10 18 12

Total primary government $308,191 $300,173 $296,013 $293,342 $302,943 $317,223 $320,337 $315,183 $350,426 $358,637

Change (decrease) in Net Position:

Governmental activities $19,173 ($42,327) ($72,122) ($3,855) $7,393 $18,880 $1,249 $13,418 ($106,249) ($64,283)
Business-type activities (559) (582) (419) 1,649 1,971 1,632 1,052 1,432 1,052 (193)
Total primary government $18,614 ($42,909) ($72,541) ($2,206) $9,364 $20,512 $2,301 $14,850 ($105,197) ($64,476)

Source:City Finance Department Data

127
 City of Birmingham, Alabama
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(in thousands)
Table A-3
Page 1 of 2
Fiscal Year Ended June 30

2008 2009 2010

General Fund
Reserved $11,417 $280 $253
Unreserved 106,065 94,501 92,027
Total general fund $117,482 $94,781 $92,280

Other Governmental Funds:

Reserved, reported in:
Special revenue funds $113,754 $96,755 $77,026
Debt service funds 44,216 40,175 50,947
Capital projects funds 160,696 138,479 94,500
318,666 275,409 222,473
Unreserved, reported in:
Special revenue funds (2,484) (1,847) (1,866)
Debt service funds (3,666) (5,805)
Capital projects funds
(2,484) (5,513) (7,671)
Total other governmental funds $433,664 $364,677 $307,082

Source: City Finance Department Data

128
 City of Birmingham, Alabama
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(in thousands)

Table A-3
Fiscal Year Ended June 30 Page 2 of2

2011 2012 2013 2014 2015 2016 2017

General Fund
Nonspendable:
Prepaid $280 $344 $344 $428 $482 $478 $608
Inventory 1573 1,573 1,377 1,221 1,978 1,890
Spendable:
Restricted
Committed
Assigned
Unassigned 98,935 90,197 91,581 77,769 91,009 86,994 83,335
Total General Fund 99,215 92,114 93,498 79,574 92,712 89,450 85,833

Other Governmental Funds:

Restricted 117,183 109,846 162,524 127,232 108,179 162,255 152,857
Committed $1,338 $95,668 $97,836 106,565 99,328 96,415 97,444
Assigned 104,963 (14) 382 1,585 0 0 1,015
Unassigned (4,627) 788 709 (3,984) 0 (17,173) 7,368
Total other governmental funds 218,857 206,288 261,451 231,398 207,507 241,497 258,684

Total Fund Balance $318,072 $298,402 $354,949 $310,972 $300,219 $330,947 $344,517

Change in fund balance Designation due to GASB Statemtent 54

Source: City Finance Department

129
 City of Birmingham, Alabama
Changes in Fund Balances, Governmental Funds
Las! Ten Fiscal Years
(in thousands)
Table A-4

Fiscal Year Ended June 30

2006 2009 2010 2011 2012 2013 2014 2015 2016 2017
REVENUES:
------
Taxes $ 269,346 $ 276,736 $ 265,396 $ 267,324 $ 260,062 $ 260,515 $ 291,627 $ 300,414 $ 317,612 $ 327,474
Licenses and permits 91,063 67,525 76,556 79,964 67,671 66,709 67,010 91,101 65,561 60,625
Intergovernmental 39,605 41,327 44,296 45,954 45,729 44,620 40,116 41,549 36,365 47,772
Charges for services 12,927 14,069 13,943 13,656 12,626 12,566 12,214 15,995 15,195 16,505
Fines and forfeitures 4,537 7,944 6,770 5,463 4,964 4,603 4,110 3,915 3,786 3,099
Investment income 10,684 (4,199) 6,235 13,560 5,066 6,361 11,975 5,989 1,940 8,521
Other operating revenues 6,157 _ _ _ 7,622 9,166 20,959 10,866 15,297 10,677 6,616 11,509 6,974
TOTAL REVENUES 436,521 _ _ _431,026 426,368 447,120 447,206 453,091 457,929 467,579 473,988 492,970

EXPENDITURES:
Current:
Public safety 155,120 177,168 194,346 181,158 178,555 172,499 161,650 180,913 192,002 196,630
Street and sanitation 66,786 52,414 57,671 49,866 46,340 46,436 53,497 43,911 50,265 52,795
Cultural and recreational 42,480 34,990 37,699 34,797 33,656 36,369 36,215 36,913 39,004 44,217
General government 62,681 118,030 141,660 123,338 125,548 123,411 123,874 128,002 137,251 133,544
Other 139
- -----
_ _ _<,82,622 366,299 378,715 395,236 369,739 416,522 427,166
Total current operations 347,206 431,576 389,179

Debt service:
Principal 27,424 25,935 42,050 33,193 36,306 38,648 36,324 36,424 46,716 33,904
Interest 25,416 _ _ _ 24,204 24,302 22,701 23,130 22,431 20,230 36,382 17,981 16,872
Total debt service 52,842 _ _ _ 50,139 66,352 55,894 61,436 61,079 56,554 74,806 66,697 50,776

Capital outlays 31,749 93,751 10,963 37,854 19,172 31,808 50,751 38,286 55,866 77,536
Warrant/Bond issue costs
------
TOTAL EXPENDITURES 431,799 _ _ _526,513 508,913 482,927 466,907 471,600 504,539 502,631 541,085 555,498

130
 City of Birmingham, Alabama
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(in thousands)
Table A-4

Fiscal Year Ended June 30

Excess (deficiency) of revenues
over (under) expenditures 4,722 _ _ _'95,487) (82,545) (35,807) (19,701) (18,509) (46,610) (35,252) (67,097) (62,528)

Other financing sources (uses):

Proceeds from sale of property 278
Proceeds of issuance of debt 21,000 110,476 70,061 31,350 124,763 81,620 14,680
Issuance of refunding bonds 19,960 8,400
Refunded bonds redeemed (19,967)
Capital lease 26,500 1,074 11,088 61,418
Premiums/(discounts)on warrants/bonds 316 3,834 (164) 5,877 1,728 16,886 5,123
Payment to escrow agent (67,511) (8,205) (1,955) (25,966) (113,750)
Transfers in 69,971 63,250 59,742 40,169 43,988 44,295 46,559 48,441 57,286 41,133
Transfers out (69,971) (63,250) (59,742) (40,169) (43,988) (44,295) (46,559) (48,441) (57,286) (41,133)
Transfers out - internal service fund (8,771) (3,400)
Net other financing sources 278 _ _ _ 26,500 21,309 46,799 31 75,057 (1,659) 24,499 97,831 76,098

Net change in fund balances $5,000 ($68,987) ($61,236) $10,992 ($19,670) $56,548 ($48,269) ($10,753) $30,734 $13,570

Debt service as a percentage of

noncapital expenditures 13.2% 11.6% 13.3% 12.6% 13.7% 13.9% 12.9% 16.1% 13.5% 10.6%

Source: City Finance Department Data

131
 City of Birmingham, Alabama
Sales and Use Tax Revenues
Last Ten Fiscal Years
(in thousands)

Table B-1

2008 * 2009 2010 2011 2012 2013 2014 2015 2016 2017

Sales and Use Tax Revenue $129,732 $131,904 $127,197 $131,162 $134,869 $140,832 $145,394 $151,919 $160,897 $165,321

Percentage Change from Prior Year 18.30% 1.67% -3.57% 3.12% 2.83% 4.50% 3.24% 4.49% 5.91% 2.75%

Breakdown of Sales/Use Tax By Industry Type:

Apparel 6,402 6,190 6,685 7,432 7,724 8,016 8,276 8,941 8,705 8,944
Automotive, RV's, Motor Homes 10,787 9,845 10,312 12,328 12,297 12,891 13,307 11,596 14,014 14,398
Building & Construction Related 11,423 14,551 12,667 13,821 14,730 15,401 15,900 17,443 16,862 17,326
Communications 2,182 2,677 2,155 1,946 2,047 2,130 2,199 1,836 2,639 2,712
Equipment & Machinery 10,758 10,884 9,855 10,404 11,148 11,650 12,027 16,507 13,419 13,788
Food and Restaurants 15,853 23,804 22,041 24,974 24,333 25,389 26,212 26,554 27,658 28,418
Furniture and Furnishings 2,852 3,447 3,329 4,241 4,351 4,550 4,698 4,614 4,586 4,712
Insurance, Finance, Real Estate 2,071 2,751 2,516 2,302 1,760 1,840 1,900 684 2,365 2,430
Medical 1,958 3,556 3,448 4,995 5,179 5,410 5,585 4,190 4,746 4,876
Personal Services, Entertainment 7,588 6,623 6,495 6,750 6,519 6,800 7,020 2,786 8,576 8,814
All Other Industries 57,858 47,576 47,694 41,969 44,781 46,755 48,270 56,768 57,327 58,903
129,732 131,904 127,197 131,162 134,869 140,832 145,394 151,919 160,897 165,321

* The City of Birmingham increased its sales tax on retail sales of automative vehicles, house trailers, and mobile home
set-up materials and supplies; retail sales of machines, machinery, or equipment used in mining, quarrying, compounding,
processing, and manufacturing tangible personal property from 1% to 2% in FY 2008. The City also increased
its sales tax on the retail sales of other tangible personal property from 3% to 4% in FY2008.

132
 City of Birmingham, Alabama
Sales and Use Tax Revenues to Total Taxes
Last Ten Years
(in thousands)

Table B-2

Fiscal Year Ended June 30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Breakdown of Tax Revenues:

Sales and Use Tax $ 129,732 $ 131,904 $ 127,197 $ 131,162 $ 134,869 $ 140,832 $ 145,394 $ 151,919 $ 160,897 $ 165,321
Occupational Tax 76,918 76,325 73,008 74,909 77,703 77,844 78,654 81,013 84,722 89,870
Property Tax 62,698 61,663 56,699 51,369 55,656 56,388 55,842 54,808 58,570 59,139
Business Licenses 85,721 83,019 74,809 75,793 83,245 82,866 82,105 85,732 79,963 74,002
Permits 5,342 4,506 3,747 4,191 4,426 3,843 4,905 5,369 5,618 6,623
$ 360,411 $ 357,417 $ 335,460 $ 337,424 $ 355,899 $ 361,773 $ 366,900 $ 378,841 $ 389,770 $ 394,955

% of Sales & Use to Total Taxes 36.00% 36.90% 37.92% 38.87% 37.90% 38.93% 39.63% 40.10% 41.28% 41.86%

Note: Prior to 2010, the portion of ad valorem tax revenues due to be paid, by statute, to the Jefferson County Board of Health ("Board of Health") and the Birmingham-
Jefferson County Transit Authority (the "Transit Authority") were included in the total amount of property taxes collected as revenue on the City's financial statements and
were also deducted as an expense. Prior to and after 2010, the amounts owing to the Board of Health and the Transit Authority were and continue to be remitted directly to
Transit Authority and Board of Health by the City's tax collector. As a result of a change in accounting procedures, the City no longer treats the portion of the ad valorem tax
revenues due the Transit Authority and the Board of Health as an item of revenue and expense on the City's financial statements. Accounting for the amounts due the Transit
Authority on the City's financial statements ceased beginning in 2010 and accounting for the amounts due the Board of Health ceased in 2011. The ad valorem tax revenue due
the Transit Authority after the accounting procedure change and not included in the "Property (ad valorem) tax" calculation above was $3,483,527, $3,947,279,
$3,144,824, $4,009,941, $2,891,796, $3,659,782, $3,632,112 and $3,808,438 in 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 respectively. The ad valorem tax revenue due the Board of Health after the
accounting procedure change and not included in the "Property (ad valorem) tax" calculation above was $1,534,510, $1,159,722, $1,172,297, $1,164,355, $1,208,827, $1,222,015 and $1,260,629 in
2011,2012,2013,2014,2015,2016 and 2017, respectively.

Source: Finance Department Data

133
 City of Birmingham, Alabama
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years

Table C-1

PACE
General General TIF Board Percentage
Fiscal Obligation Obligation Revenue Capital Revenue Aggregate of Personal Per
Year Bonds Warrants Warrants Leases Bonds Total Income Income Capita
--
2008 337,120,000 229,445,000 7,365,000 1,266,000 575,196,000 3,803,289,660 15.12% $2,369

2009 318,045,000 219,805,000 7,365,000 27,331,000 572,546,000 3,803,289,660 15.05% $2,358

2010 298,070,000 138,615,000 21,000,000 20,950,000 478,635,000 3,803,289,660 12.58% $1,971

2011 277,260,000 192,185,000 20,810,000 51,779 490,306,779 3,927,870,159 12.48% $2,310

2012 256,170,000 175,555,000 20,410,000 0 64,000,000 516,135,000 3,927,870,159 11.51% $2,432

2013 302,005,535 161,215,000 19,615,000 971,093 62,920,000 546,726,628 3,927,870,159 12.32% $2,576

2014 284,470,535 150,510,000 18,475,000 762,158 61,530,000 515,747,693 3,927,870,159 13.13% $2,430

2015 270,071,000 136,205,000 17,025,000 549,361 59,940,000 483,790,361 3,927,870,159 12.32% $2,279

2016 319,133,651 122,560,000 15,955,000 11,149,931 58,726,666 527,525,248 3,927,870,159 13.43% $2,486

2017 304,087,451 122,103,000 14,853,000 70,888,049 56,840,000 568,771,500 3,927,870,159 14.48% $2,680

Note: During 2011, capitalized leases, in the amount of $17,505,538, were refinanced by General Obligation Warrants

Source: City Finance Department data

Personal income computed from 2000 and 2010 census population and per capita income data (see table 0-1).

134
 City of Birmingham, Alabama
Ratio of Net General Obligation Bonded Debt to
Assessed Value and Net Bonded Debt Per Capita
Last Ten Fiscal Years

Table C-2

Ratio of Net
Bonded Net
Gross Less Debt Debt To Bonded
Fiscal Census Population Assessed Bonded Service Net Bonded Assessed Debt Per
year Year Number Value* Debt** Funds Debt Value (%) Capita

2008 2000 242,820 2,810,565,632 575,196,000 43,205,000 531,991,000 18.93% $ 2,191

2009 2000 242,820 2,937,624,552 572,546,000 40,175,000 532,371,000 18.12% $ 2,192
2010 2000 242,820 2,880,265,253 478,635,000 36,317,088 442,317,912 15.36% $ 1,822
2011 2010 212,237 2,826,110,356 490,306,779 32,191,620 458,115,159 16.21 % $ 2,159
2012 2010 212,237 2,755,748,375 516,135,000 29,668,690 486,466,310 17.65% $ 2,292
2013 2010 212,237 2,689,227,218 546,726,628 23,538,147 523,188,481 19.45% $ 2,465
2014 2010 212,237 2,804,674,640 515,747,693 22,694,460 493,053,233 17.58% $ 2,323
2015 2010 212,237 2,868,624,760 483,790,361 21,387,760 462,402,601 16.12% $ 2,179
2016 2010 212,237 2,893,627,248 527,525,248 23,965,021 503,560,227 17.40% $ 2,373
2017 2010 212,237 3,101,825,069 568,771,500 32,533,139 536,238,361 17.29% $ 2,527

*Source: Jefferson County Tax Assessor and Department of Revenue; Shelby County Property Tax Commissioner and
Judge of Probate
**Includes Bonds, Warrants, Revenue Warrants, Capitalized Leases and PACE Board Revenue Bonds

135
 City of Birmingham, Alabama
Assessed Value and Estimated True Value of All Taxable Property
Last Ten Tax Years

Table C-3

Class 1 Class 2 Class 3 Class 4 Ratio of

Property of All Unclassified Real Agriculture, Forest, Motor Assessed
Tax Year _ : -_ _-;,U:..:t",ilit",ie:..:s::-,:;--,---:- _--:-----'a"'n"'d..:.P.,:e;;..rs"'o"-n"'ac...1P,-r::;o",p",e:..:rt,-y.,-;-. Residential, Historic Property Vehicles Total Total Value to
Ending Assessed Estimated Assessed Estimated Assessed Estimated Assessed Estimated Assessed Estimated Estimated
30-Sep Value True Value Value True Value Value True Value Value Value Value True Value True Value

2007 218,646,340 728,821,134 1,866,230,738 9,331,153,690 440,451,774 4,404,517,740 285,236,780 1,901,578,534 2,810,565,632 16,366,071,098 17.17%

2008 209,898,240 699,660,800 1,984,448,984 9,922,244,920 462,407,628 4,624,076,280 280,869,700 1,872,464,667 2,937,624,552 17,118,446,667 17.16%

2009 215,101,040 717,003,467 1,972,102,351 9,860,511,755 448,535,382 4,485,353,820 244,526,480 1,630,176,534 2,880,265,253 16,693,045,576 17.25%

2010 212,316,380 707,721,267 1,944,617,951 9,723,089,755 433,674,085 4,336,740,850 235,501,940 1,570,012,934 2,826,110,356 16,337,564,806 17.30%

2011 212,799,421 709,331,403 1,870,926,188 9,354,630,940 439,146,266 4,391,462,660 232,876,500 1,552,510,000 2,755,748,375 16,007,935,003 17.22%

2012 208,111,380 693,704,600 1,835,441,332 9,177,206,660 391,699,466 3,916,994,660 253,975,040 1,693,166,933 2,689,227,218 15,481,072,853 17.37%

2013 212,321,060 707,736,867 1,916,117,160 9,580,585,800 412,100,240 4,121,002,400 264,136,180 1,760,907,867 2,804,674,640 16,170,232,933 17.34%

2014 211,745,640 705,818,800 1,981,580,900 9,907,904,500 401,172,700 4,011,727,000 274,125,520 1,827,503,467 2,868,624,760 16,452,953,767 17.44%

2015 210,128,500 700,428,333 2,018,534,660 10,092,673,300 385,217,620 3,852,176,200 279,746,468 1,864,976,453 2,893,627,248 16,510,254,287 17.53%

2016 208,935,380 696,451,267 2,180,396,100 10,901,980,500 415,341,480 4,153,414,800 297,152,109 1,981,014,060 3,101,825,069 17,732,860,627 17.49%

[1] The classifications of property for ad valorem taxation, as set forth above, are established by Amendment No. 373 to the Constitution of Alabama of 1901, as amended.
The assessed values are provided by:
For Class I, II and III Property in Birmingham in Jefferson County, Alabama: Tax Assessor of Jefferson County
For Class I, II and III Property in Birmingham in Shelby County, Alabama: Property Tax Commissioner of Shelby County
For Class IV Property in Birmingham in Jefferson County, Alabama: Jefferson County Department of Revenue
For Class IV Property in Birmingham in Shelby County, Alabama: Judge of Probate of Shelby County
The estimated market values of property are the quotient of the ass(lssed values of property in a classification divided by the assessment ratio applicable to that classification, as set forth below.
[2] Class I Property consists of all property of utilities used in the business of such utilities and is assessed at the rates of thirty percent (30%) of the fair and reasonable market value the"
[3] Class II Property consists of all real and personal property not otherwise classified in another class (generally commercial property) and is assessed at the ratio
of the fair and reasonalbe market value thereof. Class II amounts do not include the amounts or values of any abatements, industiral exemptions, other
or penalties with respect to such property.
[4[ Class III Property consists of all agricultural, forest, single-family owner-occupied residential property, and historic buildings and sites, and is assessed, upon application by the
the ratio of ten percent of the current use value (not fair and reasonalbe market values of such property). The amounts shown above as assessed values of Class III property are net
do not include, the amount of any homestead exemptions with respect to such property.
[5] Class IV Property consists of motor vehicles owned and operated by individuals for personal or private use, and not for hire, rent or compensation, and is assessed at the ratio of
percent of the fair and reasonable maket value tt

136
 City of Birmingham, Alabama
Schedule of Direct and Overlapping Debt
Last Five Fiscal Years
(in thousands)

Table C-4

Direct Debt 2013 2014 2015 2016 2017

City of Birmingham:
Gross bonded debt and warrants outstanding* $ 546,727 $ 515,748 $ 483,790 $ 527,525 $ 568,772
Direct Debt 546,727 515,748 483,790 527,525 568,772

Overlapping Debt
Jefferson County, Alabama overlapping debt 1 982,080 1,000,645 917,390 822,480 722,650
Jefferson County Board of Education 2 78,990 67,900 80,717 69,723 55,362
Total bonds and warrants outstanding 1,061,070 1,068,545 998,107 892,203 778,012
% of debt applicable to City of Birmingham 30.4% 30.0% 31.9% 32.0% 31.6%
City of Birmingham Debt Burden 322,565 320,564 318,396 285,505 245,852

Shelby County, Alabama 3 31,725 56,055 52,495

Shelby County, Alabama Board of Education 4 181,530 176,173 170,590 201,285 198,430
181,530 176,173 202,315 257,340 250,925
% of debt applicable to City of Birmingham 1.8% 2.0% 1.9% 2.0% 2.0%
City of Birmingham Debt Burden 3,268 3,523 3,844 5,147 5,019

Total Overlapping Debt 325,833 324,087 322,240 290,652 250,870

Total Direct and Overlapping Debt $ 872,560 $ 839,835 $ 806,030 $ 818,177 $ 819,642

The debt for schools of the Board of Education of the City of Birmingham, Alabama, is included in the City's general obligation debt shown above.

The figures for Jefferson County, the Jefferson County Board of Education, and the Shelby County Board of Education are for their fiscal years ended 9/3C

1 Source: Jefferson County Director of Finance.

2 The entire debt of the Jefferson County Board of Education is paid by appropriations from specifically pledged taxes. No portion of this debt
is paid from the school funds of the City of Birmingham.
Source: Jeferson County Board of Education

3 Source: Shelby County Finance Manager

4All of the gross debt of Shelby County Board of Education is payable from one of several specially pledged revenues, each of which produces a
substantial margin of revnue above the necessary debt service requirements.
Source: Shelby County Board of Education

*Includes Bonds, Warrants, Revenue Warrants, Capitalized Leases and PACE Board Revenue Bonds

137
 City of Birmingham, Alabama
Property Taxes - Direct and Overlapping Governments
Birmingham, Jefferson and Shelby Counties
Last Ten Fiscal Years

Table C-5

(Per $100 of Assessed Value)

City of Birmingham Jefferson County

Debt Board of
Fiscal General Service Education County State of Total
Year Fund Fund Fund Library Total County Schools Total Alabama Tax
2008 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2009 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2010 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2011 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2012 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2013 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2014 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2015 $0.90 $1.20 $1.98 $0.05 $4.13 $1.35 $0.82 $2.17 $0.65 $6.95
2016 $0.90 $1.20 $2.28 $0.05 $4.43 $1.35 $0.82 $2.17 $0.65 $7.25
2017 $0.90 $1.20 $2.28 $0.05 $4.43 $1.35 $0.82 $2.17 $0.65 $7.25
Source: Jefferson County Tax Assessor

City of Birmingham Shelby County

Debt Board of
Fiscal General Service Education County State of Total
Year Fund Fund Fund Library Total County Schools Total Alabama Tax
2008 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2009 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2010 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2011 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2012 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2013 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2014 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2015 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2016 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
2017 $0.90 $1.20 $1.47 $0.05 $3.62 $0.75 $1.60 $2.35 $0.65 $6.62
Source: Shelby County Tax Assessor

138
City of Birmingham Table C-6
Estimated Legal Debt Margin
As of June 30, 2017

Net Assessed Value of Real and Personal Property(1) $3,101,825,069

Debt Limit (20% of Assessed Value, see note below) 620,365,013

Outstanding General Obligation Bonds, Warrants and a Lease(2) $ 452,594,315

Less Exemption for School and Sewer Debt(3) (53,960,000)
Less Debt Service Fund Balance(4) (32,533,139)
366,101,176
Legal Debt Margin $ 254,263,837

(1) As reported by the Jefferson County Tax Assessor, Jefferson County Department of Revenue (motor vehicles) Shelby County
Property Tax Commissioner and Shelby County License Officer (motor vehicles).
(2) Includes the aggregate principal amount of general obligation bonds, general obligation warrants, TIF Warrants, Economic
Development Incentive Obligations ($938,970), Birmingham Zoo Obligations ($10,500,000), and a lease ($111,894), all as of June 30,
2017. Does not include any other obligation of the City and does not reflect principal payments made on any obligations after June 30,
2017. Does not include the obligations of the city incurred pursuant to Amendment No. 772 to the Constitution of Alabama, as amended.
(3) Not less than the stated amount was issued for schools, water works or sewers and is not chargeable against the City's constitutional
debt limit.
(4) Market Value as of June 30,2017
Note: Section 225, as amended, of the Constitution of the State of Alabama limits debt of the City of Birmingham to 20% of the
assessed value of taxable property. Excluded from this limitation is debt issued for schools and sewers (General Constitutional Debt
Limitation ).

Special Constitutional Debt Limitation for Economic Development Obligations

Amendment No. 772 to the constitution of Alabama authorizes the counties and municipalities within the State to use public funds for
certain purposes intended to further the economic development of such political subdivisions. Amendment 772 authorizes any county
or municipality to (i) acquire real property, buildings, plants, factories, facilities, machinery and equipment of any kind and to improve
and develop such properties for use as sites for industry of any kind or as industrial parks, (ii) lease, sell, grant, exchange or otherwise
convey all or any part of any real property, buildings, plants, factories, machinery and equipment or any industrial park project to any
individual, firm, corporation or other entity, public or private, for the purpose of constructing, developing, equipping and operating
industrial, commercial, research or service facilities of any kind or (iii) lend its credit to, or grant public funds and things of value for the

139
benefit of any individual, firm, corporation or other entity, public or private, for the purpose of promoting the economic and industrial
development of such political subdivision.

Amendment 772 also authorizes counties and municipalities to issue bonds, warrants, notes and other evidences of indebtedness and
to use the proceeds thereof in furtherance of the powers discussed in the paragraph immediately above, subject to the limitation that
the aggregate principal amount of obligations issued for such purposes may not exceed fifty percent (50%) of the assessed value of
taxable property in such county or municipality. Amendment No. 772 provides that the bonds, warrants, notes or other evidences of
indebtedness may be secured by the full faith and credit of the issuer or may be limited as to the source of payment.

The issuance of bonds, warrants, notes and other evidences of indebtedness pursuant to Amendment No. 772 is not subject to the
City's twenty percent constitutional debt limit. Pursuant to, and in accordance with, Amendment No. 772, in recent years the City has
delivered agreements with various entities for economic development purposes as provided in Amendment No. 772, whereby the City
agrees to rebate, over a stated period of years, to the other parties to such agreements, certain percentages of the proceeds of various
City taxes received by the City from the construction and operation by such other parties of the facilities described in such agreements.
The obligations of the City under such agreements (the "Amendment No. 772 Obligations") (i) are not general obligations of the City
and (ii) are limited obligations of the City payable solely from the tax proceeds specified in such agreements, and produced solely from
the facilities and projects described in such agreements, when and if such tax proceeds are actually received by the City, except a
Funding Agreement with the Commercial Development Authority of the City of Birmingham, which is a general obligation and a Funding
Agreement with the Public Athletic, Cultural and Entertainment Board of the City of Birmingham, which is a general obligation. The
economic development office of the City, based on certain assumptions which it believes to be reasonable, has projected the total tax
revenues to be received by the City frorn each of the facilities for which such a tax rebate agreement is in effect, will exceed the amount
of the City tax proceeds to be rebated pursuant to such agreement.

The City has obligations outstanding under Amendment No. 772 in the aggregate amount of approximately $233,648,869. These
obligations are limited obligations of the City payable generally as rebates of taxes received by the City from the private entity, except
for funding agreements to cover bonds issued by the Commercial Development Authority of the City of Birmingham (currently
outstanding in the principal amount of $66,130,000) and the Public Athletic and Entertainment Board of the City of Birmingham
(currently outstanding in the principal amount of $56,600,000), both, of which, are general obligations of the City and the City's General
Obligation Bonds: Series 2013-B, 2015-TMC and 2015-B, outstanding in the total amount of $20,551,216. The City treats the
obligations thereof under Amendment No. 772 (i) as exempt from the general constitutional debt limitation and (ii) as subject to the
special constitutional debt limit under Amendment No. 772.

140
 City of Birmingham, Alabama
Property Taxes Levied and Collected for
The City of Birmingham*
Last Ten Tax Years

Table C-7
City of Birmingham
Beginning Total Taxes Total Taxes
October 1 Levied Collected Percentage
2007 71,268,264 69,999,820 98.22%
2008 74,939,011 71,593,360 95.54%
2009 74,462,772 71,390,609 95.87%
2010 72,971,185 68,536,652 93.92%
2011 71,571,040 67,909,751 94.88%
2012 68,753,822 66,151,831 96.22%
2013 68,870,877 67,688,169 98.28%
2014 70,644,107 68,384,610 96.80%
2015 73,690,748 70,472,058 95.63%
2016 76,563,911 72,594,117 94.82%

*Jefferson County real property only

Sources: Jefferson County Tax Assessor and Tax Collector

141
 City of Birmingham, Alabama
Principal Property Taxpayers (jefferson County Only)
Current Fiscal Year and Ten Years Prior
Table C-8

Fiscal Year Ended June 30, 2017 Fiscal Year Ended June 30, 2006

Total Assessed % of Total Total Assessed % of Total

Value of Property Assessed Valuation Value of Property Assessed Valuation
Assessed Entity Within City Limits Rank Within City Limits Rank

Alabama Power Company $188,665,000 6.08% $112,625,760 4.05%

Affinity Hospital LLC $66,726,220 2 2.15%
Oxmoor Center LLC 36,438,680 3 1.17% $40,058,905 3 1.44%
American Cast Iron Pipe $30,929,940 4 1.00% $60,234,080 2 2.16%
Bellsouth Telecommunications $27,326,540 5 0.88%
GSA Birmingham Realty 22,458,580 6 0.72%
BBVA Compass Bank 22,201,960 7 0.72%
KAMTEC, Inc. 19,690,120 8 0.63%
SL Regions LLC 17,704,400 9 0.57%
Alabama Gas Corp. 16,931,780 10 0.55% 17,555,140 7 0.63%
HealthSouth Corporation 21,191,160 4 0.76%
Marray-Ash Plaza, Inc. 18,418,320 6 0.66%
Chase Bank of Texas 19,497,660 5 0.70%
Tish Roberts Preston 15,385,780 8 0.55%
Birmingham Logistics 11,895,400 9 0.43%
Tomorrow 35 Federal LP 11,282,686 10 0.41%
$449,073,220 14.48% $328,144,891 12.78%

Source: Jefferson County Tax Collector

142
 City of Birmingham, Alabama
Demographic and Economic Statistics
Last Ten Fiscal Years

Table D-1

Birmingham Hoover
Median Per Capita MA Annual Average
Household Personal Unemployment Unemployment
Year Population Income Income Rate Rate
2008 242,820 31,851 15,663 4.9% 4.5%
2009 242,820 31,851 15,663 12.4% 9.2%
2010 242,820 31,851 15,663 9.7% 8.9%
2011 212,237 30,212 18,507 11.2% 8.3%
2012 212,237 30,212 18,507 8.9% 7.0%
2013 212,237 30,212 18,507 7.9% 5.9%
2014 212,237 30,212 18,507 7.1% 5.4%
2015 212,237 30,212 18,507 7.1% 5.5%
2016 212,237 30,212 18,507 7.1% 5.3%
2017 212,237 30,212 18,507 5.9% 4.4%
Population figures based on 2000 and 2010 census

Unemployment rates source: Alabama Department of Labor in cooperation with the Bureau of
Labor Statistics. 2017 City and MA rate is preliminary July, 2017 rate.
Personal income and per capital personal income source: U. S. Bureau
of the Census 2010

143
 Birmingham Metro Employers
Principal Private Sector Employers Table D-2
Current and Ten Years Prior

---------------20 17---------------- --------------2007---------------

# of # of
Employer Employees Rank Employees Rank

University of Alabama in Birmingham*** 23,000 1 21,550 1

Regions Financial Corporation/AmSouth 9,000 2 5,000 5
St. Vincent's/Eastern Health System 5,100 3 5,100 4
Children's Health System 5,000 4 3,200 8
ATT/Belisouth 4,517 5 5,485 3
Honda Manufacturing of Alabama, LLC** 4,500 6 4,500 6
Brookwood Baptist Health System 4,459 7 6,600 2
Mercedes-Benz U. S International, Inc.** 3,600 8 0
Blue Cross Blue Shield of Alabama 3,100 9 3,000 10
Alabama Power Company 3,092 10 3,000 10
Birmingham Veterans Affairs Medical Center 2,440 11 1,800
BBVA Compass Bank 2,285 12 2,696 11
Grandview Medical Center 2,172 13
Wells Fargo/Wachovia 1,978 14 3,094 9
Southern Company Services* 1,881 15 1,000
Dollar General Distribution Center 1,700 16
EBSCO Industries, Inc. 1,600 17
Protective Life Corp. 1,550 18 1,252
American Family Care, Inc. 1,464 19
American Cast Iron Pipe 1,400 20 2,400 12
Samford University 1,289 21
Drummond Companies 1,283 22
Shelby Baptist Medical Center 1,125 23
State Farm Insurance 1,069 24
Encompass Health Corporation (Healthsouth) 1,043 25
Brunos Supermarkets, Inc. 0 3,477 7
U. S. Steel 700 2,400 12
Saks Incorporated 0 2,083 13
Marshall Durbin 450 2,000 14
Buffalo Rock Company 800 2,400 12
*Part of Southern Company
**Located Outside Metro Area
***Includes UAB Health Services Foundation
Does not include aggregated multiple location employers
Source: Birmingham Business Aliiance/Birmingham Chamber of Commerce

144
 Metropolitan Birmingham Largest Employers Table 0-3
by Industry 2017

Rank Company Employment Product Presence

1 University of Alabama at Birmingham* 23,000 Education and Healthcare Services Headquarters

2 Regions Financial Corporation 9,000 Financial Services (Banking) Headquarters
3 St. Vincent's Health System 5,100 Healthcare Services Headquarters
4 Children's Health System/Children's of Alab. 5,000 Healthcare Services/Pediatrics Headquarters
5 AT&T 4,517 Telecommunications Regional
6 Honda Manufacturing of Alabama, LLC** 4,500 Manufacturing advanced automotive Regional
7 Brookwood Baptist Health System, Inc. 4,459 Healthcare Services Headquarters
8 Jefferson County Board of Education 4,400 Government Public Education Headquarters
9 City of Birmingham 4,200 Government, City Administration Headquarters
10 Mercedes-Benz U. S. International, Inc.** 3,600 Manufacturing advanced automotive Headquarters
11 Blue Cross-Blue Shield of Alabama 3,100 Insurance, ekmployee benefits Major Operations
12 Alabama Power Company 3,092 Utilities Services, Electrical Headquarters
13 Birmingham Board of Education 2,721 Government, Public Education Headquarters
14 Jefferson County Commission 2,500 Government, County Administration Headquarters
15 Shelby County Board of Education 2,491 Governmnet, Public Education Headquarters
16 Birmingham Veterans Affairs Medical Cente 2,440 Healthcare Services Major Operations
17 BBVA Compass Bank 2,285 Financial Services (Banking) Headquarters
18 Grandview Medical Center 2,172 Health Care Services, Hospital Headquarters
19 U. S. Postal Service 2,000 Government Mail Processing Major Operations
20 Wells Fargo 1,978 Financial Services (Banking) Major Operations
21 Southern Company Services 1,881 Utilities/Engineering Divisional Headquarters
22 U.S. Social Security Administration 1,800 Social Security Benefits Major Operations
23 Hoover Board of Education 1,773 Governmnet, Public Education Headquarters
24 Dollar General Distribution Center 1,700 Wholesale Distribution Regional
25 EBSCO Industries, Inc. 1,600 Professional Services and Manufacturing Headquarters

Source: Birmingham Business Alliance

* University of Alabama at Birmingham (UAB) and University of Alabama at
Birmingham Services Foundation comnined employment
**Not in SMA.

145
 City of Birmingham, Alabama
Number c,f City Employees by Function/Program
Last Ten Fiscal Years
Table E·l

Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

General Government:
City Clerk 12 12 12 8 10 10 10 9 9 9
City Council 44 44 43 39 40 37 38 38 38 37
Community Development 11 11 9 7 7 7 7 10 11 14
Finance I'll 115 112 104 106 104 107 110 116 105
Law :14 34 34 36 38 40 37 38 38 39
Mayor's Office 65 82 78 79 89 89 91 93 90 92
Equipment Management 83 83 99 89 85 88 87 90 91 89
Information Management Services 55 45 53 42 43 47 45 46 60 58
Personnel :15 35 32 29 32 31 32 28 31 28

Public Safety:
Planning, Engineering, & Permits 194 194 172 141 149 150 143 147 144 144
Communications o o 9 o o o o o o o
Parole & Probation '10 10 o o o o o o o o
Municipal Court 63 61 66 66 66 69 70 70 87 90
Traffic Engineering 84 84 78 63 65 66 68 69 68 68

Police:
Officers 859 909 822 839 854 842 852 827 829 822
Civilians 322 373 373 283 289 285 277 285 238 224

Fire:
Officers 648 648 626 634 617 603 608 627 627 635
Civilians $1 61 61 63 73 62 59 64 61 61

Streets & Sanitation:

Public Works 1,038 1071 982 906 878 928 929 781 832 840
Horticulture & Urban Forestry o o 153 o o o o o o o
Culture & Recreation:
State Fairgrounds 5 5 4 3 14 17 16 17 34 35
Auditorium .21 21 21 31 28 26 29 28 28 30
Arlington 12 12 10 9 10 10 9 9 9 10
Library 300 326 320 290 292 298 287 274 259 267
Museum of Art 42 42 40 39 39 39 35 32 37 40
Parks & Recreation 305 303 172 257 245 237 262 250 247 325
Southern Museum of Flight 9 9 9 8 9 11 9 10 10 10
Sloss Furnaces 14 14 12 8 5 13 7 8 15 19

Totals 4,604 4,402 4,073 4,083 4109 4,114 3,960 4,009 4,091

Source: City Budget Office

146
 City of Birmingham, Alabama
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years

Table E-2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function/Program

Police precincts 4 4 4 5 4 4 4 4 4 4
Police substations 6 6 4 3 6 5 5 8 6 4

Fire stations 31 31 31 31 31 32 32 32 31 32

Street lights 39,000 39,000 39,000 39,000 32,000 32,000 30,000 29,238 29,238 19,315
Traffic signals 710 710 710 710 702 702 702 702 702 702
Street miles 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500

Parks & recreation:

Number of Parks 111 111 112 114 114 115 115 115 116 116
Acreage of Parks 2,635 2,635 2,635 2,683 2,683 2,746 2,746 2,746 2,748 2,748
Recreation/community centers 18 18 19 20 22 23 23 24 24 24
Playgrounds 79 79 79 81 78 125 125 127 129 129
Baseball/softball fields 40 40 40 42 35 41 47 49 56 56
Soccer/football fields 15 15 15 16 15 12 12 16 16 16

Libraries:
Central 1 1 1 1 1 1 1
Branches 19 19 19 18 18 18 18 18 18 18

Source: Various City departments

147
 City of Birmingham
Operating Indicators Table E3

BIRMINGHAM E911 CALL CENTER STATISTICS 2017

Calls Answered 2012 20131 2014 2015 2016 2017

911 Calls 245,198 413,033 412,021 418,529 417,539 374,727

328-9311 Calls 44,248 154,669 156,191 151,567 141,483 143,686
254-0800 Calls 93,984 38,582 32,087 27,122 24,246 22,706
254-2000 Calls 60,899 122,370 116,950 74,047 65,283
Total 383,430 667;183 ... 722,669 714,168 657,315 606,402

Calls dispatched 2016 2012 2013 2014 2015 2016 2017

Day 236,061 254,080 245,317 243,546 216,006 219,507

Evening 276,779 284,828 257,086 255,365 230,745 234,171
Morning 124,639 117,952 101,312 98,920 91,121 94,287
Total 637,479 656,860 603;715 597,831 537,872 547,965

Arrest/Traffic Calls 2012 2013 2014 2015 2016 2017

Arrest Calls 14808 8695 17505 10456 9,729 9,644

Traffic Citations Calls 25999 26442 26770 25434 28,021 30,824
Total 40807 35137 44275 35890 37750 40468

148
 2009·2016 PERMIT VALUATIONS AND COUNTS
Table E-4

FY 2009 Permits FY 2013 Permits FY 2017 Permits

Count

ELE $81,441,192.00 3,655 ELE $68,145,739.00 3,537

/"·7•••··."··.",,

MEG $59,057,908.00 827 MEG $33,808,797.00 784 MEG $54,019,499.00 884

PLB $16,374,536.00 1,003 PLB $17,924,789.00 913 PLB $23,892,492.00 1,088

FY 2010 Permits FY 2014 Permits

BLD $382,880,446.00 2,240

GAS $2,324,237.00 815 GAS $2,201,636.00 693

MFD $222,216.00 11 MFD $97,900.00 6

:PlcB·!l'j": .i:::;, 'Ji);:,~$~~r3~i1;.75,g;60j :; 1::1;~'~ k!S621 ij~-;~;~;-;#S~')3~2~~:_';9:3,6tp:Qn~;:1-'~~!l~~~:-'--~{;:~~;_; '~;-:~17 5~'
Totals $597,905,969.00 7,620 Totals $549,720,178.00 8,117

FY 2011 Permits FY 2015 Permits

MEG $76,879,161.00 666 MEG $56,229,903.00 870

PLB $32,942,924.00 786 PLB $27,558,118.00 990

FY 2012 Permits FY 2016 Permits

BLD $543,249,501.00 2,865

GAS $945,598.00 789 GAS $1,799,262.00 922

MFD $635,008.00 14 MFD $211,861.00 12

i:P L:B <~' ;;:~T~~~~0t:,;b',~~Xl~:;f?f:{ :;{I /$2,O-;6:1'21'5_~B:~Q-a_:,1'11',~,-~~:'-;,;: :+-;,/iTi;i,; i:!;]~~{i8,61: ;i@'~B)~i:;I:.9i0i:j};:zt~$2Q:;~~3d Q3;o6·l5;b~~I~i2~:~t;"i"990j
Totals $785,013,904.00 7,375 Totals $710,498,757.00 10,315

149
 City of Birmingham Table E·5
Police Department Statistics

20171 January.June
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 43 101 488 1413 1380 4709 618 8752
CLEARED 13 14 124 338 137 335 65 1026
RATE 30.23% 13.86% 25.41% 23.92% 9.93% 7.11% 10.52% 11.72%

2016
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 92 179 1019 2708 3161 9343 1178 17680
CLEARED 57 34 285 679 314 580 147 2096
RATE 61.96% 18.99% 27.97% 25.07% 9.93% 6.21% 12.48% 11.86%

2015
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 76 166 1127 2673 3300 9305 1037 17684
CLEARED 40 36 361 894 381 1064 136 2915
RATE 52.63% 21.69% 32.03% 33.45% 11.64% 11.43% 13.11 % 16.48%

2014
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 52 182 1051 2213 3768 8906 1460 17632
CLEARED 37 37 362 734 459 1299 314 3242
RATE 71% 20% 34% 33% 12% 15% 22% 18%

2013
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 63 178 969 1755 4059 8836 1525 17385
CLEARED 41 26 364 578 517 1008 163 2697
RATE 65% 15% 38% 33% 13% 11% 11% 16%

2012
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 67 152 983 2035 4704 9042 1042 18025
CLEARED 38 27 380 477 623 892 170 2607
RATE 57% 18% 39% 23% 13% 10% 16% 14%

2011
TOTAL PART ONES
CRIME HOMICIDE RAPE ROBBERY ASSAULT BURGLARY THEFT AUTO THEFT
TOTAL 54 182 1011 1916 5806 10522 1325 20816
CLEARED 30 52 309 536 627 891 217 2662
RATE 56% 29% 28% 28% 11% 8% 16% 13%

150
 MUNICIPAL COURT STATISTICS
Last Five Fiscal Years
Table E-6

COURT CASE STATISTICS

2013 2014 2015 2016 2017 TOTAL
" ,

DRUG/ALCOHOLRELATEDCASES " 793 "

"
,', 726 4,283 4,711 5,183 15,696
GUN COURT CASES 490 311 348 557 613 2,319
TRAFFIC CASES 57,208 32,186 47,652 '"
52,417 ' , 57,659 247,122
NON-TRAFFIC CASES 12,218 10,353 33,052 36,357 39,993 131,973

TICKETS ISSUED
2013 2014 2015 2016 2017 TOTAL
PARKING TICKETS 61,573 62,143 95,183
"

104,702 115,173 438,774

EQUIPMENT REPAIR
TICKETS(LlGHTS) 5,279 2,795 1,315 1,681 1,513 12,583

Source: Municipal Court

151
 City of Birmingham, Alabama
Debt Service Schedules Table F-1
General Obligation Warrants and Bonds

Fiscal General Obligation Warrants General Obligaton Bonds Total General Obligation Debt
Year
Ending Total Total Total
June 30 Principal Interest (Net) Debt Service Principal Interest (Net) Debt Service Principal Interest (Net) Debt Service

2018 16,764,000 4,877,304 21,641,304 15,585,000 12,510,020 28,095,020 32,349,000 17,387,324 49,736,324
2019 10,766,500 4,287,008 15,053,508 16,313,833 12,274,145 28,587,978 27,080,333 16,561,153 43,641,486
2020 9,784,500 4,004,767 13,789,267 11,179,800 13,989,453 25,169,253 20,964,300 17,994,220 38,958,520
2021 9,274,000 3,711,604 12,985,604 10,040,418 13,617,924 23,658,342 19,314,418 17,329,528 36,643,946
2022 9,515,000 3,420,737 12,935,737 9,073,255 13,217,990 22,291,245 18,588,255 16,638,727 35,226,982
2023 9,784,500 3,117,770 12,902,270 10,967,845 12,871,901 23,839,746 20,752,345 15,989,671 36,742,016
2024 6,898,000 2,823,505 9,721,505 9,246,730 12,371,380 21,618,110 16,144,730 15,194,885 31,339,615
2025 7,108,000 2,546,844 9,654,844 9,829,559 11,949,146 21,778,705 16,937,559 14,495,990 31,433,549
2026 7,338,000 2,258,614 9,596,614 12,945,649 11,425,244 24,370,893 20,283,649 13,683,858 33,967,507
2027 6,055,000 1,968,141 8,023,141 13,620,860 10,800,070 24,420,930 19,675,860 12,768,211 32,444,071
2028 6,303,000 1,720,355 8,023,355 14,331,932 10,136,434 24,468,366 20,634,932 11,856,789 32,491,721
2029 5,385,000 1,472,253 6,857,253 15,065,243 9,444,022 24,509,265 20,450,243 10,916,275 31,366,518
2030 5,230,000 1,245,766 6,475,766 15,855,114 8,707,314 24,562,428 21,085,114 9,953,080 31,038,194
2031 3,535,000 1,010,572 4,545,572 16,650,951 7,963,387 24,614,338 20,185,951 8,973,959 29,159,910
2032 3,660,000 888,825 4,548,825 17,486,609 7,192,344 24,678,953 21,146,609 8,081,169 29,227,778
2033 3,790,000 760,519 4,550,519 18,392,806 6,354,008 24,746,814 22,182,806 7,114,527 29,297,333
2034 2,010,000 597,597 2,607,597 6,180,830 5,791,984 11,972,814 8,190,830 6,389,581 14,580,411
2035 2,085,000 522,423 2,607,423 6,500,271 5,611,974 12,112,245 8,585,271 6,134,397 14,719,668
2036 2,165,000 444,444 2,609,444 6,817,752 5,831,711 12,649,463 8,982,752 6,276,155 15,258,907
2037 2,245,000 363,473 2,608,473 7,163,845 5,270,608 12,434,453 9,408,845 5,634,081 15,042,926
2038 2,330,000 279,510 2,609,510 7,514,567 4,915,327 12,429,894 9,844,567 5,194,837 15,039,404
2039 2,420,000 189,805 2,609,805 7,888,069 4,541,661 12,429,730 10,308,069 4,731,466 15,039,535
2040 2,510,000 96,635 2,606,635 8,299,218 4,152,237 12,451,455 10,809,218 4,248,872 15,058,090
2041 8,701,985 3,737,084 12,439,069 8,701,985 3,737,084 12,439,069
2042 9,137,727 3,305,348 12,443,075 9,137,727 3,305,348 12,443,075
2043 9,603,562 2,852,908 12,456,470 9,603,562 2,852,908 12,456,470
2044 4,727,649 1,269,857 5,997,506 4,727,649 1,269,857 5,997,506
2045 4,966,375 1,036,683 6,003,058 4,966,375 1,036,683 6,003,058
............... _-----_.............. _---- ---_................_--------_ ......................... __ .. __........................................................... - ............................................................ _---- ....... - ..........- ................ _.... _- ....... - ......--_ .......... _------ .............................. _------_ ................................._-----_ ...................... _----
Total 136,955,500 42,608,471 179,563,971 304,087,454 223,142,164 527,229,618 441,042,954 265,750,635 706,793,589

General obligation warrants are paid from the City's General Fund and general obligation bonds are paid from the City's Bond Reserve Fund,
which receives 12 mills of ad-valorem tax.

152
 City of Birmingham
Debt Service Schedules
Debt of Conduit Issuers that is a General Obligation of the City
The Commercial Development Authority of the City of Birmingham, Revenue Bonds
Table F-2
Fiscal Series 2011-A (Tax-Exempt) Series 2011-B (Federally Taxable) Total
Year
Ending Total Total Total
June 30 Principal Interest Debt Service Principal Interest Debt Service Principal Interest Debt Service

2018 3,118,988 3,118,988 1,400,000 474,000 1,874,000 1,400,000 3,592,988 4,992,988

2019 3,118,988 3,118,988 1,485,000 390,000 1,875,000 1,485,000 3,508,988 4,993,988
2020 3,118,988 3,118,988 1,575,000 300,900 1,875,900 1,575,000 3,419,888 4,994,888
2021 3,118,988 3,118,988 1,670,000 206,400 1,876,400 1,670,000 3,325,388 4,995,388
2022 3,118,988 3,118,988 1,770,000 106,200 1,876,200 1,770,000 3,225,188 4,995,188
2023 1,875,000 3,118,988 4,993,988 1,875,000 3,118,988 4,993,988
2024 1,970,000 3,025,238 4,995,238 1,970,000 3,025,238 4,995,238
2025 2,070,000 2,926,738 4,996,738 2,070,000 2,926,738 4,996,738
2026 2,170,000 2,823,238 4,993,238 2,170,000 2,823,238 4,993,238
2027 2,280,000 2,714,738 4,994,738 2,280,000 2,714,738 4,994,738
2028 2,395,000 2,600,738 4,995,738 2,395,000 2,600,738 4,995,738
2029 2,515,000 2,480,988 4,995,988 2,515,000 2,480,988 4,995,988
2030 2,645,000 2,348,950 4,993,950 2,645,000 2,348,950 4,993,950
2031 2,785,000 2,210,088 4,995,088 2,785,000 2,210,088 4,995,088
2032 2,805,000 2,063,875 4,868,875 2,805,000 2,063,875 4,868,875
2033 3,085,000 1,909,600 4,994,600 3,085,000 1,909,600 4,994,600
2034 3,255,000 1,739,925 4,994,925 3,255,000 1,739,925 4,994,925
2035 3,435,000 1,560,900 4,995,900 3,435,000 1,560,900 4,995,900
2036 3,620,000 1,371,975 4,991,975 3,620,000 1,371,975 4,991,975
2037 3,820,000 1,172,875 4,992,875 3,820,000 1,172,875 4,992,875
2038 4,030,000 962,775 4,992,775 4,030,000 962,775 4,992,775
2039 4,255,000 741,125 4,996,125 4,255,000 741,125 4,996,125
2040 4,485,000 507,100 4,992,100 4,485,000 507,100 4,992,100
2041 4,735,000 260,425 4,995,425 4,735,000 260,425 4,995,425
Total $58,230,000 $52,135,213 $110,365,213 $7,900,000 $1,477,500 $9,377,500 $66,130,000 $53,612,713 $119,742,713

The above amounts are a line item in the City's General Fund Budget for each fiscal year pursuant to the associated Funding Agreement.
The Bonds financed the construction of a hotel and entertainment district adjacent to the Birmingham-Jefferson Convention Center, located
in downtown Birmingham. The appropriation continues a long-standing amount appropriated for the BJCC.

153
 City of Birmingham
Debt Service Schedules
Debt of Conduit Issuers that is a General Obligation of the City
The Public Athletic Cultural and Entertainment Board of the City of Birmingham, Revenue Bonds
Table F-3
Fiscal Series 2011-A (Tax-Exempt) Series 2011-B (Federally Taxable) Series 2011-B (Federally Taxable)
Year No. R-2 No. R-1 Series B -------------Tota 1--------------------
Ending Total Total Total Total Total
June 30 Principal Interest Debt Service Principal Interest Debt Service Principal Interest Debt Service Debt Service Principal Interest Debt Service

2018 1,570,000 1,492,625 3,062,625 85,000 208,647 293,647 95,000 179,581 274,581 568,228 1,750,000 1,880,853 3,630,853
2019 1,620,000 1,443,339 3,063,339 90,000 203,756 293,756 100,000 174,833 274,833 568,589 1,810,000 1,821,928 3,631,928
2020 1,670,000 1,392,509 3,062,509 95,000 198,585 293,585 105,000 169,841 274,841 568,426 1,870,000 1,760,935 3,630,935
2021 1,720,000 1,340,133 3,060,133 100.000 193,135 293,135 110,000 164,606 274,606 567,741 1,930,000 1,697,874 3,627,874
2022 1,775,000 1,286,135 3,061,135 105,000 187,405 292,405 115,000 159,127 274,127 566,532 1,995,000 1,632,667 3,627,667
2023 1,830,000 1,230,438 3,060,438 110,0')0 181,396 291,396 125,000 153,405 278,405 569,801 2,065,000 1,565,239 3,630,239
2024 1,885,000 1,173,041 3,058,041 115,000 175,107 290,107 130,000 147,318 277,318 567,424 2,130,000 1,495,466 3,625,466
2025 1,945,000 1,113,868 3,058,868 125,0')0 168,399 293,399 135,000 140,865 275,865 569,264 2,205,000 1,423,131 3,628,131
2026 2,005,000 1,052,840 3,057,840 130,000 161,272 291,272 140,000 134,169 274,169 565,440 2,275,000 1,348,280 3,623,280
2027 2,065,000 1,363,569 3,428,569 120,000 172,794 292,794 120,000 154,105 274,105 566,899 2,305,000 1,690,468 3,995,468
2028 1,385,000 1,667,188 3,052,188 105,000 184,275 289,275 100,000 173,950 273,950 563,225 1,590,000 2,025,413 3,615,413
2029 1,460,000 1,588,950 3,048,950 115,000 176,575 291,575 105,000 166,600 271,600 563,175 1,680,000 1,932,125 3,612,125
2030 1,540,000 1,506,450 3,046,450 120,000 168,175 288,175 115,000 158,725 273,725 561,900 1,775,000 1,833,350 3,608,350
2031 1,625,000 1,419,413 3,044,413 130,OJO 159,250 289,250 125,000 150,325 275,325 564,575 1,880,000 1,728,988 3,608,988
2032 1,715,000 1,327,563 3,042,563 140,0'00 149,800 289,800 135,000 141,225 276,225 566,025 1,990,000 1,618,588 3,608,588
2033 1,810,000 1,230,625 3,040,625 150,0·)0 139,650 289,650 140,000 131,600 271,600 561,250 2,100,000 1,501,875 3,601,875
2034 1,905,000 1,128,463 3,033,463 160,000 128,800 288,800 150,000 121,450 271,450 560,250 2,215,000 1,378,713 3,593,713
2035 2,010,000 1,020,800 3,030,800 170,000 117,250 287,250 165,000 110,600 275,600 562,850 2,345,000 1,248,650 3,593,650
2036 2,125,000 907,088 3,032,088 185,000 104,825 289,825 175,000 98,875 273,875 563,700 2,485,000 1,110,788 3,595,788
2037 2,240,000 787,050 3,027,050 200,000 91,525 291,525 190,000 86,275 276,275 567,800 2,630,000 964,850 3,594,850
2038 2,365,000 660,413 3,025,413 210,OJO 77,350 287,350 200,000 72,800 272,800 560,150 2,775,000 810,563 3,585,563
2039 2,495,000 526,763 3,021,763 230,000 62,125 292,125 215,000 58,450 273,450 565,575 2,940,000 647,338 3,587,338
2040 2,630,000 385,825 3,015,825 245,000 45,850 290,850 230,000 43,225 273,225 564,075 3,105,000 474,900 3,579,900
2041 2,775,000 237,188 3,012,188 260,OJO 28,350 288,350 250,000 26,775 276,775 565,125 3,285,000 292,313 3,577,313
2042 2925,000 80,438 3,005,438 280,OQQ 9,625 289,625 265,000 9.100 274,100 563,725 3470,000 99,163 3,569,163
Total $49,090,000 $27,362,709 $76,452,709 $3,775,000 $3,493,918 $7,268,918 $3,735,000 $3,127,824 $6,862,824 $14,131,742 $56,600,000 $33,984,451 $90,584,451

These bonds financed the acquisition of property for, and the construction of, a minor league baseball park in the City center. The Series A bonds are payable
from the a lodgings tax in the City, levied at a rate of 3.5%. The Series B bonds are payable from project revenues. The Bonds are subject to Mandatory
Tender on December 14, 2026. The Series A bonds carry an interest rate of 3.09%. The above schedule assumes an interest rate of 5.50% after the tender date.
The Series B R-1 bonds carry an interest rate of 4.87%. The Series B R-2 bonds carry an interest rate of 5.59%. The above schedule assumes an interest rate of
7.00% after the tender date. The Bonds are prepayable with a yield maintenance p'lrmium. The Bonds are also payable from a general obligation funding agreement of the City.
In the event of a Determination of Taxability, the interest rate on the Series A bonds changes to 4.87%.

154
City of Birmingham Table F-4
Special Lodgings Tax Fund
Revenue from 3.5% Lodgings Tax

Fiscal Year Revenue

2011 $1,338,321 *
2012 $3,271,345
2013 $3,190,203
2014 $3,632,290
2015 $3,806,818
2016 $4,239,214
2017 $3,856,565

*Reflects five months' collections. Tax became effective January 15, 2011
The tax is pledged to the payment of a Funding Agreement with
the Public Athletic, Cultural and Entertainment Board of the
City of Birmingham, covering debt service on the Board's Series 2011-A Bonds.
See Table F.. 3.

Revenue from Stadium Lease and Service Agreement

Fiscal Year Revenue

2014 $201,233 (1)
2015 $630,000 (2)
2016 $630,000 (3)
2017 $637,450 (4)

(1 )Revenue from the Stadium Lease and Service Agreement between

the Birmingham Barons, LLC and the PACE Board are pledged to the
payment of tne PACE Board's Series B Bonds (See Table F-3). During
Fiscal Year 2014, the first year of operation, certain minimum payments
from the Barons were prorated for a partial year of operation. Additionally,
$300,000 of the rent due was paid, persuant to the Agreement, to the City
of Hoover to terminate the Barons lease of a facility owned by that City.
Assuming that the Stadium had been in operation for a full year and that
the Hoover payment was not required, net rent would have been $630,000.
$156,454 was also paid by the Barons, pursuant to the Agreement, to the Trustee
for deposit into the Operations, Maintenance and Repair Expense Fund.
The Lodgings Tax was used to pay the balance of the debt service on the Series B
Bonds durin!] this first year of operations.
(2)Revenue received was $630,000 and $153,888 was deposited into the
Operations, Maintenance and Repair Expense Fund, held by the Bond Trustee.
(3)Revenue received was $630,000 and $157,943 was generated for Repair &
MaintenancE!, with a net amount of $60,337 being deposited with the Trustee.
(4)Revenue received was $637,450 and a net amount of$135,551 was generated
for Repair and Maintenance

155
 City of Birmingham Table F-5
Debt Service Schedules
Privately Placed Debt
The Public Athletic, Cultural and Entertainment Facilities Board
of the City of Birmingham, Alabama Special Revenue Bond
(Birmingham Negro Southern League Museum)

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service
2018 94,666 6,560 101,226
2019 110,000 2,625 112,625
2020 35,000 638 35,638
Total 239,666 9,823 249,489

These bonds are payable solely from corporate pledges of donations to the Negro
Southern League Museum. Proceeds were used to complete construction of
The Museum. The bonds are prepayable from donations as they are received.
The bonds are taxable and carry an interest rate of 3%. Final maturity is April 1, 2020

156
 City of Birmingham Table F-6
Debt Service Schedules
Privately Placed Debt

The Public Athletic, Cultural and Entertainment Facilities Board

of the City of Birmingham, Alabama
Contractor/Developer Settlement Agreement

Beginning Planned Ending

Balance of Payment Actual Balance of
15-0ct Obligation Obligation Payment Obligation

2015 2,600,000.00 827,945.49 1,772,054.51

2016 1,772,054.51 955,071.95 816,982.56
2017 816,982.56 371,430.00 816,982.56
2018 816,982.56 371,430.00 816,982.56
2019 816,982.56 74,122.56 816,982.56
2020 816,982.56 0.00 816,982.56
2021 816,982.56 0.00 816,982.56
816,982.56 1,783,017.44

On September 8, 2015 the City Council approved a settlement agreement with the Developer and Contractor for the
Regions Field baseball stadium, in the amount of $4.1 million. The City paid $1.5 million from capital funds
immediately. The City is obligated to pay $371,430 for six years and $371,420 in the seventh year from its Special
Lodgings Tax Fund. Should the tax be insufficient to make the payment, after paying debt service on outstanding
PACE Board debt, the obligation will be limited to the actual revenues available and any underpayment will be
added to the end of the repayment period. Should the balance in the Special Lodgings Tax Fund exceed $750,000,
after paying debt service, the excess will be payed to the Developer/Contractor and will reduce the remaining
obligation from the last amount due. During 2017, funds were available to pay an extra amount of $583,641.95,
which reduced the amount due from the last payment obligations by an equal amount.

157
 City of Birmingham
Debt Service Schedules
Privately Placed Debt
Table F-7
General Obligation Warrants Series 2012-RB and 2012-CTB

Fiscal Series 2012-RB (Federally Taxable) Series 2012-CTB (Federally Taxable) Total
Year
Ending Total Total Total
June 30 Principal Interest Debt Service Principal Interest Debt Service Principal Interest Debt Service

2018 380,000 153,017 533,017 85,000 23,734 108,734 465,000 176,751 641,751
2019 395,000 137,555 532,555 90,000 19,906 109,906 485,000 157,462 642,462
2020 410,000 121,496 531,496 95,000 15,859 110,859 505,000 137,355 642,355
2021 430,000 104,738 534,738 100,000 11,594 111,594 530,000 116,331 646,331
2022 445,000 87,281 532,281 105,000 7,109 112,109 550,000 94,391 644,391
2023 465,000 69,127 534,127 110,000 2,406 112,406 575,000 71,533 646,533
2024 480,000 50,274 530,274 480,000 50,274 530,274
2025 500,000 30,723 530,723 500,000 30,723 530,723
2026 520,000 10,374 530,374 520,000 10,374 530,374
Total $4,025,000 $764,584 $4,789,584 $585,000 $80,609 $665,609 $4,610,000 $845,193 $5,455,193

The Warrants pay principal annually on August 1 and interest on February 1 and August 1. The Seris 2012-RB warrants carry an interest rate
of 3.99% and the Series 2012-CTB warrants carry an interest rate of 4.375%. Both Series are prepayable until August 1, 2013
with a 3% premium, August 1, 2013 through July 31, 2014 with a 2% premium, August 1, 2014 through July 31, 2015 with a 1% premium
and thereafter with no premium. The Warrants are subject to mandatory tender, at the option of the warrantholder, in the event that
Standard & Poor's assigns a rating of A-, or lower, to the long-term debt obligations of the City.

158
 City of Birmingham Table F-8
Debt Service Schedules
Privately Placed Debt

General Obligation Warrants Series 2014-PNC2

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 1,155,000 13,283 1,168,283

Total $1,155,000 $13,283 $1,168,283

The Warrants carry an interst rate of 1.15%. Principal is payable on March 1

and Interest is payable on March 1 and September 1. Proceeds were used
for capital equipment. Upon any Determinaton of Taxability, the interest
rate would be adjusted to provide the warrantholder with an equivalent
after-tax yield.

159
 City of iBirmingham
Debt Service Schedules Table F-9
Privately Placed Debt

Tax Increment Financing District I, Revenue Warrants, Series 2014

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 1,134,000 414,322 1,548,322

2019 1,167,000 381,109 1,548,109
2020 1,201,000 346,916 1,547,916
2021 1,236,000 311,749 1,547,749
2022 1,272,000 275,552 1,547,552
2023 1,311,000 238,285 1,549,285
2024 1,348,000 199,918 1,547,918
2025 1,388,000 160,431 1,548,431
2026 1,428,000 119,793 1,547,793
2027 1,470,000 77,972 1,547,972
2028 1,513,000 34,918 1,547,918
2029 385,000 1,857 386,857
Total $14,853,000 $2,562,823 $17,415,823

The Warrants have an interest rate of 2.89%. Principal and interest on both warrants. Principal and Interest
is payable monthly. The Warrants are prepayble on any date with a yield maintenance premium, and beginning on December 1,2024 on any
date without premium. The Warrants are payable from Ad-valorem taxes collected in the TIF District in excess of a base year amount.
The District includes a large portion of the city center of the City. The Warrants are also secured by a General Obligation Funding
Agreement of the City, which provides funds from any legally available source to pay principal and interest on the Warrants as it comes due.
Upon any Determination of Taxability, the interest rate would increase to an equivalent after-tax yield.

160
 City of Birmingham
Debt Service Schedules
Privately Placed Debt

General Obligation Refunding Warrants Series 2014-PNC Table F-10

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 725,000.00 34,332.50 759,332.50

2019 740,000.00 23,095.00 763,095.00
2020 750,000.00 11,625.00 761,625.00
Total 2,215,000.00 69,052.50 2,284,052.50

The Warrants pay principal on April 1 and Interest on April 1 and October 1. The Warrants
refunded the City's Series 2004-8 Warrants, which were called on April 1,2014.
The Warrants carry an interest rate of 1.55% and are not prepayable.
Upon any Determination of Taxability the interest rate would be adjusted to
provide the warrantholder an equivalent after-tax yield.

161
 City of Birmingham
Debt Service Schedules
Privately Placed Debt
Table F-11

General Obligation Refunding Bond (Federally Taxable), Series 2015-WFB

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 2,920,000 636,478 3,556,478

2019 2,995,000 522,135 3,517,135
2020 3,070,000 405,044 3,475,044
2021 2,495,000 297,737 2,792,737
2022 2,070,000 209,824 2,279,824
2023 2,165,000 128,376 2,293,376
2024 2,260,000 43,382 2,303,382
Total 17,975,000 2,242,976 $20,217,976

The Bonds pay principal on November 1 and interest on May 1 and November 1.
The Bonds carry an average interest rate of 3.85% and are not prepayable.
Upon a Determination of Taxability, the interest rate would be adjusted
to provide the bondholder an equivalent after-tax yield.

162
 City of Birmingham Table F-12
Debt Service Schedules
Privately Placed Debt

General Obligation Refunding Bond (Federally Taxable), Series 2016-C

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 684,908 684,908

2019 10,105,000 684,908 10,789,908
2020 253,425 253,425
2021 3,500,000 253,425 3,753,425
2022 2,435,000 103,975 2,538,975
Total 16,040,000 1,980,641 $18,020,641

The Bonds carry an interest rate of 4.11 %.

163
 City of Birmingham Table F-13
Debt Service Schedules
Privately Placed Debt

General Obligation Refunding Bond (Federally Taxable), Series 2016-D

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 539,946 539,946

2019 2,600,000 482,031 3,082,031
2020 2,685,000 364,308 3,049,308
2021 304,499 304,499
2022 304,499 304,499
2023 1,735,000 265,852 2,000,852
2024 1,860,000 185,774 2,045,774
2025 3,240,000 72,171 3,312,171
Total 12,120,000 2,519,080 14,639,080

The Bonds carry an interest rate of 3.91 %.

164
 City of Birmingham Table F-14
Debt Service Schedules
Privately Placl~d Debt

General Obligation Warrants, Series 2014-PNC3

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 255,000 5,968 260,968

2019 260,000 2,002 262,002
Total 515,000 7,970 $522,970

The Warrants mature on October 1st and pay interest on April 1 and
Octobert 1. The Warrants carry an interet rate of 1.54%.
Upon any Determination of Taxability the City must
pay the warrantholder an anount to produce an equivalent
after tax yield.

165
 City of Birmingham Table F-15
Debt Service Schedules
Privately Placed Debt

Annual Appropriation Lease - Banc o'f America Public Capital 2016

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2019 857,562 3,981,993 4,839,555

2020 1,397,351 1,404,559 2,801,910
2021 1,496,943 1,357,235 2,854,178
2022 1,601,010 1,306,569 2,907,579
2023 1,709,713 '1,252,413 2,962,126
2024 1,704,566 1,195,585 2,900,151
2025 1,775,304 '1,138,949 2,914,253
2026 1,888,467 1,078,988 2,967,455
2027 2,006,448 1,015,233 3,021,681
2028 2,129,406 947,525 3,076,931
2029 2,257,497 875,696 3,133,193
2030 2,390,893 799,576 3,190,469
2031 2,529,761 718,987 3,248,748
2032 2,674,274 633,746 3,308,020
2033 2,824,607 543,667 3,368,274
2034 5,331,979 419,658 5,751,637
2035 5,690,593 239,315 5,929,908
2036 3,663,899 53,975 3,717,874
Total 43,930,273 18,963,669 62,893,942

The Lease is payable quarterly beginning August 4,2018. Energy savings from this project is expected to be sufficient to pay
debt service on the lease. The lease carries a fixed interest rate of 3.30%. In the event of a Determination of Taxability, the
interest rate would be adjusted to make the lessor whole on an after-tax basis.

166
 C~ty of Birmingham Table F-16
Debt Service Schedules
Privately Placed Debt

Annual Appropriation Lease - PNC 2016

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2019 -482,643 1,599,462 1,116,819

2020 600,581 571,448 1,172,029
2021 679,468 551,163 1,230,631
2022 763,891 528,271 1,292,162
2023 854,179 502,591 1,356,770
2024 950,679 473,929 1,424,608
2025 1,053,758 442,081 1,495,839
2026 1,163,801 406,830 1,570,631
2027 1,281,215 367,947 1,649,162
2028 1,406,430 325,190 1,731,620
2029 1,539,899 278,302 1,818,201
2030 1,682,099 227,012 1,909,111
2031 1,833,535 171,032 2,004,567
2032 1,994,737 110,059 2,104,796
2033 2,166,264 43,771 2,210,035
Total 17,487,893 6,599,088 24,086,981

The Lease is payable quarterly beginning August 31, 2018. Energy savings from this project is
expected to be sufficient to pay debt service on the lease. The lease carries a fixed interest rate
of 3.22%. In the event of a Determination of Taxability, the interest rate would be adjusted to make
the lessor whole on an after-tax basis.

167
 City of Birmingham Table F-17
Debt Service Schedules
Privately Placed Debt

Series 2016 General Obligation Equipment and Improvement

Warrants

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 180,904 180,904

2019 2,654,500 163,255 2,817,755
2020 2,688,500 127,740 2,816,240
2021 2,723,000 91,786 2,814,786
2022 2,758,000 55,388 2,813,388
2023 2,793,500 18,538 2,812,038
Total 13,617,500 637,611 14,255,111

The warrants carry a fixed rate of approximately 1.33% and are non-callable.
In the event of a Determination of Taxability, the interest rate would be
adjusted to provide the warrant holder an equivalent after-tax yield.

168
 City of Birmingham Table F-18
Debt Service Schedules
Privately Placed Debt

Annual Appropriation Lease - Banc of America Public Capital

Corporation - Motorola

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 999,992.86 999,992.86

2019 999,992.86 999,992.86
2020 999,992.86 999,992.86
2021 999,992.86 999,992.86
2022 999,992.86 999,992.86
2023 999,992.86 999,992.86
Total 5,999,957.16 5,999,957.16

Lease payments are due annually and carry zero

interest. In the event of a Determination of Taxability,
the City must make the Lessor whole on a tax
equivalent basis.

169
 City of Birmingham Table F-19
Debt Service Schedules
Privately Placed Debt

Annual Appropriation Lease - Elanc of America Leasing and Capital 2016

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 288,582 83,592 372,174

2019 298,135 74,039 372,174
2020 308,004 64,170 372,174
2021 318,200 53,974 372,174
2022 328,733 43,441 372,174
2023 339,615 32,559 372,174
2024 350,858 21,316 372,174
2025 362,472 9,702 372,174
2026 69,221 566 69,786
Total 2,663,820 383,358 3,047,178

The Lease is payable quarterly beginning August 4, 2018. Energy

savings from this lighting project is expected to be sufficient to pay
debt service on the lease. In the event of a Determination of
Taxability, the interest rate would be adjusted to make the Lessor
whole on an after-tax basis.

170
 City of Birmingham Table F-20
Debt Service Schedules
Privately Placed Debt

Annual Appropriation Lease - Motorolla Solutions, Inc.

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 34'7,105.33 347,105.33

2019 347,105.33 347,105.33
Total 694,210.66 694,210.66

Lease payments are due annually and carry zero

interest. In the event of a Determination of Taxability,
the City must make the Lessor whole on a tax
equivalent basis.

171
 Birmingham Emergency Management Table F-21
Communications District
Debt Service Schedules
Privately Placed Debt

Annual Appropriation Lease - Banc of America Public Capital

Corporation - Motorola

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 175,666.67 175,666.67

2019 175,666.67 175,666.67
Total 351,333.34 351,333.34

Lease payments are due annually and carry zero interest. In the event of a
Determination of Taxability, the District must make the Lessor whole on
a tax equivalent basis.

172
 City of Birmingham Table F-22
Debt Service Schedules
Privately Placed Debt

General Obligation Warrants Dated June 29, 2017

Citizens (Taxable)

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 17,500 17,500

2019 500,000 17,500 517,500
Total 500,000 35,000 535,000

The warrants carry a variable rate of Prime minus. 75% and are
callable at any time.

173
City of Birmingham Table F-23
Debt Service Schedules
Privately Placed Debt
General Obligation Warrants Dated June 29,2017
Compass (Taxable)

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 12,060 12,060

2019 450,000 12,060 462,060
Total 450,000 24,120 474,120

The warrants carry a variable rate of 30 day USOR plus 1.45% and are
and are callable at any time. This warrant is authorized for an
amount of $2 million and can be accessed at any time up to that
amount.

174
 Commercial Development Authority of the City Table F-24
of Birmingham Crossplex Village Project
Debt Service Schedule
Conduit Issuer - General Obligation Funding Agreement
Privately Placed Debt

Fiscal
Year
Ending Total
June 30 Principal Interest Debt Service

2018 571,200 571,200

2019 571,200 571,200
2020 375,703 565,500 941,203
2021 391,268 549,936 941,204
2022 407,477 533,727 941,204
2023 424,359 516,845 941,204
2024 441,940 499,264 941,204
2025 460,249 480,955 941,204
2026 479,316 461,888 941,204
2027 499,173 442,031 941,204
2028 519,853 421,351 941,204
2029 541,390 399,814 941,204
2030 563,820 377,385 941,205
2031 587,177 354,027 941,204
2032 611,504 329,726 941,230
2033 636,837 304,367 941,204
2034 663,220 277,984 941,204
2035 690,695 250,508 941,203
2036 719,311 221,893 941,204
2037 749,111 192,093 941,204
2038 780,145 161,058 941,203
2039 812,465 128,738 941,203
2040 846,125 95,079 941,204
2041 881,178 60,025 941,203
2042 917,684 23,520 941,204
Total 14,000,000 8,790,114 22,790,114

Pursuant to a funding, Incentive and Reimbursement Agreement, dated April 1,

2017, the City guaranteed payment of the debt service on this issue in oder
to encourage the commercial development of a major City owned property,
adjacent to the City's Crossplex sports facility. Should tax revenue be insufficient
to cover the debt service, the City is obligated to advance funds for the debt service.
This debt is expected to be refinanced by private sources when New Market Tax Credits
end in approximately September, 2024 and the City's guaranty will end at that time.

175
 APPENDIX E

Form of City Funding Agreement

[THIS PAGE INTENTIONALLY LEFT BLANK]
 FUNDING AGREEMENT

THIS FUNDING AGREEMENT dated _____________, 2018 (the “Funding Agreement”

or “this Agreement”) is entered into by the CITY OF BIRMINGHAM (the “City”) and
BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY (the “Authority”).

RECITALS

A. The Authority operates and manages a civic center convention complex located
in and for the benefit of the City and Jefferson County, Alabama (the “County”). The Authority
is planning a major expansion of its facilities through the following projects (collectively, the
“Projects”): (i) renovation of Legacy Arena and the Authority’s existing convention and meeting
space, and (ii) construction of an open-air stadium (the “Stadium”) that will provide an additional
venue for convention, sports and entertainment events, including football games of the University
of Alabama at Birmingham (“UAB”). The Projects are described in more detail in the Project
Cooperation Agreement described below. Completion of the Projects will enable the Authority to
compete more successfully with similar facilities in other cities as the site for trade shows,
conventions, entertainment and sporting events.

B. The City believes the Projects will encourage and promote tourism and
convention business and will generate substantial economic benefit for the City through the
creation of jobs and the expansion of the City’s tax base. The City has agreed to support the
Projects and to provide a share of the funding for the financing of the Projects, subject to the
terms of this Agreement.

C. The Projects have a total estimated cost of approximately $300 million. The
Authority will finance the Projects through the issuance of its revenue bonds or notes in one or
more series (collectively, the “Bonds”). The Bonds are described in Exhibit A. Pursuant to this
Funding Agreement the City has agreed to make the City Contributions (defined herein) to the
Authority to provide funds for the payment of one of such series of bonds (the “City-Supported
Bonds”), which are designated as the City-Supported Bonds in Exhibit A. The City-Supported
Bonds will provide a portion of the funding for the Projects. The City’s obligation under this
Funding Agreement to make the City Contributions will be a general obligation of the City,
secured by the full faith and credit of the City.

D. The Authority and the City have the power to undertake the obligations described
in this Agreement under the provisions of Alabama law, including without limitation (i)
Amendment 280 to the Constitution of the State of Alabama (Section 3, Local Amendments,
Jefferson County, in the Official Recompilation of the Constitution of Alabama of 1901)
(“Amendment 280”), (ii) Act No.547 of the 1965 Regular Session of the Alabama Legislature, as
amended (codified as Section 45-37-90 et seq. of the Code of Alabama 1975) (“Act 547”), and
(iii) Amendment 772 to the Constitution of the State of Alabama (Section 94.01 of the Official
Recompilation of the Constitution of Alabama of 1901) (“Amendment 772”).

E. The Authority and the City will enter into a project cooperation agreement (the
“Project Cooperation Agreement”), to be executed and delivered at the same time this Agreement is
executed and delivered. The Project Cooperation Agreement will set forth agreements of the parties
with respect to the development and construction of the Projects and related matters.

E-1
 NOW, THEREFORE, in consideration of the respective representations and agreements
herein contained, the parties hereto agree as follows:

Section 1. Findings and Determinations by City.

The City hereby finds and determines that:

(a) This Agreement is authorized by Alabama law, including without limitation

(i) Amendment 280, (ii) Act 547, and (iii) Amendment 772.

(b) The City Contributions to be made pursuant to this Funding Agreement will benefit
the people of the City to an extent that fully warrants and justifies such appropriations.

(c) The City is making public funds available to the Authority for the purpose of
promoting the economic development of the City. The City has determined that the execution and
delivery of this Funding Agreement and the consummation of the transactions described herein will
promote economic development in the City as follows:

(i) The construction and operation of the Projects are in the economic interest
of the City. The Authority provides employment to citizens of the City, and the Projects
will provide an opportunity to employ additional citizens on both a temporary and
permanent basis.

(ii) The Projects will provide an opportunity for the Authority to attract larger
and additional cultural, sports and convention activities to the City. These activities will
bring more people to the restaurants, hotels and retail establishments in the City, all of
which will expand the City’s tax base.

(iii) The availability of quality cultural events and sporting events in the City
through the continued operation of the Projects will aid in the economic development of the
City by providing an incentive for businesses to locate, expand or remain in the City.

(d) The City-Supported Bonds shall be issued by the Authority and shall be limited
obligations of the Authority payable solely out of the City Contributions. Under the provisions of
Amendment 280 and Amendment 772, neither the City-Supported Bonds nor the payment
obligation of the City under this Agreement shall constitute a debt of the City for purposes of the
debt limitation provisions of Section 225 of the Constitution of the State of Alabama.

Section 2. Effective Date; Issuance of Bonds; Authority Covenants.

(a) This Agreement may be executed and delivered prior to the date of issuance of
the City-Supported Bonds; however, this Agreement will not become effective until (i) the City-
Supported Bonds are issued, (ii) the Authority has issued, or has entered into binding contractual
commitments for the issuance of, all other series of Bonds described in Exhibit A, (iii) the County
has entered into a funding agreement supporting payment of the County-Supported Bonds
identified in Exhibit A, and (iv) UAB has entered into a 20-year lease of the Stadium at fair
market value.

(b) This Agreement will expire and terminate if the City-Supported Bonds have not
been issued by December 31, 2018.

E-2
 (c) The City-Supported Bonds will have a term of 30 years. The Authority shall not
issue additional bonds payable from or secured by the City Contributions without the prior
written consent of the City. The Authority will not refund the City-Supported Bonds without the
prior written consent of the City. Any refunding of the Bonds shall not in any event increase the
amount of the City Contributions or extend the obligation of the City past the original maturity
date of the City-Supported Bonds without the prior written consent of the City.

(d) The City shall have the right to review the documents related to subsection (a)
above prior to the closing on the bond obligations.

Section 3. City Contributions.

(a) During the term of this Funding Agreement the City shall make payments to the
Authority in the amount of $3,000,000 per year for a period of 30 years (the “City
Contributions”), such payments to be made in 60 equal semi-annual installments of $1,500,000
each due on April 20 and October 20 of each year, with the first installment due on the 20th day of
October, 2018. The City’s obligation to make the City Contributions is a general obligation of
the City, secured by the full faith and credit of the City.

(b) The City will appropriate funds each year for the City Contributions in
accordance with the requirements of §6.05 of the Mayor Council Act (Section 45-37A-52.164
of the Code of Alabama 1975). To satisfy its obligation under this Funding Agreement, it is
the intention of the City to appropriate and pay over to the Authority proceeds of the City’s
occupational tax (the “Occupational Tax”) in the amount of $3,000,000 per year; however, the
City’s intention to appropriate funds from the Occupational Tax for the City Contributions does
not constitute a special pledge of the Occupational Tax revenues.

(c) The term of this Funding Agreement shall end on July 1, 2048 (the final maturity
of the City-Supported Bonds); provided, however, that this Funding Agreement shall
automatically terminate prior to the stated termination date if the City-Supported Bonds have
been paid in full. The term of this Funding Agreement may not be extended without the prior
written consent of the City.

(d) The City acknowledges that the Authority will pledge and assign the City
Contributions as security for the payment of the City-Supported Bonds and hereby consents to
such pledge and assignment. When the City-Supported Bonds are issued, the Authority shall
deliver written notification of the assignment, including payment instructions for the trustee for
holders of the City-Supported Bonds. The City Contributions shall be paid directly to such
trustee.

(e) The obligation of the City to make the City Contributions and to perform and
observe the other agreements on its part contained herein shall be absolute and unconditional,
irrespective of any rights of set-off, recoupment or counter-claim the City might otherwise have
against the Authority. The City shall not suspend or discontinue the payment of any City
Contributions or fail to perform and observe any of its other agreements and covenants contained
in this Funding Agreement or terminate this Funding Agreement for any cause whatsoever while
the City-Supported Bonds are outstanding. If the Authority defaults under the Project
Cooperation Agreement, the City may pursue any remedies at law or in equity to compel
performance by the Authority, including without limitation an action for specific performance by
the Authority or an action for actual damages resulting from the default; provided, however, that

E-3
no such default shall result in a termination of this Agreement or a reduction or delay in the City
Contributions.

(f) The Authority agrees that the proceeds of the City-Supported Bonds shall be used
exclusively for the Projects.

Section 4. Existing Agreements between the City and the Authority.

The City has heretofore provided financial assistance to the Authority, or made
commitments for such assistance, including those evidenced by the following agreements
between the City and the Authority (the “Existing Agreements”):

(a) Pledge and Appropriation Agreement dated as of January 15, 1989 (the
“1989 Agreement”), pursuant to which the City pledged $3,000,000 annually from the
City’s occupational tax revenues to the Authority to be used for debt service on certain
bonds issued by the Authority;

(b) Funding Agreement dated as of July 1, 2002 (the “2002 Agreement”),

pursuant to which the City pledged two-thirds of the City’s lodging tax to the Authority
for support of the operations of the Authority; and

(c) Funding Agreement dated as of February 1, 2011, pursuant to which the

City extended its financial commitments under the 1989 Agreement and the 2002
Agreement to pay debt service on certain bonds issued by The Commercial Development
Authority of the City of Birmingham to finance a hotel and entertainment district at the
civic center complex.

The City and the Authority acknowledge and agree that the City’s obligation to make the City
Contributions pursuant to this Funding Agreement is separate from and in addition to the City’s
financial obligations under the Existing Agreements. This Funding Agreement does not
supersede or replace any other prior agreement between the City and the Authority, including
without limitation any of the Existing Agreements. The Existing Agreements are ratified and
confirmed and shall remain in full force and effect.

Section 5. Third Party Beneficiary Agreement

This Funding Agreement shall be considered a third-party beneficiary contract, and the
trustee under the indenture pursuant to which the City-Supported Bonds will be issued and the
holders of the City-Supported Bonds shall be deemed to be third party beneficiaries of the
covenants and agreements on the part of the City and the Authority contained herein as fully and
completely as if said holders were parties hereto. The City acknowledges and agrees (i) that its
said covenants and agreements are binding, (ii) that its performance of said covenants and
agreements may be enforced through legal or equitable actions in a court of competent
jurisdiction, (iii) that the officers of the City can be compelled by mandamus to perform the acts
required by this Funding Agreement, and (iv) that the obligation of the City to appropriate and
pay the City Contributions to the Authority and to perform and observe the other agreements and
covenants on its part herein contained shall be an absolute and unconditional general obligation of
the City for payment of which the City hereby irrevocably pledges it full faith and credit,
irrespective of any rights of set-off, recoupment or counterclaim it might otherwise have against
the Authority.

E-4
 Section 6. Termination

If the City-Supported Bonds have not been issued by December 31, 2018, this Funding
Agreement shall terminate on January 1, 2019. If the City-Supported Bonds have been issued by
December 31, 2018, this Funding Agreement shall terminate upon the final payment and
retirement of the City-Supported Bonds.

Section 7. Authority to Comply with Covenants of Project Cooperation

Agreement

The Authority covenants and agrees to comply with the terms of the Project
Cooperation Agreement dated on the date of this Funding Agreement and executed
simultaneously with this Funding Agreement, including without limitation Sections 17, 19, 20,
21, 22, 23 and 24 of the Project Cooperation Agreement. If the Authority defaults under the
Project Cooperation Agreement, the City may pursue any remedies at law or in equity to compel
performance by the Authority, including without limitation an action for specific performance by
the Authority or an action for actual damages resulting from the default; provided, however, that
no such default shall result in a termination of this Agreement or a reduction or delay in the City
Contributions.

Section 8. Miscellaneous.

(a) No modification, amendment or alteration of this Funding Agreement and no

consent by the City pursuant to Section 2(c) or Section 3(c) shall be effective unless in writing
that is approved by the City Council and signed on behalf of the City and the Authority by their
duly authorized officers; provided, however, that no modification, amendment or alteration of this
Agreement may be made that would (i) reduce or eliminate the amount of the City Contributions,
(ii) change the timing or due date of the City Contributions, (iii) terminate or alter the assignment
of this Agreement to the trustee for holders of the City-Supported Bonds, or (v) in any way
adversely affect the interest of the holders of the City-Supported Bonds, unless (A) the City and
the Authority obtain the prior written consent of the holders of the City-Supported Bonds and (B)
each rating agency that maintains a rating on the City-Supported Bonds confirms in writing that
such modification, amendment or alteration will not cause or result in a reduction or withdrawal
of such rating.

(b) The provisions of this Funding Agreement shall be severable. In the event any
provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any of the remaining provisions hereof.

(c) To the extent permitted by law, the Authority agrees to indemnify the City for
any costs or expenses incurred by the City as a result of claims against the City arising out of the
performance by the City of its obligations under this Funding Agreement, including costs of
defense counsel approved by the Authority from a list provided by the City. The Authority’s
obligation to indemnify shall survive the termination of this Funding Agreement.

[signatures appear on following page]

E-5
 IN WITNESS WHEREOF, the City and the Authority have caused this instrument to be
duly executed as of the date set forth above.

ATTEST: CITY OF BIRMINGHAM

By:_________________________ By: ____________________________________

Lee Frazier, City Clerk Randall L. Woodin, Mayor

Title: ___________________________________

Approved at to Form

_______________________
City Attorney’s Office/Date

BIRMINGHAM-JEFFERSON CIVIC CENTER

AUTHORITY

By: ______________________________________

Title: ____________________________________

E-6
 EXHIBIT A

Description of Bonds and Notes for the Funding of the Projects

Private
BJCC Senior BJCC Subordinate City-Supported County-Supported Contribution
Series Lien Bonds Lien Bonds Bonds Bonds Notes

Approximate Principal $117.3 million* $67.5 million* (1) $46.6 million* $15.3 million* $31.0 million*
Amount

Source of Payment • Revenues generated • Excess revenues • City Funding • County Funding • Pledge Agreements
by the Pledged Taxes generated by the Agreement providing Agreement providing providing for
under the BJCC Pledged Taxes under for contributions to for contributions to contributions to the
senior lien Indenture, the BJCC senior lien the BJCC in the the BJCC in the BJCC in the amount
including the Special Indenture remaining amount of $3 million amount of $1 million of $500,000 per year
Beverage Tax, after the payment of per year for a term of per year for a term of for a term of 10 years
Special Lodging Tax, the BJCC Senior 30 years. 30 years. with various local
Sales and Use Tax, Lien Bonds. corporate or
Tobacco Tax, university sponsors.
Lodging Tax,
PILOTs and Car • Payments under a 20-
Rental Tax. year lease agreement
with UAB for home
football games.

• Naming Rights
agreement with a
local corporate
sponsor providing for
payments to BJCC in
the amount of $1.2
million per year for a
term of 10 years.

________________________
* Principal amounts are preliminary and subject to change based on market conditions and construction costs at the time of issuance of the
Bonds. The plan of financing described in this exhibit may be varied by the Authority if the conditions of Section 2(a) of this Agreement are satisfied and
the Authority certifies that the modified plan of financing is expected to produce sufficient funds for the completion of the Projects.

Note (1): The Authority will also issue Subordinate Lien Bonds to refund its outstanding Series 1992 Bonds.

E-7
[THIS PAGE INTENTIONALLY LEFT BLANK]
 APPENDIX F

Form of Indenture
[THIS PAGE INTENTIONALLY LEFT BLANK]
 TRUST INDENTURE

Dated August 1, 2018

Between

BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY

and

REGIONS BANK

Relating to the issuance of

[$Amount]
Revenue Bonds (City of Birmingham Funding), Series 2018D

by

Birmingham-Jefferson Civic Center Authority

 TABLE OF CONTENTS

PAGE

Parties ............................................................................................................................................................................ 1
Recitals .......................................................................................................................................................................... 1

ARTICLE 1 Definitions and Other Provisions of General Application ........................................................................ 2

SECTION 1.1 Definitions ............................................................................................................................... 2
SECTION 1.2 General Rules of Construction ................................................................................................ 6
SECTION 1.3 Effect of Action by Bondholders ............................................................................................. 7
SECTION 1.4 Effect of Headings and Table of Contents ............................................................................... 7
SECTION 1.5 Date of Indenture ..................................................................................................................... 7
SECTION 1.6 Separability Clause .................................................................................................................. 7
SECTION 1.7 Governing Law ........................................................................................................................ 7
SECTION 1.8 Counterparts ............................................................................................................................ 7
SECTION 1.9 Designation of Time for Performance ..................................................................................... 8

ARTICLE 2 Source of Payment .................................................................................................................................... 8

SECTION 2.1 Source of Payment of Series 2018D Bonds and Other Obligations ........................................ 8
SECTION 2.2 County and State Exempt From Liability ................................................................................ 8
SECTION 2.3 Incorporators, Officers and Directors of the Authority Exempt from Individual Liability ..... 8

ARTICLE 3 Security for Payment................................................................................................................................. 8

SECTION 3.1 Pledge and Assignment ........................................................................................................... 8

ARTICLE 4 Registration, Transfer, Exchange and Payment of the Series 2018D Bonds ............................................9
SECTION 4.1 The Book Entry System........................................................................................................... 9
SECTION 4.2 Alternate Provisions Regarding Payment, Registration, Transfer and Exchange of Series
2018D Bonds .................................................................................................................... 10
SECTION 4.3 Persons Deemed Owners ....................................................................................................... 11
SECTION 4.4 Trustee as Paying Agent ........................................................................................................ 11
SECTION 4.5 Payments Due on Non-Business Days .................................................................................. 12
SECTION 4.6 Currency for Payment............................................................................................................ 12

ARTICLE 5 Terms for Series 2018D Bonds and Disposition of Proceeds ................................................................. 12
SECTION 5.1 Title and Terms ..................................................................................................................... 12
SECTION 5.2 Proceeds From Sale of Series 2018D Bonds ......................................................................... 14

ARTICLE 6 Purchase and Remarketing of Series 2018D Bonds ................................................................................ 14

ARTICLE 7 Redemption of Series 2018D Bonds ....................................................................................................... 14

SECTION 7.1 Redemption Provisions .......................................................................................................... 14
SECTION 7.2 Mandatory Redemption ......................................................................................................... 16
SECTION 7.3 Election to Redeem................................................................................................................ 16
SECTION 7.4 Selection by Trustee of Series 2018D Bonds to be Redeemed .............................................. 16
SECTION 7.5 Notice of Redemption............................................................................................................ 16
SECTION 7.6 Deposit of Redemption Price ................................................................................................. 17
SECTION 7.7 Series 2018D Bonds Payable on Redemption Date ............................................................... 17
SECTION 7.8 Series 2018D Bonds Redeemed in Part ................................................................................. 17

ARTICLE 8 No Additional Series 2018D Bonds ........................................................................................................ 17

ARTICLE 9 Indenture Funds ...................................................................................................................................... 18

SECTION 9.1 Debt Service Fund ................................................................................................................. 18
 SECTION 9.2 Costs of Issuance Fund .......................................................................................................... 18
SECTION 9.3 Acquisition Fund ................................................................................................................... 18
SECTION 9.4 Investment of Indenture Funds .............................................................................................. 19
SECTION 9.5 Application of Funds After Indenture Indebtedness Defeased .............................................. 19

ARTICLE 10 Representations and Covenants ............................................................................................................ 19

SECTION 10.1 General Representations ........................................................................................................ 19
SECTION 10.2 Encumbrances on Trust Estate .............................................................................................. 20
SECTION 10.3 Payment of Series 2018D Bonds ........................................................................................... 20
SECTION 10.4 Inspection of Records ............................................................................................................ 20
SECTION 10.5 Advances by Trustee ............................................................................................................. 20
SECTION 10.6 Corporate Existence; Merger, Consolidation, Etc. ................................................................ 20
SECTION 10.7 Compliance with the Tax Certificate and Agreement............................................................ 20
SECTION 10.8 City Funding Agreement ....................................................................................................... 21

ARTICLE 11 Defaults and Remedies ......................................................................................................................... 21

SECTION 11.1 Events of Default ................................................................................................................... 21
SECTION 11.2 Remedies ............................................................................................................................... 21
SECTION 11.3 Application of Money Collected ........................................................................................... 22
SECTION 11.4 Trustee May Enforce Claims without Possession of Series 2018D Bonds ............................ 22
SECTION 11.5 Limitation on Suits ................................................................................................................ 22
SECTION 11.6 Unconditional Right of Bondholders to Receive Principal, Premium and Interest ............... 23
SECTION 11.7 Restoration of Positions ......................................................................................................... 23
SECTION 11.8 Delay or Omission Not Waiver ............................................................................................. 23
SECTION 11.9 Control by Bondholders ........................................................................................................ 23
SECTION 11.10 Waiver of Past Defaults ......................................................................................................... 23
SECTION 11.11 Suits to Protect the Trust Estate ............................................................................................. 24

ARTICLE 12 The Trustee ........................................................................................................................................... 24

SECTION 12.1 Certain Duties and Responsibilities of Trustee...................................................................... 24
SECTION 12.2 Notice of Defaults.................................................................................................................. 25
SECTION 12.3 Certain Rights of Trustee....................................................................................................... 25
SECTION 12.4 Not Responsible for Recitals ................................................................................................. 26
SECTION 12.5 May Hold Series 2018D Bonds ............................................................................................. 26
SECTION 12.6 Money Held in Trust ............................................................................................................. 26
SECTION 12.7 Compensation and Reimbursement ....................................................................................... 26
SECTION 12.8 Corporate Trustee Required; Eligibility ................................................................................ 26
SECTION 12.9 Resignation and Removal; Appointment of Successor .......................................................... 27
SECTION 12.10 Acceptance of Appointment by Successor ............................................................................ 27
SECTION 12.11 Merger, Conversion, Consolidation or Succession to Business............................................. 28

ARTICLE 13 Amendment of Bond Documents .......................................................................................................... 28

SECTION 13.1 General Requirements for Amendments ............................................................................... 28
SECTION 13.2 Amendments Without Consent of Bondholders .................................................................... 28
SECTION 13.3 Amendments Requiring Consent of All Affected Bondholders ............................................ 29
SECTION 13.4 Amendments Requiring Majority Consent of Bondholders .................................................. 29
SECTION 13.5 Discretion of Trustee ............................................................................................................. 29
SECTION 13.6 Trustee Protected by Opinion of Counsel .............................................................................. 30
SECTION 13.7 Amendments Affecting Trustee’s Personal Rights ................................................................ 30
SECTION 13.8 Effect on Bondholders ........................................................................................................... 30
SECTION 13.9 Reference in Series 2018D Bonds to Amendments ............................................................... 30
SECTION 13.10 Amendments Not to Affect Tax Exemption .......................................................................... 30

ARTICLE 14 Defeasance ............................................................................................................................................ 30

SECTION 14.1 Payment of Indenture Indebtedness; Satisfaction and Discharge of Indenture...................... 30
SECTION 14.2 Trust for Payment of Debt Service ........................................................................................ 31
ARTICLE 15 Miscellaneous ....................................................................................................................................... 31
SECTION 15.1 Notices to Financing Participants .......................................................................................... 31
SECTION 15.2 Notices to Bondholders ......................................................................................................... 32
SECTION 15.3 Successors and Assigns ......................................................................................................... 32
SECTION 15.4 Benefits of Indenture ............................................................................................................. 32

EXHIBIT 5.1(c) .................................................................................................................. Form of Series 2018D Bonds

EXHIBIT 9.2(b) .............................................................................................................................................. Requisition
EXHIBIT 9.3(d) ......................................................................................................Description of Capital Improvements
EXHIBIT 15.1(b) ................................................................................................................................................... Notices
 TRUST INDENTURE

THIS TRUST INDENTURE dated August 1, 2018 is entered into by BIRMINGHAM-JEFFERSON CIVIC
CENTER AUTHORITY, an Alabama public corporation (the “Authority”), and REGIONS BANK, an Alabama banking
corporation (the “Trustee”).

Recitals

A. The Authority owns and operates a civic center convention complex (the “Civic Center”)
consisting of various facilities to promote events that contribute to the cultural betterment of the City of Birmingham
(the “City”) and Jefferson County, Alabama (the “County”).

B. The Authority has duly authorized the issuance of its [$Amount] aggregate principal amount of
Revenue Bonds (City of Birmingham Funding), Series 2018D (the “Series 2018D Bonds”) pursuant to this
Indenture, as part of a larger plan of finance that will result in the issuance of multiple series of bonds to finance the
Capital Improvements described below.

C. The Series 2018D Bonds are being issued for the purpose of financing a portion of the cost of a
major expansion and renovations to the Civic Center (the “Capital Improvements”), which are specifically described
in Exhibit 9.3(d).

D. Pursuant to a Funding Agreement dated ________, 2018 between the City and the Authority (the
“City Funding Agreement”), the City has agreed to make payments to the Authority in the amount of $3,000,000 per
year for a period of 30 years (the “City Contributions”), such payments to be made in 60 equal semi-annual
installments due on April 20 and October 20 of each year. The City’s obligation to make the City Contributions is a
general obligation of the City, secured by the full faith and credit of the City.

E. The rights of the Authority to receive payments under the City Funding Agreement have been
assigned to the Trustee pursuant to this Indenture.

F. The Series 2018D Bonds and all other payment obligations under this Indenture are limited
obligations of the Authority payable solely out of the Trust Estate established pursuant to the Indenture, which
includes (i) the City Contributions and any other payments by City pursuant to the Funding Agreement, and
(ii) money and investments in the funds and accounts established under this Indenture.

G. All things have been done which are necessary to make the Series 2018D Bonds, when executed
by the Authority and authenticated and delivered by the Trustee hereunder, the valid obligations of the Authority,
and to constitute this Indenture a valid trust indenture for the security of the Series 2018D Bonds, in accordance with
the terms of the Series 2018D Bonds and this Indenture.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

It is hereby covenanted and declared that all the Series 2018D Bonds are to be authenticated and delivered
and the property subject to this Indenture is to be held and applied by the Trustee, subject to the covenants,
conditions and trusts hereinafter set forth, and the Authority does hereby covenant and agree to and with the Trustee,
for the equal and proportionate benefit (except as otherwise expressly provided herein) of all Series 2018
Bondholders as follows:
 ARTICLE 1

Definitions and Other Provisions

of General Application

SECTION 1.1 Definitions

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise
requires, the following terms shall have the meaning indicated:

“Acquisition Costs” means the costs of acquiring, constructing and installing the Capital Improvements,
including without limitation any rebate due to the United States Treasury with respect to the Series 2018D Bonds
pursuant to Section 148(f) of the Internal Revenue Code.

“Acquisition Fund” means the fund established pursuant to Section 9.3.

“Act of Bankruptcy” means the filing of a petition in bankruptcy (or the other commencement of a
bankruptcy or similar proceeding) by or against a person under any applicable bankruptcy, insolvency,
reorganization, or similar law, now or hereafter in effect.

“Affiliate” of any specified person means any other person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified person. For purposes of this definition, “control”
when used with respect to any specified person means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Authority” means Birmingham-Jefferson Civic Center Authority, an Alabama public corporation, until a
successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter
“Authority” means such successor corporation.

“Authorized Denominations” means $5,000 or any multiple thereof.

“Authorized Representative of the Authority” means any officer or agent of the Authority authorized by
the governing body of the Authority to act as “Authorized Representative of the Authority” for purposes of the Bond
Documents.

“Bond Documents” means the Series 2018D Bonds, the Indenture, and the City Funding Agreement.

“Bond Payment Date” means each date on which Debt Service is payable on the Series 2018D Bonds,
including any date fixed for redemption of Series 2018D Bonds.

“Bond Register” means the register or registers for the registration and transfer of Series 2018D Bonds
maintained by the Authority pursuant to Section 4.2(c).

“Bondholder” when used with respect to any Bond means the owner of such Bond.

“Book Entry System” means the book entry system maintained by DTC for the registration, transfer,
exchange and payment of debt obligations maintained by DTC.

“Business Day” means any day other than a Saturday, a Sunday, or a day on which the Trustee is
authorized to be closed under general law or regulation applicable in the place where the Trustee performs its
obligations under the Indenture.

“Callable Series 2018D Bonds” means Series 2018D Bonds that are subject to optional redemption.

2
 “Capital Improvements” means the portion of the improvements and additions to Authority’s facilities
being financed by the Series 2018D Bonds, more particularly described in Exhibit 9.3(d).

“City” means the City of Birmingham, Alabama.

“City Contributions” means the payments made by the City to the Authority under the City Funding
Agreement.

“City Funding Agreement” means the Funding Agreement dated _________, 2018 between the Authority
and the City.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement entered into by the
Authority in connection with the issuance of the Series 2018D Bonds.

“Costs of Issuance” means the expenses incurred in connection with the issuance of the Series 2018D
Bonds, including legal, consulting, accounting and underwriting fees and expenses.

“Costs of Issuance Fund” means the fund established pursuant to Section 9.2.

“Debt Service” means the principal, redemption premium (if any) and interest payable on the Series 2018D
Bonds.

“Debt Service Fund” means the fund established pursuant to Section 9.1.

“Defaulted Interest” has the meaning assigned in Section 4.2(l).

“Defeased”, when used with respect to Indenture Indebtedness, has the meaning assigned in Section 14.1.

“DTC” means The Depository Trust Company, and its successors and assigns.

“Eligible Debt Service Fund Investments” means:

(a) Federal Securities.

(b) An interest in any trust or fund that invests solely in Federal Securities or repurchase
agreements with respect to Federal Securities; provided, however, that the obligations of such trust or fund
or the counterparty to such repurchase agreement must be rated “Aa3” or higher.by Moody’s.

(c) A certificate of deposit issued by, or other interest-bearing deposit with, any bank
organized under the laws of the United States of America or any state thereof (including without limitation
the Trustee); provided, however, that deposits with such bank must have the highest short-term rating by
Moody’s (“P-1”).

(d) A repurchase agreement with respect to Federal Securities, provided that the Federal
Securities subject to such repurchase agreement are held by or under the control of the Trustee pursuant to
a perfected security interest free and clear of third-party liens; provided, however, that the obligations of the
counterparty to such repurchase agreement must be rated “Aa3” or higher.by Moody’s.

Any investment of money in the Debt Service Fund requiring a rating shall be an Eligible Debt Service Fund
Investment if the required rating is applicable on the date such investment is made. If the Authority receives notice
from the Trustee that the required rating is no longer applicable to any such investment, or if the Authority has
actual knowledge that the required rating is no longer applicable, the Authority shall promptly give instructions for
liquidation of such investment and shall give directions for reinvestment of the proceeds of such investment in
another investment that is an Eligible Debt Service Fund Investment.

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 “Enabling Law” means (i) Act No. 547 enacted at the 1965 Regular Session of the Legislature of the State
of Alabama, as amended (codified as Section 45-37-90 et seq. of the Code of Alabama 1975), (ii) Amendment No.
280 to the Constitution of Alabama 1901, and (iii) Amendment No. 772 to the Constitution of Alabama 1901.

“Event of Default” has the meaning assigned in Section 11.1. An Event of Default shall “exist” if an
Event of Default shall have occurred and be continuing.

“Favorable Tax Opinion” means an Opinion of Counsel stating in effect that the proposed action, together
with any other changes with respect to the Series 2018D Bonds made or to be made in connection with such action,
will not cause interest on the Series 2018D Bonds to become includible in gross income of the Bondholders for
purposes of federal income taxation.

“Federal Securities” means direct obligations of the Department of the Treasury of the United States of
America.

“Financing Participants” means the Authority and the Trustee.

“Fitch” means Fitch Ratings, Inc.

“Holder”, when used with respect to any Bond, means the owner of such Bond.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented,
modified or amended by one or more indentures or other instruments supplemental hereto entered into pursuant to
the applicable provisions hereof.

“Indenture Funds” means any fund or account established pursuant to this Indenture.

“Indenture Indebtedness” means all indebtedness of the Authority at the time secured by this Indenture,
including without limitation (a) all Debt Service on the Series 2018D Bonds and (b) all reasonable fees, charges and
disbursements of the Trustee for services performed and disbursements made under this Indenture.

“Independent”, when used with respect to any person, means a person who (i) does not have any direct
financial interest or any material indirect financial interest in any Financing Participant or any Affiliate of a
Financing Participant, (ii) does not serve as a member of the governing body of any Financing Participant or any
Affiliate of a Financing Participant, and (iii) is not employed by any Financing Participant or any Affiliate of a
Financing Participant.

“Interest Payment Date”, when used with respect to any installment of interest on a Bond, means the date
specified in this Indenture as the date on which such installment of interest is due and payable.

“Maturity Date”, when used with respect to any Bond, means the date specified herein in this Indenture as
the date on which principal of such Bond is due and payable.

“Moody’s” means Moody’s Investors Service, Inc.

“Obligor Bonds” means Series 2018D Bonds registered in the name of (or in the name of a nominee for)
the Authority, or any Affiliate of the Authority. The Trustee may assume that no Series 2018D Bonds are Obligor
Bonds unless it has actual notice to the contrary.

“Office of the Trustee” means the office of the Trustee for hand delivery of notices, as specified pursuant to
Section 15.1.

“Opinion of Counsel” means an opinion from an attorney or firm of attorneys with experience in the
matters to be covered in the opinion. Except as otherwise expressly provided in this Indenture, the attorney or
attorneys rendering such opinion may be counsel for one or more of the Financing Participants, including counsel in
the full-time employment of a Financing Participant.

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 “Outstanding”, when used with respect to Series 2018D Bonds means, as of the date of determination, all
Series 2018D Bonds authenticated and delivered under this Indenture, except:

(a) Series 2018D Bonds cancelled by the Trustee or delivered to the Trustee for cancellation;

(b) Series 2018D Bonds for whose payment or redemption money in the necessary amount
has been deposited with the Trustee in trust for the Holders of such Series 2018D Bonds, provided that, if
such Series 2018D Bonds are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made; and

(c) Series 2018D Bonds in exchange for or in lieu of which other Series 2018D Bonds have
been authenticated and delivered under this Indenture;

provided, however, that in determining whether the Holders of the requisite principal amount of Series 2018D
Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
Obligor Bonds shall be disregarded and deemed not to be Outstanding. Obligor Bonds which have been pledged in
good faith may be regarded as Outstanding for such purposes if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Bonds and that Bonds registered in the name of such
pledgee as beneficial owner would not be considered Obligor Bonds.

“Post-Default Rate” means (a) when used with respect to any payment of Debt Service on any Bond, the
interest rate applicable to such Bond on the date such Debt Service became due plus 2.0% (200 basis points), and
(b) when used with respect to all other payments due under this Indenture, a variable rate equal to the Trustee’s
prime or base rate plus 2.0% (200 basis points), in each case computed on the basis of a 365 or 366-day year, as the
case may be, for actual days elapsed.

“Qualified Investments” means:

(a) Federal Securities.

(b) An interest in any trust or fund that invests solely in Federal Securities or repurchase
agreements with respect to Federal Securities.

(c) Obligations or any of the following federal agencies, which obligations represent the full
faith and credit of the United States of America:
a. Farmers Home Administration.
b. General Services Administration.
c. U.S. Maritime Administration.
d. Small Business Administration.
e. Government National Mortgage Association (GNMA).
f. U.S. Department of Housing and Urban Development (HUD).
g. Federal Housing Administration.

(d) U.S. dollar denominated deposit accounts and certificates of deposit with banks or
savings associations which are qualified public depositories un Chapter 14A of Title 41 of the Code of
Alabama 1975.

(e) A certificate of deposit issued by, or other interest-bearing deposit with, any bank
organized under the laws of the United States of America or any state thereof (including without limitation
the Trustee), provided that (i) long-term deposits with such bank are rated by at least one Rating Agency in
one of the three highest rating categories, or (ii) such deposit is collaterally secured by the issuing bank by
pledging Federal Securities having a market value (exclusive of accrued interest) not less than the face
amount of such certificate less the amount of such deposit insured by the Federal Deposit Insurance
Corporation.

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 (f) Interests, however evidenced, in any common trust fund or other collective investment
fund maintained by any national or state chartered bank, trust company or savings association having trust
powers, or securities of or other interests in any open-end or closed-end management type investment
company or investment trust registered under the Investment Company Act of 1940, as from time to time
amended, so long as (i) such fund meets the requirements of Section 11-81-21(5) of the Code of Alabama
1975 and (ii) such fund is rated by at least one Rating Agency in one of the three highest rating categories.

(g) A repurchase agreement with respect to Federal Securities, provided that the Federal
Securities subject to such repurchase agreement are held by or under the control of the Trustee pursuant to
a perfected security interest free and clear of third-party liens.

For purposes of this definition, rating categories are determined without regard to qualifiers, such as “+” or “1” (for
example, ratings of “A-1”, “A-2”, “A-” and “A+” are considered part of the same rating category). Any investment
requiring a rating shall be a Qualified Investment if the required rating is applicable on the date such investment is
made. If the Authority receives notice from the Trustee that the required rating is no longer applicable to any such
investment, or if the Authority has actual knowledge that the required rating is no longer applicable, the Authority
shall promptly give instructions for liquidation of such investment and shall give directions for reinvestment of the
proceeds of such investment in another investment that is a Qualified Investment.

“Rating Agency” means Moody’s, S & P, Fitch and any other nationally recognized securities rating
agency.

“Regular Record Date”, when used with respect to the payment of interest on the Series 2018D Bonds,
means the 15th day (whether or not a Business Day) of the month next preceding each Interest Payment Date for
such Bond.

“S & P” means S&P Global Ratings.

“Series 2018D Bonds” means the bonds issued pursuant to this Indenture.

“Special Record Date” for the payment of any Defaulted Interest on the Series 2018D Bonds means a date
fixed by the Trustee pursuant to Section 4.2(l).

“Tax Certificate and Agreement” means that certain Tax Certificate and Agreement entered into by the
Authority in connection with the issuance of the Series 2018D Bonds.

“Term Bonds” means Series 2018D Bonds subject to scheduled mandatory redemption pursuant to
Section 7.1(b).

“Trust Estate” shall have the meaning assigned in Section 3.1.

“Trustee” means Regions Bank, an Alabama banking corporation, until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” means such successor.

SECTION 1.2 General Rules of Construction

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise
requires:

(a) Defined terms in the singular shall include the plural as well as the singular, and vice
versa.

(b) The definitions in the recitals to this instrument are for convenience only and shall not
affect the construction of this instrument.

6
 (c) All accounting terms not otherwise defined herein have the meaning assigned to them,
and all computations herein provided for shall be made, in accordance with generally accepted accounting
principles. All references herein to “generally accepted accounting principles” refer to such principles as
they exist at the date of application thereof.

(d) All references in this instrument to designated “Articles”, “Sections” and other
subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally
executed.

(e) The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other subdivision.

(f) All references in this instrument to a separate instrument are to such separate instrument
as the same may be amended or supplemented from time to time pursuant to the applicable provisions
thereof.

(g) The term “person” shall include any individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization and any government or any agency
or political subdivision thereof.

(h) The term “including” means “including without limitation” and “including, but not
limited to”.

SECTION 1.3 Effect of Action by Bondholders

Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any
Bond shall bind every future Holder of the same Bond and the Holder of every Bond issued upon the transfer thereof
or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the
Authority in reliance thereon, whether or not notation of such action is made upon such Bond.

SECTION 1.4 Effect of Headings and Table of Contents

The Article and Section headings herein and in the Table of Contents are for convenience only and shall
not affect the construction hereof.

SECTION 1.5 Date of Indenture

The date of this Indenture is intended as and for a date for the convenient identification of this Indenture
and is not intended to indicate that this Indenture was executed and delivered on said date.

SECTION 1.6 Separability Clause

If any provision in this Indenture or in the Series 2018D Bonds shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.

SECTION 1.7 Governing Law

This Indenture shall be construed in accordance with and governed by the laws of the State of Alabama.

SECTION 1.8 Counterparts

This instrument may be executed in any number of counterparts, each of which so executed shall be
deemed an original, but all such counterparts shall together constitute but one and the same instrument.

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 SECTION 1.9 Designation of Time for Performance

Except as otherwise expressly provided herein, any reference in this Indenture to the time of day means the
time of day in the city where the Trustee maintains its place of business for the performance of its obligations under
this Indenture.

ARTICLE 2

Source of Payment

SECTION 2.1 Source of Payment of Series 2018D Bonds and Other Obligations

(a) The Series 2018D Bonds and all other payment obligations under this Indenture are limited
obligations of the Authority payable solely out of the Trust Estate established pursuant to this Indenture, which
includes (i) the City Contributions and any other payments by the City pursuant to the City Funding Agreement, and
(ii) money and investments in the funds and accounts established pursuant to the Indenture.

(b) This Indenture shall not constitute or effect a pledge or assignment of, or any other type of security
interest in, the property, taxes or revenues of the Authority other than the property specifically identified by this
Indenture as part of the Trust Estate.

SECTION 2.2 County and State Exempt From Liability

The Series 2018D Bonds and any other payment obligations under this Indenture shall not constitute or
give rise to an indebtedness or liability of, and shall not constitute a charge against the general credit or taxing
powers of, the County or the State of Alabama.

SECTION 2.3 Incorporators, Officers and Directors of the Authority Exempt from Individual
Liability

No recourse under or upon any covenant or agreement of this Indenture, or of any Series 2018D Bonds, or
for any claim based thereon or otherwise in respect thereof, shall be had against any past, present or future
incorporator, officer or director of the Authority, or of any successor, either directly or through the Authority,
whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the Series 2018D Bonds issued hereunder are solely
corporate obligations, and that no personal liability whatever shall attach to, or is or shall be incurred by, any
incorporator, officer or director of the Authority or any successor, or any of them, because of the issuance of the
Series 2018D Bonds, or under or by reason of the covenants or agreements contained in this Indenture or in any
Series 2018D Bonds or implied therefrom.

ARTICLE 3

Security for Payment

SECTION 3.1 Pledge and Assignment

To secure the payment of Debt Service on the Series 2018D Bonds and all other Indenture Indebtedness
and the performance of the covenants contained in this Indenture and the Series 2018D Bonds, and to declare the
terms and conditions on which the Series 2018D Bonds are secured, and in consideration of the premises and of the
purchase of the Series 2018D Bonds by the Holders thereof, the Authority hereby pledges and assigns to the Trustee,
and grants to the Trustee a security interest in, the following property:

(a) Indenture Funds. Money and investments from time to time on deposit in, or forming a
part of, the Indenture Funds.

(b) City Funding Agreement. All right, title and interest of the Authority in and to the City
Funding Agreement, including all City Contributions and all other payments by the City pursuant to the

8
 City Funding Agreement; provided, however, that nothing contained in this Indenture shall impair,
diminish or otherwise affect the Authority’s obligations under the City Funding Agreement or impose any
of such obligations on the Trustee.

(c) Other Property. Any and all property of every kind or description which may, from
time to time hereafter, by delivery or by writing of any kind, be subjected to the lien of this Indenture as
additional security by the Authority or anyone on its part or with its consent, or which pursuant to any of
the provisions hereof may come into the possession or control of the Trustee or a receiver appointed
pursuant to this Indenture; and the Trustee is hereby authorized to receive any and all such property as and
for additional security for the obligations secured hereby and to hold and apply all such property subject to
the terms hereof.

TO HAVE AND TO HOLD all such property, rights and privileges (collectively called the “Trust Estate”) unto
the Trustee and its successors and assigns;

BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the Holders from
time to time of the Series 2018D Bonds (without any priority of any such Bond over any other such Bond).

PROVIDED, HOWEVER, that money and investments in the Indenture Funds may be applied for the purposes
and on the terms and conditions set forth in this Indenture.

ARTICLE 4

Registration, Transfer, Exchange and Payment of the Series 2018D Bonds

SECTION 4.1 The Book Entry System

(a) The ownership, transfer, exchange and payment of Series 2018D Bonds shall be governed by the
Book Entry System administered by DTC until the Book Entry System is terminated pursuant to Section 4.1(c).

(b) While Series 2018D Bonds are in the Book Entry System, the following provisions shall govern
for purposes of this Indenture and shall supersede any contrary provisions of this Indenture:

(1) DTC shall be the registered Holder of the Series 2018D Bonds on the Bond Register
maintained by the Trustee pursuant to Section 4.2(c).

(2) Notwithstanding the fact that DTC may hold one or more Bond certificates for purposes
of the Book Entry System, the term “Bond” means each separate security credited to a beneficial owner (or
entitlement holder) pursuant to the Book Entry System, and the term “Holder” means the person identified
pursuant to the Book Entry System as the beneficial owner of the related security.

(3) The terms and limitations of this Indenture with respect to each separate Bond shall be
applicable to each separate security credited to a beneficial owner under the Book Entry System.

(4) All payments of Debt Service on the Series 2018D Bonds shall be made by the Trustee
through the Book Entry System, and payments by such method shall be valid and effective fully to satisfy
and discharge the Authority’s obligations with respect to such payments.

(c) The Trustee may, in its discretion, discontinue the Book Entry System in accordance with the rules
and regulations of the Book Entry System.

(d) If the Book Entry System is discontinued, (i) a physical certificate or physical certificates shall be
executed, authenticated and delivered to each beneficial owner, or entitlement holder, under the Book Entry System
in accordance with such person’s ownership of Series 2018D Bonds, (ii) such certificates shall be registered in the
Bond Register maintained by the Trustee, and (iii) the remaining provisions of this Article shall govern the
registration, transfer, exchange and payment of Series 2018D Bonds.

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 SECTION 4.2 Alternate Provisions Regarding Payment, Registration, Transfer and Exchange
of Series 2018D Bonds

(a) If the Book Entry System is discontinued, the provisions of this Section shall control the
registration, transfer, exchange and payment of Series 2018D Bonds.

(b) Payment of Debt Service on the Series 2018D Bonds shall be made as follows:

(1) Payment of interest on the Series 2018D Bonds which is due on any Interest Payment
Date shall be made by check or draft mailed by the Trustee to the persons entitled thereto at their addresses
appearing in the Bond Register. Such payments of interest shall be deemed timely made if so mailed on the
Interest Payment Date (or, if such Interest Payment Date is not a Business Day, on the Business Day next
following such Interest Payment Date).

(2) Payment of the principal of (and premium, if any, on) the Series 2018D Bonds and
payment of accrued interest on the Series 2018D Bonds due upon redemption on any date other than an
Interest Payment Date shall be made only upon surrender thereof at the Office of the Trustee.

(3) Upon the written request of any Bondholder, the Trustee shall make payments of Debt
Service by wire transfer, provided that (i) such request contains adequate instructions for the method of
payment, and (ii) payment of the principal of (and redemption premium, if any, on) such Series 2018D
Bonds and payment of the accrued interest on such Series 2018D Bonds due upon redemption on any date
other than an Interest Payment Date shall be made only upon surrender of such Series 2018D Bonds to the
Trustee.

(c) The Authority shall cause to be kept at the Office of the Trustee a register (herein sometimes
referred to as the “Bond Register”) in which, subject to such reasonable regulations as it may prescribe, the
Authority shall provide for the registration of Series 2018D Bonds and registration of transfers of Series 2018D
Bonds entitled to be registered or transferred as herein provided. The Trustee is hereby appointed as agent of the
Authority for the purpose of registering Series 2018D Bonds and transfers of Series 2018D Bonds as herein
provided.

(d) Upon surrender for transfer of any Bond at the Office of the Trustee, the Authority shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more
new Series 2018D Bonds of the same maturity and interest rate, of any Authorized Denominations and of a like
aggregate principal amount.

(e) At the option of the Holder, Series 2018D Bonds may be exchanged for other Series 2018D Bonds
of the same maturity and interest rate, of any Authorized Denominations and of a like aggregate principal amount,
upon surrender of the Series 2018D Bonds to be exchanged at the Office of the Trustee. Whenever any Series
2018D Bonds are so surrendered for exchange, the Authority shall execute, and the Trustee shall authenticate and
deliver, the Series 2018D Bonds which the Bondholder making the exchange is entitled to receive.

(f) All Series 2018D Bonds surrendered upon any exchange or transfer provided for in this Indenture
shall be promptly cancelled by the Trustee.

(g) All Series 2018D Bonds issued upon any transfer or exchange of Series 2018D Bonds shall be the
valid obligations of the Authority and entitled to the same security and benefits under this Indenture as the Series
2018D Bonds surrendered upon such transfer or exchange.

(h) Every Bond presented or surrendered for transfer or exchange shall contain, or be accompanied
by, all necessary endorsements for transfer.

(i) No service charge shall be made for any transfer or exchange of Series 2018D Bonds, but the
Authority may require payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Series 2018D Bonds.

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 (j) The Authority shall not be required (i) to transfer or exchange any Bond during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of redemption of Series 2018D Bonds
and ending at the close of business on the day of such mailing, or (ii) to transfer or exchange any Bond so selected
for redemption in whole or in part.

(k) Interest on any Bond which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the person in whose name that Bond is registered at the close of business on the
Regular Record Date for such Interest Payment Date.

(l) Any interest on any Bond which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date solely by virtue of such Holder having been such Holder; and such Defaulted Interest
shall be paid by the Authority to the persons in whose names such Series 2018D Bonds are registered at the close of
business on a special record date (herein called a “Special Record Date”) for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Authority shall notify the Trustee of the amount of Defaulted
Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be such as will
enable the Trustee to comply with the next sentence hereof), and at the same time the Authority shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this subsection provided and not to be deemed part of the Trust Estate. Thereupon, the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than
10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the Authority of such Special Record Date and,
in the name and at the expense of the Authority, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Bondholder at his
address as it appears in the Bond Register not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the persons in whose names the Series 2018D Bonds are registered on such
Special Record Date.

(m) Subject to the foregoing provisions of this Section, each Bond delivered under this Indenture upon
transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Bond and each such Bond shall bear interest from such date that
neither gain nor loss in interest shall result from such transfer, exchange or substitution.

(n) All Series 2018D Bonds surrendered for payment, redemption, transfer or exchange, shall be
promptly cancelled by the Trustee. The Trustee may destroy cancelled certificates. No Bond shall be authenticated
in lieu of or in exchange for any Bond cancelled as provided in this Section, except as expressly provided by this
Indenture.

SECTION 4.3 Persons Deemed Owners

(a) If the Book Entry System is in effect, the ownership of Series 2018D Bonds shall be determined
pursuant to the rules and regulations of the Book Entry System.

(b) If the Book Entry System is terminated, the registered Holder of each Bond shall be treated as the
owner of such Bond for purposes of this Indenture.

SECTION 4.4 Trustee as Paying Agent

Debt Service on the Series 2018D Bonds shall be payable on behalf of the Authority by the Trustee, which
has been designated as the paying agent of the Authority for purposes of this Indenture.

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 SECTION 4.5 Payments Due on Non-Business Days

Except as otherwise expressly provided by this Indenture, if any payment on the Series 2018D Bonds is due
on a day which is not a Business Day, such payment may be made on the first succeeding day which is a Business
Day with the same effect as if made on the day such payment was due.

SECTION 4.6 Currency for Payment

Payment of Debt Service on the Series 2018D Bonds shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of public and private debts.

ARTICLE 5

Terms for Series 2018D Bonds and Disposition of Proceeds

SECTION 5.1 Title and Terms

(a) Title and Amount. The Series 2018D Bonds shall be entitled “Revenue Bonds (City of
Birmingham Funding), Series 2018D”. The aggregate principal amount of the Series 2018D Bonds which may be
Outstanding is limited to [$Amount].

(b) Authorized Denominations. The Series 2018D Bonds shall be in Authorized Denominations.

(c) Form and Number. The Series 2018D Bonds shall be issuable as registered bonds without
coupons in Authorized Denominations. The Series 2018D Bonds shall be numbered separately from 1 upward. In
order to facilitate the Book Entry System, a single physical certificate for all Series 2018D Bonds of the same
maturity and interest rate shall be delivered to the Trustee. The Series 2018D Bonds and the certificate of
authentication shall be substantially as set forth in Exhibit 5.1(c), with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture.

(d) Maturity Dates and Interest Rates. The Series 2018D Bonds shall mature in years and amounts
and shall bear interest as follows:

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 Principal Initial
Year of Maturity Amount Applicable CUSIP
(May 1) Maturing Interest Rate Number

[Note: If any Bonds are to be issued as Term Bonds, the scheduled mandatory redemption requirements of
Section 7.1(b) will reflect the scheduled mandatory redemption requirements and the maturities reflected in
this Section 5.1(d) will be modified accordingly.]

(e) Date. The Series 2018D Bonds shall be dated as of the date of initial delivery of the Series 2018D
Bonds.

(f) Interest Payment Dates. Interest on the Series 2018D Bonds shall be payable in arrears on
May 1 and November 1 in each year, beginning November 1, 2018.

(g) Person to Whom Interest Payable. If the Book Entry System is in effect, the Trustee shall pay
interest to DTC, and interest payments shall be distributed by DTC in accordance with the rules and regulations of
DTC. If the Book Entry System is terminated, the interest due on any Interest Payment Date for the Series 2018D
Bonds shall be payable to the Bondholders as of the Regular Record Date for such Interest Payment Date.

(h) Computation of Interest Accrual. The Series 2018D Bonds shall bear interest from their date, or
the most recent date to which interest has been paid or duly provided for, at the applicable rate per annum set forth
above. Interest shall be computed on the basis of a 360-day year with 12 months of 30 days each.

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 (i) Interest on Overdue Payments. Interest shall be payable on overdue principal on the Series
2018D Bonds and (to the extent legally enforceable) on any overdue installment of interest on the Series 2018D
Bonds at the Post-Default Rate.

(j) Execution and Authentication. Physical certificates evidencing the Series 2018D Bonds shall be
executed on behalf of the Authority by its Chairman or Vice Chairman under its corporate seal reproduced thereon
and attested by its Secretary. The signature of any of these officers on the physical certificates may be manual or, to
the extent permitted by law, facsimile. Physical certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Authority shall bind the Authority, notwithstanding that
such individuals or any of them shall have ceased to hold such offices prior to the authentication and delivery of
such physical certificates or shall not have held such offices at the date of such physical certificates. No physical
certificate shall be secured by, or be entitled to any lien, right or benefit under, this Indenture or be valid or
obligatory for any purpose, unless there appears on such physical certificate a certificate of authentication
substantially in the form provided for herein, executed by the Trustee by manual signature, and such certificate upon
any physical certificate shall be conclusive evidence, and the only evidence, that such physical certificate has been
duly authenticated and delivered hereunder.

SECTION 5.2 Proceeds From Sale of Series 2018D Bonds

The proceeds from the sale of the Series 2018D Bonds to the original purchaser or purchasers thereof shall
be applied as follows:

(a) The amount to be used for Costs of Issuance shall be deposited in the Costs of Issuance Fund.

(b) The amount to be used for Acquisition Costs shall be deposited in the Acquisition Fund.

The amount of Bond proceeds to be applied to each purpose identified in this Section 5.2 shall be specified by
directions from an Authorized Representative of the Authority delivered to the Trustee.

ARTICLE 6

Purchase and Remarketing of Series 2018D Bonds

The Series 2018D Bonds are not subject to optional or mandatory tender for purchase by the Holders. The
principal of each Bond is due and payable only on the Maturity Date for such Bond. Neither the Authority nor any
other Financing Participant has any obligation to purchase Series 2018D Bonds from the Holders prior to the
Maturity Date.

ARTICLE 7

Redemption of Series 2018D Bonds

SECTION 7.1 Redemption Provisions

The Series 2018D Bonds shall be subject to redemption prior to maturity as follows:

(a) Optional Redemption. Any Bond that matures after ________, _____ may be redeemed in
whole or in part on any date on or after _______, _____ at a redemption price equal to 100% of the principal amount
redeemed plus accrued interest thereon to the date of redemption.

(b) Scheduled Mandatory Redemption of Term Bonds. Term Bonds are subject to scheduled
mandatory redemption as follows:

(1) Series 2018D Bonds with a stated maturity in ______ and an interest rate of __% shall
be redeemed, at a redemption price equal to 100% of the principal amount to be redeemed plus accrued

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 interest thereon to the redemption date, or shall mature on dates and in principal amounts (after credit as
provided below) as follows:

__% Term Bonds Maturing in ____

Redemption Principal
Date Amount to be
(May 1) Redeemed

(maturity)

(2) Series 2018D Bonds with a stated maturity in ______ and an interest rate of __% shall
be redeemed, at a redemption price equal to 100% of the principal amount to be redeemed plus accrued
interest thereon to the redemption date, or shall mature on dates and in principal amounts (after credit as
provided below) as follows:

__% Term Bonds Maturing in ____

Redemption Principal
Date Amount to be
(May 1) Redeemed

(maturity)

Not later than the date on which notice of scheduled mandatory redemption is to be given to Holders of Term Bonds,
the Trustee shall select the affected Term Bonds for scheduled mandatory redemption by lot; provided, however,
that the Authority may, upon direction delivered to the Trustee not less than 3 days prior to the date notice of such
redemption is to be given to Holders, direct that any or all of the following amounts be credited against the principal
amount of Term Bonds scheduled for redemption on such date: (i) the principal amount of Term Bonds of the same
maturity and interest rate delivered by the Authority to the Trustee for cancellation and not previously claimed as a
credit; (ii) the principal amount of Term Bonds of the same maturity and interest rate previously redeemed (other
than Term Bonds redeemed pursuant to the provisions requiring scheduled mandatory redemption) and not
previously claimed as a credit; and (iii) the principal amount of Term Bonds of the same maturity and interest rate
otherwise Defeased and not previously claimed as a credit.

(c) Optional Redemption Upon Damage, Destruction or Condemnation of Operating Assets.

The Series 2018D Bonds may be redeemed in whole or in part on any Business Day at the option of the Authority at
a redemption price equal to 100% of the principal amount of Series 2018D Bonds to be redeemed plus accrued
interest thereon to the redemption date if, and to the extent that, the net proceeds of any insurance or condemnation
award resulting from damage, destruction or condemnation of operating assets of the Authority exceed the cost of
any repairs or replacements to its operating assets which the Authority elects to make with such proceeds.

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 SECTION 7.2 Mandatory Redemption

Series 2018D Bonds shall be redeemed in accordance with the applicable mandatory redemption provisions
without any direction from or consent by the Authority. Unless the date fixed for such mandatory redemption is
otherwise specified by this Indenture, the Trustee shall select the date for mandatory redemption, subject to the
provisions of this Indenture with respect to the permitted period for such redemption.

SECTION 7.3 Election to Redeem

The election to exercise any right of optional redemption shall be evidenced by notice from an Authorized
Representative of the Authority to the Trustee not less than 3 days prior to the date when notice of such redemption
must be given to affected Holders (unless a shorter notice is acceptable to the Trustee). An election to redeem shall
specify (i) the principal amount and maturity of Series 2018D Bonds to be redeemed (and, if less than all Series
2018D Bonds of a maturity are to be redeemed and the Series 2018D Bonds of such maturity have more than one
applicable interest rate, the maturity and interest rate of Series 2018D Bonds to be redeemed), (ii) the redemption
date, and (iii) any conditions to such redemption specified in accordance with the provisions of Section 7.5(d).

SECTION 7.4 Selection by Trustee of Series 2018D Bonds to be Redeemed

(a) Except as otherwise provided in the specific redemption provisions for the Series 2018D Bonds, if
less than all Series 2018D Bonds Outstanding are to be redeemed, the principal amount of Series 2018D Bonds of
each maturity and interest rate to be redeemed may be specified in the notice of election to redeem, or, in the
absence of specifications in such notice, shall be selected by the Trustee by lot or by such other method as the
Trustee shall deem fair and appropriate; provided, however, that the principal amount of Series 2018D Bonds of
each maturity and interest rate to be redeemed may not be larger than the principal amount of Series 2018D Bonds
of such maturity and interest rate then eligible for redemption and may not be smaller than the smallest Authorized
Denomination.

(b) Except as otherwise provided in the specific redemption provisions for the Series 2018D Bonds, if
less than all Series 2018D Bonds with the same maturity and interest rate are to be redeemed, the particular Series
2018D Bonds of such maturity and interest rate to be redeemed shall be selected by the Trustee from the
Outstanding Series 2018D Bonds of such maturity and interest rate then eligible for redemption by lot or by such
other method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption
of portions (in Authorized Denominations) of the principal of Series 2018D Bonds of such maturity and interest rate
of a denomination larger than the smallest Authorized Denomination.

(c) The Trustee shall promptly notify the Authority of the Series 2018D Bonds selected for
redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be
redeemed.

(d) For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Series 2018D Bonds shall relate, in the case of any Bond redeemed or to be redeemed only in part,
to the portion of the principal of such Bond which has been or is to be redeemed.

SECTION 7.5 Notice of Redemption

(a) Notice of redemption shall be given to affected Bondholders not less than 20 days prior to the
redemption date. If the Book Entry System is in effect, such notice shall be given to DTC by such method as shall
be specified in the rules and regulations of the Book Entry System. If the Book Entry System has been terminated,
such notice shall be given by registered mail.

(b) All notices of redemption shall state:

(1) the redemption date,

(2) the redemption price,

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 (3) the principal amount of Series 2018D Bonds to be redeemed, and, if less than all
Outstanding Series 2018D Bonds are to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the Series 2018D Bonds to be redeemed,

(4) that on the redemption date the redemption price of each of the Series 2018D Bonds to be
redeemed will become due and payable and that the interest thereon shall cease to accrue from and after
said date, and

(5) any conditions to such redemption specified in accordance with the provisions of
Section 7.5(d).

(c) Notice of optional redemption of Series 2018D Bonds to be redeemed shall be given by the
Authority or, at the Authority’s request, by the Trustee on behalf of the Authority. Notice of redemption of Series
2018D Bonds in accordance with the mandatory redemption provisions of the Series 2018D Bonds shall be given by
the Trustee in the name of the Authority without any notice to, or consent of, the Authority.

(d) A notice of optional redemption may state that the redemption of Series 2018D Bonds is
contingent upon specified conditions, such as receipt of a specified source of funds, or the occurrence of specified
events. If the conditions for such redemption are not met, the Authority shall not be required to redeem the Series
2018D Bonds (or portions thereof) identified in such notice, and any Series 2018D Bonds surrendered on the
specified redemption date shall be returned to the Holders of such Series 2018D Bonds.

SECTION 7.6 Deposit of Redemption Price

On the applicable redemption date, an amount of money sufficient to pay the redemption price of all the
Series 2018D Bonds which are to be redeemed on that date shall be deposited with the Trustee, unless the notice of
redemption specified contingencies that were not met on the redemption date. Such money shall be held in trust for
the benefit of the persons entitled to such redemption price and shall not be deemed to be part of the Trust Estate.

SECTION 7.7 Series 2018D Bonds Payable on Redemption Date

If notice of redemption is given and any conditions to such redemption specified pursuant to Section 7.5(d)
are met, the Series 2018D Bonds to be redeemed shall become due and payable on the redemption date at the
applicable redemption price and from and after such date (unless the Authority shall default in the payment of the
redemption price) such Series 2018D Bonds shall cease to bear interest.

SECTION 7.8 Series 2018D Bonds Redeemed in Part

(a) If the Book Entry System is in effect, partial redemption of any Bond shall be effected in
accordance with the Book Entry System.

(b) If the Book Entry System has been terminated, any Bond which is to be redeemed only in part
shall be surrendered at the Office of the Trustee with all necessary endorsements for transfer, and the Authority shall
execute and the Trustee shall authenticate and deliver to the Holder of such Bond, without service charge, a new
Bond or Series 2018D Bonds of the same maturity and interest rate and of any Authorized Denomination or
Denominations as requested by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Bond surrendered.

ARTICLE 8

No Additional Series 2018D Bonds

This Indenture authorizes the issuance of Series 2018D Bonds described in Article 5. No additional bonds
may be issued pursuant to this Indenture.

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 ARTICLE 9

Indenture Funds

SECTION 9.1 Debt Service Fund

(a) There is hereby established a special trust fund which shall be designated the “Debt Service
Fund”. The Trustee shall be the depository, custodian and disbursing agent for the Debt Service Fund.

(b) The City Funding Agreement requires the City to make the City Contributions, which will be
made directly to the Trustee and deposited by the Trustee to the Debt Service Fund to be used to pay Debt Service
on the Series 2018D Bonds. The Authority and the City have executed a payment direction in which the City has
agreed to pay the City Contributions directly to the Trustee.

(c) On each Bond Payment Date money in the Debt Service Fund shall be applied by the Trustee to
pay Debt Service on the Series 2018D Bonds.

(d) If money is on deposit in the Debt Service Fund on any Bond Payment Date sufficient to pay Debt
Service on the Series 2018D Bonds due and payable on such Date, but the Holder of any Bond that matures on such
Date or that is subject to redemption on such Date fails to surrender such Bond to the Trustee for payment of Debt
Service due and payable on such Date, the Trustee shall segregate and hold in trust for the benefit of the person
entitled thereto money sufficient to pay the Debt Service due and payable on such Bond on such Date. Money so
segregated and held in trust shall not be a part of the Trust Estate and shall not be invested, but shall constitute a
separate trust fund for the benefit of the persons entitled to such Debt Service.

(e) Money on deposit in the Debt Service Fund may be invested only in Eligible Debt Service Fund
Investments.

SECTION 9.2 Costs of Issuance Fund

(a) There is hereby established with the Trustee a trust fund which shall be designated the “Costs of
Issuance Fund”. A deposit to the Costs of Issuance Fund is to be made pursuant to Section 5.2.

(b) Money in the Costs of Issuance Fund shall be paid out by the Trustee from time to time for the
purpose of paying Costs of Issuance with respect to the Series 2018D Bonds upon delivery to the Trustee of a
requisition substantially in the form attached as Exhibit 9.2(b), executed by an Authorized Representative of the
Authority.

(c) After an Authorized Representative of the Authority certifies to the Trustee that money remaining
in the Costs of Issuance Fund is not needed to pay Costs of Issuance with respect to the Series 2018D Bonds, any
balance remaining in the Costs of Issuance Fund shall be transferred to the Acquisition Fund or the Debt Service
Fund, as directed by an Authorized Representative of the Authority.

SECTION 9.3 Acquisition Fund

(a) There is hereby established with the Trustee a trust fund which shall be designated the
“Acquisition Fund”. A deposit to the Acquisition Fund is to be made pursuant to Section 5.2.

(b) Money in the Acquisition Fund shall be paid out by the Trustee from time to time for the purpose
of paying Acquisition Costs (including reimbursement of the Authority for any such costs paid by it) upon delivery
to the Trustee of a requisition substantially in the form attached as Exhibit 9.2(b), executed by an Authorized
Representative of the Authority.

(c) After an Authorized Representative of the Authority certifies to the Trustee that remaining
proceeds of the Series 2018D Bonds are not needed to pay Acquisition Costs, any balance remaining in the
Acquisition Fund shall be deposited in the Debt Service Fund and shall be applied to the redemption of as many

18
Series 2018D Bonds as possible on the next date on which the Series 2018D Bonds are subject to redemption and
for which the required notice of redemption can be given, and the balance remaining, if any, after such redemption
shall be applied to the payment of Debt Service on the Series 2018D Bonds on the next ensuing Bond Payment Date.

(d) The Capital Improvements are described in Exhibit 9.3(d). The Authority may cause changes or
amendments to be made in the description of the Capital Improvements and may add items to, or delete items from,
the list of Capital Improvements; provided that (i) the Authority delivers to the Trustee a certificate of an Authorized
Representative of the Authority specifying such changes, amendments, additions or deletions, (ii) the Authority
delivers to the Trustee an Opinion of Counsel stating in effect that the Capital Improvements, after giving effect to
such changes, amendments, additions or deletions, qualify for financing under the Enabling Law, and (iii) the
Authority delivers to the Trustee a Favorable Tax Opinion.

SECTION 9.4 Investment of Indenture Funds

(a) Except as otherwise expressly provided in this Indenture, any money held as part of the Debt
Service Fund shall be invested or reinvested by the Trustee only in Eligible Debt Service Fund Investments and any
money held as part of any other Indenture Fund shall be invested or reinvested by the Trustee only in Qualified
Investments, in each case in accordance with the instructions of the Authority, to the extent that such investment is,
in the opinion of the Trustee, feasible and consistent with the purposes for which such Fund was created. Any
investment made with money on deposit in an Indenture Fund shall be held by or under control of the Fund
custodian and shall be deemed at all times a part of the Indenture Fund where such money was on deposit, and the
interest and profits realized from such investment shall be credited to such Fund and any loss resulting from such
investment shall be charged to such Fund.

(b) Any investment of money in the Indenture Funds may be made by the Trustee through its own
bond department, investment department or other commercial banking department providing investment services.

(c) The Trustee shall follow the instructions of the Authority with respect to investments of the
Indenture Funds as provided in this Section, but the Trustee shall not be responsible for (i) determining that any such
investment complies with the arbitrage limitations imposed by Section 148 of the Internal Revenue Code, or
(ii) calculating the amount of, or making payment of, any rebate due to the United States under Section 148(f) of the
Internal Revenue Code.

SECTION 9.5 Application of Funds After Indenture Indebtedness Defeased

After all Indenture Indebtedness has been Defeased, any money or investments remaining in the Indenture
Funds or otherwise constituting part of the Trust Estate shall be paid to the Authority if no Event of Default exists.

ARTICLE 10

Representations and Covenants

SECTION 10.1 General Representations

The Authority makes the following representations and warranties as the basis for the undertakings on its
part herein contained:

(a) Under the provisions of the Enabling Law and its organization documents, it has the
power to consummate the transactions described in the Bond Documents to which it is a party.

(b) The Bond Documents to which it is a party constitute legal, valid and binding obligations
of the Authority and are enforceable against it in accordance with the terms of such Bond Documents,
except as enforcement thereof may be limited by (i) bankruptcy, insolvency, or other similar laws affecting
the enforcement of creditors’ rights and (ii) general principles of equity, including the exercise of judicial
discretion in appropriate cases.

19
 SECTION 10.2 Encumbrances on Trust Estate

The Authority will not create or permit the creation of any pledge, lien, charge or encumbrance of any kind
on the Trust Estate or any part thereof prior to or on a parity of lien with this Indenture.

SECTION 10.3 Payment of Series 2018D Bonds

(a) The Authority will, from funds constituting part of the Trust Estate, duly and punctually pay, or
cause to be paid, the Debt Service on the Series 2018D Bonds as and when the same shall become due and will duly
and punctually deposit, or cause to be deposited, in the Indenture Funds the amounts required to be deposited
therein, all in accordance with the terms of the Series 2018D Bonds and this Indenture.

(b) The Authority will not extend or consent to the extension of the time for payment of Debt Service
on the Series 2018D Bonds, unless such extension is consented to by the Holder of the Bond affected.

SECTION 10.4 Inspection of Records

The Authority will at any and all times, upon the request of the Trustee, afford and procure a reasonable
opportunity for the Trustee by its representatives to inspect any books, records, reports and other papers of the
Authority relating to the performance by the Authority of its covenants in this Indenture, and the Authority will
furnish to the Trustee any and all information as the Trustee may reasonably request with respect to the performance
by the Authority of its covenants in this Indenture and the City Funding Agreement.

SECTION 10.5 Advances by Trustee

If the Authority shall fail to perform any of its covenants in this Indenture, the Trustee may, but shall not be
required, at any time and from time to time, to make advances to effect performance of any such covenant on behalf
of the Authority. Any money so advanced by the Trustee, together with interest at the Post-Default Rate, shall be
repaid upon demand and such advances shall be secured under this Indenture prior to the Series 2018D Bonds.

SECTION 10.6 Corporate Existence; Merger, Consolidation, Etc.

(a) The Authority will do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.

(b) The Authority may consolidate with or merge into any other corporation or transfer its property
substantially as an entirety to another person if:

(1) the corporation formed by such consolidation or into which the Authority is merged or
the person which acquires by conveyance or transfer the Authority’s property substantially as an entirety
(the “Successor”) shall execute and deliver to the Trustee an instrument in form recordable and acceptable
to the Trustee containing an assumption by such Successor of the due and punctual payment of the Debt
Service on the Series 2018D Bonds and the performance and observance of every covenant and condition
of the Bond Documents to be performed or observed by the Authority; and

(2) the Authority shall deliver to the Trustee a Favorable Tax Opinion.

(c) Upon any consolidation or merger or any conveyance or transfer of the Authority’s property
substantially as an entirety in accordance with this Section, the Successor shall succeed to, and be substituted for,
and may exercise every right and power of, the Authority under this Indenture with the same effect as if such
Successor had been named as the Authority herein.

SECTION 10.7 Compliance with the Tax Certificate and Agreement

The Authority will comply with the covenants and agreements on its part contained in the Tax Certificate
and Agreement.

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 SECTION 10.8 City Funding Agreement

The Authority will not terminate the City Funding Agreement or permit any amendment to the City
Funding Agreement to eliminate, reduce or delay the obligation of the City to make payments at times and amounts
required under the City Funding Agreement.

ARTICLE 11

Defaults and Remedies

SECTION 11.1 Events of Default

Any one or more of the following shall constitute an event of default (an “Event of Default”) under this
Indenture (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(a) failure to pay (i) the interest on any Bond when such interest becomes due and payable,
or (ii) the principal of (or premium, if any, on) any Bond when such principal (or premium, if any) becomes
due and payable, whether at its stated maturity, by call for redemption or otherwise; or

(b) an Act of Bankruptcy by the Authority; or

(c) default in the performance, or breach, of any covenant or warranty of the Authority in
this Indenture (other than a covenant or warranty a default in the performance or breach of which is
elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of
30 days after notice of such default or breach, stating that such notice is a “notice of default” hereunder, has
been given to the Authority by the Trustee, or to the Authority and the Trustee by the Holders of at least
10% in principal amount of the Outstanding Series 2018D Bonds, unless, in the case of a default or breach
that cannot be cured by the payment of money, the Authority initiates efforts to correct such default or
breach within 30 days from the receipt of such notice and diligently pursues such action until the default or
breach is corrected; or

(d) the occurrence of an event of default, as therein defined, under the City Funding
Agreement and the expiration of the applicable notice period or grace period, if any.

SECTION 11.2 Remedies

(a) Remedies under City Funding Agreement. The Trustee shall have the right, in its own name or
on behalf of the Authority, to declare any default and exercise any remedies under the City Funding Agreement, and
any money collected by the Trustee pursuant to the exercise of any remedies under the City Funding Agreement
shall be applied as provided in Section 11.3

(b) Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the
Trustee or to the Bondholders is intended to be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or
remedy.

(c) Remedies Subject to Applicable Law. All rights, remedies and powers provided by this Article
may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law in the
premises, and all the provisions of this Article are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent necessary so that they will not render

21
this Indenture invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any
applicable law.

SECTION 11.3 Application of Money Collected

Any money collected by the Trustee pursuant to this Article and any other sums then held by the Trustee as
part of the Trust Estate, shall be applied in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the
Series 2018D Bonds and the notation thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

(a) First: To the payment of all undeducted amounts due the Trustee under Section 12.7;

(b) Second: To the payment of the whole amount then due and unpaid upon the Outstanding
Series 2018D Bonds for principal (and premium, if any) and interest, in respect of which or for the benefit
of which such money has been collected, with interest (to the extent that such interest has been collected by
the Trustee or a sum sufficient therefor has been so collected and payment thereof is legally enforceable at
the respective rate or rates prescribed therefor in the Series 2018D Bonds) on overdue principal (and
premium, if any) and on overdue installments of interest; and in case such proceeds shall be insufficient to
pay in full the whole amount so due and unpaid upon such Series 2018D Bonds, then to the payment of
such principal (and premium, if any) and interest, without any preference or priority, ratably according to
the aggregate amount so due; provided, however, that payments with respect to Obligor Bonds shall be
made only after all other Series 2018D Bonds have been Defeased; and

(c) Third: To the payment of the remainder, if any, to the Authority or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

SECTION 11.4 Trustee May Enforce Claims without Possession of Series 2018D Bonds

All rights of action and claims under this Indenture or the Series 2018D Bonds may be prosecuted and
enforced by the Trustee without the possession of any of the Series 2018D Bonds or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust. Any recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable
benefit of the Holders of the Series 2018D Bonds in respect of which such judgment has been recovered.

SECTION 11.5 Limitation on Suits

No Holder of any Bond shall have any right to institute any proceeding, judicial or otherwise, under or with
respect to this Indenture, or for the appointment of a receiver or trustee or for any other remedy hereunder, unless

(a) such Holder has previously given notice to the Trustee of a continuing Event of Default;

(b) the Holders of not less than 25% in principal amount of the Outstanding Series 2018D
Bonds shall have made request to the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;

(c) such Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request;

(d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and

(e) no direction inconsistent with such request has been given to the Trustee during such
60-day period by the Holders of a majority in principal amount of the Outstanding Series 2018D Bonds.

22
it being understood and intended that no one or more Holders of Series 2018D Bonds shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the
lien of this Indenture or the rights of any other Holders of Series 2018D Bonds, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all Outstanding Series 2018D Bonds.

SECTION 11.6 Unconditional Right of Bondholders to Receive Principal, Premium and Interest

Notwithstanding any other provision in this Indenture, the Holder of any Bond shall have the right which is
absolute and unconditional to receive payment of the principal of (and premium, if any) and interest on such Bond
on the Maturity Date expressed in such Bond (or, in the case of redemption, on the redemption date) and to institute
suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such
Holder.

SECTION 11.7 Restoration of Positions

If the Trustee or any Bondholder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason or has been determined adversely
to the Trustee or to such Bondholder, then and in every such case the Authority, the Trustee and the Bondholders
shall, subject to any determination in such proceeding, be restored to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Bondholders shall continue as though no such proceeding had been
instituted.

SECTION 11.8 Delay or Omission Not Waiver

No delay or omission of the Trustee or of any Bondholder to exercise any right or remedy accruing upon an
Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Bondholders
may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the
Bondholders, as the case may be.

SECTION 11.9 Control by Bondholders

The Holders of a majority in principal amount of the Outstanding Series 2018D Bonds shall have the right,
during the continuance of an Event of Default,

(a) to require the Trustee to proceed to enforce this Indenture, either by judicial proceedings
for the enforcement of the payment of the Series 2018D Bonds or otherwise, and

(b) to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee hereunder; provided
that

(1) such direction shall not be in conflict with any rule of law or this Indenture,

(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and

(3) the Trustee shall not determine that the action so directed would be unjustly
prejudicial to the Bondholders not taking part in such direction.

SECTION 11.10 Waiver of Past Defaults

(a) Before any judgment or decree for payment of money due has been obtained by the Trustee, the
Holders of not less than a majority in principal amount of the Outstanding Series 2018D Bonds may, by notice to the
Trustee and the Authority, on behalf of all Bondholders waive any past default hereunder or under any other Bond
Document and its consequences, except a default

23
 (1) in the payment of Debt Service on any Bond, or

(2) in respect of a covenant or provision hereof which under Article 13 cannot be modified or
amended without the consent of the Holder of each Outstanding Bond affected.

(b) Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.

SECTION 11.11 Suits to Protect the Trust Estate

The Trustee shall have power to institute and to maintain such proceedings as it may deem expedient to
prevent any impairment of the Trust Estate by any acts which may be unlawful or in violation of this Indenture and
to protect its interests and the interests of the Bondholders in the Trust Estate and in the rents, issues, profits,
revenues and other income arising therefrom, including power to institute and maintain proceedings to restrain the
enforcement of or compliance with any governmental enactment, rule or order that may be unconstitutional or
otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security
hereunder or be prejudicial to the interests of the Bondholders or the Trustee.

ARTICLE 12

The Trustee

SECTION 12.1 Certain Duties and Responsibilities of Trustee

(a) Except during the continuance of an Event of Default,

(1) the Trustee undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the
Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture.

(b) If an Event of Default exists, the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.

(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that

(1) this subsection shall not be construed to limit the effect of Section 12.1(a);

(2) the Trustee shall not be liable for any error of judgment made in good faith, unless it shall
be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of a majority in principal amount of the
Outstanding Series 2018D Bonds relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture; and

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 (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this
Section.

SECTION 12.2 Notice of Defaults

(a) If a notice event described in Section 12.2(b) exists, the Trustee shall notify Bondholders of such
event within 30 days after the Trustee becomes aware of its existence; provided, however, that the Trustee shall be
protected in withholding such notice if (1) the notice event has been cured or waived or otherwise ceases to exist
before such notice is given; or (2) the Trustee determines in good faith that the withholding of such notice is in the
interest of Bondholders.

(b) For purposes of this Section, the following shall constitute “notice events”:

(1) the occurrence of an Event of Default; and

(2) any event which is, or after notice or lapse of time or both would become, an Event of
Default.

SECTION 12.3 Certain Rights of Trustee

Except as otherwise provided in Section 12.1:

(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;

(b) any request or direction of the Authority mentioned herein shall be sufficiently evidenced
by a certificate or order executed by an Authorized Representative of the Authority;

(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely
upon a certificate executed by an Authorized Representative of the Authority or a certificate executed by an
Authorized Representative of the Authority;

(d) the Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted by the Trustee hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Bondholders pursuant to this Indenture, unless
such Bondholders shall have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such request or direction.

(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall

25
 determine to make such further inquiry or investigation, it shall be entitled to examine the books and
records of the Authority, personally or by agent or attorney; and

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

SECTION 12.4 Not Responsible for Recitals

The recitals contained herein and in the Series 2018D Bonds, except the certificate of authentication on the
Series 2018D Bonds, shall be taken as the statements of the Authority, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the value or condition of the Trust Estate or any part
thereof, or as to the title of the Authority thereto or as to the security afforded thereby or hereby, or as to the validity
or sufficiency of this Indenture or of the Series 2018D Bonds.

SECTION 12.5 May Hold Series 2018D Bonds

The Trustee in its individual or any other capacity, may become the owner or pledgee of Series 2018D
Bonds and may otherwise deal with the Authority with the same rights it would have if it were not Trustee.

SECTION 12.6 Money Held in Trust

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent
expressly provided in this Indenture or required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise provided in Article 9.

SECTION 12.7 Compensation and Reimbursement

(a) The Authority agrees to pay to the Trustee, or to reimburse the Trustee for, but solely from the
Trust Estate:

(1) reasonable compensation for all services rendered by the Trustee hereunder (which
compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an
express trust); and

(2) all reasonable expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be
attributable to the Trustee’s gross negligence or bad faith.

(b) As security for the performance of the obligations of the Authority under this Section, the Trustee
shall be secured under this Indenture by a lien prior to the Series 2018D Bonds, and for the payment of such
compensation, expenses, reimbursements and indemnity the Trustee shall have the right to use and apply any money
held by it as a part of the Trust Estate.

SECTION 12.8 Corporate Trustee Required; Eligibility

There shall at all times be a Trustee hereunder which shall (i) be a commercial bank or trust company
organized and doing business under the laws of the United States of America or of any state, (ii) be authorized under
such laws to exercise corporate trust powers, (iii) be subject to supervision or examination by federal or state
authority, and (iv) have an investment grade rating for its long-term deposits from each Rating Agency that provides
a rating on the Series 2018D Bonds or, if the Series 2018D Bonds are not rated, by any Rating Agency.

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 SECTION 12.9 Resignation and Removal; Appointment of Successor

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the successor Trustee under
Section 12.10.

(b) The Trustee may resign at any time by giving notice thereof to the Authority. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(c) The Trustee may be removed at any time by the Holders of a majority in principal amount of the
Outstanding Series 2018D Bonds by notice delivered to the Trustee and the Authority. If no Indenture Default
exists, the Trustee may be removed at any time by the Authority by notice delivered to the Trustee.

(d) If at any time:

(1) the Trustee shall cease to be eligible under Section 12.8 and shall fail to resign after
request therefor by the Authority or by any Bondholder who has been a bona fide Holder of a Bond for at
least 6 months, or

(2) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case (i) the Authority may remove the Trustee, or (ii) any Bondholder who has been a bona fide
Holder of a Bond for at least 6 months may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur
in the office of Trustee for any cause, a successor Trustee shall be appointed by the Authority. In case all or
substantially all of the Trust Estate shall be in the possession of a receiver or trustee lawfully appointed, such
receiver or trustee may similarly appoint a successor to fill such vacancy until a new Trustee shall be so appointed
by the Bondholders. If, within 1 year after such resignation, removal or incapability or the occurrence of such
vacancy, a successor Trustee shall be appointed by the Holders of a majority in principal amount of the Outstanding
Series 2018D Bonds, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee and supersede the successor Trustee appointed by the Authority or by such receiver or
trustee. If no successor Trustee shall have been so appointed by the Authority or the Bondholders and accepted
appointment in the manner hereinafter provided, any Bondholder who has been a bona fide Holder of a Bond for at
least 6 months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.

(f) The Authority shall give notice of each resignation and each removal of the Trustee and each
appointment of a successor Trustee, to the Bondholders.

SECTION 12.10 Acceptance of Appointment by Successor

(a) Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the
Authority and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the estates, properties, rights, powers, trusts and duties of the retiring
Trustee; but, on request of the Authority or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument conveying and transferring to such successor Trustee upon the trusts
herein expressed all the estates, properties, rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder,

27
subject nevertheless to its lien, if any, provided for in Section 12.7. Upon request of any such successor Trustee, the
Authority shall execute any and all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such estates, properties, rights, powers and trusts.

(b) No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article, to the extent operative.

SECTION 12.11 Merger, Conversion, Consolidation or Succession to Business

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this
Article, to the extent operative, without the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Series 2018D Bonds shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Series 2018D Bonds so authenticated with the same effect as if such successor Trustee
had itself authenticated such Series 2018D Bonds.

ARTICLE 13

Amendment of Bond Documents

SECTION 13.1 General Requirements for Amendments

The Trustee may, on behalf of the Bondholders, from time to time enter into, or consent to, an amendment
of any Bond Document only as permitted by this Article.

SECTION 13.2 Amendments Without Consent of Bondholders

An amendment of the Bond Documents for any of the following purposes may be made, or consented to,
by the Trustee without the consent of the Holders of any Series 2018D Bonds:

(a) to correct or amplify the description of any property at any time subject to the lien of any
Bond Document, or better to assure, convey and confirm unto any secured party any property subject or
required to be subjected to the lien of any Bond Document, or to subject to the lien of any Bond Document,
additional property; or

(b) to evidence the succession of another person to any Financing Participant and the
assumption by any such successor of the covenants of such Financing Participant (provided that the
requirements of the related Bond Document for such succession and assumption are otherwise satisfied); or

(c) to add to the covenants of any Financing Participant for the benefit of Bondholders and to
make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants an
event of default under the specified Bond Documents permitting the enforcement of all or any of the
several remedies provided therein; provided, however, that with respect to any such covenant, such
amendment may provide for a particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available upon such default; or

(d) to surrender any right or power conferred upon any Financing Participant other than
rights or powers for the benefit of Bondholders; or

(e) to cure any ambiguity or to correct any inconsistency, provided such action shall not
adversely affect the interests of the Bondholders; or

28
 (f) to appoint a separate agent of the Authority or the Trustee to perform any one or more of
the following functions: (i) registration of transfers and exchanges of Series 2018D Bonds or (ii) payment
of Debt Service on the Series 2018D Bonds; provided, however, that any such agent must be a bank or trust
company with long-term obligations, at the time such appointment is made, in one of the three highest
rating categories of at least one Rating Agency.

SECTION 13.3 Amendments Requiring Consent of All Affected Bondholders

An amendment of the Bond Documents for any of the following purposes may be entered into, or
consented to, by the Trustee only with the consent of the Holder of each Bond affected:

(a) to change the stated Maturity Date of the principal of, or any installment of interest on,
any Bond, or reduce the principal amount thereof or the interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which, any Bond, or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment on or after the stated Maturity
Date thereof (or, in the case of redemption, on or after the redemption date); or

(b) to reduce the percentage in principal amount of the Outstanding Series 2018D Bonds, the
consent of whose Holders is required for any amendment of the Bond Documents, or the consent of whose
Holders is required for any waiver provided for in the Bond Documents; or

(c) to modify or alter the provisions of the proviso to the definition of the term
“Outstanding”; or

(d) to modify any of the provisions of this Section or Section 11.10, except to increase any
percentage provided thereby or to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Bond affected thereby; or

(e) to permit the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any of the Trust Estate or terminate the lien of this Indenture on any property at
any time subject hereto or deprive the Holder of any Bond of the security afforded by the lien of this
Indenture; or

(f) to eliminate, reduce or delay the obligation of the Authority to make payments at times
and in amounts sufficient to pay Debt Service on the Series 2018D Bonds.

(g) to eliminate, reduce or delay the obligation of the City to make payments at times and in
amounts required under the City Funding Agreement.

SECTION 13.4 Amendments Requiring Majority Consent of Bondholders

An amendment of the Bond Documents for any purpose not described in Sections 13.2 or 13.3 may be
entered into, or consented to, by the Trustee only with the consent of the Holders of a majority in principal amount
of Series 2018D Bonds Outstanding.

SECTION 13.5 Discretion of Trustee

The Trustee may in its discretion determine whether or not any Series 2018D Bonds would be affected by
any amendment of the Bond Documents and any such determination shall be conclusive upon the Holders of all
Series 2018D Bonds, whether theretofore or thereafter authenticated and delivered hereunder. The Trustee shall not
be liable for any such determination made in good faith.

29
 SECTION 13.6 Trustee Protected by Opinion of Counsel

In executing or consenting to any amendment permitted by this Article, the Trustee shall be entitled to
receive, and, subject to Section 12.1, shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Indenture.

SECTION 13.7 Amendments Affecting Trustee’s Personal Rights

The Trustee may, but shall not be obligated to, enter into any amendment that affects the Trustee’s own
rights, duties or immunities under the Bond Documents.

SECTION 13.8 Effect on Bondholders

Upon the execution of any amendment under this Article, every Holder of Series 2018D Bonds theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 13.9 Reference in Series 2018D Bonds to Amendments

Series 2018D Bonds authenticated and delivered after the execution of any amendment under this Article
shall, if required by such amendment or by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such amendment. New Series 2018D Bonds so modified as to conform to any such
amendment shall, if required by such amendment or by the Trustee, be prepared and executed by the Authority and
authenticated and delivered by the Trustee in exchange for Outstanding Series 2018D Bonds.

SECTION 13.10 Amendments Not to Affect Tax Exemption

No amendment may be made to the Bond Documents unless the Trustee receives a Favorable Tax Opinion.

ARTICLE 14

Defeasance

SECTION 14.1 Payment of Indenture Indebtedness; Satisfaction and Discharge of Indenture

(a) Whenever all Indenture Indebtedness has been Defeased, then (i) this Indenture and the lien, rights
and interests created hereby shall cease, determine and become null and void (except as to any surviving rights of
transfer or exchange of Series 2018D Bonds herein or therein provided for), and (ii) the Trustee shall, upon the
request of the Authority, execute and deliver a termination statement and such instruments of satisfaction and
discharge as may be necessary and pay, assign, transfer and deliver to the Authority or upon the order of the
Authority, all cash and securities then held by it hereunder as a part of the Trust Estate.

(b) A Bond shall be deemed “Defeased” if

(1) such Bond has been cancelled by the Trustee or delivered to the Trustee for cancellation,
or

(2) such Bond shall have matured or been called for redemption and, on such Maturity Date
or redemption date, money for the payment of Debt Service on such Bond is held by the Trustee in trust for
the benefit of the person entitled thereto, or

(3) a trust for the payment of such Bond has been established in accordance with
Section 14.2.

(c) Indenture Indebtedness other than Debt Service on the Series 2018D Bonds shall be deemed
“Defeased” whenever the Authority has paid, or made provisions satisfactory to the Trustee for payment of, all such
Indenture Indebtedness.

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 SECTION 14.2 Trust for Payment of Debt Service

(a) The Authority may provide for the payment of any Bond by establishing a trust for such purpose
with the Trustee and depositing therein cash and/or Federal Securities which (assuming the due and punctual
payment of the principal of and interest on such Federal Securities, but without reinvestment) will provide funds
sufficient to pay the Debt Service on such Bond as the same becomes due and payable until the Maturity Date or
redemption of such Bond; provided, however, that:

(1) Such Federal Securities must not be subject to redemption prior to their respective
maturities at the option of the issuer of such Securities.

(2) If such Bond is to be redeemed prior to its Maturity Date, either (i) the Trustee shall
receive evidence that notice of such redemption has been given in accordance with the provisions of this
Indenture and such Bond or (ii) the Authority shall confer on the Trustee irrevocable authority for the
giving of such notice.

(3) Prior to the establishment of such trust the Trustee must receive a Favorable Tax
Opinion.

(4) Prior to the establishment of such trust, the Trustee must receive verification satisfactory
to the Trustee demonstrating that the principal and interest payments on the Federal Securities in such trust,
without reinvestment, together with the cash balance in such trust remaining after purchase of such
Securities, will be sufficient to make the required payments from such trust.

(b) Any trust established pursuant to this Section may provide for payment of less than all Series
2018D Bonds outstanding or less than all Series 2018D Bonds of any remaining maturity.

(c) If any trust provides for payment of less than all Series 2018D Bonds of the same maturity and
interest rate, the Series 2018D Bonds of such maturity and interest rate to be paid from the trust shall be selected by
the Trustee by lot by such method as shall provide for the selection of portions (in Authorized Denominations) of the
principal of Series 2018D Bonds of such maturity and interest rate of a denomination larger than the smallest
Authorized Denomination. Such selection shall be made within 7 days after such trust is established. This selection
process shall be in lieu of the selection process otherwise provided with respect to redemption of Series 2018D
Bonds. After such selection is made, Series 2018D Bonds that are to be paid from such trust (including Series
2018D Bonds issued in exchange for such Series 2018D Bonds pursuant to the transfer or exchange provisions of
this Indenture) shall be identified by a separate CUSIP number or other designation satisfactory to the Trustee. The
Trustee shall notify Holders whose Series 2018D Bonds (or portions thereof) have been selected for payment from
such trust and shall direct such Bondholders to surrender their Series 2018D Bonds to the Trustee in exchange for
Series 2018D Bonds with the appropriate designation. The selection of Series 2018D Bonds for payment from such
trust pursuant to this Section shall be conclusive and binding on the Financing Participants.

(d) Cash and/or Federal Securities deposited with the Trustee pursuant to this Section shall not be a
part of the Trust Estate but shall constitute a separate, irrevocable trust fund for the benefit of the Holder of the Bond
to be paid from such fund.

ARTICLE 15

Miscellaneous

SECTION 15.1 Notices to Financing Participants

(a) Notices and other communications to Financing Participants pursuant to this Indenture must be in
writing except as otherwise expressly provided in this Indenture. Any specific reference in this Indenture to “written
notice” shall not be construed to mean that any other notice may be oral, unless such oral notice is specifically
permitted by this Indenture under the circumstances.

31
 (b) Notices and other communications pursuant to this Indenture may be delivered by any method
provided in the directions for notices attached as Exhibit 15.1(b). A Financing Participant may change its directions
for notices by giving notice to the other Financing Participants.

(c) Any notice shall be deemed given when actually received by the Financing Participant to whom
the notice is addressed. In addition, any notice sent by registered mail shall be deemed received 3 days after such
notice is deposited in the United States mail, addressed as provided in the notice directions included in
Exhibit 15.1(b) or, if the designated Financing Participant has delivered a change notice, as specified in such change
notice.

(d) Notice to any Financing Participant required by this Indenture may be waived in writing by such
Financing Participant, either before or after the event, and such waiver shall be the equivalent of such notice.

SECTION 15.2 Notices to Bondholders

(a) Notices and other communications to Bondholders pursuant to this Indenture must be in writing
except as otherwise expressly provided in this Indenture. Any specific reference in this Indenture to “written notice”
shall not be construed to mean that any other notice may be oral, unless such oral notice is specifically permitted by
this Indenture under the circumstances.

(b) If the Book Entry System is in effect, notices and other communications to Bondholders may be
delivered to DTC. If the Book Entry System is terminated, notices and other communications to Bondholders may
be delivered to such Holders at their address as it appears in the Bond Register.

(c) Any notice to Bondholders shall be deemed given when sent by registered mail, addressed as
provided in the Bond Register.

(d) In any case where notice to Bondholders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders.

(e) Notice to any Bondholder required by this Indenture may be waived in writing by such
Bondholder, either before or after the event, and such waiver shall be the equivalent of such notice.

SECTION 15.3 Successors and Assigns

All covenants and agreements in this Indenture by the Authority shall bind its successors and assigns,
whether so expressed or not.

SECTION 15.4 Benefits of Indenture

Nothing in this Indenture or in the Series 2018D Bonds, express or implied, shall give to any person, other
than the parties hereto and their successors hereunder, and the Holders of the Outstanding Series 2018D Bonds, any
benefit or any legal or equitable right, remedy or claim under this Indenture

IN WITNESS WHEREOF, the Authority and the Trustee have caused this instrument to be duly executed by
their duly authorized officers.

[Signature pages follow]

32
 BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY

By:

Title:

[Signature page to Trust Indenture for Authority]

 REGIONS BANK

By:

Title:

[Signature page to Trust Indenture for Regions Bank]

 EXHIBIT 5.1(c)

Form of Series 2018D Bonds

Birmingham-Jefferson Civic Center Authority

Revenue Bonds (City of Birmingham Funding), Series 2018D

Number:

Maturity Date:

Interest Rate:

Date of Initial Delivery of Series 2018D Bonds:

CUSIP:

Birmingham-Jefferson Civic Center Authority, an Alabama public corporation (the “Authority”, which
term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby
promises to pay to

___________________________________________,

or registered assigns, the principal sum of

________________________________________ DOLLARS

on the Maturity Date specified above and to pay interest hereon from the date of initial delivery of this Bond, or the
most recent date to which interest has been paid or duly provided for, until the principal hereof shall become due and
payable at the applicable interest rate specified above; provided, however, that all such payments shall be limited
obligations of the Authority payable solely from the sources hereinafter identified.

Authorizing Document

This Bond has been issued pursuant to a Trust Indenture August 1, 2018 (the “Indenture”), between the
Authority and Regions Bank, an Alabama banking corporation (the “Trustee”, which term includes any successor
trustee under the Indenture). The bonds issued pursuant to the Indenture are referred to herein as the “Series 2018D
Bonds”. Capitalized terms not otherwise defined herein shall have the meaning assigned in the Indenture. The
provisions of the Indenture are hereby incorporated by reference as if fully set forth in this Bond.

Limited Obligations

The Series 2018D Bonds and all other payment obligations under the Indenture are limited obligations of
the Authority payable solely out of the Trust Estate established pursuant to the Indenture, which includes (i) the City
Contributions and any other payments by the City of Birmingham, Alabama pursuant to the City Funding
Agreement, and (ii) money and investments in the funds and accounts established pursuant to the Indenture.

Bond Documents

Copies of the Bond Documents are on file at the Office of the Trustee, and reference is hereby made to
such instruments for a description of the properties pledged and assigned, the nature and extent of the security, the
respective rights thereunder of the Holders of the Series 2018D Bonds and the Financing Participants, and the terms
upon which the Series 2018D Bonds are, and are to be, authenticated and delivered.

Exhibit 5.1(c), Page 1 of 6

Transfer, Registration, Exchange and Payment Provisions

The ownership, transfer, exchange and payment of Series 2018D Bonds shall be governed by the Book
Entry System administered by DTC until the Book Entry System is terminated pursuant to the terms and conditions
of the Indenture. If the Book Entry System is terminated, the Indenture provides alternate provisions for the
ownership, transfer, exchange and payment of Series 2018D Bonds.

Computation of Interest Accrual

Interest on this Bond shall be computed on the basis of on the basis of a 360-day year with 12 months of 30
days each.

Interest Payment Dates

Interest on Series 2018D Bonds is payable in arrears on May 1 and November 1 in each year, beginning
November 1, 2018.

Regular Record Date for Interest Payments

If the Book Entry System is in effect, the Trustee shall pay interest on this Bond to DTC, and interest shall
be distributed to the Holder of this Bond in accordance with the rules and regulations of DTC. If the Book Entry
System is terminated, the interest due on any Interest Payment Date with respect to this Bond shall be payable to the
Holder of this Bond on the Regular Record Date for such Interest Payment Date, which shall be the15th day
(whether or not a Business Day) of the month next preceding each Interest Payment Date for such Bond.

Interest on Overdue Payments

Interest shall be payable on overdue principal on this Bond and (to the extent legally enforceable) on any
overdue installment of interest on this Bond at the Post-Default Rate specified in the Indenture.

Authorized Denominations

Series 2018D Bonds may be issued in denominations of $5,000 or any multiple thereof.

Currency of Payment

Payment of Debt Service on this Bond shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and private debts.

Redemption Prior to Maturity

This Bond will be subject to redemption prior to its Maturity Date as follows:

[Specify applicable redemption provisions from Section 7.1.]

If less than all Bond outstanding are being redeemed, the Indenture provides procedures for selection of
Series 2018D Bonds to be redeemed.

Notice of redemption shall be given to affected Bondholders not less than 20 days prior to the redemption
date in the manner provided in the Indenture.

A notice of optional redemption may state that the redemption of Series 2018D Bonds is contingent upon
specified conditions, such as receipt of a specified source of funds, or the occurrence of specified events. If the
conditions for such redemption are not met, the Authority shall not be required to redeem the Series 2018D Bonds
(or portions thereof) identified in such notice, and any Series 2018D Bonds surrendered on the specified redemption
date shall be returned to the Holders of such Series 2018D Bonds.

Exhibit 5.1(c), Page 2 of 6

 On the applicable redemption date, an amount of money sufficient to pay the redemption price of all the
Series 2018D Bonds which are to be redeemed on that date shall be deposited with the Trustee, unless the notice of
redemption specified contingencies that were not met on the redemption date. Such money shall be held in trust for
the benefit of the persons entitled to such redemption price and shall not be deemed to be part of the Trust Estate.

If notice of redemption is given and any conditions to such redemption are met, the Series 2018D Bonds to
be redeemed shall become due and payable on the redemption date at the applicable redemption price, and from and
after such date (unless the Authority shall default in the payment of the redemption price) such Series 2018D Bonds
shall cease to bear interest.

If the Book Entry System is in effect, partial redemption of any Bond shall be effected in accordance with
the Book Entry System. If the Book Entry System has been terminated, any Bond which is to be redeemed only in
part shall be surrendered at the Office of the Trustee with all necessary endorsements for transfer, and the Authority
shall execute and the Trustee shall authenticate and deliver to the Holder of such Bond, without service charge, a
new Bond or Series 2018D Bonds of the same maturity and interest rate and of any Authorized Denomination or
Denominations as requested by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Bond surrendered.

The Indenture permits the Authority to purchase Series 2018D Bonds that have been called for optional
redemption in lieu of retiring such Series 2018D Bonds on the redemption date. No notice to Bondholders is
required in connection with a purchase in lieu of redemption.

Remedies

If an “Event of Default”, as defined in the Indenture, shall occur, the principal of all Series 2018D Bonds
then Outstanding may become or be declared due and payable in the manner and with the effect provided in the
Indenture.

The Holder of this Bond shall have no right to enforce the provisions of the Indenture, or to institute any
action to enforce the covenants therein, or to take any action with respect to any default thereunder, or to institute,
appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture.

Amendments

The Indenture permits the amendment of the Bond Documents and waivers of past defaults under such
Documents and the consequences of such defaults, in certain circumstances without consent of Bondholders and in
other circumstances with the consent of all Bondholders or a specified percentage of Bondholders. Any such
consent or waiver by the Holder of this Bond shall be conclusive and binding upon such Holder and upon all future
Holders of this Bond and of any Bond issued in exchange for this Bond or in lieu of this Bond, whether or not
notation of such consent or waiver is made upon this Bond.

Exoneration of Incorporators, Directors and Officers of the Authority

No recourse under or upon any covenant or agreement of the Indenture, or of any Series 2018D Bonds, or
for any claim based thereon or otherwise in respect thereof, shall be had against any past, present or future
incorporator, officer or director of the Authority, or of any successor, either directly or through the Authority,
whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that the Indenture and the Series 2018D Bonds are solely corporate
obligations, and that no personal liability whatever shall attach to, or is or shall be incurred by, any incorporator,
officer or director of the Authority or any successor, or any of them, because of the issuance of the Series 2018D
Bonds, or under or by reason of the covenants or agreements contained in the Indenture or in any Series 2018D
Bonds or implied therefrom.

Exhibit 5.1(c), Page 3 of 6

County and State Exempt From Liability

The Series 2018D Bonds and any other payment obligations under the Indenture shall not constitute or give
rise to an indebtedness or liability of, and shall not constitute a charge against the general credit or taxing powers of,
the Jefferson County, Alabama or the State of Alabama.

It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and
be performed precedent to and in the execution and delivery of the Indenture and issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required by law.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this
Bond shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

Exhibit 5.1(c), Page 4 of 6

 IN WITNESS WHEREOF, the Authority has caused this Bond to be duly executed under its corporate seal.

Dated: Date of initial delivery of this Bond identified above.

Birmingham-Jefferson Civic Center Authority

By:
Chairman
[SEAL]

Attest:

Secretary

Certificate of Authentication

This is one of the Series 2018D Bonds referred to in the within-mentioned Indenture.

Date of authentication:_________________

REGIONS BANK,
as Trustee

By
Authorized Officer

Assignment

For value received, __________________________________________ hereby sell(s), assign(s) and

transfer(s) unto [Please insert name and taxpayer identification number] ___________________________________
this Bond and hereby irrevocably constitute(s) and appoint(s) _______________________________ attorney to
transfer this Bond on the books of the within named Authority at the office of the within named Trustee, with full
power of substitution in the premises.

Exhibit 5.1(c), Page 5 of 6

 Dated: ________________________

NOTE: The name signed to this assignment must correspond

with the name of the payee written on the face of the within
bond in all respects, without alteration, enlargement or change
whatsoever.

Signature Guaranteed:

(Bank or Trust Company)

By
(Authorized Officer)

*Signature(s) must be guaranteed by an eligible guarantor

institution which is a member of the recognized signature
guarantee program, i.e., Securities Transfer Agents Medallion
Program (STAMP), Stock Exchanges Medallion Program
(SEMP), or New York Stock Exchange Medallion Signature
Program (MSP).

Exhibit 5.1(c), Page 6 of 6

 EXHIBIT 9.2(b)

Requisition

To: Regions Bank, as trustee under

the Indenture referred to below No. __________________

Re: [$Amount] Revenue Bonds (City of Birmingham Funding), Series 2018D, issued by Birmingham-Jefferson
Civic Center Authority pursuant to a Trust Indenture dated August 1, 2018 (the “Indenture”)

Capitalized terms not otherwise defined herein shall have the meanings assigned in the Indenture.

Request for Payment by the Authority

The Authority hereby requests payment from [__] the Costs of Issuance Fund or [__] the Acquisition Fund

of $______________________ to

Name of payee:

Address of payee:

Such payment will be made for the following purpose(s):

(Describe purpose in reasonable detail.)

The Authority hereby certifies that: (a) such payment is for Costs of Issuance if the payment is to be made
from the Costs of Issuance Fund or Acquisition Costs (if the payment is to be made from the Acquisition Fund),
(b) no Event of Default exists, and (c) such payment will not cause or result in the violation of any covenant
contained in the Tax Certificate and Agreement.

Dated: ___________________.

BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY

By:
Authorized Representative of the Authority

Exhibit 9.2(b), Page 1 of 1

 EXHIBIT 9.3(d)

Description of Capital Improvements

Exhibit 9.3(d), Page 1 of 1

 EXHIBIT 15.1(b)

Directions for Notices

Birmingham-Jefferson Civic Center Authority

Mailing address: 2100 Richard Arrington, Jr. Boulevard North

Birmingham, Alabama 35203
Attention:

Hand delivery or courier delivery address: 2100 Richard Arrington, Jr. Boulevard North
Birmingham, Alabama 35203
Attention:

Email address:

Regions Bank (as Trustee)

Mailing address:

Hand delivery or courier delivery address:

Email address:

Facsimile transmissions:

Exhibit 15.1(b), Page 1 of 1

[THIS PAGE INTENTIONALLY LEFT BLANK]
 APPENDIX G

Form of Opinion of Bond Counsel

[THIS PAGE INTENTIONALLY LEFT BLANK]
 [Closing Date]

Holders of the Series 2018D Bonds referred to below

Re: $___________ Revenue Bonds (City of Birmingham Funding), Series 2018D issued by the
Birmingham-Jefferson Civic Center Authority

We have acted as bond counsel to the Birmingham-Jefferson Civic Center Authority, a public corporation
and instrumentality of the State of Alabama (the “Authority”), in connection with the issuance by the Authority of
the above-referenced bonds (the “Series 2018D Bonds”).

The Series 2018D Bonds are being issued pursuant to a Trust Indenture dated August 1, 2018 (the
“Indenture”) between the Authority and Regions Bank, an Alabama banking corporation, as trustee (the “Trustee”).
The Series 2018D Bonds are being issued under the authority of Act No. 547 enacted at the 1965 Regular Session of
the Legislature of Alabama, as amended (the “Enabling Law”). Capitalized terms not otherwise defined herein shall
have the meanings assigned to them in the Indenture.

The Series 2018D Bonds are secured by a pledge of and security interest in certain payments (the “City
Contributions”) to be made to the Authority by the City of Birmingham, Alabama (the “City”) pursuant to a Funding
Agreement dated July __, 2018 (the “Funding Agreement”). The rights of the Authority under the Funding
Agreement, including the right to receive the City Contributions, will be assigned to the Trustee pursuant to the
Indenture. The Series 2018D Bonds are limited obligations of the Authority payable solely out of the City
Contributions. The City’s obligation to make the City Contributions is a general obligation of the City, secured by
the full faith and credit of the City.

We have examined executed counterparts of the Indenture and the Funding Agreement and such law,
certificates, proceedings, proofs and other documents as we have deemed necessary to render this opinion.

As to various questions of fact material to our opinion, we have relied upon representations made in the
documents described above and upon certificates of certain public officials and officers of the Authority.

Based on the foregoing and upon such investigation as we have deemed necessary, we are of the opinion
that:

1. The Authority has been duly organized and is validly existing as a public corporation and
instrumentality of the State of Alabama under (i) the Enabling Law, and (ii) Amendment No. 280 to the Constitution
of Alabama of 1901.

2. The Authority has the power and authority to enter into and perform its obligations under the
Indenture and to issue and deliver the Series 2018D Bonds. The execution, delivery and performance by the
Authority of its obligations under the Indenture and the issuance and delivery of the Series 2018D Bonds have been
duly authorized by all requisite action of the Authority, and the Series 2018D Bonds have been duly executed and
delivered by the Authority.

3. The Series 2018D Bonds constitute legal, valid and binding limited obligations of the Authority,
payable solely out of the City Contributions.

4. The Indenture constitutes a legal, valid and binding obligation of the Authority and is enforceable
against the Authority in accordance with the terms of the Indenture. The Indenture creates a valid lien on the rights
of the Authority under the Funding Agreement and creates a valid pledge and assignment of the City Contributions
for the security of the Series 2018D Bonds.

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 5. Interest on the Series 2018D Bonds is excludable from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations; however, it should be noted that, for the purpose of computing the alternative
minimum tax imposed on certain corporations (as defined for federal income tax purposes), (i) such interest is taken
into account in determining adjusted current earnings, and (ii) the federal alternative minimum tax imposed on
corporations is eliminated for tax years beginning after December 31, 2017. The opinion set forth in the preceding
sentence is subject to the condition that the Authority complies with all requirements of the Internal Revenue Code
that must be satisfied subsequent to the issuance of the Series 2018D Bonds in order that the interest thereon be, and
continue to be, excludable from gross income for federal income tax purposes. The Authority has covenanted to
comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the
Series 2018D Bonds to be included in gross income for federal income tax purposes retroactively to the date of
issuance of the Series 2018D Bonds.

6. Under existing law, interest on the Series 2018D Bonds is exempt from State of Alabama income
taxation.

We express no opinion regarding tax consequences arising with respect to the Series 2018D Bonds other
than as expressly set forth herein.

The rights of the holders of the Series 2018D Bonds and the enforceability thereof and of the Indenture and
Funding Agreement are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity.

We express no opinion herein regarding the accuracy, adequacy or completeness of the Official Statement
relating to the Series 2018D Bonds.

This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement
this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that
may hereafter occur.

Faithfully yours,

MAYNARD, COOPER & GALE, P.C.

By:

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 APPENDIX H

Forms of Continuing Disclosure Agreements

[THIS PAGE INTENTIONALLY LEFT BLANK]
 CONTINUING DISCLOSURE AGREEMENT

THIS CONTINUING DISCLOSURE AGREEMENT (the “Agreement”) is entered into by BIRMINGHAM-

JEFFERSON CIVIC CENTER AUTHORITY, an Alabama public corporation (the “Obligor”).

This Agreement is being delivered in connection with the issuance by the Obligor of its $__________
Revenue Bonds (City of Birmingham Funding), Series 2018D (the “Bonds”). The Bonds are being issued pursuant
to a Trust Indenture dated August 1, 2018 (the “Indenture”) between the Obligor and Regions Bank, an Alabama
banking corporation, as trustee (the “Trustee”).

To provide for the payment of debt service on the Bonds, the Authority and the City of Birmingham (the
“City”) have entered into a funding agreement dated July ____, 2018 (the “Funding Agreement”), pursuant to which
the City has agreed to make payments to the Authority in the amount of $3,000,000 per year for a period of 30 years.
The Authority’s rights in and to the Funding Agreement have been pledged by the Authority as part of the trust
estate established in the Indenture for payment of debt service on the Bonds. The City has also entered into a
continuing disclosure agreement of even date herewith with respect to the Bonds.

In consideration of the purchase of such Bonds by the beneficial owners thereof, the Obligor covenants and
agrees as follows:

Section 1. Definitions

Capitalized terms not otherwise defined in this Agreement shall have the meaning assigned in the
Indenture. In addition, the terms set forth below shall have the meaning assigned unless the context clearly
otherwise requires:

“Bonds” means the $__________ Revenue Bonds (City of Birmingham Funding), Series 2018D issued by
the Obligor.

“EMMA” means the MSRB’s Electronic Municipal Market Access System (EMMA) established pursuant
to the Rule.

“Indenture” means the Trust Indenture dated August 1, 2018 between the Obligor and the Trustee.

“MSRB” means the Municipal Securities Rulemaking Board.

“Obligor” means Birmingham-Jefferson Civic Center Authority, an Alabama public corporation.

“Official Statement” means the Official Statement dated July ____, 2018 with respect to the Bonds.

“Rule” means Rule 15c2-12 adopted by the Securities and Exchange Commission, as the same may be
amended from time to time.

“Trustee” means Regions Bank, an Alabama banking corporation, as trustee under the Indenture.

Section 2. Purpose and Beneficiaries of this Agreement

This Agreement is entered into by the Obligor for the benefit of the holders of the Bonds in order to assist
the underwriter or underwriters for the Bonds in complying with the requirements of the Rule.

Section 3. Annual Financial Information

(a) Within 180 days after the end of each fiscal year, the Obligor shall file with the MSRB an annual
report which shall include financial information and statistical data generally consistent with that contained in
APPENDIX A to the Official Statement under the following heading:

H-1
 • DEMOGRAPHICS

(b) The Obligor may omit or modify any part of the annual information required by this section if the
operations to which it relates have been discontinued or materially changed. The Obligor will include an
explanation to that effect as part of the annual information for the year in which such event first occurs.

(c) If any amendment is made to this Agreement, the annual information for the year in which such
amendment is made shall contain a description of the reasons for such amendment and its impact on the type of
information being provided.

Section 4. Audited Financial Statements

Within 30 days after receipt by Obligor, but in no event more than 180 days after the end of each fiscal
year, the Obligor shall file with the MSRB audited financial statements of the Obligor. The audited financial
statements shall be prepared on a basis consistent with the accounting and auditing standards used to prepare the
financial statements attached as APPENDIX B to the Official Statement, as such standards may be modified from time
to time under generally accepted accounting and auditing standards applicable to the Obligor.

Section 5. Event Disclosure

(a) In a timely manner not in excess of 10 business days after the occurrence of the event, the Obligor
shall file with the MSRB notice of the occurrence of any of the following events affecting the Bonds:

(1) principal and interest payment delinquencies;

(2) non-payment related defaults, if material;
(3) unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on credit enhancements reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notice of Proposed Issue (IRS Form 5701-TEB), or other material notices or
determinations with respect to the tax status of the Bonds, or other material events affecting the tax status
of the Bonds;
(7) modifications to rights of the holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) defeasances;
(10) release, substitution or sale of property securing repayment of the Bonds, if material;
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar events affecting the Obligor;
(13) the consummation of a merger, consolidation, or acquisition involving an Obligor or the
sale of all or substantially all of the assets of the Obligor, 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
(14) appointment of a successor or additional trustee or the change of name of a trustee, if
material.

(b) In a timely manner the Obligor shall file with the MSRB notice of failure to make a filing, on or
before the date specified in this Agreement, of annual information required by Section 3 or Section 4 of this
Agreement.

Section 6. Consequences of Failure to File

If the Obligor fails to comply with any provision of this Agreement, the holder of any Bond may seek
mandamus or specific performance by court order, to cause the Obligor to comply with its obligations under this

H-2
Agreement. A default under this Agreement shall not be deemed an event of default under the Indenture or any
other financing document related to the issuance of the Bonds. The sole remedy under this Agreement shall be an
action to compel performance.

Section 7. Amendment

This Agreement may be amended by the Obligor if the amendment is required by, or consistent with,
changes to, or interpretations of, the Rule made by governmental authority after the Bonds are issued.

Section 8. Termination

This Agreement shall terminate when (i) all Bonds have been paid or defeased in accordance with the terms
of the Indenture or (ii) the continuing disclosure obligation of the Rule is no longer applicable to the Bonds.

Section 9. Filing

(a) The Obligor shall make the information filings required or permitted by this Agreement with the
MSRB through the MSRB’s Electronic Municipal Market Access System (EMMA).

(b) All documents provided to the MSRB pursuant to this Agreement shall be filed in electronic
format as prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the
MSRB.

(c) Information about the filing system and requirements of EMMA is available at
www.emma.msrb.org.

Section 10. Additional Information

The Obligor may, in its sole discretion, file with the MSRB additional notices with information not
required by this Agreement or the Rule. Such additional filings may be discontinued by the Obligor at any time in
its sole discretion.

Section 11. No Indirect Beneficiaries

This Agreement is for the benefit of the underwriter or underwriters for the Bonds and the holders of the
Bonds and shall not create rights or benefits for any other person or entity.

Section 12. Agent for Filings

The Obligor may appoint an agent for purposes of making the filings required or permitted by this
Agreement, but no such appointment, or failure of such agent to perform, shall relieve the Obligor of its
responsibilities under this Agreement.

Section 13. Governing Law

This Agreement shall be governed by the laws of the State of Alabama.

H-3
Dated: _______________, 2018.

BIRMINGHAM-JEFFERSON CIVIC CENTER

AUTHORITY

By:

Its:

H-4
 CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (the “Agreement”) is entered into between the City of Birmingham
(the “City”) and the holders of the Bonds described below.

RECITALS:

Contemporaneously with the execution and delivery of this Agreement by the City, the Birmingham-
Jefferson Civic Center Authority (the “Authority”) is issuing its Revenue Bonds (City of Birmingham Funding),
Series 2018D (herein called the “Bonds”) in the aggregate principal amount of $_________. The Bonds are being
issued pursuant to a Trust Indenture dated August 1, 2018 (the “Indenture”) between the Authority and Regions
Bank, as trustee. To provide for the payment of debt service on the Bonds, the Authority and the City have entered
into a funding agreement dated July ____, 2018 (the “Funding Agreement”), pursuant to which the City has agreed
to make payments to the Authority in the amount of $3,000,000 per year for a period of 30 years. The Authority’s
rights in and to the Funding Agreement have been pledged by the Authority as part of the trust estate established in
the Indenture for payment of debt service on the Bonds.

The proceeds of the Bonds will be used to (i) make certain improvements to the Authority’s facilities that
the City believes will encourage and promote tourism and convention business and will generate substantial
economic benefit for the City and (ii) pay the costs of issuing the Bonds.

The Bonds are subject to the provisions of Rule 15c2-12 (the “Rule”), promulgated by the Securities and
Exchange Commission of the United States of America (the “SEC”) pursuant to the Securities Exchange Act of
1934. The Authority has delivered to the underwriters for the Bonds (the “Underwriters”) the Authority’s Official
Statement with respect to the Bonds dated July ____, 2018 (the “Official Statement”). The City acknowledges that
it is an “obligated person” as defined in the Rule with respect to the Bonds and that, except as specifically set forth
herein, (i) it has undertaken no responsibility with respect to any notices or disclosures required pursuant to the
Rule, and (ii) it has no liability to any person, including any Holder of the Bonds, with respect to any such notices or
disclosures. The City has entered into this Agreement in order to assist the Underwriters in complying with the
Rule.

Except where otherwise defined in this Agreement, all capitalized terms used herein shall have the same
meaning herein as in the Official Statement.

NOW, THEREFORE, the City does hereby undertake and agree with the holders of the Bonds as follows:

Section 1. Annual Reports of the City. The City hereby agrees, so long as any of the Bonds are
outstanding and so long as the City remains an “obligated person” for purpose of the Rule, in accordance with the
provisions of the Rule, to provide or cause to be provided within 270 days after the close of each fiscal year of the
City its audited financial statements to the Municipal Securities Rulemaking Board (MSRB) by posting such audited
financial statements to the MSRB’s Electronic Municipal Market Access System (EMMA); provided, however, that
if audited financial statements of the City are not available at such time, the City will provide unaudited financial
statements within 270 days after the end of the fiscal year and will provide its audited financial statements for such
fiscal year when and if available. The audited financial statements of the City so provided will be prepared pursuant
to generally accepted accounting principles as applicable to it.

In addition, the City agrees, so long as any of the Bonds are outstanding and so long as the City remains an
“obligated person” for purpose of the Rule, in accordance with the provisions of the Rule, to provide or cause to be
provided to the MSRB by posting to EMMA, not later than 270 days after the close of each fiscal year of the City,
commencing with the fiscal year ending June 30, 2018, the following annual financial information and operating
data (the “Annual Report”):

1. The assessed value of all taxable property within the corporate limits of the City for the previous
fiscal year of the City;

H-5
 2. Total ad valorem tax collections from the City’s ad valorem tax for the previous fiscal year of the
City;

3. Total sales and use tax collections for the previous fiscal year of the City;

4. Total occupational license tax collections for the previous fiscal year of the City;

5. Total license and permit fee or tax collections for the previous fiscal year of the City;

6. Total revenues collected by the City from charges for services for the previous fiscal year of the
City;

7. The ten largest ad valorem taxpayers in the City, ranked by assessed value, for the previous fiscal
year;

8. A list of the outstanding principal amounts of all general obligation bonds of the City as of the end
of the previous fiscal year;

9. A list of the outstanding principal amounts of all general obligation warrants of the City as of the
end of the previous fiscal year;

10. A statement of revenues, expenditures and changes in fund balances for the City’s general fund for
the previous fiscal year; and

11. A statement of revenues, expenditures and changes in fund balances for the City’s general bond
debt reserve fund for the previous fiscal year.

Section 2. Notice of Material Events. The City agrees, so long as any of the Bonds are outstanding and
so long as the City remains an “obligated person” for purposes of the Rule, to provide or cause to be provided within
ten (10) business days of the occurrence of the following events, by posting to EMMA notice of the occurrence of
any of the following events with respect to the City:

1. Bankruptcy, insolvency, receivership or similar event of the City.

2. The consummation of a merger, consolidation, or acquisition involving the City or the sale of all
or substantially all of the assets of the City, other than in the ordinary course of business, or the
entry into a definitive agreement relating to any such actions, other than pursuant to its terms, if
material.

Nothing in this Agreement shall be deemed to prevent the City from disseminating any other information,
using the means of dissemination set forth in this Agreement or any other means of communication, or including any
other information in any notice of occurrence of an event described above in this Section 2, in addition to that which
is required by this Agreement. If the City chooses to disseminate information in addition to that required herein,
whether by including such information in any notice of occurrence of an event described above in this Section 2 in
addition to that which is specifically required by this Agreement or otherwise, the City shall have no obligation
under this Agreement to update or continue to provide such information or include it in any future notice of
occurrence of an event described above in this Section 2.

Section 3. Notice of Non-Compliance. The City agrees to provide or cause to be provided, in a timely
manner, by posting to EMMA notice of any failure by it to provide the annual financial information and the notice
of material events described in Sections 1 and 2 hereof on or prior to the dates respectively set forth in said sections.

Section 4. Beneficiaries and Enforcement. This Agreement is for the benefit of the holders of the Bonds
and shall be enforceable by such holders, subject to the limitations herein. The City shall never be subject to money
damages in any sum or amount, whether compensatory, punitive or otherwise, for its failure to comply with its

H-6
obligations contained herein. The only remedy available to the holders of the Bonds for breach by the City of its
obligations hereunder shall be the remedy of specific performance or mandamus against the appropriate officials of
the City to obtain performance of the City's obligations hereunder. No failure by the City to comply with the
provisions of this Agreement shall be an event of default with respect to the Funding Agreement or any other
document delivered by the City in connection with the issuance of the Bonds.

Section 5. Amendment. This Agreement may be amended by the City without consent of any holders of
the Bonds if

(a) such amendment is made in connection with a change in circumstances that arises from a
change in legal requirements, change in law, or change in the indemnity, nature, or status of the City;

(b) the agreement, as so amended, would have complied with the requirements of the Rule at
the time of the execution hereof, after taking into account any amendments or interpretations of the Rule, as
well as any change in circumstances; and

(c) such amendment does not materially impair the interests of any of the holders of the
Bonds.

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 IN WITNESS WHEREOF, this Agreement has been duly executed by and on behalf of the City as of the
_____ day of _________________, 2018.

THE CITY OF BIRMINGHAM, ALABAMA

By:
Mayor

[SEAL]

Attest:

________________________________
City Clerk

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 APPENDIX I

The DTC Book Entry System

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 APPENDIX I

THE DTC BOOK ENTRY SYSTEM

The information contained in this section concerning The Depository Trust Company and its book-entry
only system has been obtained from materials furnished by The Depository Trust Company to the Authority. The
Authority and the Underwriters do not make any representation or warranty as to the accuracy or completeness of
such information.

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 other name as may be requested by an authorized representative of DTC. One fully-
registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of
such maturity, and will be deposited with DTC.

DTC, the world’s largest 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
1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s
participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in deposited securities, through electronic computerized book-
entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement
of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company 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 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 (a
“Beneficial Owner”) is in turn to be recorded on the Direct Participants’ 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 Participant or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made
on the books of Direct Participants and Indirect Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use
of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds. DTC’s records reflect only the identity of the Direct Participants to whose
accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct Participants 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

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

Redemption notices shall be sent to DTC. If less than all of the Bonds 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. (nor any other DTC nominee) will consent or vote with respect to Bonds
unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures,
DTC mails an “Omnibus Proxy” to the Authority 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”).

Principal, premium and interest 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 receipt of funds and corresponding detail information, in accordance with their respective holdings
shown on DTC’s records. Payments by Direct Participants and 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 Direct Participants and
Indirect Participants and not of DTC, the Trustee or the Authority, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payments of principal, premium (if any) and interest to Cede &
Co. (or such other DTC nominee as may be requested by an authorized representative of DTC) is the responsibility
of the Trustee, 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 Participants and
Indirect Participants.

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

The Authority, the Trustee and the Underwriters cannot and do not give any assurances that DTC,
the Direct Participants or the Indirect Participants will distribute to the Beneficial Owners of the Bonds
(1) payments of principal, redemption price or interest on the Bonds; (2) certificates representing an
ownership interest or other confirmation of beneficial ownership interests in Bonds; or (3) redemption or
other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will
do so on a timely basis or that DTC, Direct Participants or Indirect Participants will serve and act in the
manner described in this Official Statement. The current “rules” applicable to DTC are on file with the
United States Securities and Exchange Commission, and the current “procedures” of DTC to be followed in
dealing with DTC participants are on file with DTC.

Neither the Authority, the Trustee nor the Underwriters will have any responsibility or obligation to
any Direct Participant, Indirect Participant or any Beneficial Owner or any other person with respect to:
(1) the Bonds; (2) the accuracy of any records maintained by DTC or any Direct Participant or Indirect
Participant; (3) the payment by DTC or any Direct Participant or Indirect Participant of any amount due to
any Beneficial Owner in respect of the principal or redemption price of or interest on the Bonds; (4) the
delivery by DTC or any Direct Participant or Indirect Participant of any notice to any Beneficial Owner
which is required or permitted under the terms of the Indenture to be given to holders of the Bonds; (5) the
selection of the Beneficial Owners to receive payment in the event of any partial redemption of the Bonds; or
(6) any consent given or other action taken by DTC as a holder of the Bonds.

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BIRMINGHAM-JEFFERSON CIVIC CENTER AUTHORITY • Revenue Bonds (City of Birmingham Funding), Series 2018D