cityofrockhill

1. Rating Agency Presentation September 3, 2009

2. 2 Presentation Outline I. Introduction II. Utility System Overview III. Financial Review & Demographic/ Economic Overview

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4. 4 City of Rock Hill City founded in 1852 and incorporated in 1892 City Manager Form of Government since 1915 City encompasses approximately 35.85 square miles Current Population: 67,339 20 miles south of Uptown Charlotte, North Carolina 3-15-20043-15-2004

6. 6 Rock Hill City Council

7. 7 Management Team Carey F. Smith, City Manager City Manager since April 2002 Previously served as City Manager of Daytona Beach, FL Former City Manager of Myrtle Beach, S.C., Hilton Head Island, S.C., and Tarpon Springs, FL Masters in Public Administration, University of Georgia Bachelors in Political Science, The Citadel Past President of the South Carolina City and County Management Association Past Board Member of the Florida City and County Management Association Currently Serving on ICMA’s Strategic Planning Committee and the PMPA Board Gerald E. Schapiro, Deputy City Manager Assistant City Manager since 1999 Previously served as Finance Director from 1977-1999 Employed with the City since 1970 Masters in Business Administration, Columbia University Graduate Business School Bachelors in Economics, University of Pittsburgh Past President of the Municipal Finance Officers, Clerks and Treasurers Association of S.C.

8. 8 Management Team David B. Vehaun, Assistant City Manager Promoted to Assistant City Manager in February 2009 Formerly served as Management Services Administrator & Finance Director from 1999 – 2009 Formerly served as Budget Officer from 1989-1999 Previously worked with the City of Charlotte Masters in Public Administration, University of North Carolina at Chapel Hill Bachelor’s in Government & Public Service, Winthrop University Certificate of Completion from the Advanced Government Finance Institute, University of Wisconsin School of Business Past President of the Government Finance Officers Association of South Carolina Past President of the Municipal Finance Officers, Clerks and Treasurers Association of S.C. Formerly served on GFOA National Budget Committee (3 years as Chair) and National Nominating Committee Currently serves on GFOA National Executive Board Steven Gibson Administrative Services Director Employed with the City since 1990 Bachelor of Science with emphasis in Business Admin. From Winthrop University Certificate of Completion from the Advanced Government Finance Institute, University of Wisconsin School of Business Serves as Examiner for South Carolina Governor’s Quality Award Serves as Primary Coordinator for ICMA Center for Performance Measurement Currently serves on GFOA National Budget Committee

9. 9 Management Team Anne P. Bunton Customer Service Director Employed with the City since 2005 Formerly Served as York County Treasurer and Finance Director from 1991-2005 Bachelors of Science with emphasis in Business Admin. from Winthrop University Certified Public Accountant since 1990 Certificate of Completion from the Advanced Government Finance Institute, University of Wisconsin School of Business Past Secretary Government Finance Officer’s Association-S.C. Serves on the S.C. Association of Certified Public Accountants Board Andrew C. Cooper Controller Has held position since 1988 Bachelors degree in Accounting, University of North Carolina at Chapel Hill Certified Public Accountant since 1984 Four years public accounting experience with emphasis in governmental accounting Twenty-one years electrical utilities accounting experience

10. 10 Management Team James G. “Jimmy” Bagley, Jr., P.E. Has served as Public Services Administrator/CIO since February 2009 Formerly served as Chief Information Officer 2008-2009 Formerly served as Utilities Director from 1989-2008 Employed with the City since 1989 Bachelor of Science in Electrical Engineering, Clemson University Masters of Business Administration, Winthrop University Past President of the S.C. Society of Professional Engineers, Catawba Chapter Past President of the S.C. Association of Municipal Power Systems Board Member of the American Public Power Association Transmission and Distribution Committee Certified Government Chief Information Officer Registered Professional Engineer and Licensed Electrical Contractor for S.C. Scott Motsinger Utilities Director Employed with the City since January 2009 Bachelor of Science in Electrical Engineering, The Citadel Formerly served in Electric Operations and Management at S.C. Electric & Gas Member Catawba River Scenic Council Piedmont Municipal Power Agency Director (alternate) S.C. Water Management Group Member

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12. 12 Utility System Overview The City operates the Electric, Water and Sewer System - providing utilities to over 95,000 customers The Rock Hill City Council is the rate setting body for all utilities - no State or other authority regulates the City’s utility rates

13. 13 Use of Proceeds2009 Bonds Series 2009A To fund $14 M outstanding 2008 BAN (Land purchases, water & wastewater utility relocations and improvements, and a water reuse system) Series 2009B To fund $15.5 M in new utility projects (Cel River Rd utility improvements, Raw Water Pump Station, and Phase I funding for new operations center) Series 2009C To refund all or any portion of $15.8 M outstanding Bonds 1998C, 2000A, and 2000C

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15. 15 Electric System Overview Established in 1911 The City serves 32,873 customers inside and outside the City limits The electric service area covers 46.30 square miles

16. 16 Electric System Overview Rock Hill purchases power from Piedmont Municipal Power Agency and Southeastern Power Administration. Rock Hill’s purchases represent 32% of PMPA’s output. PMPA is part owner of Catawba Nuclear Station, which is licensed for operations through December 2043. City operates a standby/peak generation unit at the Manchester Wastewater Treatment Plant site.

17. 17 Electric System Overview Additional standby/peak generation units can be found at the City’s Operations Center, City Hall, all Fire Stations, and Law Center Load switches for water heaters and air conditioner compressors throughout City

18. 18 Trend in Electric Customers1999-2009

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24. 24 Water System Overview Established in 1911 The City serves 28,779 customers inside and outside the City limits The City serves over 33,000 water meters The water service area covers 57.08 square miles

25. 25 Water System Overview The Catawba River, a 225 mile water system with Lake Wylie in York County, is the City’s water supply Raw water intake on Lake Wylie is currently 30 MGD; this bond would take it to 48 MGD; designed for 60 MGD and is expected to be sufficient through 2030 Raw water is currently pumped through a 54”, 20,000 foot line to the water filter plant

26. 26 Water System Overview Water is treated and pumped into a 382 mile water distribution system 4.5 million gallons of elevated storage 3.0 million gallons of ground storage Water Filter Plant is permitted for 30 MGD.

27. 27 Water System Overview Current average flow of 17.35 MGD for FY 08/09 Peak flow of 28.7 MGD for FY 08/09 The City has current water agreements with the Town of Fort Mill and York County

28. 28 Trend in Water Customers1999-2009

29. 29 Average Day MGD1998-2009

30. 30 Water SystemTop 10 Customers

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36. 36 Wastewater System Overview Established in 1920 The City serves 29,786 customers inside and outside the City limits The wastewater service area covers 57.25 square miles

37. 37 Wastewater System Overview Wastewater is collected from a 455 mile sewer collection system 20 MGD Wastewater Treatment Plant. Average daily flow for 2009 was 8.34 MGD Peak daily flow for 2009 was 29.3 MGD

38. 38 Wastewater System Overview The City has current wastewater agreements with the Town of Fort Mill, The City of Tega Cay, and York County

39. 39 Trend in Wastewater Customers1999-2009

40. 40 Wastewater SystemTop Ten Customers

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61. 61 City of Rock Hill Transfer Policy Section 1. The City will annually budget a franchise fee that equals the franchise fee that would have been paid by an investor-owned utility. The franchise fee is calculated by multiplying all gross revenues of the utility by the current franchise fee (5%) charged to private utility providers. This will be an expense of the electric, water, and sewer system and a revenue of the General Fund.

62. 62 City of Rock Hill Transfer Policy Section 2. The City will annually budget a payment in lieu of taxes from the Utility systems to the General Fund that approximates the amount of ad valorem taxes that would have been charged to private utility providers. This will be an expense of the electric, water and sewer system and a revenue of the General Fund.

63. 63 City of Rock Hill Transfer Policy Section 3. The City will annually budget a rate of return on the gross operational revenues of the electric, water and sewer systems. This will be based on 5% of the gross utility revenues and may be adjusted by Council. This will be an expense of the electric, water and sewer system and a revenue of the General Fund.

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65. 65 CITY OF ROCK HILL, SOUTH CAROLINACombined Utility System Revenue Bonds

66. 66 CITY OF ROCK HILL, SOUTH CAROLINACombined Utility System Revenue Bonds

67. 67 Combined Utility System Bonds Aggregate Annual Debt Service

68. 68 Variable Rate Debt AnalysisExisting Utility System Debt 3-12-20043-12-2004

69. 69 City of Rock Hill Debt CoverageUtility System Debt Coverage Ratios: 1998-2014

70. 70 Outstanding bonds with a Junior and/or Subordinate Utility System Revenue Pledge 2008A $7,066,000 Refunded 1998B 2007 $1,370,000 Downtown TIF 2007 $2,750,000 Textile Corr TIF 2004 SRF Note $4,658,633 2005 SRF Note $2,511,889 None of these TIF Bonds or SRF Notes have relied on the pledge of Utility system revenues for repayment.

71. 71 Utility Collection Management 99% collection rate

72. 72 Recent Collection Changes due to National Economic Crisis Customer Security Deposits were raised from a maximum deposit of $210 to $300 The non-payment disconnect threshold was reduced from $100 to $75 The setoff debt program (garnishment of state income tax refunds) was pursued more aggressively Web payments now require the name on the card and the credit card number to match the credit card processor’s files, which has significantly reduced credit chargebacks

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74. 74 Capital Improvements to the Utility System

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78. 78 Future Wastewater System Capital Improvements

79. 79 Future Miscellaneous Capital Improvements

80. 80 Summary of all Future Capital Improvements

81. 81 III. Financial Review & Demographic/Economic Outlook

82. 82 Property Tax Revenue

83. 83 Assessed Value of Taxable Property

84. 84 Current Assessed ValueClassification of Property & Assessed Value

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86. 86 Rock Hill’s Total Tax RatesTax Years 1994 - 2008 3-11-20043-11-2004

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88. 88 Tax Collections1998-2008

89. 89 Ten Largest Taxpayers2008 Tax Year

90. 90 Taxpayer Concentration2001-2008

91. 91 Market Value Per Capita2001-2008

92. 92 Multi-Year Budgeting Balanced budgets for 2009/2010 and 2010/2011 Summarized expense projections for personnel, operating, and capital expenses for 2011/12, 2012/13 & 2013/14 2009/10-2013/14 Line Item Projections for all revenues

93. 93 Summary of Revenues/Expenses 2009/10-2013/14

94. 94 Summary of Previous GapsTaken From Prior Long Range Financial Plans and Long Range Budget Projections

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97. 97 Aggregate Debt ServiceAll Debt Service

98. 98 Major Manufacturing & Industrial Employers-Rock Hill Area 3-15-20043-15-2004

99. 99 Major Non-Manufacturing EmployersRock Hill Area 3-15-20043-15-2004

100. 100 City Population GrowthSince Last Decennial Census 3-15-20043-15-2004

101. 101 Unemployment Rate Analysismore people moved to area and attempted to enter workforce

102. 102 Increase in Unemployment Rate Partially due to Increase in Population and Existing Citizens entering the Laborforce

103. 103 Fastest-growing Municipalities in S.C.Total Population Growth

104. 104 Foreclosure RatesPercentage of Units by Area

105. 105 Unemployment RatesRock Hill, York County, S.C. and the U.S. 3-15-20043-15-2004

106. 106 York County Per Capita Income 3-15-20043-15-2004

107. 107 Retail Sales & Growth TrendsCity and County - Since 1990 3-15-20043-15-2004

108. 108 City of Rock Hill Building Permits1997-2008

109. 109 Assessed ValueReal and Personal Property 3-15-20043-15-2004

110. 110 New Capital Investments-York County2002-2008

112. 112 Major Development - Riverwalk Plans are well underway for “Riverwalk”, a $600 million private investment mixed use development planned along the Catawba River Since this time last year, Council has annexed 1,008 acres along the Catawba River, approved an MOU, Zoning, an Improvement Plan, a Municipal Improvement District, a Land Development Agreement, a Financing Agreement, and has begun the process for TIF & MID Bonds for the Development

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116. 116 Items of InterestRock Hill Area Transportation Interstate Highway 77, U.S. Highway 21 and a network of South Carolina highways run through the City. Rail service is provided by Southern Railway. The Charlotte/Douglas International Airport averages 640 daily departures and over 29 million passengers annually. The Rock Hill/York County Municipal Airport serves the City's general aviation aircraft needs. Medical and Health Services There are two hospitals located in or near the city, Piedmont Health Care System, Rock Hill, and Carolina Medical Center, Pineville. Financial Institutions The city is served by numerous branches of eleven commercial banking institutions and is located just 20 miles south of Charlotte, N.C., one of the largest financial centers in the U.S. Utilities Electricity for industrial, residential and commercial consumption is provided by Piedmont Municipal Power Agency and Duke Power Company. Natural gas is provided by York County Natural Gas. Water and sewer service is provided by the City inside the City limits, as well as to portions of the County.

117. 117 Recreation Local cultural organizations, such as the Center for the Arts, the Fort Mill Community Playhouse and the Historical Center of York County, encompass all facets of artistic endeavors and performing arts. The City is home to a number of parks such as Glencairn Garden, Huckle Grove, the Confederate Park, River Park and Ebenezer Park. The Catawba Cultural Center on the Catawba Indian Reservation seeks to preserve the Catawba heritage and culture. Lake Wylie, a 12,000-acre lake, provides opportunities for fishing and water sports. Cherry Park, Manchester Meadows Soccer Complex, Rock Hill Tennis Center and Winthrop University Coliseum/Sports Complex offer a wide range of sports activities for both spectators and participants and offer special events. Historic Brattonsville, Carowinds, and the AAA Charlotte Knights provide a wide range of entertainment options for residents and visitors Education Approximately 37,867 students enrolled in the public school system in York County for the 2008-2009 school year. All public schools are fully accredited and all teachers fully certified by the South Carolina Department of Education. Winthrop University, a four-year state-supported institution is located in the City and has a student body of approximately 6,200 students. Items of InterestRock Hill Area

118. 118 Credit Strengths and Summary Diversified economic base Solid legal provisions Proximity to Charlotte Long Range Financial Planning and Multi-year budgeting

119. 119 Credit Strengths and Summary The City’s Strategic Planning Process City Services are competitively priced The City continues to provide high quality services

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