CONSOLIDATED UTILITY DISTRICT Rutherford County, Tennessee

Transcription

1 CONSOLIDATED UTILITY DISTRICT Rutherford County, Tennessee 709 New Salem Highway P.O. Box 249 Murfreesboro, Tennessee Telephone Facsimile August 1, 2016 Ms. Lori Barnard Financial Analyst State of Tennessee Comptroller of the Treasury Office of State and Local Finance Suite 1600 James K. Polk Building 505 Deaderick Street Nashville, TN RECEIVED!. :; ~ ;" 1 201fj STATE AND LOCAL FINANCE Dear Ms. Barnard: On behalf of the Consolidated Utility District of Rutherford County, Tennessee (the "District"), I am submitting this request for report on a proposed issuance of water system revenue refunding bonds (the "Series 2016 Bonds"), pursuant to Tennessee Code Annotated Sections (c) and The governing body of the District, the Board of Commissioners, intends to consider the bond resolution authorizing the Series 2016 Bonds at a meeting on August 23, If you have any questions or comments, please feel free to contact Paul Long at or our Advisor on this financing, Sam Crewse, at Thank you for considering our request. General Printed on Recycled Paper

2 CONSOLIDATED UTILITY DISTRICT OF RUTHERFORD COUNTY, TENNESSEE PLAN OF FINANCE On behalf of the Consolidated Utility District of Rutherford County, Tennessee (the "District"), I am submitting this request for report on a proposed issuance of water system revenue refunding bonds (the "Series 2016 Bonds"), pursuant to Tennessee Code Annotated Sections (c)(1) and The governing body of the District, the Board of Commissioners, intends to consider the bond resolution authorizing the Series 2016 Bonds at a meeting on August 23, In connection with this request, I am enclosing the following: Exhibit A- Proposed bond resolution Exhibit B- Financial projections detailing the plan of finance for the Series 2016 Bonds, which include (i) estimated amortization schedule for the Series 2016 Bonds, (ii) a detailed schedule of the costs of issuance for the Series 2016 Bonds, (iii) a listing of the sources and uses of funds for the Series 2016 Bonds, (iv) a projection of savings generated by the refunding and (v) amortization schedules for the Refunded Bonds. Exhibit C- Schedule of total outstanding debt of the District as of the beginning of the current fiscal year and Schedule oftotal debt service following the issuance of the Series 2016 Bonds Exhibit D- Current financial statements of the District as of June 30, 2016 Exhibit E- Audited financial statements for the fiscal year ended September 30, 2015 Exhibit F- Current Debt Management Policy of the District

3 FINANCING SUMMARY The par amount of the Series 2016 Bonds will not exceed $10,000,000. The preliminary analysis of the transaction is based on a par amount of $9,523,542. The District has approximately $1,118,300 in Debt Service Reserve Funds (DSRF) for the 2009 Bonds. The District's new bond resolution will not require a DSRF. The refunding of the callable 2009 Bonds will result in the release of approximately $365,800. The District will use these released funds to reduce the size of the 2016 Bond issue. The District will use the proceeds of the Series 2016 Bonds, together with released DSRF money, as follows: (i) approximately $9,833, will be deposited in escrow and used to advance refund the Series 2009 Bonds maturing in the years 2021 to 2030; and (ii) approximately $56, will be used to pay costs of issuance of the Series 2016 Bonds. The Series 2016 Bonds will be secured by the net revenues of the District's water system and will be subordinate in lien to any of the District's remaining 2009 Bonds and Rural Development obligations. The Series 2016 Bonds will be on parity with the District's 2013 Bonds. The following table outlines the basic structure of the Series 2016 Bonds. Expected Amount $9,523,542 Dated Date Date of Issuance (tentatively August 30, 2016) Anticipated Final Maturity February 1, 2030 Weighted Average Maturity Series 2016 Bonds: years Refunded 2009 Bonds: years Interest Semi-annually-February 1 and August 1 First Interest Payment February 1, 2017 First Principal Payment February 1, 2017 Call Date Security Any time at par System Revenues (Subordinate to Certain Outstanding Debt)

4 DESCRIPTION OF REFUNDED BONDS The following chart summarizes the terms of the Refunded Bonds Series 2009 Bonds Name of Issue $15,000,000 Waterworks Revenue Bonds, Series 2009 Type of Debt Fixed Rate I Publicly Sold Original Terms Amortization 2011 through 2030 (please see Prior Bond Debt Service Schedule in Exhibit B and State Report on Debt Obligations included in Exhibit G) Tax-Status Tax-exempt Maturities Proposed for February 1, Refunding Date of Issue November 19, 2009 Authorized by Resolution April 28, 2009 Bank-Qualified Status Yes Purpose System Improvements DESCRIPTION OF REFUNDING PLAN AND SAVINGS The proposed refunding plan is made beneficial by the current low interest rate environment. The annual debt service on the 2009 Bonds will be reduced by over $1,337,810 over the life of the 2016 Bonds.. When adjustments are made to net out the impact of the contributed debt service reserve fund to the escrow, the net present value savings from the refunding are estimated to be $820,842 or 9.338% of the amount being refunded by the 2016 Bonds. A projection of savings generated by the refunding of the obligation is included in Exhibit B. The final maturity of the refunding portion of the Series 2016 Bonds will not extend beyond the fiscal year of the final maturity of the Refunded Bonds, and the weighted average maturity of the Series 2016 Bonds will be less than the weighted average maturity of the bonds refunded by the 2016 Bonds. The amortization schedules for both the Refunded Bonds and the Series 2016 Bonds are included in Exhibit B hereto. The District solicited quotes from multiple banks to purchase the 2016 Bonds. The District has an offer of 1.81% from the winning proposal. The District must approve and complete this bond issue by August 30, 2016 in order to lock in this rate.

5 CONSISTENCY WITH DEBT MANAGEMENT POLICY The District adopted a debt management policy on December 20, 2011, which policy is attached hereto as Exhibit F for filing with the Office of State and Local Finance. The Series 2016 Bonds comply in all respects with the District's debt management policy, including specifically the following: Reasons for Refunding-The refunding complies with our policy as it is expected to produce net PV savings of over 9.338% of the amount being refunded. (See Debt Policy - Debt Management Practices: Refinancing Outstanding Debt: Section {8}{1} Reasons for Refunding). Structuring-- The refunding is structured in a manner that does not extend the life of the refunded debt. (See Debt Policy - Debt Management Practices: Refinancing Outstanding Debt: Section {8}{2} Term of Refunding Issue.) Method of Sale- The proposed plan contemplates a private placement. This is consistent with our policy (See Debt Policy - Debt Management Practices: Methods of Sale: Section (C}{3} Private Placement). The District will consider private placements when this method of sale offers the opportunity for additional savings relative to other methods of sale. This method of sale was selected for the Series 2016 Bonds due to the timeliness with which the District can lock in a rate, the reduced interest rate exposure associated with the timely rate commitment, the low rate available, the lower costs of issuance associated with this method of sale and the flexible prepayment terms associated with bonds sold through this method of sale. ADDITIONAL INFORMATION Should you have additional questions or require further information in order to issue your report, please do not hesitate to contact any of the following individuals who have assisted the District in connection with the preparation of this request and plan of finance: District Paul Long Comptroller plong@cud rc.com Financial Advisor Sam Crewse Stephens Inc. samcrewse@stephens.com Bass, Berry & Sims Jeff Oldham joldham@bassberry.com Thank you for considering our request.

6 EXHIBIT A Proposed Bond Resolution

7 A RESOLUTION AUTHORJZING THE ISSUANCE, SALE AND PAYMENT OF UP TO $10,000,000 IN PRJNCIPAL AMOUNT OF A REVENUE REFUNDING BOND OF THE CONSOLIDATED UTILITY DISTRJCT OF RUTHERFORD COUNTY. BE IT RESOLVED by the Board of Commissioners of The Consolidated Utility District of Rutherford County, Tennessee, as follows: 1. Authority; Findings. a. The Consolidated Utility District of Rutherford County, Tennessee (the "District") is duly incorporated pursuant to Section et seq., Tennessee Code Annotated (the "Act"). b. The District owns and operates a waterworks system (the "System"). c. Section I of the Act authorizes the District to issue bonds and use the proceeds to refinance outstanding District indebtedness. d. The Board of Commissioners of the District finds that it is advisable to refinance its outstanding Waterworks Revenue Bonds, Series 2009 maturing on or after February 1, 2021 (the "Refunded Obligations"). The refinancing is advisable because it will result in debt service savings for the District. e. The District has submitted to the Director of State and Local Finance a request for financing report, as required by the Act. The Director has reported on the plan of finance; the report has been published as required by the Act; and the report is attached hereto as Exhibit B. f. The District has issued and presently has outstanding its Waterworks Revenue Refunding Bonds, Series 2013 (the "Series 2013 Bonds"), payable from and secured by a lien on the net revenues of the System, pursuant to a resolution of the Board of Commissioners of the District adopted on February 26, 2013 (the "Master Resolution"). The bonds authorized herein will be issued on parity with the Series 2013 Bonds, under the terms and conditions of the Master Resolution. 2. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed by the Master Resolution. The following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: a. "Escrow Agent" means Regions Bank, Nashville, Tennessee. b. "Escrow Agreement" means the Escrow Agreement between the Municipality and the Escrow Agent in a form similar to the form attached hereto as Exhibit C. c. "Purchaser" means First Tennessee Bank National Association artd its successors and assigns. d. "Refunded Obligations" shall have the meaning ascribed in Section 1.

8 e. "Registration Agent" means the Comptroller of the District, or any successor designated by the Governing Body. f. There shall be no "Reserve Fund Requirement" with respect to the Series 2016 Bond. g. "Series 2016 Bond" means the revenue refunding bond authorized to be issued by this Resolution. 3. Authorization and Terms ofthe Series 2016 Bond. a. General Terms. The Governing Body hereby authorizes the issuance of a revenue bond of the District in a principal amount up to $10,000,000. 1) The Series 2016 Bond shall be issued to: a) refinance the Refunded Obligations; and b) pay bond issuance costs. 2) The bond shall be known as "Waterworks Revenue Refunding Bond, Series 20 16" or such other name as may be selected by the President. 3) The Series 2016 Bond shall be dated the date of its delivery. 4) Interest on the Series 2016 Bond shall be payable each February 1 and August 1, commencing February 1, 2017, at an interest rate of 1.81% per annum (calculated on the basis of a 360 day year consisting of twelve 30-day months). 5) Principal of the Series 2016 Bond shall be payable in annual installments on each February 1, in amounts substantially consistent with the financing report filed with the Director of State and Local Finance, which such principal amounts and payment dates shall be established by the President and set forth in the Series 2016 Bond. b. Optional Redemption. The District shall have the right from time to time to redeem the Bond, in whole or in part, at the price of par plus accrued interest to the redemption date, by giving ten days prior written notice to the Purchaser. Such redemption notice shall specify the date of such redemption and the principal amount to be prepaid. Partial redemptions shall be applied first to the latest installments of principal or, at the election of the District (written notice of which shall be provided to the Purchaser), pro rata among the annual installments of principal, in proportion to the relative par amounts of the annual principal installments. c. Bond Payments;,Registration. All payments in respect of the Series 2016 Bond, principal and interest, shall be made directly to the registered owner at its address shown on the bond registration records of the District, without, except for final payment, the presentation or surrender of the Series 2016 Bond, and all such payments shall discharge the obligation of the District in respect of such Series 2016 Bond to the extent of the payments so made. Upon final payment, the Series 2016 Bond shall be submitted to the Comptroller of the District, as bond registrar, for cancellation. 2

9 The District hereby appoints the Comptroller of the District to act on behalf of the District as registrar and paying agent for the Series 2016 Bond. The Series 2016 Bond is transferable by the registered owner thereof, or by its attorney duly authorized in writing, on the registration books of the District, upon presentation of the Series 2016 Bond to the registrar for transfer with the form of assignment attached thereto completed in full and signed with the name of the registered owner. All transferees shall take the Series 2016 Bond subject to such condition. The District may treat the registered owner as the absolute owner hereof for all purposes and shall not be affected by any notice to the contrary whether or not any payments due on the Series 2016 Bond shall be overdue. d. Execution of Bonds. The Series 2016 Bond shall be executed in such manner as may be prescribed by applicable law, in the name, and on behalf of the District, by the President and attested by the Secretary. 4. Form of Series 2016 Bond. The Series 2016 Bond shall be in substantially the form attached hereto as Exhibit A. The form of the Series 2016 Bond set forth in Exhibit A hereto shall be conformed to reflect any changes made pursuant to Section Source of and Security for Payment. a. The Series 2016 Bond shall be payable solely from and secured by a pledge of the Net Revenues, on parity with the Series 2013 Bonds. The punctual payment of principal of and premium, if any, and interest on the Series 2016 Bond shall be secured equally and ratably by the Net Revenues without priority by reason of series, number or time of sale or delivery. The Net Revenues are hereby irrevocably pledged to the punctual payment of such principal, premium, if any, and interest as the same become due. The Series 2016 Bond does not constitute a debt of the State of Tennessee, or any political subdivision thereof, or municipal corporation therein, other than the District, and no holder of the Series 2016 Bond shall have recourse to the taxing power of any such entities. b. For the further protection of the registered owners of the Series 2016 Bond, a statutory lien in the nature of a mortgage lien upon the System is granted and created by the Act, which said statutory mortgage lien is hereby recognized as valid and binding upon the District, on parity with the lien in favor of the Series Bonds, and to be a lien upon the System and the System shall remain subject to such statutory mortgage lien until the payment in full of the principal and interest on the Series 2016 Bond. 6. Sale of the Series 2016 Bond; Changes Authorized. a. The Series 2016 Bond shall be sold to the Purchaser at the price of par. b. The President and the Secretary, or either of them, are authorized to cause the Series 2016 Bond to be delivered to the Purchaser, and to execute, publish, and deliver all certificates and documents as they shall deem necessary in connection with the sale and delivery of the Series 2016 Bond. In connection with the sale of the Series 2016 Bond, the President is authorized to: 3

10 1) determine whether to reduce the principal amount of the Series 2016 Bond below $10,000,000; and 2) adjust the optional redemption terms for the Series 2016 Bond. c. The President and/or the General Manager are authorized to enter into an engagement letter with Stephens Inc., as financial advisor to the District in connection with the issuance of the Series 2016 Bond and Bass, Berry & Sims PLC, as bond counsel to the District in connection with the issuance of the Series Bond, and all actions heretofore taken to engage financial advisor and bond counsel are hereby ratified and approved. 7. Application of Proceeds of Series 2016 Bond and Other District Funds. a. The proceeds from the sale of the Series 2016 Bond shall be immediately applied in the following order: 1) To the refinancing of the Refunded Obligations. 2) To pay costs of issuance of the Series 2016 Bond, with any remaining funds to be used to pay debt service on the Series 2016 Bond. b. Upon the issuance of the Series 2016 Bond, the District shall contribute to the refunding of the Refunded Obligations amounts on deposit in the debt service reserve fund for (and allocable to) the Refunded Obligations. 8. Refunding Matters. For the purpose of providing for the payment of the Refunded Obligations, the President is hereby authorized and directed to execute and the Secretary to attest on behalf of the District the Escrow Agreement with the Escrow Agent and to deposit with the Escrow Agent the amounts described in Section 7. The form of the Escrow Agreement presented to this meeting and attached hereto as Exhibit C is hereby approved and the President and the Secretary are hereby authorized and directed to execute and deliver the Escrow Agreement on behalf of the District in substantially the form thereof presented to this meeting, or with such changes as may be approved by the President and Secretary, their execution thereof to constitute conclusive evidence of their approval of all such changes. The Escrow Agent is hereby authorized and directed to hold and administer all funds deposited in trust for the payment when due of principal of and interest on the Refunded Obligations and to exercise such duties as set forth in the Escrow Agreement. 9. Cash Defeasance of Unrefunded Series 2009 Bonds. The President is hereby authorized to apply up to $_million of System funds (which may include amounts on deposit in the debt service sinking fund and the debt service reserve fund for such bonds) to the cash defeasance of any unrefunded Waterworks Revenue Bonds, Series Such funds may be deposited with the Escrow Agent and held under the terms of the Escrow Agreement described in Section 8 hereof. 10. Federal Tax Matters Related to the Series 2016 Bond. a. The Series 2016 Bond will be issued as federally tax-exempt bonds. The District hereby covenants-that it will not use, or permit the use of, any proceeds of the 4

11 Series 2016 Bond in a manner that would cause the Series 2016 Bond to be subjected to treatment under Section 148 of the Code, and applicable regulations thereunder, as an "arbitrage bond". To that end, the District shall comply with applicable regulations adopted under said Section 148. The District further covenants with the registered owners from time to time of the Series 2016 Bond that it will, throughout the term of the Series 2016 Bond and through the date that the final rebate, if any, must be made to the United States in accordance with Section 148 of the Code, comply with the provisions of Sections 103 and 141 through 150 of the Code and all regulations proposed and promulgated thereunder that must be satisfied in order that interest on the Series 2016 Bond shall be and continue to be excluded from gross income for federal income tax purposes under Section 103 of the Code. b. The Governing Body hereby delegates to the President the authority to designate the Series 2016 Bond as a "qualified tax-exempt obligation," as defined in Section 265 of the Code, to the extent the Series 2016 Bond is not deemed designated as such and may be designated as such. c. The President is authorized and directed, on behalf of the District, to execute and deliver all such certificates and documents that may be required of the District in order to comply with the provisions of this Section related to the issuance of the Series 2016 Bond. 11. Applicability of the Master Resolution. The Series 2016 Bond shall be issued in compliance with the provisions of the Master Resolution so as to be on a parity of lien with respect to the Net Revenues with the Series 2013 Bonds, and when duly delivered, shall constitute a series of bonds delivered under authority of the Master Resolution. As long as the Series 2016 Bond remains outstanding and unpaid either as to principal or as to interest, or until the discharge and satisfaction of the Series 2016 Bond, as provided in Section 17 of the Master Resolution, the provisions of Sections of the Master Resolution shall be applicable to the Series 2016 Bond and shall inure to the benefit of the Purchaser. All references to "Bondholders" or "Owners" in the aforesaid Sections of the Master Resolution shall be deemed to include the Purchaser, and all references to the "Bonds" contained in those Sections shall be deemed to include the Series 2016 Bond and shall be administered for the benefit of the Purchaser. 12. Repeal of Conflicting Resolutions and Effective Date. All other resolutions and orders, or parts thereof, in conflict with the provisions of this Resolution are, to the extent of such conflict, hereby repealed and this Resolution shall be in immediate effect from and after its adoption. 13. General Authorization. The President and the Secretary, and the officers of the District are hereby authorized and directed, on behalf and in the name of the District, to prepare or cause to be prepared and to execute, deliver, verify, acknowledge, file or record any documents, instruments, certificates, statements, papers, or any amendments thereto, as may be deemed necessary or advisable in order to effectuate the actions approved herein, and to take such further steps and do all such further acts or things as are necessary or desirable to carry out the transactions contemplated by the foregoing resolutions. 5

12 14. Separability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. (signature page follows) 6

13 Adopted and approved on August 23, President ATTEST: Secretary

14 STATE OF TENNESSEE ) ) COUNTY OF RUTHERFORD ) I hereby certify that I am the duly qualified and acting Secretary of the Board of Commissioners ofthe Consolidated Utility District of Rutherford County, Tennessee, and as such official I further certify that attached hereto is a copy of excerpts from the minutes of a meeting of the Board of Commissioners of the District held on August 23, 2016; that these minutes were promptly and fully recorded and are open to public inspection; that I have compared said copy with the original minute record of said meeting in my official custody; and that said copy is a true, correct and complete transcript from said original minute record insofar as said original record relates to not to exceed $10,000,000 in principal amount of a Waterworks Revenue Refunding Bond, Series 2016 of said District. WITNESS my official signature and seal of said District this 23rd day of August, (SEAL) Secretary

15 EXHIBIT A REGISTERED Number 1 (Form of Series 2016 Bond) UNITED STATES OF AMERICA STATE OF TENNESSEE CONSOLIDATED UTILITY DISTRICT OF RUTHERFORD COUNTY, TENNESSEE WATERWORKS REVENUE REFUNDING BOND, SERIES 2016 Registered Owner: Federal Taxpayer Identification No.: REGISTERED $, Tennessee Principal Amount: Thousand Dollars ($ / Maturity Date: Date:,2016 KNOW ALL MEN BY THESE PRESENTS: That The Consolidated Utility District of Rutherford County, Tennessee, a public corporation lawfully organized and existing in Rutherford County, Tennessee (the "District"), for value received hereby promises to pay to the registered owner hereof, or its registered assigns, in the manner and from the revenues hereinafter provided, the sum of Thousand Dollars($, with interest on the unpaid balance hereof at the rate of 1. 81% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) from the date hereof until the principal amount hereof shall have been fully paid. This Bond is payable as to interest semiannually on each February 1 and August 1, commencing February 1, Principal ofthis Bond is payable in annual installments on each February 1, as set forth in the table below: Principal Installment Date Principal Amount Both principal hereof and interest hereon are payable in lawful money of the United States of America by check or draft mailed to the registered owner at the address shown on the bond registration records of the District, and such payments shall discharge the obligation of the issuer hereof to the extent of the payments so made. Upon final payment, this Bond shall be submitted to the Comptroller of the District, as Bond registrar for cancellation. The District shall have the right from time to time to redeem this Bond, in whole or in part, at a price of par plus accrued interest to the redemption date, by giving ten days prior written notice to the holder hereof. Such redemption notice shall specify the date of such redemption and the principal amount to be prepaid. Partial redemptions shall be applied first to the latest installments of principal or, upon the A-1

16 election of the District (written notice of which shall be provided to the holder hereof) pro rata among the installments of principal in proportion to the relative par amounts of the principal installments. Upon prior written notice to the President of the Governing Body, this Bond shall be transferable by the registered owner hereof, or by its attorney, duly authorized in writing, on the registration records of the District at the office of the Comptroller of the District upon presentation of the Bond to the registrar for transfer with the form of assignment attached hereto completed in full and signed with the name of the registered owner. All transferees shall take this Bond subject to such condition. The District may treat the registered owner as the absolute owner hereof for all purposes, and shall not be affected by any notice to the contrary whether or not any payments due on this Bond shall be overdue. This Bond is issued by the District for the purpose of paying the costs of (i) refinancing a portion of the District's outstanding Waterworks Revenue Bonds, Series 2009; and (ii) issuing the Bond, under and in full compliance with the constitution and statutes of the State of Tennessee, including Sections , et ~.,Tennessee Code Annotated, and pursuant to a resolution duly adopted by the Board of Commissioners of said District on the 23rd day of August, 2016 (the "Resolution"). This Bond is payable solely from and is secured by a pledge of the revenues of the District's waterworks system (the "System") as provided in the Resolution, subject to the application of said revenues to the payment of the reasonable and necessary expenses of operating, maintaining, repairing and insuring the System on a complete parity and equality of lien with the District's outstanding Waterworks Revenue Refunding Bonds, Series This Bond and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) inheritance, transfer and estate taxes, (b) Tennessee excise taxes on interest on the Bond during the period the Bond is held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee, and (c) Tennessee franchise taxes by reason of the inclusion of the book value of the Bond in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee. A statutory mo1tgage lien, which is hereby recognized as valid and binding, is created and granted by statute on the System in favor of the owner this Bond, and the System shall remain subject to such statutory mortgage lien until the full payment of the principal of and interest on this Bond. This Bond shall be deemed to be a registered obligation for purposes of Section 149 of the Internal Revenue Code of The District shall cause to be kept records relating to the holder and owner of the Bond by and through its Comptroller, who shall be deemed to be the registration agent hereunder. This Bond shall be transferable only upon notice to the Comptroller and notation on the records of the Comptroller of the name and address of the transferee of the Bond. 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 issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any limitation prescribed by the constitution and statutes of the State oftennessee. A-2

17 IN WITNESS WHEREOF, Consolidated Utility District of Rutherford County, Tennessee has caused this Bond to be signed by the President of its Board of Commissioners and attested by the Secretary of said Board under the corporate seal of the District, all as of this day of -----' THE CONSOLIDATED UTILITY DISTRICT OF RUTHERFORD COUNTY, TENNESSEE (SEAL) BY: President ATTEST: Secretary (FORM OF ASSIGNMENT) FOR VALUE RECEIVED, the undersigned sells, assigns, and transfers unto '' whose address is (Please insert Federal Identification of Social Security Number of Assignee the within Bond of The Consolidated Utility District of Rutherford County, Tennessee and does hereby irrevocably constitute and appoint, attorney, to transfer the said bond on the records kept for registration thereof with full power of substitution in the premises. Dated: A-3

18 EXHIBITB REPORT OF DIRECTOR OF STATE AND LOCAL FINANCE (attached) B-1

19 EXHIBIT C FORM OF ESCROW AGREEMENT (attached) C-1

20 EXHIBIT B Financial Projections

21 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Table of Contents Report Debt Service Comparison ,..,,...,., Sources & Uses , Detail Costs Of Issuance Pricing Summary......,...,...,, Debt Service Schedule ,,,..., Proof Of Bond Yield@ % Summary Of Bonds Refunded Debt Service To Maturity And To Call ,.., , Prior Original Debt Service ,...,, Current Outstanding Debt Service ,......,...,..., Total Refunded Debt Service ,..., ,..., Escrow Summary Cost :-...,,, 14 Escrow Fund Cashflow......, Stephens Inc. Public Finance

22 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Debt Service Comparison Date Total P+l Existing DIS Net New DIS Old Net DIS Savings I I I , , , , ,014, ,015, I,024, I,0 I 0, ,005, ,02 1, ,011, , , I,00 I, , , , , I, ,028, ,036, I,008, ,014, ,015, ,024, ,010, I,005, I,02I, ,011, , , ,001, , I,124, I,132, I,i04, ,109, ,110, I, I20, I,1 06, ,101, ,117, ,I06, ,085, I,092, ,097, , , , , , , , , , , , , , , Total $II,038, $2,9I8, $13,956, $I5,294,3I2.50 $1,337, PV Analysis Summary (Net to Net) Gross PV Debt Service Savings ,..., 1,186, Net PV Cashflow Savings@ 1.884%(AJC) ,186, Total Cash contribution (365,800.00) Net Present Value Benefit $820, Net PV Benefit I $8,790,000 Refunded Principal /o Net PV Benefit I $9,523,542 Refunding PrincipaL % Refunding Bond Information Refunding Dated Date Refunding Delivery Date ,...,...,,,..., ,..., /30/2016 8/30/2016 Stephens Inc. Public Fi~ance Page 1

23 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan offinance *** Dated 08/30/2016 I Delivered 08/30/2016 Sources & Uses Sources Of Funds Par Amount ofbonds $9,523, Planned Issuer Equity contribution,...,,..,,..,,...,,...,,,.,,,,.,,.., , Total Sources."'"""""""""""""" """""... """""" ,....,...,... $9,889, Uses Of Funds Costs of Issuance.....,......,...,,..,,..,,...,..., Deposit to Net Cash Escrow Fund , ,833, $9,889, Stephens Inc. Public Finance Page2

24 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Dated 08/30/2016 I Delivered 08/30/2016 Detail Costs Of Issuance COSTS OF ISSUANCE DETAIL Financial Advisor Verification Agent , ,,,...,,,, , Bond Counsel Local CounseL , ,,..., Escrow Agent Miscellaneous $27, $2, $15, $7, $2, $1, TOTAL....,.....,.... "' ,...,......,... $56, Stephens Inc. Public Finance Page3

25 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Pricing Summary Maturity Type of Bond Coupon Yield Maturity Value Price Dollar Price 02/ Term I Coupon 1.810% 1.810% 9,523, % Total $9,523, ,523, $9,523, Bid Information Par Amount of Bonds Gross Production ,,..,, , Bid ( %) ,......, Total Purchase Price Bond Year Dollars Average Life , Average Coupon Net Interest Cost (NIC).., True Interest Cost (TIC) $9,523, $9,523, ,523, $9,523, $83, Years % % % Stephens Inc. Public Finance Page4

26 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Debt Service Schedule Part 1 of 2 Date 08/30/ /01/ /30/ /01/ / /30/ /01/ /01/ /30/ /01 / /01/ /30/ / / /30/ /01/ / /30/ / / /30/ / / /30/ / / /30/ /01/ / /30/ / / /30/ /01/ / /30/ / / /30/ /01/ / /30/2030 Total Principal Coupon Interest Total P+I 22, % 72, , , , , % 85, , , , , % 84, , , , , % 83, , , , , % 82, , , , , % 75, , , , , % 67, , , , , % 59, , , , , % 51, , , , , % 43, , , , , % 34, , , , , % 26, , , , , % 17, , , , , % 8, , $9,523, $1,514, $11,038, Fiscal Total 94, , , , ,014, ,015, I,024, I,0 I 0, ,005, ,021, ,01 1, , , ,001, Stephens Inc. Public Finance Page 5

27 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Debt Service Schedule Part 2 of 2 Yield Statistics Bond Year Dollars $83, Average Life Years Average Coupon...,..,., % Net Interest Cost (NIC) % True Interest Cost (TIC)., % Bond Yield for Arbitrage Purposes ,,,,,,.,,..,,, % All Inclusive Cost (AIC).,...,...,....,...,....,_...,...., % IRS Form 8038 Net Interest Cost...,...,,,, % Weighted Average Maturity ,.,...,..., Years Stephens Inc. Public Finance Page 6

28 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** ProofOfBond % Date 08/30/ /01/ / /01120I8 08/01120I8 02/01120I9 08/01120I9 02/0I/ / /0I/ /0I/202I 02/01/ /01/ / /0I/ / / /0I/ /0I/ / / /0I/ /0I/ /01/ /0I/ / /0I/ /01/2030 Total Cash flow PV Factor Present Value l.ooooooox 94, x 93, , x 84, I98, x I93, , x 82, I99, Ix I90, , x 79, , x I88, , I8I08x 77, , x 860, , x 68,826.7I 939, x 852, , x 60, , x 852, , x 52, , x 832, I, I9x 44, , x 820, , I5289x 36, , I4x 825, , x 28, ,678.5I I3x 809, , x 2I, , x 784,I90.37 I 7, I92x I4, , x 782, ,904.I I29x 7, , x 779, $I I,038, $9,523, Cumulative PV 93, , , , , , I2, ,5I2.00 1,849, I,9I8, , 770, ,83 I, ,684, , 736,43 I.54 4,568, ,6I3, ,433, ,469, ,295,9 I8.46 6,324, ,134, ,I55, ,939, ,954,I ,736,943.4I 8,743, ,523, Derivation Of Target Amount Par Amount ofbonds ,... $9,523, Original Issue Proceeds , $9,523, Stephens Inc. Public Finance Page 7

29 The Consolidated Utility District of Rutherford County Water System Revenue Refunding Bonds, Series 2016 ***Plan of Finance*** Summary Of Bonds Refunded Issue Maturity Maturity Type of Bond Coupon Value Call Date Call Price Dated 2/01/2016 I Delivered 2/01/2016 Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Series 2009 Bonds Subtotal Total 02/ Serial 02/01 /2021 Term l 02/ Term I 02/ Term 2 02/ Term2 02/01/2026 Term 3 02/0l/2027 Term 3 02/0J/2028 Term 3 02/ Term4 02/0J/2030 Term4 Coupon 4.000% 850,000 02/01 /2020 Coupon 4.000% 730,000 02/01 /2020 Coupon 4.000% 760,000 02/ Coupon 4.250% 800,000 02/01/2020 Coupon 4.250% 820,000 02/ Coupon 4.500% 900,000 02/01/2020 Coupon 4.500% 930,000 02/01 /2020 Coupon 4.500% 950,000 02/0J/2020 Coupon 4.500% 1,000,000 02/01/2020 Coupon 4.500% 1,050,000 02/ $8,790,000 $8,790, % % % % % % % % % % Stephens Inc. Public Finance PageS

30 The Consolidated Utility District of Rutherford County Waterworks Revenue Bonds, Series 2009 ***Final Numbers*** Debt Service To Maturity And To Call Date Refunded Bonds Refunded Interest DIS To Call Principal Coupon Interest 02/01/ % 08/01/ / % 08/01/ / % 08/01/ /01/2020 8, 790, ,979, % 08/ /01/ , % 08/01 / , /01/ , % 175, /01/ , /01 / , % 160, / , / , % 143, / , / , % 125, / , /01/ , % 108, /01/ , /01/ , % 88, / , /01/ , % 67, /01/ , /01/2029 1,000, % 46, /01/ , / ,050, % 23, Total $8,790, $1,329, $10,119, $8,790, $3,586, Refunded D/S 919, , , , , , , , , , ,008, , ,018, , ,017, , ,046, , ,073, $12,376, Yield Statistics Base date for Avg. Life & Avg. Coupon Calculation.....,...,,..., Average Life Average Coupon......,... Weighted Average Maturity (Par Basis)......: Weighted Average Maturity (Original Price Basis) ,... 8/30/ Years % Years Years Refunding Bond Information Refunding Dated Date Refunding Delivery Date /30/2016 8/30/2016 Stephens Inc. Public Finance Page9

31 The Consolidated Utility District of Rutherford County Waterworks Revenue Bonds, Series 2009 ***Final Numbers*** Prior Original Debt Service Part 1 of Z Date 02/01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/ /01/ /01/ /30/2030 Total Principal Coupon Interest Total P+I 650, % 236, , , , , % 227, , , , , % 216, , , , , % 202, , , % 919, i75, , , % 175, , , , , % 160, , , , , % 143, , , , , % 125, , , , , % 108, ,008, , , , % 88, ,018, , , , % 67, ,017, , , ,000, % 46, ,046, , , ,050, % 23, ,073, $11,510, $3,784, $15,294, Fiscal Total 886, ,124, ,132, ,104, ,109, ,110, ,120, ,106, ,101, ,117, ,106, ,085, ,092, ,097, Stephens Inc. Public Finance Page 10

32 The Consolidated Utility District of Rutherford County Waterworks Revenue Bonds, Series 2009 ***Final Numbers*** Prior Original Debt Service Part 2 of 2 Yield Statistics Base date for Avg. Life & Avg. Coupon Calculation /30/2016 Average Life Years Average Coupon % Weighted Average Maturity (Par Basis) Years Weighted Average Maturity (Original Price Basis) Years Refunding Bond Information Refunding Dated Date Refunding Delivery Date ,, , /30/2016 8/30/2016 Stephens Inc. Public Finance Page 11

33 The Consolidated Utility District of Rutherford County Waterworks Revenue Bonds, Series 2009 ***Final Numbers*** Current Outstanding Debt Service Date 02/ / / / / / / Total Principal Coupon Interest 650, % 46, , , % 37, , , % 26, , , % 12, $2,720, $198, Total P+I 696, , , , , , , $2,918, Yield Statistics Base date for Avg. Life & Avg. Coupon Calculation Average Life Average Coupon Weighted Average Maturity (Par Basis) Weighted Average Maturity (Original Price Basis) /30/ Years % Years Years Refunding Bond Information Refunding Dated Date ,... Refunding Delivery Date , /30/2016 8/30/2016 \ Stephens Inc. Public Finance Page 12

34 The Consolidated Utility District of Rutherford County Waterworks Revenue Bonds, Series 2009 ***Final Numbers*** Total Refunded Debt Service Date 02/01/ /01/ / / / /01/ /01/ /01/ / / / /01/ /01/ /01/ /01/ /01/ / / /01/ /01/ /01/ /01/ / /01/ /01/ /01/ /01/2030 Total Principal Coupon Interest 3.000% 3.250% 4.000% 3.500% 730, % 175, , % 175, , , % 160, , , % 143, , , % 125, , , % 108, , , % 88, , , % 67, , ,000, % 46, , I,050, % 23, $8,790, $3,586, Total P+l 919, , , , , , , , , , ,008, , ,018, , ,017, , ,046, , ,073, $12,376, Yield Statistics Base date for Avg. Life & Avg. Coupon Calculation Average Life , Average Coupon Weighted Average Maturity (Par Basis) Weighted Average Maturity (Original Price Basis) /30/ Years % Years Years Refunding Bond Information Refunding Dated Date Refunding Delivery Date ,..,,,.,,,,..,,,, ,..,.... 8/30/2016 8/30/2016 Stephens Inc. Public Finance Page 13