MUNICIPAL BUILDING AUTHORITY OF TOOELE COUNTY, UTAH $25,340,000 LEASE REVENUE BONDS, SERIES 2010A (FEDERALLY TAXABLE) Consisting of

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1 NEW ISSUE Issued in Book-Entry Only Form Ratings: S&P A Moody s A2 (See BOND RATINGS herein.) In the opinion of Ballard Spahr LLP, Bond Counsel to the Authority, interest on the Series 2010A Bonds is not excludable from gross income for purposes of federal income tax. Bond Counsel is also of the opinion that, under currently existing law, interest on the Series 2010A Bonds is exempt from State of Utah individual income taxes. See TAX MATTERS herein. SERIES 2010A-1 (FEDERALLY TAXABLE ISSUER SUBSIDY RECOVERY ZONE BONDS) MUNICIPAL BUILDING AUTHORITY OF TOOELE COUNTY, UTAH $25,340,000 LEASE REVENUE BONDS, SERIES 2010A (FEDERALLY TAXABLE) Consisting of SERIES 2010A-2 (FEDERALLY TAXABLE ISSUER SUBSIDY BUILD AMERICA BONDS) Payable from Base Rentals to be Made by TOOELE COUNTY, UTAH Pursuant to an Annually Renewable Lease SERIES 2010A-3 (FEDERALLY TAXABLE) Dated: Date of Initial Delivery Due: December 15, as shown on the inside front cover The Series 2010A Bonds are issuable as fully registered bonds and when initially issued will be registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Series 2010A Bonds. Purchases of Series 2010A Bonds will be made in bookentry form only, in the principal amount of $5,000 or any integral multiple thereof, through brokers and dealers who are, or who act through, DTC participants. Owners of the Series 2010A Bonds will not be entitled to receive physical delivery of bond certificates so long as DTC or a successor securities depository acts as the securities depository with respect to the Series 2010A Bonds. Interest on the Series 2010A Bonds is payable on June 15 and December 15 of each year, commencing June 15, 2011, by Zions First National Bank, as Paying Agent, all as more fully described herein. Payment of the principal of and interest on such Series 2010A Bonds will be made directly to DTC or its nominee. Disbursement of such payments to DTC participants is the responsibility of DTC and disbursement of such payments to the beneficial owners is the responsibility of DTC participants. See THE SERIES 2010A BONDS Book-Entry System herein. The Series 2010A Bonds are subject to optional, mandatory sinking fund, and extraordinary redemption prior to maturity. See THE SERIES 2010A BONDS Redemption herein. The Series 2010A Bonds are being issued to (i) finance the costs of the acquisition, construction, equipping and furnishing of a jail facility, land, and related improvements for lease to the County (the Series 2010 Project ), (ii) fund a deposit to a debt service reserve fund, and (iii) pay costs associated with the issuance of the Series 2010A Bonds. Proceeds of the Series 2010A-3 Bonds will also be used to fund working capital related to the Series 2010 Project. The Series 2010A Bonds are issued under and are equally and ratably secured by the Indenture. Pursuant to the Indenture, the Authority has pledged and assigned to the Trustee, among other things, its right, title and interest in and to the Master Lease, including its right to receive the Base Rentals under the Master Lease as security for the payment of the principal of, premium, if any, and interest on the Series 2010A Bonds. In addition, the Authority has granted a security interest in the Series 2010 Project pursuant to a Deed of Trust, Assignment of Rents and Security Agreement for the equal and proportionate benefit of the owners of the Series 2010A Bonds. The Series 2010A Bonds are special limited obligations of the Authority payable solely from the revenues and receipts received pursuant to the Master Lease and other funds or amounts held by the Trustee under the Indenture as security for the Series 2010A Bonds. Under the Master Lease, the County has agreed to make payments in stated amounts which are sufficient to pay the principal of and the interest on the Bonds coming due in each year but only if and to the extent that the County Commission annually appropriates funds sufficient to pay the Base Rentals coming due during each succeeding Renewal Term under the Master Lease plus such additional amounts as are necessary to operate and maintain the Projects during such period. The Master Lease specifically provides that nothing therein shall be construed to require the County Commission to appropriate any money to pay any Base Rentals or Additional Rentals thereunder and the County shall not be obligated to pay such Rentals except to the extent appropriated. THE OBLIGATION OF THE COUNTY TO PAY ANY RENTALS IS ANNUALLY RENEWABLE AS PROVIDED IN THE MASTER LEASE. NEITHER THE OBLIGATIONS OF THE COUNTY TO PAY RENTALS NOR THE OBLIGATION OF THE AUTHORITY TO PAY THE BONDS WILL CONSTITUTE A DEBT OF THE COUNTY OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. THE ISSUANCE OF THE SERIES 2010A BONDS DOES NOT DIRECTLY OR CONTINGENTLY OBLIGATE THE COUNTY TO PAY ANY RENTALS BEYOND THOSE APPROPRIATED FOR THE COUNTY S THEN CURRENT FISCAL YEAR. THE SERIES 2010A BONDS ARE NOT AN INDEBTEDNESS OR A LIABILITY OF THE COUNTY OR THE STATE. THE AUTHORITY HAS NO TAXING POWER. The Series 2010A Bonds are offered when, as and if issued by the Authority and subject to the approval of their legality by Ballard Spahr LLP, Bond Counsel to the Authority. Certain matters relating to disclosure will be passed upon by Ballard Spahr LLP, Disclosure Counsel to the Authority. Certain legal matters will be passed upon for the Authority and the County by Doug Hogan, Counsel to the Authority and the County. It is expected that the Series 2010A Bonds, in book-entry only form, will be available for delivery to DTC or its agent on or about December 21, This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement is dated December 14, 2010 and the information contained herein speaks only as of that date.

2 MUNICIPAL BUILDING AUTHORITY OF TOOELE COUNTY, UTAH $25,340,000 LEASE REVENUE BONDS, SERIES 2010A (FEDERALLY TAXABLE) Consisting of SERIES 2010A-1 (FEDERALLY TAXABLE ISSUER SUBSIDY RECOVERY ZONE BONDS) $5,135, % Term Bond Due December 15, 2037; Price %; CUSIP No AL2 ** $3,870, % Term Bond Due December 15, 2040; Price %; CUSIP No AF5 ** $3,625, % Term Bond Due December 15, 2042; Price %; CUSIP No AN8 ** SERIES 2010A-2 (FEDERALLY TAXABLE ISSUER SUBSIDY BUILD AMERICA BONDS) Due (December 15) Principal Amount Interest Rate Yield CUSIP No.** 2033 $290, % 8.10% AJ7 $870, % Term Bond Due December 15, 2015; Price %; CUSIP No AC2 ** $2,455, % Term Bond Due December 15, 2020; Price %; CUSIP No AH1 ** $2,365, % Term Bond Due December 15, 2024; Price %; CUSIP No AG3 ** $6,370, % Term Bond Due December 15, 2032; Price %; CUSIP No AK4 ** SERIES 2010A-3 (FEDERALLY TAXABLE) Due (December 15) Principal Amount Interest Rate Yield CUSIP No.** 2013 $360, % 3.00% AM0 ** The above referenced CUSIP number(s) have been assigned by an independent company not affiliated with the parties to this Bond transaction and are included solely for the convenience of the holders of the Series 2010A Bonds. None of the Authority, the County, the Trustee or the Underwriters is responsible for the selection or uses of such CUSIP numbers, and no representation is made as to its correctness on the Series 2010A Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2010A Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities.

3 No dealer, broker, salesman or any other person has been authorized by the Authority, the County, or the Underwriters to give any information or to make any representations, other than those contained in this Official Statement, in connection with the offering contained herein, and, if given or made, such information or representations must not be relied upon. This Official Statement does not constitute an offer or solicitation of an offer to buy nor shall there be any sale of the Series 2010A Bonds by any person in any jurisdiction in which it is unlawful for such offer, solicitation or sale. The information set forth herein has been obtained from the County, the Authority, DTC and other sources that are believed to be reliable. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made thereafter shall under any circumstances create any implication that there has been no change in the affairs of the Authority, the County or in any other information contained herein since the date hereof. All inquiries relating to this Official Statement and the offering contemplated herein should be directed to the Underwriters. Prospective investors may obtain additional information from the Underwriters or the County which they may reasonably require in connection with the decision to purchase any of the Series 2010A Bonds from the Underwriters. The yields at which the Series 2010A Bonds are offered to the public may vary from the initial reoffering yields on the inside front cover page of this Official Statement. In addition, the Underwriters may allow concessions of discounts from the initial offering prices of the Series 2010A Bonds to dealers and others. In connection with this offering, the Underwriters may engage in transactions that stabilize, maintain or otherwise affect the market prices of the Series 2010A Bonds. Such transactions, if commenced, may be discontinued at any time. 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 part of, its 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. Certain statements included or incorporated by reference in this Official Statement constitute forwardlooking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as plan, expect, estimate, project, budget or other similar words. Forward-looking statements are included in the Official Statement under the captions INTRODUCTION Additional Bonds and Refunding Bonds, ESTIMATED SOURCES AND USES OF FUNDS, THE SERIES 2010 PROJECT, and DEBT STRUCTURE OF THE AUTHORITY AND THE COUNTY Outstanding Obligations of the Authority and the County, Future Financing Plans, and RISK FACTORS Additional Parity Debt, but are not solely limited to said sections. The forward-looking statements in this Official Statement are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. THE SERIES 2010A BONDS WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. THE SERIES 2010A BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The County maintains a website; however, the information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2010A Bonds.

4 MUNICIPAL BUILDING AUTHORITY OF TOOELE COUNTY, UTAH $25,340,000 LEASE REVENUE BONDS, SERIES 2010A (FEDERALLY TAXABLE) Consisting of SERIES 2010A-1 (FEDERALLY TAXABLE ISSUER SUBSIDY RECOVERY ZONE BONDS) SERIES 2010A-2 (FEDERALLY TAXABLE ISSUER SUBSIDY BUILD AMERICA BONDS) 47 South Main Street Tooele, Utah (435) SERIES 2010A-3 (FEDERALLY TAXABLE) BOARD OF TRUSTEES AND OFFICERS OF THE AUTHORITY Colleen S. Johnson... President J. Bruce Clegg...Trustee Jerry Hurst...Trustee Marilyn Gillette...Secretary BOARD OF COUNTY COMMISSIONERS AND COUNTY ADMINISTRATION Colleen S. Johnson...Chair J. Bruce Clegg...Commissioner Jerry Hurst...Commissioner Wendy Shubert...Assessor Doug Hogan...Attorney Michael Jensen... Auditor Marilyn Gillette...Clerk Caleen Peshell.... Recorder Frank Park... Sherriff Doug Kinsman... Surveyor Valerie B. Lee...Treasurer TRUSTEE, PAYING AGENT, & REGISTRAR Zions First National Bank Corporate Trust Services One South Main Street, 12 th Floor Salt Lake City, Utah (801) (801) (Fax) UNDERWRITERS COUNSEL TO AUTHORITY & COUNTY Doug Hogan, Esq. Gordon R. Hall Courthouse 74 South 100 East, Suite 26 Tooele, Utah (435) (435) (Fax) Stifel, Nicolaus & Company, Incorporated Municipal Capital Markets Group, Inc th Street, Suite East Prentice, Suite 500 Denver, Colorado Greenwood Village, Colorado (303) (303) (303) (Fax) (303) (Fax) BOND & DISCLOSURE COUNSEL Ballard Spahr LLP 201 South Main Street, Suite 800 Salt Lake City, Utah (801) (801) (Fax) i

5 TABLE OF CONTENTS INTRODUCTION...1 The Authority...1 The County...2 Authority and Purpose...2 Designation Of the Series 2010A-1 Bonds and the Series 2010A-2 Bonds under the Recovery Act...2 Security for and Sources of Payment of the Bonds...3 Additional Bonds and Refunding Bonds...3 Redemption of Series 2010A Bonds...3 Registration, Denominations, Manner of Payment...4 Tax Status of the Series 2010A Bonds...4 Bondholders Risks...4 Conditions of Delivery, Anticipated Date, Manner and Place of Delivery...4 Basic Documentation...4 Contact Persons...5 Other Information...5 THE SERIES 2010A BONDS...5 General...5 Redemption...6 Notice of Redemption...9 Partial Redemption of Bonds...9 Book-Entry System...10 Registration and Exchange of Series 2010A Bonds; Persons Treated as Owners...10 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS...11 General...11 Rental Payments...11 Debt Service Reserve Fund...11 Security Documents...12 Release of Portions of the Projects Upon Payment of Related Series of Bonds...12 Additional Bonds and Refunding Bonds...12 DEBT SERVICE SCHEDULE FOR THE SERIES 2010A BONDS...16 ESTIMATED SOURCES AND USES OF FUNDS...17 THE SERIES 2010 PROJECT...17 THE AUTHORITY...18 Establishment...18 Corporate Powers...18 Statutory Powers...18 Organization...18 THE COUNTY...19 General Information...19 Form of Government...19 Services Provided by the County...20 Employee Workforce and Retirement System...20 Other Post-Employment Benefits...20 Risk Management...20 Investment of Funds...20 Additional Information...22 DEBT STRUCTURE OF THE AUTHORITY AND COUNTY...22 Outstanding Obligations of the Authority...22 Outstanding Obligations of the County...22 Future Financing Plans...22 Investment Policy...23 No Defaulted Bonds or Failure to Renew Lease...23 General Obligation Debt Authorization and Limit for the County...23 Direct And Overlapping Debt...23 Debt Ratios...24 FINANCIAL INFORMATION REGARDING THE COUNTY24 Fund Structure; Accounting Basis...24 Budget and Appropriation Process...24 Financial Controls...25 Discussion and Analysis of Financial Condition and Results of Operations...25 Sources of General Fund Revenues...26 Five-Year Financial Summaries...26 Sales and Use Tax...31 Certain Property Tax Matters...31 Uniform Fees...32 Tax Levy and Collection...32 Public Hearing on Certain Tax Increases...33 Assessed and Estimated Actual Value of Taxable Property...33 Summary Of The County s Taxable Value...34 Property Tax Levied and Collected...34 Property Tax Rates Direct and Overlapping Governments...35 Largest Property Taxpayers...36 RISK FACTORS...36 Construction Risk of the Series 2010 Project...36 Non-Appropriation...37 Changes in Makeup of the County Commission...37 Expiration or Termination of Master Lease...38 Limited Remedies...38 Destruction of Series 2010 Project...39 Environmental Conditions...40 Sources of Payment for Rentals under the Master Lease...40 Non-Essential Nature of Portions of the Projects...40 Reduction in Value and Obsolescence...40 Tax Status...40 Additional Parity Debt...40 No Secondary Market...40 LEGAL MATTERS...41 General...41 Absence of Litigation...41 TAX MATTERS...41 UNDERWRITING...43 BOND RATINGS...43 CONTINUING DISCLOSURE UNDERTAKING...43 MISCELLANEOUS...43 Independent Auditors...43 Additional Information...43 APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, A-1 APPENDIX B EXTRACTS OF CERTAIN PROVISIONS OF THE GENERAL INDENTURE AND THE MASTER LEASE...B-1 APPENDIX C DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING TOOELE COUNTY.C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE UNDERTAKING... D-1 APPENDIX E PROPOSED FORM OF BOND COUNSEL OPINION...E-1 APPENDIX F PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM... F-1 ii

6 OFFICIAL STATEMENT RELATING TO MUNICIPAL BUILDING AUTHORITY OF TOOELE COUNTY, UTAH $25,340,000 LEASE REVENUE BONDS, SERIES 2010A (FEDERALLY TAXABLE) Consisting of $12,630,000 SERIES 2010A-1 (FEDERALLY TAXABLE ISSUER SUBSIDY RECOVERY ZONE BONDS) $12,350,000 SERIES 2010A-2 (FEDERALLY TAXABLE ISSUER SUBSIDY BUILD AMERICA BONDS) Payable from Base Rentals to be Made by TOOELE COUNTY, UTAH Pursuant to an Annually Renewable Lease INTRODUCTION $360,000 SERIES 2010A-3 (FEDERALLY TAXABLE) This Official Statement is provided to furnish certain information in connection with the issuance by the Municipal Building Authority of Tooele County, Utah (the Authority ), of its $25,340,000 Lease Revenue Bonds, Series 2010A (Federally Taxable) consisting of $12,630,000, Series 2010A-1 (Federally Taxable Issuer Subsidy Recovery Zone Bonds) (the Series 2010A-1 Bonds ); $12,350,000, Series 2010A-2 (Federally Taxable Issuer Subsidy Build America Bonds) (the Series 2010A-2 Bonds ); and $360,000, Series 2010A-3 (Federally Taxable) (the Series 2010A-3 Bonds and together with the Series 2010A-1 Bonds and the Series 2010A-2 Bonds, the Series 2010A Bonds ). The principal amounts of the various series of Series 2010A Bonds will be determined at the time of pricing, as more fully described below under the subheading Designation of the Series 2010A-1 Bonds and the Series 2010A-2 Bonds under the Recovery Act. This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Series 2010A Bonds to potential investors is made only by means of the entire Official Statement. See also the following appendices attached hereto: APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 ; APPENDIX B EXTRACTS OF CERTAIN PROVISIONS OF THE GENERAL INDENTURE AND THE MASTER LEASE ; APPENDIX C DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING TOOELE COUNTY ; APPENDIX D FORM OF CONTINUING DISCLOSURE UNDERTAKING ; APPENDIX E PROPOSED FORM OF BOND COUNSEL OPINION ; and APPENDIX F PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM. The Authority The Authority is a nonprofit corporation created by the County Commission of Tooele County, Utah (the County ), and currently organized and existing pursuant to the Local Building Authority Act, Title 17D, Chapter 2, Utah Code Annotated 1953, as amended (the Building Authority Act ), and the Utah Revised Nonprofit Corporation Act, Title 16, Chapter 6a, Utah Code Annotated 1953, as amended (the Nonprofit Corporation Act ). The Authority was created by the County for the purpose of financing projects on behalf of the County as provided in the Building Authority Act. For more complete information, see THE AUTHORITY herein. 1

7 The County The County was established in 1850 and is situated in the northwestern portion of the State of Utah (the State ), located approximately 30 miles west of Salt Lake City, Utah. The County is bordered on the west by the State of Nevada. The County is the second largest county in the State in terms of area, covering an area of approximately 6,930 miles. The County had an estimated 58,335 residents in 2009 according to the U.S. Census Bureau, ranking the County as the seventh most populous county in the State (out of a total of 29 counties). For more complete information, see THE COUNTY, FINANCIAL INFORMATION REGARDING THE COUNTY, DEBT STRUCTURE OF THE AUTHORITY AND THE COUNTY, and APPENDICES A and C herein. Authority and Purpose The Series 2010A Bonds are being issued pursuant to (i) the Building Authority Act; (ii) the Local Government Bonding Act, Title 11, Chapter 14, Utah Code Annotated 1953, as amended (the Local Government Act ); (iii) a General Indenture of Trust dated as of December 1, 2010 (the General Indenture ), as supplemented by a First Supplemental Indenture of Trust dated as of December 1, 2010 (the First Supplemental Indenture, and together with the General Indenture, the Indenture ), each by and between the Authority and Zions First National Bank, as trustee (the Trustee ); and (iv) certain authorizing resolutions of the Authority adopted on September 21, 2010, and December 14, The issuance of the Series 2010A Bonds and the execution and delivery of the hereinafter defined Master Lease and the Indenture were approved by the County pursuant to a resolution adopted by the County Commission of the County (the County Commission ), on December 14, The Series 2010A Bonds are being issued for the purpose of (i) financing the costs of the acquisition, construction, equipping and furnishing of a jail facility, land, and related improvements for lease to the County (the Series 2010 Project ), (ii) funding a deposit to a debt service reserve fund, and (iii) paying costs associated with the issuance of the Series 2010A Bonds. [Proceeds of the Series 2010A-3 Bonds will also be used to fund working capital related to the Project.] See THE SERIES 2010 PROJECT and ESTIMATED SOURCES AND USES OF FUNDS herein. The Series 2010 Project will be leased by the Authority to the County under an annually renewable Master Lease Agreement dated as of December 1, 2010 (the Master Lease ), by and between the Authority and the County. For more complete information with respect to the Master Lease, see APPENDIX B EXTRACTS OF CERTAIN PROVISIONS OF THE GENERAL INDENTURE AND THE MASTER LEASE herein. Designation of the Series 2010A-1 Bonds and the Series 2010A-2 Bonds under the Recovery Act The Authority has elected to treat the Series 2010A-1 Bonds as Recovery Zone Bonds for purposes of the Recovery Act and to receive a cash subsidy from the United States Treasury in connection therewith. Pursuant to the Recovery Act, the Authority expects to receive cash subsidy payments from the United States Treasury equal to 45% of the interest payable on the Series 2010A-1 Bonds (the RZB Direct Payments and together with the BAB Direct Payments, the Direct Payments ). Pursuant to the Indenture, such RZB Direct Payments will be pledged under the Indenture as a component of Revenues. The Authority has also elected to treat the Series 2010A-2 Bonds as Build America Bonds for purposes of the American Recovery and Reinvestment Act of 2009 (the Recovery Act ) and to receive a cash subsidy from the United States Treasury in connection therewith. Pursuant to the Recovery Act, the Authority will receive cash subsidy payments from the United States Treasury equal to 35% of the interest payable on the Series 2010A-2 Bonds (the BAB Direct Payments ). Pursuant to the Indenture, such BAB Direct Payments will be pledged under the Indenture as a component of Revenues. The Series 2010A-3 Bonds are, like the Series 2010A-1 Bonds and the Series 2010A-2 Bonds, issued as bonds the interest on which is not excludable from federal income tax. However, no interest subsidy is payable with 2

8 respect to the Series 2010A-3 Bonds. Proceeds of the Series 2010A-3 Bonds will be used to pay costs that are not qualified costs under the Internal Revenue Code of 1986, as amended (the Code ). Security for and Sources of Payment of the Bonds The Series 2010A Bonds are issued under and are equally and ratably secured by the Indenture. Pursuant to the Indenture, the Authority has pledged and assigned to the Trustee, among other things, its right, title and interest in and to the Master Lease, including its right to receive the Base Rentals (as defined below) under the Master Lease as security for the payment of the principal of, premium, if any, and interest on the Bonds (as hereinafter defined). In addition, the Authority will grant a security interest in the Series 2010 Project pursuant to a Deed of Trust, Assignment of Rents and Security Agreement dated as of December 1, 2010 (the Deed of Trust ). The Deed of Trust and any financing statements filed in connection therewith are sometimes collectively referred to herein as the Security Documents. The Security Documents are being executed for the equal and proportionate benefit of the Bondowners. The Series 2010A Bonds are limited obligations of the Authority payable solely from the Base Rentals received by the Authority pursuant to the Master Lease and other funds or amounts held by the Trustee under the Indenture as security for the Series 2010A Bonds. Under the Master Lease, the County has agreed to make payments in stated amounts which are sufficient to pay the principal of and the interest on the Bonds coming due in each year (collectively, the Base Rentals ) but only if and to the extent that the County Commission annually appropriates funds sufficient to pay the Base Rentals coming due during each succeeding Renewal Term (as described herein) under the Master Lease plus such additional amounts (the Additional Rentals ) as are necessary to operate and maintain the Projects (as hereinafter defined) during such period. The Master Lease specifically provides that nothing therein shall be construed to require the County Commission to appropriate any money to pay any Base Rentals or Additional Rentals (collectively, the Rentals ) thereunder and that the County shall not be obligated to pay such Rentals except to the extent appropriated. THE OBLIGATION OF THE COUNTY TO PAY ANY RENTALS IS ANNUALLY RENEWABLE AS PROVIDED IN THE MASTER LEASE. NEITHER THE OBLIGATION OF THE COUNTY TO PAY RENTALS NOR THE OBLIGATION OF THE AUTHORITY TO PAY THE SERIES 2010A BONDS WILL CONSTITUTE A DEBT OF THE COUNTY OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. THE ISSUANCE OF THE SERIES 2010A BONDS DOES NOT DIRECTLY OR CONTINGENTLY OBLIGATE THE COUNTY TO PAY ANY RENTALS BEYOND THOSE APPROPRIATED FOR THE COUNTY S THEN CURRENT FISCAL YEAR. THE SERIES 2010A BONDS ARE NOT AN INDEBTEDNESS OR A LIABILITY OF THE COUNTY OR THE STATE. THE AUTHORITY HAS NO TAXING POWER. Additional Bonds and Refunding Bonds The Authority may issue additional Bonds ranking on a parity with the Series 2010A Bonds under the Indenture, on the terms and conditions specified in the Indenture and the Master Lease, for the purpose of refunding outstanding bonds of the Authority ( Refunding Bonds ) or to finance additional Projects for lease to the County ( Additional Bonds ). The Series 2010A Bonds and any Additional Bonds and Refunding Bonds are herein collectively referred to as the Bonds. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Additional Bonds and Refunding Bonds. The Series 2010A Bonds are the first series of Bonds to be issued under the Indenture. At present, the Authority has no plans to issue any Additional Bonds in the next three to five years, but reserves the right to do so as capital needs require, including completion of the Series 2010 Project. See RISK FACTORS Construction of the Series 2010 Project herein. Redemption of Series 2010A Bonds The Series 2010A Bonds are subject to optional, mandatory sinking fund and extraordinary redemption as described herein under the caption THE SERIES 2010A BONDS Redemption. 3

9 Registration, Denominations, Manner of Payment The Series 2010A Bonds are issuable only as fully registered bonds without coupons and, when initially issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository of the Series 2010A Bonds. Purchases of Series 2010A Bonds will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof, through brokers and dealers who are, or who act through, DTC Participants (as defined herein). Beneficial Owners (as defined herein) of the Series 2010A Bonds will not be entitled to receive physical delivery of bond certificates so long as DTC or a successor securities depository acts as the securities depository with respect to the Series 2010A Bonds. Principal of, premium, if any, and interest on the Series 2010A Bonds (interest payable June 15 and December 15 of each year, commencing June 15, 2011, each an Interest Payment Date ) are payable through Zions First National Bank, Salt Lake City, Utah, as Paying Agent, to the registered owners of the Series 2010A Bonds, initially DTC. So long as DTC is the registered owner, it is required, in turn, to remit such principal and interest to its Participants, for subsequent disbursements to the Beneficial Owners of the Series 2010A Bonds, as described in THE SERIES 2010A BONDS Book-Entry System herein. Tax Status of the Series 2010A Bonds Federal Income Tax. In the opinion of Ballard Spahr LLP, Bond Counsel to the Authority, interest on the Series 2010A Bonds is not excludable from gross income for purposes of federal income tax State Income Tax. Bond Counsel is also of the opinion that, under currently existing laws, interest on the Series 2010A Bonds is exempt from State of Utah individual income taxes. No Further Opinion. Bond Counsel expresses no opinion regarding any other tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Series 2010A Bonds. Bondholders Risks THE PURCHASE OF THE SERIES 2010A BONDS BEING OFFERED HEREBY INVOLVES A DEGREE OF RISK. AMONG OTHER FACTORS, THERE CAN BE NO GUARANTEE OR ASSURANCE THAT THE COUNTY COMMISSION WILL BUDGET AND APPROPRIATE SUFFICIENT COUNTY FUNDS TO MAKE PAYMENT OF BASE RENTALS AND ADDITIONAL RENTALS AS THEY BECOME DUE AND PAYABLE DURING EACH RENEWAL TERM OF THE MASTER LEASE. See the information under the captions RISK FACTORS and APPENDIX B EXTRACTS OF CERTAIN PROVISIONS OF THE GENERAL INDENTURE AND THE MASTER LEASE The Master Lease Nonappropriation herein. Conditions of Delivery, Anticipated Date, Manner and Place of Delivery The Series 2010A Bonds are offered when, as, and if issued and received by the Underwriters subject to the approval of legality by Ballard Spahr LLP, Bond Counsel to the Authority, and certain other conditions. Certain matters relating to disclosure will be passed upon by Ballard Spahr LLP, Disclosure Counsel to the Authority. Certain legal matters will be passed on for the Authority and the County by Doug Hogan, Esq., County Attorney. It is expected that the Series 2010A Bonds will be available for delivery to DTC in book-entry form on or about December 21, Basic Documentation The Indenture, the Master Lease, the Security Documents and other documents with respect to the Series 2010A Bonds (collectively, the basic documentation ), establishes the rights and responsibilities of the County, the Authority, the Trustee and the investors. Basic documentation may be obtained from the persons indicated below in this section under the heading Contact Persons. 4

10 Contact Persons As of the date of this Official Statement, the chief contact person for the Authority and the County concerning the Series 2010A Bonds are: Other Information Michael Jensen, County Auditor Tooele County, Utah 47 South Main Street Tooele, Utah (435) (435) (Fax) Additional requests for information may be directed to the following representative of the Underwriters: Troy Bernberg Stifel, Nicolaus & Company, Incorporated th Street, Suite 1600 Denver, Colorado (303) (303) (Fax) This Official Statement speaks only as of its date, and the information contained herein is subject to change. Brief descriptions of the Authority, the County, the Series 2010 Project, the Series 2010A Bonds, the Master Lease, the Indenture, and the Security Documents are included in this Official Statement. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Master Lease, the Indenture and the Security Documents are qualified in their entirety by reference to such documents, and references herein to the Series 2010A Bonds are qualified in their entirety by reference to the forms thereof included in the Indenture and the information with respect thereto included in the aforementioned documents, copies of which are available for inspection at the principal office of the Trustee on or after the delivery of the Series 2010A Bonds. During the period of the offering of the Series 2010A Bonds, copies of the preliminary forms of such documents will be available at the office of the Underwriters listed on the cover page hereof. Definitions of certain terms used herein and in the Indenture and the Master Lease are found in APPENDIX B attached hereto. General THE SERIES 2010A BONDS The Series 2010A Bonds will be issued as fully registered Bonds in denominations of $5,000 or any integral multiple thereof and will be dated as of the date of their initial delivery (the Dated Date ). The Series 2010A Bonds will mature on the dates and bear interest at the rates set forth on the inside front cover page of this Official Statement, payable on June 15 and December 15 of each year, commencing June 15, Interest on the Series 2010A Bonds authenticated prior to the first Interest Payment Date shall be payable from the Dated Date. Interest on the Series 2010A Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The principal of, premium, if any, and interest on the Series 2010A Bonds will be payable in lawful money of the United States of America. The principal of and premium, if any, on the Series 2010A Bonds will be payable upon presentation and surrender at the principal corporate trust office of the Trustee in Salt Lake City, Utah, to the registered owners thereof, initially DTC. Interest on the Series 2010A Bonds will be payable by check or draft of the Trustee mailed to the registered owner thereof (initially DTC) of record as of the fifteenth day next preceding such Interest Payment Date. 5

11 Redemption Optional Redemption. The Series 2010A Bonds maturing on or prior to December 15, 2019, are not subject to optional redemption. The Series 2010A Bonds maturing on or after December 15, 2020, are subject to redemption at the option of the Authority in whole or in part at any time on or after December 15, 2020, in such order of maturity as shall be directed by the Authority at a redemption price of 100% of the principal amount of the Series 2010A Bonds to be redeemed, plus accrued interest to the date of redemption. Portions of the Series 2010A Bonds to be redeemed within a maturity shall be selected in such manner as the Authority may determine. Mandatory Sinking Fund Redemption. The Series 2010A-1 Bonds maturing on December 15, 2037, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2033 $700, ,040, ,085, ,130, ,180,000 The Series 2010A-1 Bonds maturing on December 15, 2040, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2038 $1,235, ,290, ,345,000 The Series 2010A-1 Bonds maturing on December 15, 2042, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2041 $1,405, ,220,000 If fewer than all of the Series 2010A-1 Bonds maturing on December 15, 2037, 2040, or 2042, then Outstanding are redeemed in a manner other than pursuant to a mandatory sinking fund redemption, the principal amount so redeemed shall be credited at 100% of the principal amount thereof by the Trustee against the obligation of the Authority on the next mandatory sinking fund redemption date for the Series 2010A-1 Bonds maturing on 6

12 December 15, 2037, 2040, or 2042, and any excess shall be credited against future mandatory sinking fund redemption obligations in such order as may be directed by the Authority. The Series 2010A-2 Bonds maturing on December 15, 2015, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2014 $430, ,000 The Series 2010A-2 Bonds maturing on December 15, 2020, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2016 $455, , , , ,000 The Series 2010A-2 Bonds maturing on December 15, 2024, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2021 $550, , , ,000 7

13 The Series 2010A-2 Bonds maturing on December 15, 2032, are subject to mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date on the dates and in the principal amounts as follows: Stated Maturity. Mandatory Sinking Fund Redemption Date (December 15) Sinking Fund Requirements 2025 $660, , , , , , , ,000 If fewer than all of the Series 2010A-2 Bonds maturing on December 15, 2015, 2020, 2024, or 2032, then Outstanding are redeemed in a manner other than pursuant to a mandatory sinking fund redemption, the principal amount so redeemed shall be credited at 100% of the principal amount thereof by the Trustee against the obligation of the Authority on the next mandatory sinking fund redemption date for the Series 2010A-2 Bonds maturing on December 15, 2015, 2020, 2024, or 2032, and any excess shall be credited against future mandatory sinking fund redemption obligations in such order as may be directed by the Authority. Extraordinary Redemption. The Series 2010A Bonds shall be callable for redemption prior to maturity in whole on any date, if (i) the Series 2010 Project or a material portion thereof are damaged or destroyed or taken in a condemnation proceeding, or a material defect in the construction of the Series 2010 Project shall become apparent, or title to or the use of all or any material portion of the Project shall be lost by reason of a defect in title thereto, (ii) the Net Proceeds of any insurance policy, performance bond or condemnation award made available by reason of one or more such occurrences shall be insufficient to pay in full the cost of repairing or replacing such portion of the Series 2010 Project, and (iii) the County elects to discharge its obligation to repair and replace such portion of the Projects by depositing such Net Proceeds into the Bond Fund. Upon the deposit of such Net Proceeds in the Bond Fund, the payment obligations of the County with respect to the Series 2010 Project under the Master Lease shall terminate and the County shall have no further obligation for the payment of Base Rentals and Additional Rentals thereunder with respect to the Series 2010 Project, and possession of the Series 2010 Project, as well as all right, title and interest of the County and the Authority in any funds or accounts created under the Indenture (except moneys held in the Rebate Fund or for the payment of Series 2010A Bonds not then deemed outstanding) with respect to the Series 2010 Project shall be surrendered to the Trustee, as trustee for the Bondholders. Thereafter, the Indenture and the Security Documents for the Series 2010 Project may, subject to the limitations of the Indenture, be foreclosed and the Authority s interest in the Series 2010 Project liquidated and the proceeds of such liquidation and the Net Proceeds of any insurance policy, performance bond or condemnation award so deposited in the Bond Fund, as well as all other moneys on deposit in any fund created under the Indenture with respect to the Series 2010 Project (except moneys held in the Rebate Fund or for the payment of Series 2010A Bonds not then deemed outstanding), shall be applied to the redemption of the Series 2010A Bonds at the earliest date practicable, as specified in a written notice from the Authority to the Trustee. Any such redemption of the Series 2010A Bonds shall be made upon payment of all or a prorated portion of the principal amount thereof plus accrued interest thereon to the redemption date. IN THE EVENT THE SERIES 2010A BONDS ARE TO BE REDEEMED BY PAYMENT OF AN AMOUNT LESS THAN THE OUTSTANDING PRINCIPAL AMOUNT THEREOF, AND ACCRUED INTEREST TO THE REDEMPTION DATE, NO FURTHER CLAIM FOR PAYMENT MAY BE HAD BY THE BONDHOLDERS AGAINST THE AUTHORITY, THE COUNTY OR THE TRUSTEE WITH RESPECT TO SAID SERIES 2010A BONDS. In the event there are moneys remaining in the Bond Fund after payment in full of all Series 2010A Bonds, the Trustee is authorized and directed to transfer said moneys to the County. Extraordinary Event Optional Redemption. The Series 2010A-1 Bonds and the Series 2010A-2 Bonds are also subject to redemption prior to their maturity at the option of the Authority, in whole or in part, within 90 days 8

14 upon the occurrence of an Extraordinary Event (as defined below), at a redemption price (the Extraordinary Event Optional Redemption Price ) equal to 100% of the principal amount of the Series 2010A-1 Bonds and the Series 2010A-2 Bonds to be redeemed, plus, accrued interest on the Series 2010A-1 Bonds and the Series 2010A-2 Bonds to be redeemed to the redemption date. An Extraordinary Event will have occurred if a material adverse change has occurred to Section 54AA, 6431, or 1400U-2(a) of the Code (as such Sections were added by Section 1531 of the American Recovery and Reinvestment Act of 2009, pertaining to Build America Bonds and Recovery Zone Bonds) pursuant to which the Authority s cash subsidy payment (Direct Payment) from the United States Treasury is reduced or eliminated. Partial Redemption of Series 2010A-1 Bonds and Series 2010A-2 Bonds. If less than all of the Series 2010A-1 Bonds or Series 2010A-2 Bonds of any maturity are to be redeemed prior to maturity, (a) if the Series 2010A-1 Bonds or Series 2010A-2 Bonds to be redeemed are in book-entry form at the time of such redemption, the Trustee shall instruct DTC to instruct the DTC Participants to select the specific Series 2010A-1 Bonds or Series 2010A-2 Bonds for redemption pro rata, and neither the Authority nor the Trustee shall have any responsibility to insure that DTC or its Participants properly select such Series 2010A-1 Bonds or Series 2010A-2 Bonds for redemption, and (b) if the Series 2010A-1 Bonds or Series 2010A-2 Bonds are not then in book-entry form at the time of such redemption, on each redemption date, the Trustee shall select the specific Series 2010A-1 Bonds or Series 2010A-2 Bonds for redemption pro rata. Notice of Redemption In the event any of the Series 2010A Bonds are to be redeemed, the Registrar shall cause notice to be given as provided in the Indenture. Notice of such redemption (i) shall be filed with the Paying Agent and (ii) shall be mailed by first class mail, postage prepaid, to all Registered Owners of Series 2010A Bonds to be redeemed at their addresses as they appear on the registration books of the Registrar at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption. If at the time of mailing of any notice of redemption there shall not be on deposit with the Trustee moneys sufficient to redeem all the Series 2010A Bonds called for redemption, such notice shall state that such redemption is subject to the deposit of the redemption moneys with the Trustee not later than the opening of business five days prior to the redemption date and that such notice shall be of no effect unless such moneys are so deposited. A second notice of redemption shall be given, not later than ninety (90) days subsequent to the redemption date, to Registered Owners of Series 2010A Bonds or portions thereof redeemed but who failed to deliver Series 2010A Bonds for redemption prior to the 60th day following such redemption date. Any notice mailed shall be conclusively presumed to have been duly given, whether or not the owner of such Series 2010A Bonds receives the notice. Receipt of such notice shall not be a condition precedent to such redemption, and failure so to receive any such notice by any of such registered Owners shall not affect the validity of the proceedings for the redemption of the Series 2010A Bonds. Partial Redemption of Bonds In case any registered Series 2010A Bond shall be redeemed in part only, upon the presentation of such Bond for such partial redemption, the Authority shall execute and the Trustee shall authenticate and shall deliver or cause to be delivered to or upon the written order of the Registered Owner thereof, at the expense of the Authority, a Series 2010A Bond or Series 2010A Bonds of the same interest rate and maturity, in aggregate principal amount equal to the unredeemed portion of such registered Series 2010A Bond. A portion of any Series 2010A Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or an integral multiple thereof and in selecting portions of such Series 2010A Bonds for redemption, the Trustee will treat each such Series 2010A Bond as representing that number of Series 2010A Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Series 2010A Bonds by $5,000. 9

15 Book-Entry System The Bonds originally will be issued solely in book-entry form to The Depository Trust Company ( DTC ), New York, New York, or its nominee, Cede & Co., to be held in DTC s book-entry system. So long as such Bonds are held in the book-entry only system, DTC or its nominee will be the registered owner or Holder of such Bonds for all purposes of the Bonds and this Official Statement. Purchases of beneficial ownership interests in the Bonds may be made in denominations described above. For a description of the book-entry only system for the Bonds, see APPENDIX F PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM herein. Registration and Exchange of Series 2010A Bonds; Persons Treated as Owners The Authority shall cause books for the registration and for the transfer of the Series 2010A Bonds to be kept by the Trustee which is also the Bond Registrar of the Authority. In the event the book-entry only system is discontinued, any Series 2010A Bond may, in accordance with its terms, be transferred only upon the registration books kept by the Registrar, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Series 2010A Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Registrar, duly executed. No transfer shall be effective until entered on the registration books kept by the registrar. Upon surrender for transfer of any Series 2010A Bond at the principal office of the Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Bondholder or his attorney duly authorized in writing, the Authority shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new, fully registered Series 2010A Bond or Series 2010A Bonds of the same maturity for a like aggregate principal amount as the Series 2010A Bond surrendered for transfer. In the event the book-entry system is discontinued, Series 2010A Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Series 2010A Bonds of other authorized denominations of the same maturity. The Authority and the Trustee shall not be required to transfer or exchange any Series 2010A Bond (i) during the period from and including any Regular Record Date, to and including the next succeeding Interest Payment Date; (ii) during the period from and including the day fifteen days prior to any Special Record Date, to and including the date of the proposed payment pertaining thereto; (iii) during the period from and including the day fifteen days prior to the mailing of notice calling any Series 2010A Bonds for redemption, to and including the date of such mailing; or (iv) at any time following the mailing of notice calling such Series 2010A Bond for redemption. The Authority, the Registrar and the Paying Agent may treat and consider the person in whose name each Series 2010A Bond is registered on the registration books kept by the Registrar as the holder and absolute owner thereof for the purpose of receiving payment of, or on account of, the principal or redemption price thereof and interest due thereon and for all other purposes whatsoever, and neither the Authority, nor the Registrar nor the Paying Agent shall be affected by any notice to the contrary. Payment of or on account of either principal of or interest on any Series 2010A Bond shall be made only to or upon order of the Registered Owner thereof or such person s legal representative, but such registration may be changed as provided in the Indenture. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2010A Bond to the extent of the sum or sums so paid. The Trustee shall require the payment by the Bondholder requesting exchange or transfer of Series 2010A Bonds of any tax or other governmental charges which are required to be paid with respect to such exchange or transfer and such charges shall be paid before such new Series 2010A Bond shall be delivered. 10

16 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General The Bonds are not general obligations but are special, limited obligations of the Authority. The Bonds and the interest thereon are payable solely from, and are secured by a pledge of, the Base Rentals, and any other amounts derived by the Authority under the Master Lease and the Indenture, except to the extent payable from certain moneys held under the Indenture (excluding the Rebate Fund) and from the investment thereof, the proceeds of certain insurance policies, performance bonds, condemnation awards and liquidation proceeds, if any. The Bonds and the interest thereon shall not constitute an indebtedness of the County within the meaning of any constitutional provision or statutory limitation and shall not constitute or give rise to a pecuniary liability of the County, nor shall any of the Bonds or interest thereon be a charge against the general credit or taxing powers of the County. Neither the County, nor the Authority on its behalf, has pledged the credit of the County to the payment of the Bonds, the interest thereon or amounts due, or to become due, under the Master Lease. The Authority has no taxing power. Rental Payments Under the Master Lease, the County has agreed to pay Base Rentals with respect to the Projects in amounts and at times that are sufficient to pay principal of and interest on the Bonds coming due in each fiscal year, but only if and to the extent that the County Commission annually appropriates funds sufficient to pay the Base Rentals coming due during each succeeding Renewal Term plus such Additional Rentals as are to be paid during such period. The Master Lease specifically provides that nothing therein shall be construed to require the County to appropriate any moneys to pay the Base Rentals or Additional Rentals thereunder and the County shall be obligated to pay such rentals only to the extent appropriated. Neither the issuance of the Series 2010A Bonds nor the execution and the delivery of the Master Lease directly or contingently obligate the County to pay any Base Rentals or Additional Rentals beyond those appropriated for the County s then current fiscal year. See RISK FACTORS. The Authority has no taxing powers. In the event that the County does not appropriate sufficient funds to extend the term of the Master Lease, and the Master Lease thereby expires by its terms at the end of any Renewal Term, the County will have no further payment obligation under the Master Lease, except for the Base Rentals which are payable prior to the termination of the Master Lease. Upon such expiration, the Trustee may exercise one or more of the rights provided in the Master Lease and the Indenture, including the right to recover and liquidate, relet or sell the Project (but only to the extent authorized in the Indenture), and apply the proceeds of such liquidation, reletting or sale, if any, together with the moneys in the Bond Fund and the Reserve Fund (other than any moneys to be paid into the Rebate Fund), to the payment of principal of all then outstanding Bonds and accrued interest thereon. However, due to the nature of the Project, the revenues from such sources may not be sufficient to pay in full all then outstanding Bonds if payment were then due by acceleration or otherwise. Should such a shortfall occur, the Bonds would be paid on a pro rata basis as provided in the Indenture. Under the Master Lease, the County is entitled not to appropriate Rentals for the next succeeding Renewal Term with respect to all of the Projects, but it is not entitled to elect to appropriate with respect to less than all of the Projects. Debt Service Reserve Fund The Indenture creates a Debt Service Reserve Fund and provides that a separate account for each Series of Bonds shall be established within the Debt Service Reserve Fund. The Indenture provides that moneys in the Debt Service Reserve Fund shall at all times be maintained in a total aggregate principal amount of not less than the Debt Service Reserve Requirement for each Outstanding Series of Bonds. Debt Service Reserve Requirement means with respect to each Series of Bonds issued pursuant to the Indenture, and unless otherwise provided in the related Supplemental Indenture, an amount equal to the least of (i) 10% of the proceeds of such Series of Bonds determined on the basis of its initial purchase price to the public, (ii) the maximum Aggregate Annual Debt Service Requirement during any Fiscal Year for such Series of Bonds, and 11

17 (iii) 125% of the average Aggregate Annual Debt Service Requirement for such Series of Bonds; provided, however, that in the event any Series of Additional Bonds is issued to refund only a portion and not all of the then Outstanding Bonds of any other Series of Bonds issued pursuant to the Indenture (the Prior Bonds ), then the portion of such Series of Prior Bonds that remain Outstanding immediately after the issuance of such Additional Bonds and the portion of such Additional Bonds that is allocable to the refunding of such Series of Prior Bonds shall be combined and treated as a single Series for purpose of determining the Debt Service Reserve Requirement relating to such combined Series. Each account of the Debt Service Reserve Fund shall only be used with respect to the related Series of Bonds. An account in the Debt Service Reserve Fund has been established for the Series 2010A Bonds to secure the Series 2010A-1 Bonds, the Series 2010A-2 Bonds, and the Series 2010A-3 Bonds on a parity basis. The Debt Service Reserve Requirement for the Series 2010A Bonds equals $750,000. The Debt Service Reserve Requirement for the Series 2010A Bonds will be funded from proceeds of the Series 2010A Bonds. The Indenture provides that funds on deposit in the Debt Service Reserve Fund may be used to maintain the Series 2010 Project following an Event of Default or an Event of Nonappropriation, including, but not limited to, maintenance of the Series 2010 Project, related insurance requirements, repair, costs of subletting the Series 2010 Project, Trustee expenses and costs and other reasonably incurred expenses in the judgment of the Trustee. Security Documents In addition to a pledge of the Base Rentals, and any other amounts derived by the Authority under the Master Lease and the Indenture, the Bonds will be secured by the Security Documents. See APPENDIX B EXTRACTS OF CERTAIN PROVISIONS OF THE GENERAL INDENTURE AND THE MASTER LEASE. No deficiency judgment upon foreclosure of the lien of the Indenture or of the Security Documents may be entered against the County or the Authority, and no judgment requiring a payment of money may be entered against the County under the Master Lease. Release of Portions of the Projects Upon Payment of Related Series of Bonds Pursuant to the Master Lease, the County has been granted the option of purchasing a Project in advance of the final maturity of the related Series of Bonds. So long as no Event of Default shall have occurred and be continuing under the Indenture and so long as no Event of Default or Event of Nonappropriation shall have occurred and be continuing under the Master Lease, a Project may be released from the lien created with respect to the related Series of Bonds and the Indenture and the Master Lease and transferred to the County if (i) the County deposits with the Trustee the Purchase Option Price for the Project; and (ii) if the interest payable on one or more Series of the Bonds is excludable from gross income for federal income tax purposes, there has been delivered to the Trustee an opinion of nationally recognized bond counsel to the effect that the release of the Project will not adversely affect the excludability of interest on said Bonds from the federal gross income of the owners thereof. Additional Bonds and Refunding Bonds General. Pursuant to the Indenture, the Authority may issue additional Series of Bonds under the Indenture which shall be equally and ratably secured under the Indenture with the Series 2010A Bonds. Prior to the authentication by the Trustee of each Series of Bonds there shall have been filed with the Trustee certain documents, certificates and opinions. Refunding Bonds. So long as the Master Lease is in effect and no Event of Default under the Indenture or the Master Lease has occurred and is continuing and so long as no Event of Nonappropriation has occurred and is continuing, one or more Series of Refunding Bonds may be issued, authenticated and delivered for the purpose of refunding Bonds or other obligations of the Authority. Such Additional Bonds shall be payable solely from the Base Rentals and, if paid by the County, the Purchase Option Price and other amounts derived from the leasing of the Projects. The Refunding Bonds may be issued in one or more Series, shall be authenticated by the Trustee and, upon payment to the Trustee of the proceeds of said sale of Refunding Bonds, they shall be delivered by the Trustee 12

18 to or upon the order of the purchasers thereof, but only upon compliance with respect to said Series of Refunding Bonds and upon there being filed with the Trustee: (a) original executed counterparts of a Supplemental Indenture, a supplement or amendment (if necessary) to the Security Documents and Master Lease providing for the issuance of such Refunding Bonds, and further providing for a revision to the Base Rentals to be paid by the County under the Master Lease to such amount as shall be necessary to pay, assuming that no Event of Default or Event of Nonappropriation shall occur, the principal of, premium, if any, and interest on the Bonds (including the Refunding Bonds being issued and the Initial Bonds and any Additional Bonds and Refunding Bonds theretofore issued and to remain Outstanding), and to extend the Lease Term if the maturity of any of the Refunding Bonds would otherwise occur after the expiration of the then current Lease Term. The date or dates of the Refunding Bonds, the rate or rates of interest on the Refunding Bonds, and the redemption provisions (if any) with respect thereto all shall be as provided in the Supplemental Indenture; (b) if the Bonds theretofore issued were Tax-Exempt Bonds or were designated as Build America Bonds or Recovery Zone Bonds qualifying for Direct Payments, a written opinion of nationally recognized bond counsel, to the effect that the exclusion from gross income of the interest on the Tax- Exempt Bonds or the status of the Bonds as Build America Bonds qualifying for Direct Payments theretofore issued, for federal income tax purposes, will not be adversely affected by the issuance of the Refunding Bonds being issued; (c) a date down endorsement to the ALTA mortgagee title insurance policy issued in connection with the issuance of the Bonds being refunded or commitment therefor (or if the bonds or other obligations being refunded were not issued pursuant to this Indenture, an ALTA Mortgagee title insurance policy or commitment therefor), which endorsement or policy shall insure to the date of issuance of such Refunding Bonds and the recording of any supplement or amendment to the Security Documents the continuing validity of the lien thereof, as modified by any supplement or amendment to the Security Documents, as a first and prior lien on the premises thereby secured, subject only to Permitted Encumbrances, and which endorsement or policy shall increase the amount of title insurance coverage thereunder, if necessary, to an amount, which when added to the coverage provided under any other title policies delivered with respect to other Bonds then Outstanding, is at least equal to the aggregate principal amount of all Bonds to be Outstanding following said refunding and naming the Trustee as an insured; (d) a report of an independent verification agent to the effect that, upon the issuance of the Refunding Bonds, moneys and Direct Obligations will be deposited with the Trustee or an escrow agent sufficient to cause the Bonds (or other obligations) being refunded to be deemed paid (or a comparable provision of the documents authorizing the obligations to be refunded); or in the event that the Bonds (or other obligations) to be refunded are to be redeemed on the date of issuance of the Refunding Bonds or within ninety (90) days thereafter, there shall be delivered to the Trustee evidence satisfactory to it that upon the issuance of the Refunding Bonds moneys and Direct Obligations will be deposited with the Trustee or an escrow agent sufficient, without taking into account investment earnings thereon, to redeem the Bonds (or other obligations); and (e) a certificate of the Authority, stating that, as of the date of such delivery, no event or condition has happened or exists and is continuing, or is happening or existing, which constitutes, or which, with notice or lapse of time or both, would constitute, an Event of Default under the Indenture or the Lease and there has not occurred and is then continuing an Event of Nonappropriation; provided however that the existence of an Event of Default shall not preclude the issuance of any Refunding Bonds if: (i) the issuance of such Refunding Bonds otherwise complies with the provisions hereof and (ii) any Event of Default will cease to continue upon the issuance of such Refunding Bonds and the application of the proceeds thereof. Each Series of Refunding Bonds issued pursuant to the Indenture shall be equally and ratably secured under the Indenture with the Series 2010A Bonds and all other Series of Refunding Bonds and Additional Bonds, if any, theretofore issued pursuant to the Indenture, without preference, priority or distinction of any Bonds over any other thereof. 13

19 Additional Bonds. So long as the Master Lease is in effect and no Event of Default under the Indenture or the Master Lease has occurred and is continuing and so long as no Event of Nonappropriation has occurred and is continuing, one or more Series of Additional Bonds may be issued, authenticated and delivered for the purpose of financing Costs of Acquisition and Construction of a Project or Projects. The Additional Bonds may be issued in one or more Series, shall be authenticated by the Trustee and, upon payment to the Trustee of the proceeds of said sale of Additional Bonds, they shall be delivered by the Trustee to or upon the order of the purchasers thereof, but only upon compliance with the conditions set forth in the Indenture and upon there being filed with the Trustee: (a) original executed counterparts of a Supplemental Indenture, a supplement or amendment (if necessary) to the Security Documents and Master Lease providing for the financing of a Project and for the issuance of the Additional Bonds and further providing for an increase in the Base Rentals to be paid by the County under the Master Lease in such amount as shall be necessary to pay, assuming that no Event of Default or Event of Nonappropriation shall occur, the principal of, premium, if any, and interest on the Bonds (including the Additional Bonds being issued and the Initial Bonds and any Additional Bonds and Refunding Bonds theretofore issued and Outstanding), and to extend the Lease Term if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the then current Lease Term. The date or dates of the Additional Bonds, the rate or rates of interest on the Additional Bonds, and the redemption provisions (if any) with respect thereto all shall be as provided in the Supplemental Indenture; (b) if any of the Bonds theretofore issued were Tax-Exempt Bonds or were designated as Build America Bonds or Recovery Zone Bonds qualifying for Direct Payments, a written opinion of nationally recognized bond counsel, to the effect that the exclusion from gross income of the interest on the Tax-Exempt Bonds or the status of the Bonds as Build America Bonds qualifying for Direct Payments theretofore issued, for federal income tax purposes, will not be adversely affected by the issuance of the Additional Bonds being issued; (c) a date down endorsement to the ALTA mortgagee title insurance policy issued in connection with the issuance of the Initial Bonds (or other Bonds) or commitment therefor or an additional ALTA mortgagee title insurance policy or commitment therefor, which endorsement or policy shall insure to the date of issuance of such Additional Bonds and the recording of any supplement to the Security Documents, if required, the continuing validity of the lien thereof, as modified by any supplement to the Security Documents, as a first and prior lien on the premises thereby secured, subject only to Permitted Encumbrances, and which endorsement or additional policy shall increase the amount of title insurance coverage thereunder to an amount at least equal to the aggregate principal amount of the Additional Bonds to be issued (or in the case of Additional Bonds issued to complete or extend a Project previously financed hereunder the endorsement to the original policy for such Project shall increase the coverage to at least the aggregate principal amount of Bonds issued for such Project to be Outstanding upon the issuance of such Additional Bonds) and naming the Trustee as an insured. In the event that the property upon which additional projects are to be located has not been acquired at or prior to the time of issuance of the Additional Bonds, it shall be required that such endorsement or additional title policy with respect to such property be delivered at the time of or prior to any disbursements being made from the Construction Fund with respect to such portion of the Project; (d) if such Series of Additional Bonds is being issued in whole or in part for construction purposes, (i) a copy, duly certified by the Secretary of the Authority, of the Construction Contract and Design Contract with respect to such construction and the performance and payment bond covering such Construction Contract or, in the alternative, a requirement that a copy of such documents be delivered to the Trustee prior to the time that moneys are withdrawn from the Construction Fund with respect to such portions of the Project, and (ii) a certificate of the architect or engineer responsible for planning and designing any such construction which sets forth the estimated useful life of the Project or Projects, as so improved and extended, in compliance with Section 17D of the Building Authority Act; and (e) a certificate of the Authority, stating that as of the date of such delivery no event or condition has happened or exists and is continuing, or is happening or existing, which constitutes, or which, with notice or lapse of time or both, would constitute, an Event of Default under the Indenture or the Master Lease and there has not occurred and is then continuing an Event of Nonappropriation; provided 14

20 however that the existence of an Event of Default shall not preclude the issuance of any Additional Bonds if: (i) the issuance of such Additional Bonds otherwise complies with the provisions of the Indenture and (ii) any Event of Default will cease to continue upon the issuance of such Additional Bonds and the application of the proceeds thereof. Each Series of Additional Bonds issued pursuant to the Indenture shall be equally and ratably secured under the Indenture with the Series 2010A Bonds and all other Series of Additional Bonds and Refunding Bonds, if any, theretofore issued pursuant to the Indenture, without preference, priority or distinction of any Bonds over any other thereof. (The remainder of this page intentionally left blank.) 15

21 DEBT SERVICE SCHEDULE FOR THE SERIES 2010A BONDS (1) The following table sets forth the debt service schedule with respect to the Series 2010A Bonds: Fiscal Year Ending December 31 Principal Interest (2) Fiscal Total 2011 $1,900,837 $1,900, ,933,055 1,933, $360,000 1,933,055 2,293, ,000 1,922,255 2,352, ,000 1,903,765 2,343, ,000 1,884,845 2,339, ,000 1,857,090 2,327, ,000 1,828,420 2,318, ,000 1,798,530 2,308, ,000 1,767,420 2,297, ,000 1,735,090 2,285, ,000 1,695,215 2,270, ,000 1,653,528 2,258, ,000 1,609,665 2,244, ,000 1,563,628 2,223, ,000 1,510,828 2,205, ,000 1,455,228 2,190, ,000 1,396,428 2,166, ,000 1,334,828 2,144, ,000 1,270,028 2,125, ,000 1,201,628 2,101, ,000 1,129,628 2,074, ,000 1,054,028 2,044, ,040, ,828 2,014, ,085, ,628 1,976, ,130, ,828 1,934, ,180, ,428 1,894, ,235, ,028 1,855, ,290, ,758 1,808, ,345, ,978 1,757, ,405, ,688 1,707, ,220, ,370 2,405,370 TOTAL $25,340,000 $42,764,547 $68,104,547 (1) (2) Amounts rounded to the nearest dollar. Does not include Direct Payments related to the Series 2010A-1 Bonds and Series 2010A-2 Bonds. (Source: The Underwriters.) 16

22 ESTIMATED SOURCES AND USES OF FUNDS The sources and uses of the Series 2010A Bonds are estimated to be as follows, Sources of Funds: Par amount of Bonds...$25,340, Reoffering Discount...(199,342.35) Total...$25,140, Uses of Funds: Deposit to Construction Account (1)...$23,757, Deposit to Debt Service Reserve Account...750, Cost of Issuance (2)...632, Total...$25,140, (1) (2) Including $1,709, for capitalized interest, which is capitalized through June 15, Includes Underwriters discount, legal fees, financial advisor fees, rating agency fees, trustee, registrar, and paying agent fees, printing fees, rounding amounts and other costs incurred in connection with the issuance and sale of the Series 2010A Bonds. THE SERIES 2010 PROJECT The Series 2010 Project consists of the acquisition, construction, equipping and furnishing of a jail facility, land, and related improvements for lease to the County, including an approximately 72,500 square-foot, 260-bed jail facility, together with space required to operate the jail (including as booking area, kitchen, medical clinic, laundry, administration space, storage, security equipment, and similar features). The County expects that Series 2010 Project will be located in Tooele City, Utah, close to the County courthouse location. [A portion of the proceeds of the Series 2010A-3 Bonds will also be used to fund working capital related to the Series 2010 Project.] Furthermore, the County has designed the Series 2010 Project to qualify as a jail facility sufficient to accommodate State and federal prisoners to the extent there are available beds in excess of the County's demands. The County expects that revenues generated from the Series 2010 Project will be sufficient to cover debt service on the Series 2010 Bonds, however, none of such revenues will be pledged to the repayment of the Bonds. The County's expectations are based upon a currently available analysis of prisoner demand, associated fees that can be collected, and other variables that the County cannot guaranty. It is expected that the construction on the Series 2010 Project will commence during the early part of 2011 and will be completed during the middle part of Although the site has not yet been purchased and a construction contract has yet been entered into with respect to the Series 2010 Project, an analysis of the costs of the Series 2010 Project has been undertaken and the Authority believes that proceeds of the Series 2010 Bonds will be sufficient to pay the costs of the Series 2010 Project. See RISK FACTORS Construction of the Series 2010 Project. 17

23 THE AUTHORITY Establishment The Authority was incorporated in 1988, as a non-profit corporation and currently exists under the provisions of the Nonprofit Corporation Act and the Building Authority Act. The Authority is to be of perpetual duration as set forth in its Articles of Incorporation. The Authority has no full-time employees or other personnel other than its Board of Directors. The Authority has no property, money or other assets, except for those which are to be acquired with the proceeds of, and pledged to the payment of, its bonds. The principal place of business and office of the Authority is located at 47 South Main Street, Tooele, Utah Corporate Powers The Authority has been incorporated for the purpose of acquiring, improving or extending one or more projects (as defined in the Building Authority Act) and financing their costs on behalf of the County in accordance with the procedures and subject to the limitations of the Building Authority Act, in order to accomplish the public purposes for which the County exists. The Authority has all of the powers provided for in the Building Authority Act and in the Constitution and other laws of the State of Utah. The Authority may not, however, undertake any of the activities provided for in its Articles of Incorporation without prior authorization therefor by the County Commission. The Authority has been organized as a non-profit corporation and its Articles of Incorporation expressly require that it remain a nonprofit corporation. The Authority may not be dissolved unless all of its outstanding bonds and other obligations are paid in full as to principal, interest and redemption premiums, if any, or unless provisions for the payment of the same when due has been made. Whenever bonds, notes or other evidences of indebtedness issued by the Authority are satisfied, discharged and retired, title to all real and personal property financed with the proceeds of such bonds, notes or other evidences of indebtedness is required to be forthwith transferred to the County. Statutory Powers Under the Building Authority Act, the Authority has the power to: (i) acquire one or more projects, which, by definition, means that it may obtain or gain property of every kind or nature which a public body is authorized or permitted by law to own, possess or hold or which has or may come into its possession or ownership by any lawful means, including, but not limited to purchase, lease, rental, sale, contract, exchange, devise, bequest, gift, condemnation, donation, construction or operation of law, and it may otherwise improve or extend such a project or projects and finance their costs on behalf of the public body which created the Authority in order to accomplish the public purposes for which the public body exists; (ii) enter into leasing contracts with the County with respect to projects which the Authority has acquired, improved or extended or will acquire, improve or extend on behalf of the County; (iii) issue and sell its bonds for the purpose of paying the cost of acquiring, improving or extending a project; and (iv) perform such other acts as enumerated in the Act; all in accordance with and subject to the specific requirements of the Building Authority Act with respect to such powers. Organization According to the By-Laws of the Authority, the affairs of the Authority are managed by a Board of Directors (the Board ). The Board consists of the three members (the Trustees ) of the County Commission as may from time to time serve. Each Trustee serves on the Board until death, incapacity or removal from the County Commission. Whenever a member of the County Commission ceases to be a member of the County Commission, such member s successor, upon election and qualifying for office, thereupon becomes a member of the Board. 18

24 The By-laws further provide for election of officers by the Board. The current members of the Board and the officers are set forth at the front of this Official Statement. For additional information regarding the Boardmembers and the officers, see THE COUNTY Form of Government herein. General Information THE COUNTY The County was established in 1850 and is situated in the northwestern portion of the State, located approximately 30 miles west of Salt Lake City, Utah. The County is bordered on the west by the State of Nevada, on the north by Box Elder County, on the east by Davis, Salt Lake and Utah counties, and on the south by Juab County. The County is the second largest land county in the State in terms of area, covering an area of approximately 6,930 square miles. The County had an estimated 58,335 residents in 2009 according the U.S. Census Bureau, ranking the County as the seventh most populous county in the State (out of 29 total counties). Tooele City (the City ), incorporated in 1853, is located approximately 30 miles from Salt Lake City, is the most populous city in the County with an 2009 U.S. Census Bureau population estimate of 30,708. The City is the headquarters for the Tooele County School District and is also the county seat of the County. Grantsville City and the City of Wendover are two other major cities within the County. Grantsville City is situated on the shore of the Great Salt Lake about 10 miles northwest of the City, and the City of Wendover is situated on the western boundary of the County on the Utah-Nevada state line. Form of Government The County is governed by the Board of County Commissioners (the Board ), consisting of three members, elected at large by voters in the County unless otherwise required by court order. A measure of continuity is provided in the Board by the election of the commissioners to four-year overlapping terms. Duties of the Board include the responsibility for all County affairs in general, including but not limited to, budget matters, appropriation of funds, levying taxes, and licenses and regulating businesses, exhibitions, and recreation within the unincorporated County area. Acting in the capacity of the County Board of Equalization the Board may make any adjustments they deem appropriate in equalizing the assessments of property determined by the County Assessor, subject to review by the Utah State Tax Commission. Other elected County officials are the Assessor, Attorney, Auditor, Clerk, Recorder, Sheriff, Surveyor and Treasurer. Current members of the Board and other officers of the County and their respective terms in office are as follows: Office Person Years of Service Expiration of Term (1) Commission Chair Colleen S. Johnson 6 January 2013 Commissioner J. Bruce Clegg 4 January 2011 Commissioner Jerry Hurst 4 January 2011 Assessor Wendy Shubert 4 January 2011 Attorney Doug Hogan 4 January 2011 Auditor Michael J. Jensen 10 January 2011 Clerk Marilyn Gillette 4 January 2011 Recorder Caleen Peshell 12 January 2011 Sheriff Frank Park 10 January 2011 Surveyor Doug Kinsman 8 January 2011 Treasurer Valerie B. Lee 16 January 2011 (1) With the exception of Caleen Peshell and Valerie B. Lee, all members of the Board and officers of the County whose current terms are scheduled to expire in January 2011 were re-elected to additional four year terms. Jerry Houghton will assume the duties of Recorder in January 2011 and Jeremy Walker will assume the duties of the Treasurer in January

25 Services Provided by the County The County provides services to incorporated and unincorporated areas within the County. Some of the most important of these services are as follows: County-wide services: tax assessment, tax collection, tax distribution, tax equalization, auditing, budgeting, accounting, investment, surveying, recording, marriage licenses, passports, jail services, criminal justice support, prosecution, civil services, ordinance enactment and enforcement, aging services, health (including air quality and emissions testing), mental health, economic development and tourism, golf courses, criminal justice and youth services, administration and support services to county operations, flood control, agricultural extension services, paramedics, libraries, justice courts and animal control. Unincorporated area services: police protection, libraries, justice courts, fire protection, emergency 911, street lighting, highways, planning and zoning, traffic engineering, development services and business licenses. Employee Workforce and Retirement System The County employs approximately 300 full-time equivalent employees. The County is a member of the Utah State Retirement System which also provides and administers a deferred compensation plan for County employees. See APPENDIX B AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 Notes to Financial Statements Note 10. Pension Plans. Other Post-Employment Benefits In addition to the pension benefits described above, the County provides postemployment health care and life insurance benefits to all employees who retire from the County and qualify to retire from the Systems. The County currently pays for postemployment benefits on a pay-as-you-go basis; however it is studying the establishment of a trust that would be used to cumulate and invest assts necessary to pay for the accumulated liability. For the fiscal year ended December 31, 2009, the County s annual OPEB cost was $1,080,465. See APPENDIX B AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 Notes to Financial Statements Note 11. Other Postemployment Benefits. Risk Management The County provides for its general liability, automobile liability, property and public officials risks through a joint venture protection agreement with the Utah Counties Insurance Pool, a property and casualty pool ( UCIP ). UC1P is a self-insured pool program, in which 27 of the 29 counties in the State participate, and provides for the County s lawful liabilities resulting from bodily injury, property damage, personal injury and/or public official s errors and omissions limited up to $1 million per each occurrence. The County also has a secondary insurance policy. Investment of Funds Investment of Operating Funds: The Utah Money Management Act. The Utah Money Management Act, Title 51, Chapter 7, Utah Code Annotated 1953, as amended (the Money Management Act ), governs the investment of all public funds held by public treasurers in the State. It establishes criteria for investment of public funds with an emphasis on safety, liquidity, yield, matching strategy to fund objectives, and matching the term of investments to the availability of funds. The Money Management Act provides a limited list of approved investments including qualified in-state and permitted out-of-state financial institutions, guaranteed investment contracts, approved government agency securities and investments in corporate securities carrying top credit ratings. The Money Management Act also provides for pre-qualification of broker dealers by requiring that broker dealers agree in writing to comply with the Money Management Act and certify that they have read and understand 20

26 the Money Management Act. The Money Management Act establishes the Money Management Council (the Money Management Council ) to exercise oversight of public deposits and investments. The law requires all securities to be delivered versus payment to the public treasurer s safekeeping bank. It requires diversification of investments, especially in securities of corporate issuers. Not more than 5% of the portfolio may be invested with any one issuer. Investments in mortgage pools and mortgage derivatives or any security making unscheduled periodic principal payments are prohibited. The Money Management Act also defines the State s prudent investor rules. The Money Management Council is comprised of five members appointed by the Governor of the State for terms of four years, after consultation with the State Treasurer and with the advice and consent of the State Senate. The County is currently complying with all of the provisions of the Money Management Act for all County operating funds. A significant portion of County funds are invested in the Utah Public Treasurers Investment Fund, as discussed below. The Utah Public Treasurers Investment Fund. The Utah Public Treasurers Investment Fund (the PTIF ) is a public treasurers investment fund, established in 1981, and is managed by the Treasurer of the State of Utah. The PTIF invests to ensure safety of principal, liquidity and a competitive rate of return on short-term investments. All moneys transferred to the PTIF are promptly invested in securities authorized by the Money Management Act. Safe-keeping and audit controls for all investments owned by the PTIF must comply with the Money Management Act. All investments in the PTIF must comply with the Money Management Act and rules of the Money Management Council. The PTIF invests primarily in money market securities including time certificates of deposit, top rated commercial paper, treasuries and certain agencies of the U.S. Government. The maximum weighted average adjusted life of the portfolio, by policy, is not to exceed 90 days. The maximum final maturity of any security purchased by the PTIF is limited to three years, except for a maximum maturity of five years is allowed for treasury or agency securities whose rate adjusts at least annually. By law, investment transactions are conducted only through certified dealers, qualified depositories or directly with issuers of the securities. All securities purchased are delivered via payment to the custody of the State Treasurer or the State Treasurer s safekeeping bank, assuring a perfected interest in the securities. Securities owned by the PTIF are completely segregated from securities owned by the State. The State has no claim on assets owned by the PTIF except for any investment of State moneys in the PTIF. Deposits are not insured or otherwise guaranteed by the State. Securities in the PTIF include certificates of deposit, commercial paper, short-term corporate notes, obligations of the U.S. Treasury and securities of certain agencies of the U.S. Government. These short-term securities must be rated first tier ( A-1, P1, for short-term investments and A or better for long-term investments) by two nationally recognized statistical rating organizations, one of which must be Moody s Investors Service, Inc. or Standard & Poor s Ratings Group, a division of The McGraw-Hill Companies, Inc. These securities represent limited risks to governmental institutions investing with the PTIF. Variable rate securities in the PTIF must have an index or rate formula that has a correlation of at least 94% of the effective Federal Funds rate. Investment activity of the State Treasurer in the management of the PTIF is reviewed monthly by the State s Money Management Council and audited by the State Auditor. See APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 Notes to the Basic Financial Statements Note 3. Cash and Cash Equivalents. Moneys from the sale of obligations issued by the County or pledged to the payment therefor are also on deposit in funds and accounts of the County. Investment policies regarding such moneys are governed by the specific instruments pursuant to which such obligations were issued. 21

27 Additional Information For additional information with respect to the County and its finances see FINANCIAL INFORMATION REGARDING THE COUNTY, DEBT STRUCTURE OF THE AUTHORITY AND THE COUNTY APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 and APPENDIX C DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING TOOELE COUNTY. Outstanding Obligations of the Authority DEBT STRUCTURE OF THE AUTHORITY AND COUNTY OUTSTANDING LEASE REVENUE BONDS Series Purpose Original Amount Final Maturity Date Current Principal Amount Outstanding 2010A (1) Jail Facility $25,340,000 December 15, 2042 $25,340, Jail Facility 2,500,000 May 1, ,000 Total... $25,501,000 (1) Assumes that the Series 2010A Bonds are issued and outstanding. Outstanding Obligations of the County OUTSTANDING SALES TAX REVENUE BONDS Series Purpose Original Amount Final Maturity Date Current Principal Amount Outstanding 2008 Convention Center $2,275,000 April 15, 2023 $2,021, State Courts 2,645,000 February 1, ,120, B Recreation 978,000 February 1, , A Recreation 700,000 February 1, ,000 Total... $5,227,000 REVENUE BONDS Series Purpose Original Amount Final Maturity Date Current Principal Amount Outstanding 1998A Airport $1,200,000 December 23, 2018 $715, B Airport 500,000 December 1, , C Airport 331,800 December 1, ,236 Total... $1,308,418 Future Financing Plans The County currently does not have any plans to incur any additional obligations within the next three years, other than normal operating expenditures. 22

28 Investment Policy As stated above, the Authority has no money or assets except for those which result from the sale or pledged to the payment of its bonds. Investment policies regarding such moneys and assets are governed by the specific instruments pursuant to which such bonds were issued. No Defaulted Bonds or Failure to Renew Lease Neither the Authority nor the County has ever failed to pay principal and interest when due on their respective outstanding bonded indebtedness or other obligations nor has the County ever failed to appropriate amounts due under its lease obligations. General Obligation Debt Authorization and Limit for the County Pursuant to the provisions of Article XIV, Section 3, of the Utah Constitution, the County may incur general obligation indebtedness only upon the approval of a majority of the qualified electors within the County voting on a proposition to incur such indebtedness. Pursuant to the provisions of Article XIV, Section 4 of the Utah Constitution and applicable statutory provisions, the general obligation indebtedness of the County is limited to an amount not exceeding two percent (2%) of the value of taxable property in the County as shown in the last assessment for County purposes. Based upon the County s 2009 estimated fair market value of property of $4,626,756,403, the general obligation debt limit of the County is shown below: Direct And Overlapping Debt Debt Limit $92,535,128 Less Outstanding General Obligation Bonds -0- Available Debt Margin $92,535,128 Percentage Applicable to the County (2) The County s Portion of Overlapping G.O. Debt G.O. Entity (1) Debt Outstanding The County (3) $ 0 100% $ 0 Tooele County School District (4) 107,825, % 107,825,000 Total Overlapping Debt 107,825,000 Total Direct Debt 0 Total Direct and Overlapping Debt $107,825,000 (1) (2) (3) (4) General obligation debt of the State is not shown in the calculation of overlapping debt because no property taxes are currently levied for the payment of such debt. Such debt is currently paid from revenue sources other than property taxes. Calculated by dividing the County s taxable value by the taxable value (or portion thereof attributable to the listed entity) of the listed entity. The County currently has no outstanding general obligation debt. As of June 30, (Sources: The individual entities listed.) 23

29 Debt Ratios The State of Utah general obligation debt is not included in the debt ratios because the State of Utah currently levies no property tax for payment of general obligation bonds. To 2009 Taxable Value (1) To Estimated Fair Market Value (2) Per Capita (3) Direct General Obligation Debt Direct and Overlapping General Obligation Debt 3.25% 2.32% $1,839 (1) (2) (3) Based on a 2009 taxable value of $3,295,188,469, which value excludes the taxable value used to determine uniform fees on tangible personal property. Based on an estimated 2009 fair market value of $4,626,756,403. Based on 2009 population estimate of 58,335 provided by the U.S. Census Bureau. Fund Structure; Accounting Basis FINANCIAL INFORMATION REGARDING THE COUNTY The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties for goods or services. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The remaining governmental and enterprise funds are combined into a single column and reported as other (nonmajor) funds. Internal service funds are aggregated and reported in single column on the proprietary fund financial statements. Revenues and expenditures are recognized using the modified accrual basis of accounting in the governmental fund statements. Revenues are recognized in the accounting period in which they become both measurable and available. Measurable means that amounts can be reasonably determined within the current period. Available means that amounts are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues on cost reimbursement grants are accrued when the related expenditures are incurred. In the proprietary fund statements and the government wide statements, revenues and expenses are recognized using the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and become measurable, and expenses are recognized in the period incurred. Budget and Appropriation Process The budget and appropriation process of the County is governed by the Uniform Fiscal Procedures Act for Utah Counties, Title 17, Chapter 36, Utah Code Annotated 1953, as amended (the Fiscal Procedures Act ). Pursuant to the Fiscal Procedures Act, the budget officer of the County is required to prepare budgets for the general fund, special revenue funds, debt service funds, capital project funds and proprietary funds. These budgets are to provide a complete financial plan for the budget period, i.e. the ensuing fiscal year. Each budget is required to specify, among other things, estimates of anticipated revenues and appropriations for expenditures. Under the Fiscal Procedures Act, the total of anticipated revenues must equal the total of appropriated expenditures. 24

30 On or before November 1 of each year, the budget officer is required to submit to the Board a tentative budget for each fund for the fiscal year commencing January 1. Various actual and estimated budget data are required to be set forth in the tentative budgets. The tentative budget is then tentatively adopted by the Board, and may thereafter be amended or revised by the Board prior to a public hearing. If the tax rate in the proposed budget exceeds the certified tax rate, the Board shall comply with the Tax Increase Disclosure Act in adopting the budget. (See in this section Public Hearing On Certain Tax Increases below.) After public notice and hearing, the tentative budget is adopted by the Board, subject to further amendment or revisions by the Board prior to adoption of the final budget. On or before December 31 in each year, the final budgets for all funds are adopted by the Board. The Fiscal Procedures Act prohibits the Board from making any appropriation in the final budget of any fund in excess of the estimated expendable revenue of such fund. The adopted final budget is subject to amendment by the Board during the fiscal year. However, in order to increase the budget of the general fund, public notice and hearing must be provided. To increase the budget of funds, other than the general fund, public notice must be provided. The amount set forth in the final budget as the total amount of estimated revenue from property taxes constitutes the basis for determining the property tax levy to be set by the Board for the succeeding tax year. See Tax Levy And Collection below for a description of certain matters relating to the County s ability to levy and collect general property taxes and the procedures applicable to such levy and collection. Adoption of Ad Valorem Tax Levy. The legislative body of each taxing entity shall, before June 22 of each year, adopt a proposed, or, if the tax rate is not more than the certified tax rate, a final, tax rate for the taxing entity. The legislative body shall report the rate and levy, and any other information prescribed by rules of the Utah State Tax Commission for the preparation, review, and certification of the rate, to the county auditor of the county in which the taxing entity is located. Net Assets or Fund Balance. A county may accumulate net assets in any enterprise or internal service fund or a fund balance in any other fund; but with respect to the general fund, its use shall be restricted to the following purposes: (i) to provide cash to finance expenditures from the beginning of the budget period until general property taxes, sales taxes, or other revenues are collected; (ii) to provide a fund or reserve to meet emergency expenditures; and (iii) to cover unanticipated deficits for future years. The maximum accumulated unappropriated surplus in the general fund, as determined prior to adoption of the tentative budget, may not exceed an amount equal to the greater of: (a) for a county with a taxable value of $750 million or more and a population of 100,000 or more, 20% of the total revenues of the general fund for the current fiscal period; or (b) for any other county, including the County, 50% of the total revenues of the general fund for the current fiscal period; and the estimated total revenues from property taxes for the current fiscal period. Any surplus balance in excess of the above computed maximum shall be included in the estimated revenues of the general fund budget for the next fiscal period and any fund balance exceeding 5% of the total general fund revenues may be used for budgetary purposes. Financial Controls The County utilizes a computerized financial accounting system which includes a system of budgetary controls. State law requires budgets to be controlled by individual departments, but the County has also empowered the County Auditor to maintain control by major categories within departments. These controls are such that a requisition will not be entered into the purchasing system unless the appropriated funds are available. The County Auditor checks for sufficient funds again prior to the purchase order being issued and again before the payment check is issued. Voucher payments are also controlled by the County Auditor for sufficient appropriations. Discussion and Analysis of Financial Condition and Results of Operations See APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 Management s Discussion and Analysis. 25

31 Sources of General Fund Revenues Set forth below are brief descriptions of the various sources of revenues available to the County s general fund. The percentage of total general fund revenues represented by each source is based on the County s audited financial statements for fiscal year ended December 31, Property, Sales, and Franchise Taxes Approximately 31% of general fund revenues are from taxes. Licenses and Permits Less than 1% of general fund revenues are from licenses and permits fees. Intergovernmental Revenues Approximately 24% of general fund revenues are from State shared revenues. Charges for Services Approximately 7% of general fund revenues are from charges for services. Mitigation Fees Approximately 33% of general fund revenues are from mitigation fees. Mitigation Fees are contractual fees paid to the County by corporations located in the County involved in the disposal of hazardous waste, landfill activities, and chemical munitions disposal. The largest portion of these fees (approximately 75%) comes from payments made by Energy Solutions, Inc. The County reports that it expects Mitigation Fees to be stable with a moderate trend of increasing in the foreseeable future. Fines and Forfeitures Approximately 3% of general fund revenues are from fines and forfeitures. Interest Less than 1% of general fund revenues are from interest earnings. Other Revenues Approximately 2% of general fund revenues are from other revenues. Five-Year Financial Summaries The following tables set forth a summary of certain financial information regarding the County and have been extracted from the County s basic financial statements for the fiscal years ended December 31, 2005, through December 31, The following summaries themselves are unaudited. (The remainder of this page left intentionally blank.) 26

32 TOOELE COUNTY, UTAH Statement of Net Assets Governmental-Type Activities (This summary has not been audited.) Assets: Current Assets: Cash and investments $3,669,039 $4,853,974 $13,226,809 $18,442,296 $26,179,016 Receivables (Net): Accounts 2,049, , , , ,897 Taxes 3,108,130 2,852,858 74,081 Due from other governmental units 1,554, , , ,100 1,397,861 Inventories 11,301 12,858 11,970 10,634 10,218 Prepaid expenses 221, ,264 38, , ,901 Total Current Assets 10,613,999 9,812,461 14,376,626 20,181,691 28,282,974 Noncurrent assets: Capital assets, net of depreciation: Land (1) 49,042,964 7,570,720 7,571,047 5,612,459 3,462,568 Buildings and improvements (2) 21,272,665 14,525,086 14,696,450 8,306,560 5,457,827 Construction in progress 4,519, ,237 2,881,510 39,000 Furniture, fixtures, and equipment 2,198,816 1,963,637 2,239,212 2,097,371 Infrastructure 39,870,785 39,870,785 38,753,002 38,108,360 Total Noncurrent Assets 70,315,629 68,685,380 64,311,156 57,792,743 49,165,126 Total Assets $80,929,628 $78,497,841 $78,687,782 $77,974,434 $77,448,100 Liabilities: Current liabilities: Account payable and accrued expenses 3,288,360 1,946, ,866 1,552,712 1,357,234 Accrued interest payable 441,465 33,286 33,286 36,871 18,210 Due to other governmental units 36, , , , ,520 Deferred revenue 107, ,354 39,676 39, ,531 Bonds payable 273, ,000 Total current liabilities 4,146,660 2,798,904 1,496,329 1,772,520 1,626,495 Long-Term Liabilities: Accrued compensated absences 1,383,496 1,260,975 1,120,773 1,093,957 1,067,434 Bonds payable 2,281,000 2,554,000 Net OPEB obligation 1,484, ,537 Long-term debt and capital lease obligations: Due within one year 245, , ,000 Due in more than one year 2,822,000 3,067,000 3,312,000 Total long-term liabilities 5,149,314 4,538,512 4,187,773 4,405,957 4,620,434 Total liabilities 9,295,974 7,337,416 5,684,102 6,178,477 6,246,929 Net Assets: Invested in capital assets, net of related debt 66,378,133 64,573,119 61,203,137 54,294,413 45,142,641 Restricted for: Capital improvements 9,429 2,665 88,499 1,066,928 5,059,297 Debt service 300, , , , ,067 Unrestricted 4,946,071 6,284,474 8,919,113 13,570,926 18,359,217 Workers compensation and early retirement 2,457,273 2,133,745 2,008,049 Prepaid expenses 38, , ,901 Total net assets 71,633,654 71,160,425 73,003,680 71,795,958 71,201,172 Total liabilities and net assets $80,929,628 $78,497,841 $78,687,782 $77,974,435 $77,448,101 (1) In fiscal year 2009, this line item includes roads and construction in progress. (2) In fiscal year 2009, this line item includes equipment and other depreciable assets. (Source: Information extracted from the County s audited basic financial statements. This summary itself is unaudited.) 27

33 TOOELE COUNTY, UTAH Statement of Revenues, Expenditures and Net Revenues Before Capital Costs and Debt Service Governmental-Type Activities (This summary has not been audited.) Revenues: Taxes $ 10,976,677 $ 12,153,539 $ 6,787,237 $ 5,346,501 $ 5,646,077 Licenses and permits 543, , , ,808 1,160,449 Intergovernmental revenues 14,413,176 11,469,280 12,165,181 12,263,462 15,670,550 Charges for services 3,463,508 3,312,715 3,122,905 2,800,504 2,452,573 Fines and forfeitures 830, , , , ,535 Interest on investments 72, , ,020 1,207, ,997 Mitigation fees 8,183,022 6,802,768 9,259,408 10,680,367 13,318,600 Other 930,726 1,244,237 1,499,773 1,462, ,640 Total Revenues 39,413,105 37,527,425 35,390,795 35,268,154 39,907,421 Expenditures: General government 13,025,047 12,878,602 11,329,732 9,839,105 8,962,586 Tourism and promotion 643, , , , ,323 Public safety 10,097,071 8,362,434 8,099,654 8,687,546 8,923,939 Public health and human services 7,730,646 7,384,652 5,760,060 5,764,234 4,773,085 Highways and public improvements 4,255,797 3,359,995 3,727,279 2,943,776 2,511,352 Parks and recreation 741, , , , ,606 Conservation and economic development 235,545 39,222 14,140 51,343 29,268 Capital Projects 3,013,215 5,600,906 7,891,100 9,552,229 1,077,699 Other administrative 623, , , , ,349 Debt Service: Principal retirement 264, , , , ,000 Interest and fiscal charges 111, , , , ,248 Total Expenditures 40,741,452 39,581,969 38,926,659 38,679,419 28,048,455 Excess of revenues over (under) expenditures (1,328,347) (2,054,544) (3,535,864) (3,411,265) 11,858,966 Add Back: Capital outlays 3,013,215 5,600,906 7,891,100 9,552,229 1,077,699 Add Back: Debt service 375, , , , ,248 Net revenue before Capital Outlays and Debt Service $2,060,610 $3,914,910 $4,727,384 $6,516,596 $13,236,913 (Source: This table has been prepared by the Underwriters from information extracted from the County s audited basic financial statements. This summary itself is unaudited.) 28

34 TOOELE COUNTY, UTAH Statement of Revenues, Expenditures and Changes in Fund Balances General Fund (This summary has not been audited.) Revenues: Taxes $7,590,971 $9,110,389 $4,566,138 $3,330,897 $4,020,320 Licenses and Permits 16,710 13,795 14,250 14,310 12,250 Intergovernmental revenues 6,044,742 5,927,391 5,524,210 5,602,170 7,448,069 Charges for services 1,697,571 1,628,097 1,615,097 1,493,087 1,252,237 Fines and forfeitures 830, , , , ,535 Interest on investments 55, , , , ,656 Mitigation fees 8,183,022 6,802,768 9,259,408 10,680,367 13,318,600 Other 380, ,059 1,342,909 1,289, ,767 Total Revenues 24,799,317 25,926,415 23,729,438 24,022,933 27,509,434 Expenditures: General government 8,747,590 8,860,104 7,655,692 6,602,402 6,116,148 Public safety 10,097,071 8,362,434 8,099,654 8,687,546 8,923,939 Highways and public improvements 155, , , , ,580 Parks and recreation 741, , , , ,606 Conservation and economic development 235,545 39,222 14,140 51,343 29,268 Other administrative 623, , , , ,349 Total Expenditures 20,601,195 18,512,999 17,065,771 16,623,144 16,370,890 Excess of revenues over (under) expenditures 4,198,122 7,413,416 6,663,667 7,399,789 11,138,544 Other Financing Sources (Uses): Operating transfers in 100, , , ,256 Operating transfers (out) (6,678,583) (11,919,294) (11,162,165) (11,683,958) (7,437,146) Total Other Financing sources (Uses) (6,578,583) (11,919,294) (10,838,637) (11,558,262) (7,184,890) Net change in fund balance (2,380,461) (4,505,878) (4,174,970) (4,158,473) 3,953,654 Fund balance, beginning of year 3,921,966 (1) 7,733,199 11,908,169 16,066,642 12,112,988 Fund balance, end of year $1,541,505 $3,227,321 $7,733,199 $11,908,169 $16,066,642 (1) As restated. (Source: Information extracted from the County s audited basic financial statements. This summary itself is unaudited.) 29

35 TOOELE COUNTY, UTAH Balance Sheet General Fund (This summary has not been audited.) Assets: Cash and Investments $371,146 $415,393 $7,564,510 $11,069,212 $14,761,212 Receivables: Accounts 1,285, , , , ,516 Taxes 2,545,657 2,852,858 74,081 Due from other governmental units 1,466, , , ,311 1,291,570 Prepaid Expenses 13, ,029 36, , ,542 Total assets $5,682,320 $5,095,566 $8,547,587 $12,680,984 $16,739,921 Liabilities and Fund Equity Liabilities: Accounts payable and accrued liabilities 2,245, , , , ,759 Accrued liabilities 373,641 Due to other funds 680,000 Due to other governmental units 107, , , , ,520 Deferred revenue 734, ,955 Total liabilities 4,140,815 1,868, , , ,279 Fund equity: Fund Balance, reserved 233,019 2,493,841 2,573,730 2,351,591 Fund balance, unreserved 1,308,486 3,227,321 5,239,358 9,334,439 13,715,051 Total fund equity 1,541,505 3,227,321 7,733,199 11,908,169 16,066,642 Total liabilities and fund equity $5,682,320 $5,095,566 $8,547,587 $12,680,984 $16,739,921 (Source: Information extracted from the County s audited basic financial statements. This summary itself is unaudited.) 30

36 Sales and Use Tax The State currently imposes 4.70% sales and use tax on the purchase price of taxable goods and services (except that only 1.75% is levied on unprepared food and food ingredients), with sales of natural gas, electricity and fuel oil for residential use being taxed at a statewide rate of 2.00%. Sales tax is imposed on the amount paid or charged for sales of tangible personal property in the State and for services rendered in the State for the repair, renovation or installation of tangible personal property. Use tax is imposed on the amount paid or charged for the use, storage or other consumption of tangible personal property in the State, including services for the repair, renovation or installation of such tangible personal property. Sales and use taxes also apply to leases and rentals of tangible personal property if the tangible personal property is in the State, the lessee takes possession in the State or the tangible personal property is stored, used or otherwise consumed in the State. In addition to the sales and use taxes described above, counties and cities in the State are authorized to impose a local sales and use tax, sales and use taxes to fund a public transportation system, for zoo, art and parks purposes and at the option of the county for general fund purposes of the county. The County currently imposes a 1.25% sales and use taxes for general fund purposes of the County. The total sales and use tax imposed by the County (other than certain specialty taxes, including a motor vehicle rental tax, a transient room tax, and a tourism restaurant tax imposed by the County) is 5.95%. Local sales and use taxes are collected by the Utah State Tax Commission and distributed on a monthly basis to each county, city and town. The distributions are based on a formula, which provides that (1) 50% of sales tax collections will be distributed on the basis of the population of the local government and (2) 50% of sales tax collections will be distributed on the basis of the point of sale (the 50/50 Distribution ). The 50/50 Distribution formula is subject to the provision that through fiscal year , certain qualifying counties, cities and towns may be eligible to receive an annual distribution equal to their distribution in fiscal year or , whichever is greater (the Minimum Distribution ). However, any local government not receiving the Minimum Distribution for three consecutive fiscal years shall receive the 50/50 Distribution for the following fiscal year. Beginning in fiscal year and ending with fiscal year , a local government shall receive the Minimum Distribution for such fiscal year if for fiscal year the 50/50 Distribution is less than or equal to the product of the Minimum Distribution and 0.9. Certain Property Tax Matters The following information with respect to certain property tax matters is included in this Official Statement to provide background information relating to a major source of general fund revenues of the County. As described herein, the Series 2010A Bonds are not secured by any pledge of property tax revenues and do not constitute a debt or indebtedness of the County or the Authority. See RISKS FACTORS below. The Property Tax Act, Title 59, Chapter 2, Utah Code Annotated 1953, as amended (the Property Tax Act ), provides that all taxable property within the taxing entity is required to be assessed and taxed at a uniform and equal rate on the basis of 100% of its fair market value as of January 1 of each year, unless otherwise provided by law. Fair market value is defined in the Property Tax Act as the amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Determinations of fair market value shall take into account the current zoning laws applicable to the property in question. Section 2 of Article XIII of the Utah Constitution provides that the Utah Legislature may by law exempt from taxation up to 45% of the fair market value of residential property as defined by law. Pursuant to this provision, the Utah Legislature has provided that the fair market value of primary residential property shall be reduced by 45% for tax years 1995 and thereafter. No more than one acre of land per residential unit may qualify for the residential exemption. The Property Tax Act provides that the State Tax Commission shall assess certain types of property ( centrally assessed property ), including (i) properties that operate as a unit across county lines that must be apportioned among more than one county or state, (ii) public utility (including railroad) properties, (iii) airline 31

37 operating properties, (iv) geothermal properties and (v) mines, mining claims and appurtenant machinery, furnishings and improvements, including oil and gas properties. All other taxable property ( locally assessed property ) is required to be assessed by the county assessor of the county in which such locally assessed property is located. Each county assessor must update property values annually based upon a systematic review of current market data. Each county assessor must also complete a detailed review of property characteristics for each parcel of property at least once every five years. The Property Tax Act requires that the State Tax Commission conduct an annual investigation in each county to determine whether all property subject to taxation is on the assessment rolls and whether the property is being assessed at its fair market value. The State Tax Commission and the county assessors utilize various valuation methods, as determined by statute, administrative regulation or accepted practice, to determine the fair market value of taxable property. Many areas within the State have agricultural farmland devoted to the raising of useful plants and animals. For general property tax purposes, agricultural land is assessed based on statutory requirements and the value which the land has for agricultural use or on its agricultural value. Uniform Fees An annual statewide uniform fee is levied on tangible personal property in lieu of the ad valorem tax, which uniform fee is based on the value of motor vehicles, watercraft, recreational vehicles, and all other tangible personal property required to be registered with the State (the Uniform Fee or Uniform Fees ). The Uniform Fee was adjusted to a set fee structure for motor vehicles weighing 12,000 pounds or less based on the model year of the vehicle. The revenues collected in each county from the Uniform Fee are distributed by the county to each taxing entity in which the property is located in the same proportion in which revenue collected from ad valorem property tax is distributed, and each taxing entity is to distribute the revenues in the same proportion in which revenue collected from ad valorem property tax is distributed. Tax Levy and Collection The State Tax Commission must assess all centrally-assessed property by May 1 of each year and shall immediately notify the owners or operators of such property, and the county assessors, of such assessment. County assessors must assess all taxable property other than centrally-assessed property before May 22 of each year. Before May 25 the State Tax Commission apportions the value of centrally-assessed property to the various taxing entities within each county and reports such values to county auditors before June 8. The governing body of each taxing entity must adopt a final tax rate before June 22, except as described below for rates in excess of the certified tax rate. County auditors must forward to the State Tax Commission a statement prepared by the governing body of each taxing entity showing the amount and purpose of each levy. If the State Tax Commission determines that a tax levy established by a taxing entity exceeds the maximum levy permitted by law, the State Tax Commission must lower the levy to the maximum level permitted by law, must notify the taxing entity that the rate has been lowered, and must notify the county auditor of the county in which the taxing entity is located to implement the rate established by the State Tax Commission. On or before July 22 of each year, the county auditors must mail to all owners of real estate shown on their assessment rolls notice of, among other things, the value of the property, itemized tax information for all taxing entities and the date their respective county boards of equalization will meet to hear complaints. Not later than 30 days following the mailing of the notice, taxpayers owning property assessed by the county assessors may file an application with the appropriate county board of equalization for the purpose of contesting the assessed valuation of their property. The county boards of equalization must render a decision on each appeal no later than October 1 (with extensions requiring State Tax Commission approval). Such decisions may be appealed to the State Tax Commission, which must decide all appeals by November 1 of the following year. Owners of centrally-assessed property, or any county with a showing of reasonable cause, may apply to the State Tax Commission on or before June 1 for a hearing to contest the assessment of centrally-assessed property. The State Tax Commission must render a written decision no later than 120 days following completion of the hearing and submission of all post hearing briefs. The county auditors must make a record of all changes, corrections and orders and, before November 1, must deliver the corrected assessment rolls to their respective county treasurers. By November 1, the county 32

38 treasurers are to furnish to each taxpayer a notice containing the kind and value of the property assessed to the taxpayer, the street address of the property, where applicable, the amount of the tax levied on the property and the year that the property is subject to a detailed review. Taxes are due November 30, or, if a Saturday, Sunday, or holiday, the next business day following. Each county treasurer is responsible for collecting all taxes levied on real property within that county. There are no prior claims to such taxes. As taxes are collected, each county treasurer must pay the State and each taxing entity within the county its proportionate share of the taxes, on the tenth day of each month. Delinquent taxes are subject to a penalty of 2.5% of the amount of the taxes due or $10, whichever is greater. However, if the delinquent tax and the penalty are paid on or before January 31 of the following year the penalty is only 1% of the delinquent taxes, or $10, whichever is greater. Unless the delinquent taxes and penalty are paid before January 31 of the following year, the amount of delinquent taxes and penalty bears interest at the federal discount rate in effect on January 1 of that year plus 6% from January 1 until paid. Such interest rate may not be less than 7% or more than 10%. If after four years (March 15 of the fifth year after assessment) delinquent taxes have not been paid, the affected county may advertise and sell the property at a tax sale Public Hearing on Certain Tax Increases Each taxing entity that proposes to levy a tax rate that exceeds the certified tax rate may do so, by ordinance, only after holding a public hearing. Notice of the public hearing must be mailed by July 22 to all owners of real estate and, in most cases, must be advertised by publication. Generally, the certified tax rate for a taxing entity is the rate necessary to generate the same property tax revenue that the taxing entity collected for the prior year, exclusive of collections from redemptions, interest and penalties. For purposes of calculating the certified tax rate, county auditors are to use the taxable value of property on the assessment rolls, exclusive of new growth. New growth is any increase in taxable value of the taxing entity from the previous calendar year to the current year, less the amount of increase to locally-assessed real property taxable values resulting from factoring, reappraisal or any other adjustments. After the public hearing is held, the taxing entity may adopt a resolution levying a tax in excess of the certified tax rate. If a resolution levying a tax in excess of the certified tax rate is not forwarded to the county auditor by August 17, the county auditor must forward the certified tax rate to the State Tax Commission. The final tax notice is then mailed by November 1. Assessed and Estimated Actual Value of Taxable Property Taxable Value $3,295,188,469 $2,913,171,010 $2,558,750,567 $2,203,753,610 $1,874,546,289 Fair Market Value 4,626,756,403 4,185,557,911 3,640,557,151 3,090,281,804 2,637,707,854 Increase in Fair Market Value from prior year 10.54% 14.97% 17.81% 17.16% n/a Ratio Taxable Value/Fair Market Value 71.22% 69.60% 70.28% 71.31% 71.07% (Source: Derived from taxable values provided by the Utah State Tax Commission. Fair Market Value is calculated adding 45% haircut back in to taxable value of primary residential values. ) 33

39 Summary Of The County s Taxable Value (1) Locally Assessed: Real Property Land Primary Residential $344,561,370 $329,847,024 $243,907,665 $229,993,736 $218,318,612 Other Residential 3,512,523 2,409,558 2,457,985 2,169,348 1,635,561 Commercial and Industrial 95,479,856 92,589,482 92,251, ,181,067 88,203,698 FAA 6,981,592 6,945,618 8,232,900 7,923,990 6,600,060 Unimproved Non FAA 275,205, ,721, ,293, ,555, ,382,871 Total Real Property Land 725,740, ,513, ,143, ,824, ,140,802 Real Property Buildings Primary Residential 1,272,750,161 1,214,508,168 1,067,403, ,940, ,345,907 Other Residential 16,572,308 13,312,492 11,890,818 10,470,751 9,783,968 Commercial and Industrial 541,073, ,514, ,429, ,844, ,146,635 Agricultural 13,584,270 11,103,173 10,184,575 9,828,604 9,441,619 Total Real Property Buildings 1,843,980,400 1,727,438,736 1,502,908,576 1,244,084,475 1,055,718,129 Total Real Property 2,569,721,383 2,398,952,226 2,052,052,347 1,754,908,512 1,515,858,931 Personal Property: Primary Mobile Homes 10,160,388 10,784,354 10,897,129 12,172,717 12,088,505 Secondary Mobile Homes 265, ,311 4,672, ,425 Other Business Personal 388,182, ,819, ,337, ,224, ,157,368 Total Personal Property 398,608, ,830, ,906, ,865, ,574,298 Total Locally Assessed 2,968,329,831 2,650,782,296 2,303,959,140 1,959,774,206 1,648,433,229 Total Centrally Assessed 326,858, ,388, ,791, ,979, ,113,060 Total Taxable Value $3,295,188,469 $2,913,171,010 $2,558,750,567 $2,203,753,610 $1,874,546,289 (1) Does not include motor vehicle age-based value estimates or fee-in-lieu values. (Source: Utah State Tax Commission.) Property Tax Levied and Collected The following table shows the property tax levied and collected for the County for the fiscal years 2009 through 2005: Percent of Tax Levy Collected Percent of Total Tax Collections to Tax Levy Fiscal Year Total Tax Levied Current Tax Collections Delinquent Tax Collections Total Tax Collections 2009 $1,992,961 $1,770, % $429,995 (1) $2,200, % ,805,195 1,708, ,868 2,094, ,742,372 1,611, ,223 1,907, ,673,263 1,519, ,366 2,023, ,588,154 1,454, ,151 2,039, (1) As reported by the County Treasurer. (Source: Except as noted above, financial statements of the County for the fiscal years ) 34

40 Property Tax Rates Direct and Overlapping Governments The following table sets out the individual tax rates levied by the taxing entities that have levied taxes within the County for each of the last five tax years. Note that no area in the County is subject to the tax levy of all the entities listed below. Year A B C D E F G H I Year J K L M N O P Q ENTITIES A The County B Tooele County School District C Tooele Valley Mosquito Abatement District D Rush Valley Water Conservancy District E Lakepoint Improvement District F North Tooele County Fire Protection Service District G Lakepoint Cemetery and Park Service Area H Stansbury Park Improvement District I Stansbury Greenbelt Service Area J Stansbury Recreation Service Area K Tooele City L Grantsville City M City of Wendover N Stockton Town O Town of Vernon P Ophir Town Q Rush Valley Town (Source: Utah State Tax Commission.) 35

41 Largest Property Taxpayers As of December 31, 2009 Taxpayer Type of Business Taxable Value (1) Taxable Value (2) Percent of County s Total ATI Titanium Metal refining $190,621, % Wal-Mart Retail store 87,217, Energy Solutions Waste management 74,428, PacifiCorp Electric utility 73,131, Intrepid Potash-Wendover, LLC Waste management 72,487, Miller Motorsports Park Entertainment 72,164, Clean Harbors Aragonite LLC Waste management 43,730, US Magnesium Mineral mining 26,926, Tooele Hospital Corporation Hospital 25,507, Western Pacific Railroad Transportation 23,489, (1) (2) Based on preliminary estimates of 2009 taxable value. Based on County s 2009 total taxable value of $3,295,188,469. Excludes age based and fee-in-lieu taxes. (Source: The County.) RISK FACTORS THE PURCHASE OF THE SERIES 2010A BONDS BEING OFFERED HEREBY INVOLVES CERTAIN INVESTMENT RISKS THAT ARE DISCUSSED THROUGHOUT THIS OFFICIAL STATEMENT. CERTAIN OF THESE RISKS ARE DESCRIBED BELOW. Construction Risk of the Series 2010 Project Construction of the Series 2010 Project has not yet commenced. Furthermore, the property on which the Series 2010 Project will be located has not yet been acquired and related Security Documents will have been approved but have not been executed or recorded. Completion of the Series 2010 Project must occur to enable the County to begin paying Rentals under the Master Lease, the source of repayment for the Series 2010 Bonds. A delay in the acquisition of the site of the Series 2010 Project or other components of the Series 2010 Project could delay or prohibit the County from paying Rentals. Furthermore, until the site on which the Series 2010 Project is located is acquired, the Deed of Trust and the other Security Documents that secure the Series 2010 Bonds will not be recorded. Moneys from proceeds of the Series 2010 Bonds will be held in escrow with the Trustee until such time that the site for the Series 2010 Bonds can be acquired and the Deed of Trust and the other Security Documents can be recorded. The site that has been identified for the Series 2010 Project is under contract and is scheduled to close subsequent to the delivery of the Series 2010 Bonds. In the event the closing does not occur on that site, other sites have been identified as potential locations for the Series 2010 Project. Although the Authority believes that it can acquire such other sites for approximately the same amount as the current contemplated site, there is no assurance that any such other sites may be acquired for an amount similar to that budgeted for the current site. A contingency from proceeds of the Series 2010 Bonds will be set aside to provide for any additional cost of site acquisition and other contingencies for the Series 2010 Project. However, no guaranty can be made that such contingent amounts will be sufficient to cover the cost of such contingencies. In the event that there are shortfalls, the Authority will either need to downsize the Series 2010 Project, issue Additional Bonds or seek additional funds from the County to complete the Series 2010 Project. No assurance can be given that any of the aforementioned actions would be taken if there are insufficient funds to complete the Series 2010 Project. Failure to timely complete the Series 2010 Project may result in an Event of Nonappropriation which could result in a declaration of an Event of Default. 36

42 As previously discussed, no construction contract has been executed with respect to the Series 2010 Project. The Authority has undertaken an analysis of the costs of the Series 2010 Project and believes that it has an adequate basis for estimating the costs of the Series 2010 Project and sizing the Series 2010 Bonds accordingly. Furthermore, the Authority has stated that it expects that any construction contract for the Series 2010 Project will be a fixed price contract with a specified completion date, standard bonding provisions and liquidated damages provisions. However, in the event that a construction contract cannot be entered into upon the terms expected by the Authority, it might lead to a delay in the construction of the Series 2010 Project or a shortfall in the amount of funds available for the Series 2010 Project. At that time, the Authority could take the actions set forth in the preceding paragraph. No assurances can be given that such actions would be taken. Failure to timely complete the Series 2010 Project may result in an Event of Nonappropriation which may lead to an Event of Default. Although the Authority believes that construction of the Series 2010 Project will be completed on time and on budget, no assurance can be given to potential holders of Series 2010A Bonds that the construction of the Series 2010 Project will be completed in a timely manner or that the cost of such construction will not exceed the budgeted amount. Non-Appropriation Base Rentals and Additional Rentals (sometimes collectively referred to herein as Rentals ) will be payable solely from County Funds which are annually budgeted and appropriated by the County Commission and which may be reduced or terminated by action of such County Commission. There is no assurance that the Master Lease will be renewed for all of its anticipated Renewal Terms. The County Commission is under no obligation to provide County Funds for such renewals. The County s obligation under the Master Lease does not constitute a general obligation or other indebtedness of the County or the State of Utah or any agency or political subdivision of the State of Utah within the meaning of any constitutional or statutory debt limitation. THE AUTHORITY HAS NO TAXING POWER. Accordingly, the likelihood that the County will extend the term of the Master Lease for all Renewal Terms and continue to pay the Base Rentals to enable the Authority to timely pay the principal of, premium, if any, and interest on the Bonds in the future depends upon a number of factors which are beyond the control of the Bond Owners, including, but not limited to, (i) the continuing need of the County for the Series 2010 Project, (ii) the composition of the County Commission and their respective views with respect to the leasing of the Series 2010 Project, (iii) the economic and demographic conditions within the County, (iv) the ability of the County to generate sufficient funds from property taxes and other taxes and other sources of revenue to pay obligations associated with the Master Lease and other obligations of the County (whether now existing or hereafter created), and (v) the value of the Authority s interest in the Series 2010 Project if sold or relet (to the extent authorized by the Trustee) in the event of the termination of the term of the Master Lease as a result of the occurrence of certain events described below or the expiration of any Renewal Term if the County does not appropriate sufficient funds that extends the term of the Master Lease as provided in the Master Lease. Neither the Indenture nor the Master Lease limits the ability of the County to incur additional obligations against its revenues. In the event the County Commission fails to renew the Master Lease for all contemplated Renewal Terms, fails to budget and appropriate sufficient County Funds for the payment of Base Rentals and Additional Rentals or defaults under the Master Lease, the Master Lease, which is subject to annual renewal, will be terminated, and, in such event, the Bonds will be payable from any moneys held by the Trustee under the Indenture, and the proceeds, if any, from a liquidation or other disposition of the Authority s interest in the Projects subsequent to foreclosure of the lien of the Indenture and the Security Documents. In such event, the County has agreed to immediately vacate the Series 2010 Project. Changes in Makeup of the County Commission The individuals elected to serve on the County Commission may change during the period the Series 2010A Bonds are outstanding. There can be no assurance that the membership of the County Commission will not change in a manner that will result in a future County Commission taking a position contrary to the continued appropriation of Rentals under the Master Lease for the Projects. Although the County has directed its budget officer in the Master Lease to include in the tentative budget prepared annually by the budget officer and submitted to the County Commission an item for all payments required for the ensuing Renewal Term under the Master Lease, the decision to renew or not to renew the Master Lease is to be made solely by the County Commission at the time it 37

43 considers for adoption in final the budget relating to each Renewal Term and not by any official of the County, acting in his or her individual capacity. Expiration or Termination of Master Lease The Master Lease will expire by its terms on each December 31 during the years 2010 through 2041, unless the County, in its sole discretion exercises the option provided in the Master Lease to extend the term of the Master Lease for each next succeeding Renewal Term with a final lease expiration date of December 31, In the event that the County does not extend in any year the term of the Master Lease, the County s obligation to pay Rentals will terminate on the December 31 occurring at the end of the then current Renewal Term. Upon (a) the expiration of any Renewal Term of the Master Lease during which an Event of Nonappropriation occurs or (b) a default under the Master Lease and an election by the Trustee to terminate the possessory interest of the County under the Master Lease, the County s rights of possession of the Projects under the Master Lease will expire or be terminated, as appropriate. In the event the County s right of possession of the Series 2010 Project under the Master Lease expires or is terminated for either of the reasons described in the preceding paragraph, the obligation of the County to pay Rentals thereunder will terminate and the Series 2010A Bonds will be payable from, among other sources, such moneys, if any, as may be available under the Indenture. Should the Master Lease expire at the end of a Renewal Term or be terminated, the Trustee may recover and relet or sell the Authority s interest in the Series 2010 Project as provided in the Indenture. The net proceeds of any reletting or sale of the Authority s interest in the Series 2010 Project together with certain other moneys then held by the Trustee under the Indenture, are required to be used to pay the Series 2010A Bonds to the extent of such moneys. However, each separate public facility or property constituting the Series 2010 Project represents special purpose facilities or property for use in connection with providing particular governmental service (including open space). No assurance can be given that the Trustee could relet or sell the Series 2010 Project for the amount necessary to pay the principal of and the interest on the Series 2010A Bonds. A potential purchaser of the Series 2010A Bonds should not assume that it will be possible to relet or sell the Series 2010 Project after the expiration or termination of the County s right to possess the Series 2010 Project under the Master Lease as described above for an amount equal to the aggregate principal amount of the Series 2010A Bonds then outstanding plus accrued interest thereon. In this regard, it should be noted that (i) the Series 2010 Project may be subject to ad valorem taxes and other property taxation if owned by someone other than the County or other governmental body, (ii) the use of the Series 2010 Project by a non-governmental entity may affect the tax-exempt status of interest on the Series 2010A Bonds, (iii) the Series 2010 Project may not be suitable for general commercial use, and (iv) zoning restrictions could limit the use of the Series 2010 Project. Furthermore, no assurance can be given that the amount, if any, realized upon any reletting of the Series 2010 Project will be available to provide for the payment of the Series 2010A Bonds on a timely basis. Limited Remedies A termination of the County s right of possession of the Series 2010 Project under the Master Lease as a result of an Event of Default or expiration of the term of the Master Lease at the end of any Renewal Term without an extension for the next succeeding Renewal Term will give the Trustee the right to possession of, and the right to relet or sell the Authority s interest in the Series 2010 Project in accordance with the provisions of the Master Lease and the Indenture. However, the enforceability of the Master Lease and the Indenture is subject to the applicable bankruptcy laws, equitable principles affecting the enforcement of creditors rights generally and liens securing such rights, the police powers of the State of Utah, the exercise of judicial authority by state or Federal courts and the exercise by the United States of America of the powers delegated to it by the Federal Constitution. Due to the limited remedies available with respect to the Series 2010 Project, the limited uses of the Series 2010 Project and the delays inherent in obtaining foreclosure on real property and other judicial remedies, no assurance can be given that a court, in the exercise of judicial discretion, would enforce these remedies in timely manner. Any delays in the ability of the Trustee to obtain possession of the Series 2010 Project, of necessity, will result in delays in any payment of principal of or interest on the Series 2010A Bonds after the expenditure of amounts available pursuant to the Debt Service Reserve Fund. Nor can any assurance be given that any moneys realized by the Trustee upon an exercise of any remedies would be sufficient to pay the principal of and interest on the Series 2010A Bonds. In the event any such moneys recovered are in an amount less than the aggregate principal amount of all outstanding Series 2010A Bonds, plus accrued interest to the redemption date, the Series 2010A Bonds would be paid in part on a pro 38

44 rata basis, and no holder of any Series 2010A Bond will have any further claim for payment upon the Authority or the County. Destruction of Series 2010 Project The Master Lease requires that a Project be insured against losses sustained as a result of casualty and property damage (not including earthquake damage). In the event of damage to or destruction of the Series 2010 Project, or in the event title to or the temporary or permanent use of the Series 2010 Project, or any portion thereof, or the interest of the Authority in the Series 2010 Project, or any portion thereof, shall be taken from the Authority under the exercise of the power of eminent domain, or a material defect in the construction portion of Series 2010 Project shall become apparent, or title to or the use of all or any portion of the Series 2010 Project shall be lost by reason of a defect in title thereto, the County is nevertheless required to continue to make Base Rentals under the Master Lease, subject to the exercise of its option provided in the Master Lease not to extend the term of the Master Lease for each next succeeding Renewal Term and to the application of Net Proceeds from insurance and certain other sources to extraordinary redemption of the Series 2010A Bonds as described in the Master Lease, and to take such action as it deems necessary or appropriate to repair, rebuild, and replace the Series 2010 Project. See THE SERIES 2010A BONDS Redemption herein. If the Net Proceeds from insurance are sufficient to repair, rebuild, and replace the affected portion of the Series 2010 Project, such proceeds are to be so applied. If such Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification, or improvement or to redeem all the Series 2010A Bonds then deemed Outstanding, the County shall, from and to the extent of available County Funds that are budgeted and appropriated by the County Commission for such purpose, complete the work and pay any cost in excess of the amount of the Net Proceeds. In the event that the County Commission fails to appropriate an amount necessary to cover such insufficiency, the County may discharge its obligation to repair and replace the Series 2010 Project by depositing the Net Proceeds of the insurance policies, performance bonds or condemnation awards made available by reason of such occurrence in the Bond Fund. Upon the deposit of such Net Proceeds into the Bond Fund, the County shall have no further obligation for the payment of Base Rentals and Additional Rentals and possession of the Series 2010 Project as well as all rights in such Project created pursuant to the Master Lease and the interest of the County and the Authority therein. Thereafter, the Authority s interest in the Series 2010 Project may be liquidated and the proceeds of such liquidation and the Net Proceeds of any insurance policy, performance bond or condemnation award so deposited in the Bond Fund, as well as all other moneys on deposit in any fund created under the Indenture (except money held in the Rebate Fund or for the payment of Bonds not then deemed Outstanding), shall be applied to the redemption of the Series 2010A Bonds on the next succeeding redemption date. Such redemption of the Series 2010A Bonds shall be made upon full or partial payment of the principal amount of the Series 2010A Bonds then Outstanding and accrued interest thereon all in accordance with the Indenture. In the event that available moneys shall be insufficient to redeem said Series 2010A Bonds by payment of an amount equal to the Outstanding principal amount thereof and accrued interest to the redemption date, no further claim for payment may be had by the Series 2010A Bondowners against the County, the Authority or the Trustee. There can be no assurance either as to the adequacy of or timely payment under property damage insurance in effect at that time or that the County will elect to extend the term of the Master Lease for the next Renewal Terms succeeding such damage or destruction or pay the Purchase Option Price then applicable. See APPENDIX B EXTRACTS OF CERTAIN PROVISIONS OF THE GENERAL INDENTURE AND THE MASTER LEASE herein. The County is required under the Master Lease to cause Projects to be insured by policies of casualty and property damage insurance in an amount not less than the full insurable value of the Projects. The County however, does not currently maintain earthquake damage insurance with respect to the Series 2010 Project. The term full insurable value as used in the Master Lease means the actual replacement value, or at the option of the County any lesser amount which is equal to or greater than the amount of all of the Bonds then Outstanding. Alternatively, the County may insure or cause to be insured under a blanket insurance policy or policies or under self-insurance which cover not only the Series 2010 Project but other properties in the amounts required by the previous sentence. However, there is no assurance that, in the event the Master Lease is terminated as a result of damage to or destruction or condemnation of the Series 2010 Project, moneys made available by reason of such an occurrence will be sufficient to redeem the Series 2010A Bonds at a price equal to the principal amount thereof outstanding plus accrued interest to the redemption date. 39

45 Environmental Conditions Environmental conditions may also affect the Series 2010 Project. If an environmental condition is discovered on the Series 2010 Project, it could adversely impact the County Commission s decision about whether to appropriate moneys to pay Rentals. An environmental condition could also adversely impact the ability to relet or resell the Series 2010 Project and thus negatively affect the value of one of the underlying sources of security for the Series 2010A Bonds. The County reports that there are no known environmental conditions with respect to the properties on which the Series 2010 Project is expected to be located. However, until the final site for the Series 2010 Project is selected, no assurance can be given that there are not environmental issues with respect to the site on which the Series 2010 Project will be located. Sources of Payment for Rentals under the Master Lease The Series 2010A Bonds will be payable solely from and secured by a pledge by the Authority of the Rentals payable by the County pursuant to the annually renewable Master Lease, except to the extent payable from the proceeds of the Series 2010A Bonds and the income from the investment thereof, the Purchase Option Price (as defined in the Master Lease) if paid by the County, the proceeds of certain insurance policies, performance bonds, condemnation awards and liquidation proceeds. Non-Essential Nature of Portions of the Projects Portions of future Projects financed under the Indenture with the issuance of Additional Bonds may not be deemed essential to the operations of the County. This fact may affect the County Commission s decision whether to renew the term of the Master Lease since the County may not elect to appropriate for only portions of the Projects. If the County desires to renew the Master Lease, the County must appropriate an amount sufficient to pay Base Rentals attributable to all portions of the Projects which have been delivered for occupancy. Reduction in Value and Obsolescence Certain components of the Series 2010 Project may become obsolete or may reduce in value during the time the Series 2010A Bonds are outstanding. Consequently, following an Event of Nonappropriation, an Event of Default under the Master Lease or the Indenture or termination of the Master Lease for any reason, revenues realized by the Trustee from a reletting of the Series 2010 Project may be insufficient to redeem or pay all outstanding Series 2010A Bonds. Tax Status Failure by the Authority or the County to comply continuously with certain covenants in the Indenture, the Master Lease and the tax certificate executed by the County and the Authority at the time of issuance of the Series 2010A Bonds, so long as any of the Series 2010A Bonds are outstanding under the Indenture and thereafter as required by such covenants and applicable law, could result in a loss of the interest rate subsidy for the Series 2010A-1 Bonds and Series 2010A-2 Bonds and result in a reduction in Revenues. See TAX MATTERS herein. Additional Parity Debt The Indenture provides that the Authority may issue Additional Bonds and Refunding Bonds upon compliance with certain requirements. In the event the Authority were to issue Additional Bonds or Refunding Bonds, such issuance of Additional Bonds or Refunding Bonds could result in some dilution of the collateral security pledged to secure the payment of the Series 2010A Bonds. No Secondary Market Although the Underwriters expect to develop a secondary market for the Series 2010A Bonds offered hereby, no secondary market presently exists, and there is no assurance that any such market will develop. 40

46 LEGAL MATTERS General All legal matters incident to the authorization and issuance of the Series 2010A Bonds are subject to the approval of Ballard Spahr LLP, Bond Counsel to the Authority. The approving opinion of Bond Counsel will be delivered with the Series 2010A Bonds. The opinion of Bond Counsel will be in substantially the form set forth in APPENDIX E to this Official Statement. Certain matters relating to disclosure will be passed upon by Ballard Spahr LLP, Disclosure Counsel to the Authority. Certain legal matters will be passed upon for the Authority and the County by Doug Hogan, Esq. County Attorney. Absence of Litigation It is a condition of closing that the Authority execute a certificate to the effect that to the best of its knowledge, after due inquiry, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or threatened against or affecting the Authority, nor to the best knowledge of the Authority is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by the Master Lease or any other agreement or instrument to which the Authority is a party and which is used or contemplated for use in the consummation of the transaction contemplated by the Master Lease. It is a condition of closing that the County execute a certificate to the effect that, to the best of its knowledge, after due inquiry, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or threatened against or affecting the County, nor to the best knowledge of the County is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by the Master Lease or any other agreement or instrument to which the County is a party and which is used or contemplated for use in the consummation of the transactions contemplated by the Master Lease. A non-litigation certificate executed by the office of the County Attorney, counsel to the Authority and the County, dated the date of original delivery of the Series 2010A Bonds, will be provided stating, among other things, that, to the best of his knowledge, after due inquiry, there is no action, suit, proceeding, inquiry or any other litigation or investigation, at law or in equity, before or by any court, public board or body, which is pending or threatened, challenging the creation, organization or existence of the Authority or the County, or the titles of their officers to their respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the Series 2010A Bonds, or for the purpose of restraining or enjoining the levy and collection of taxes or assessments by the city, or directly or indirectly contesting or affecting the proceedings or the authority by which the Series 2010A Bonds are issued, the legality of the purpose for which the Series 2010A Bonds are issued, or the validity of the Series 2010A Bonds or the issuance thereof. TAX MATTERS Federal Income Tax. In the opinion of Ballard Spahr LLP, Bond Counsel to the Authority, interest on the Series 2010A Bonds is not excludable from gross income for purposes of federal income tax. Original Issue Discount. Certain of the Series 2010A Bonds are offered at a discount ( original issue discount ) equal generally to the difference between public offering price and principal amount. The accrual of original issue discount increases the holder s tax basis in the Series 2010A Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Series 2010A Bondholders should consult their tax advisers for an explanation of the accrual rules. State Of Utah Income Tax. Bond Counsel is also of the opinion that interest on the Series 2010A Bonds is exempt from State of Utah individual income taxes under currently existing law. 41

47 No Further Opinion. Bond Counsel expresses no opinion regarding any other tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Series 2010A Bonds. Build America Bonds and Recovery Zone Bonds. General Description. In February 2009, as part of the Recovery Act, Congress added Sections 54AA and 6431 to the Code, which permit state or local governments to obtain certain tax advantages when issuing taxable obligations that meet certain requirements of the Code and the related Treasury regulations. Such bonds are generally referred to as Build America Bonds, which designation includes a special class of Build America Bonds qualifying under Section 1400U-2 of the Code and more specially designated as Recovery Zone Economic Development Bonds or Recovery Zone Bonds. A Build America Bond is a qualified bond under Section 54AA(g) of the Code (a Qualified Bond ) if it meets certain requirements of the Code and the related Treasury Regulations and the issuer has made an irrevocable election to have the special rule for qualified bonds apply. Interest on Qualified Bonds is not excluded from gross income for purposes of the federal income tax, and owners of Qualified Bonds will not receive any tax credits as a result of ownership of such Qualified Bonds when an issuer has elected to receive the interest subsidy payment, i.e. the Direct Payment as defined below. Direct Payments. Under Section 6431 of the Code, an issuer of a Qualified Bond may apply to receive payments (the Direct Payments ) directly from the Secretary of the U.S. Treasury (the Secretary ). The amount of a Direct Payment for a Build America Bond is set in Section 6431 of the Code at 35% of the corresponding interest payable on the related Qualified Bond. Those Build America Bonds qualifying under Section 1400U-2 and designated as Recovery Zone Bonds receive 45% of the corresponding interest payable on the related Qualified Bond. To receive a Direct Payment, under currently existing procedures, the issuer must file a tax return (now designated as Form 8038 CP) between 90 and 45 days prior to the corresponding bond interest payment date. The issuer should expect to receive the Direct Payments contemporaneously with the interest payment date with respect to the Qualified Bond. Depending on the timing of the filing and other factors, the Direct Payments may be received before or after the corresponding interest payment date. The Series 2010A-1 Bonds as Recovery Zone Bonds. The Authority has made an irrevocable election to treat the Series 2010A-1 Bonds as Qualified Recovery Zone Bonds. As a result of this election, interest on the Series 2010A-1 Bonds will be includable in gross income of the holders thereof for federal income tax purposes and the holders of the Series 2010A-1 Bonds will not be entitled to any tax credits as a result of either ownership of the Series 2010A-1 Bonds or receipt of any interest payments on the Series 2010A-1 Bonds. Holders of the Series 2010A-1 Bonds should consult their tax advisors with respect to the inclusion of interest on the Series 2010A-1 Bonds in gross income for federal income tax purposes. The Series 2010A-2 Bonds as Qualified Build America Bonds. The Authority has made an irrevocable election to treat the Series 2010A-2 Bonds as Qualified Build America Bonds. As a result of this election, interest on the Series 2010A-2 Bonds will be includable in gross income of the holders thereof for federal income tax purposes and the holders of the Series 2010A-2 Bonds will not be entitled to any tax credits as a result of either ownership of the Series 2010A-2 Bonds or receipt of any interest payments on the Series 2010A-2 Bonds. Holders of the Series 2010A-2 Bonds should consult their tax advisors with respect to the inclusion of interest on the Series 2010A-2 Bonds in gross income for federal income tax purposes. The Authority intends to apply for Direct Payments for the Series 2010A-1 Bonds and the Series 2010A-2 Bonds from the Secretary under the Build America Program pursuant to Section 6431 of the Code. Such credits, if received by the Authority, are pledged under the Indenture as Revenues to the repayment of the Series 2010A Bonds. No assurances are provided that the Authority will receive Direct Payments. The amount of any Direct Payment is subject to legislative changes by Congress. Direct Payments will only be paid if the Series 2010A-1 Bonds and the Series 2010A-2 Bonds are Qualified Bonds. For the Series 2010A-1 Bonds and the Series 2010A-2 Bonds to be and remain Qualified Bonds, the Authority must comply with certain covenants and the Authority must establish certain facts and expectations with respect to the Series 2010A-1 Bonds and the Series 2010A-2 Bonds, the use and investment of proceeds thereof and the use of property financed thereby. Also, Direct Payments are subject to offset against certain amounts that may, for unrelated reasons, be owed by the Authority or the County to an agency of the United States of America. 42

48 UNDERWRITING Stifel, Nicolaus & Company, Incorporated and Municipal Capital Markets Group, Inc., as the underwriters of the Series 2010A Bonds (the Underwriters ), have agreed, subject to certain conditions, to purchase all of the Series 2010A Bonds from the Authority at a purchase price of $24,988, (being the par amount of the Series 2010A Bonds less an Underwriters discount of $152,040.00, less an original issue discount of $199,342.35) and to make a public offering of the Series 2010A Bonds. The Series 2010A Bonds may be offered and sold to certain dealers (including dealers depositing the Series 2010A Bonds into investment trusts) at prices lower than the offering prices set forth on the cover page of this Official Statement and such public offering prices may be changed from time to time. Municipal Capital Markets Group, Inc. is also being paid a fee of $202,720 in connection with services provided for an analysis of the Series 2010 Project. BOND RATINGS Standard and Poor s Rating Services, a division of The McGraw-Hill Companies ( S&P ) and Moody s Investors Service ( Moody s ) have assigned their bond ratings of A and A2, respectively, to the Series 2010A Bonds. Any explanation of the significance of these ratings may be obtained only from the rating agency furnishing the same. There is no assurance that the ratings given to the Series 2010A Bonds will be maintained for any period of time or that the ratings may not be lowered or withdrawn entirely by the rating agencies if, in their judgment, circumstances so warrant. Any such downward change or withdrawal of such ratings may have an adverse effect on the market price of the Series 2010A Bonds. CONTINUING DISCLOSURE UNDERTAKING The County has undertaken for the benefit of the Owners and the Beneficial Owners of the Series 2010A Bonds to provide certain annual financial information and operating data to the Municipal Securities Rulemaking Board (the MSRB ) and the County has undertaken for the benefit of the Owners and Beneficial Owners of the Series 2010A Bonds to provide notice of certain material events to the MSRB all in order to assist the Underwriters in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the Rule ). See APPENDIX D attached hereto and incorporated herein by reference for a form of the Continuing Disclosure Undertaking that will be executed and delivered by the County. The County has previously entered into continuing disclosure undertaking pursuant to the Rule. The County has never failed to comply with any such undertakings. Independent Auditors MISCELLANEOUS The general purpose financial statements of the County at and for the fiscal year ended December 31, 2009, contained in APPENDIX A to this Official Statement, have been audited by Haynie & Company ( Haynie ), independent auditors, as set forth in their report dated October 28, 2010, included in APPENDIX A hereto. Haynie has not been asked to consent to the use of its name or its report in this Official Statement. Copies of the County s comprehensive annual financial report may be obtained upon request from the County Auditor, 47 South Main Street, Tooele, Utah Additional Information The Authority and the County have furnished all information in this Official Statement relating to the Authority and the County. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates herein will be realized. 43

49 The County presently maintains its financial records on a January 1 to December 31 fiscal year basis. See APPENDIX A to this Official Statement for extracts from the Financial Statements and Independent Auditor s Report (including the audited basic financial statements) for the fiscal year ended December 31, All quotations contained herein from and summaries and explanations of the Utah Constitution, statutes, programs, laws of the State, court decisions, and the Indenture do not purport to be complete, and reference is made to said Constitution, statutes, programs, laws, court decisions and the Indenture for full and complete statements of their respective provisions. The appendices attached hereto are an integral part of this Official Statement, and should be used in conjunction with the foregoing material. (The remainder of this page left intentionally blank.) 44

50 This Official Statement has been duly approved, executed and delivered by the Municipal Building Authority of Tooele County, Utah, and by Tooele County, Utah. MUNICIPAL BUILDING AUTHORITY OF TOOELE COUNTY, UTAH By: /s/ Colleen S. Johnson President TOOELE COUNTY, UTAH By: /s/ Colleen S. Johnson Chair, County Commission 45

51 APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR S REPORT FOR FISCAL YEAR ENDED DECEMBER 31, 2009 A-1

52 TOOELE COUNTY Financial Statements and Independent Auditors' Report December 31, 2009

53 TOOELE COUNTY Table of Contents Page Independent Auditors' Report 1 Management's Discussion and Analysis 2-10 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets 11 Statement of Activities 12 Fund Financial Statements: Balance Sheet - Governmental Funds 13 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 14 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 15 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 16 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 17 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Public Health Fund 18 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Road Maintenance Fund 19 Statement of Net Assets - Proprietary Funds 20 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 21 Statement of Cash Flows - Proprietary Funds 22 Statement of Fiduciary Net Assets - Agency Funds 23 Notes to Basic Financial Statements Required Supplementary Information: Condition and Ratings for the County's Road System Postemployment Benefit Plan - Schedule of Funding Progress 42 Supplementary Information: Combining Balance Sheet - Non-Major Governmental Funds 44 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds 45

54 TOOELE COUNTY Table of Contents (Continued) Page Supplementary Information (Continued): Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Funds Combining Statement of Net Assets - Internal Service Funds 49 Combining Statement of Revenues, Expenses, and Changes in Net Assets - Internal Service Funds 50 Combining Statement of Cash Flows - Internal Service Funds 51 Combining Statement of Changes in Assets and Liabilities - All Agency Funds 52 Balance Sheet - Component Unit 53 Statement of Revenues, Expenditures, and Changes in Fund Balances - Component Unit 54 Statistical and Additional Information Section: Schedule of Taxable Values, Taxes Charged, and Taxes Collected 55-56

55 Haynie & Company Certified Public Accountants (a professional corporation) 1785 West Printers Row Salt Lake City, Utah (801) Fax (801) INDEPENDENT AUDITORS' REPORT Honorable Board of County Commissioners Tooele County, Utah We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of Tooele County, Utah (the County), as of and for the year ended December 31, 2009, which collectively comprise the County's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Tooele County, as of December 31, 2009, and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund, Public Health Fund and Road Maintenance Fund for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 26, 2010 on our consideration of the County s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management s discussion and analysis and the required supplementary information on pages 2 through 10 and 39 through 42 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. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The combining and individual nonmajor fund financial statements and statistical section listed in the table of contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Salt Lake City, Utah October 28, 2010 Associate Office At Associate Office At Associate Office At 5974 S. Fashion Pointe Dr. Suite West Mineral Avenue Suite Campus Drive South Ogden, UT Littleton, CO Newport Beach, CA (801) (303) (949) Fax (801) Fax (303) Fax (949)

56 Management's Discussion and Analysis This discussion of Tooele County's financial performance provides an overview of the County's financial activities for the year ending December 31, This report is in conjunction with the County's financial statements. The purpose of the County is to provide general services to its residents, which include general government, public safety, public health, highways and public improvements, parks and recreation, and economic development. Additional services provided to residents in the unincorporated areas include road maintenance and fire control. Financial Highlights The Government-Wide assets of Tooele County exceeded its liabilities as of the close of the most recent year by $94,974,427 (net assets ). Of this amount, $5,764,891 (unrestricted net assets ) may be used to meet the government's ongoing obligations to citizens and creditors. The government's total Government-Wide net assets decreased by $241,858. The revenues were slightly less than the adopted budgeted amounts, and expenditures were less than the adopted budgeted amounts. At the close of the current year, the Tooele County governmental funds reported combined ending fund balances of $4,513,313, a decrease of $2,253,847 in comparison with the prior year. Approximately 83.38% of this total amount, $3,763,057, is available for spending at the government's discretion (unreserved fund balance). At the end of the current year, unreserved fund balance for the general fund was $1,308,486, or 6.35% of total general fund expenditures. Tooele County's total debt had a net decrease of $576,342 during the current year. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to Tooele County's basic financial statements. Tooele County's basic financial statements comprise three components: 1) government-wide financial statements; 2) fund financial statements; and, 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of Tooele County's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of Tooele County's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of Tooele County is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of Tooele County that are principally supported by taxes and intergovernmental revenues (governmental activities ) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of Tooele County include general government, public safety, public health, highways and public improvements, parks and recreation, and economic development. The business-type activities of Tooele County include Deseret Peak, the landfill operation, and the airport. The government-wide financial statements include not only Tooele County itself (known as the primary government), but also a legally separate special service district for recreation, for which Tooele County is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. Refer to the table of contents for the location of the government-wide financial statements. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Tooele County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. All of the funds of Tooele County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 2

57 Management's Discussion and Analysis Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balance of spendable resources available at the end of the year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Tooele County maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the public health fund, and the capital projects fund, which are considered to be major funds. Data from the other seven governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. Tooele County adopts an annual appropriated budget for all its governmental funds. Budgetary comparison statements have been provided for the general fund and major special revenue funds to demonstrate compliance with those budgets. Refer to the table of contents for the location of the basic governmental fund financial statements. Proprietary Funds Tooele County maintains two types of proprietary funds--enterprise funds and Internal Service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Tooele County uses enterprise funds to account for its Deseret Peak, landfill, and airport operations. Internal Service funds are presented as governmental activities in the government-wide financial statements and are used to account for the central stores and service equipment operations. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for Deseret Peak, the Landfill, and the Airport, which are all considered to be major Proprietary funds of Tooele County. Refer to the table of contents for the location of the basic proprietary fund financial statements. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support Tooele County's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Refer to the table of contents for the location of the basic fiduciary fund financial statements. Notes to Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes are part of the basic financial statements. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning Tooele County. The combining statements referred to earlier in connection with non-major governmental funds and the enterprise fund is presented immediately following the required supplementary information. 3

58 Management's Discussion and Analysis Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of Tooele County, assets exceeded liabilities by $94,974,427 at the close of the most recent fiscal year. The largest portion of Tooele County's net assets (93.46%) reflects its investment in capital assets (e.g. land, buildings and improvements, furniture, fixtures, and equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. Tooele County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Tooele County's investment in its 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 sources, since the capital assets themselves cannot be used to liquidate these liabilities. Tooele County's Net Assets Governmental Activities Business-type Activities Total as restated 2009 as restated 2009 as restated Current and other assets $ 10,613,999 $ 9,812,461 $ 1,544,998 $ 4,449,405 $ 12,158,997 $ 14,261,866 Capital assets 70,315,629 68,685,380 27,055,736 25,438,317 97,371,365 94,123,697 Total assets 80,929,628 78,497,841 28,600,734 29,887, ,530, ,385,563 Long-term liabilities outstanding 5,149,314 2,554,000 4,679,460 4,621,418 9,828,774 7,175,418 Other liabilities 4,146,660 4,783, ,501 1,210,444 4,727,161 5,993,860 Total liabilities 9,295,974 7,337,416 5,259,961 5,831,862 14,555,935 13,169,278 Net Assets: Invested in capital assets, net of related debt 66,378,133 64,573,119 22,388,157 20,453,596 88,766,290 85,026,715 Restricted 309, , , , ,832 Unrestricted 4,946,071 6,284, ,820 3,602,264 5,764,891 9,886,738 Total net assets $ 71,633,654 $ 71,160,425 $ 23,340,773 $ 24,055,860 $ 94,974,427 $ 95,216,285 A portion of Tooele County's net assets (0.47%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets in the amount of $5,764,891 may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the year, Tooele County is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior year. 4

59 Management's Discussion and Analysis Governmental Activities Governmental activities decreased Tooele County's net assets by $358,401 and the Business-type activities decreased net assets by $715,087. The net decrease in total net assets was $1,073,488. Key elements of this net increase are as follows: Tooele County's Changes in Net Assets Governmental Activities Business-type Activities Total Revenues: Program revenues: Charges for services $ 5,373,051 $ 4,914,707 $ 5,475,743 $ 6,316,924 $ 10,848,794 $ 11,231,631 Operating grants and contributions 13,459,473 11,375, , ,985 13,566,633 11,491,182 Capital grants and contributions 302,465-1,539,886 1,921,168 1,842,351 1,921,168 General revenues: Taxes 11,472,857 12,954, ,472,857 12,954,494 Earnings on investments 83, ,835 33,831 52, , ,400 Mitigation fees 8,183,022 6,802, ,183,022 6,802,768 Rental income 408, , , ,062 Miscellaneous 797, ,748 60,751 43, , ,240 Total revenues 40,079,809 38,459,811 7,217,371 8,450,134 47,297,180 46,909,945 Expenses: General government 14,083,970 13,692, ,083,970 13,692,576 Tourism and promotion 678, , , ,146 Public safety 10,440,500 8,615, ,440,500 8,615,123 Public health 8,258,492 7,837, ,258,492 7,837,711 Highways and public improvements 3,124,221 3,445, ,124,221 3,445,191 Parks and recreation 782, , , ,283 Economic development 248,400 41, ,400 41,047 Capital projects 1,015, , ,015, ,069 Other administrative 791, , , ,686 Interest on long-term debt 115, , , ,548 Landfill - - 2,109,826 2,369,722 2,109,826 2,369,722 Deseret Peak - - 3,704,736 3,347,004 3,704,736 3,347,004 Airport - - 3,017,896 4,189,073 3,017,896 4,189,073 Total expenses 39,538,210 36,269,380 8,832,458 9,905,799 48,370,668 46,175,179 Change in net assets before transfers 541,599 2,190,431 (1,615,087) (1,455,665) (1,073,488) 734,766 Transfers in (out) (900,000) (4,280,000) 900,000 4,280, Change in net assets (358,401) (2,089,569) (715,087) 2,824,335 (1,073,488) 734,766 Net assets - beginning 71,160,426 73,003,680 24,055,860 21,182,269 95,216,286 94,185,949 Restatement adjustment 831, ,314-49, , ,570 Net assets - ending $ 71,633,654 $ 71,160,425 $ 23,340,773 $ 24,055,860 $ 94,974,427 $ 95,216,285 5

60 Management's Discussion and Analysis Expenses and Program Revenues - Governmental Activities (Excluding General Revenues) 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Expenses Revenues General government Public safety Public health Highways and public Parks and recreation Tourism and promotion Economic development Capital projects Other administrative Interest on longterm debt Expenses and Program Revenues - Business-Type Activities 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - Landfill Deseret Peak Airport Expenses Revenues 6

61 Management's Discussion and Analysis Revenues by Source - Governmental Activities 1% 0% 13% 21% 29% 34% 2% Operating grants and contributions Miscellaneous Property taxes Charges for services Earnings on investments Mitigation fees Rental income Revenues by Source - Business-Type Activities 1% 2% 21% 0% 76% Charges for services Miscellaneous Operating grants and contributions Capital grants and contributions Earnings on investments 7