Salt Lake County, Utah

Transcription

1 NEW ISSUE Rating: S&P Aaa; Fitch AA+ See MISCELLANEOUS Bond Ratings herein. Subject to compliance by the County with certain covenants, in the opinion of Chapman and Cutler LLP, Bond Counsel, under present law, interest on the 2012 Bonds is excludable from gross income of the owners thereof for federal income tax purpose and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the opinion of Bond Counsel, under the existing laws of the State of Utah, as presently enacted and construed, interest on the 2012 Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act. See LEGAL MATTERS Tax Exemption herein for a more complete discussion. $43,725,000 Salt Lake County, Utah Sales Tax Revenue Refunding Bonds, Series 2012A The $43,725,000 Sales Tax Revenue Refunding Bonds, Series 2012A are issued by the County as fully registered bonds and, when initially issued, will be in book entry form, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York. DTC will act as securities depository for the 2012 Bonds. Principal of and interest on the 2012 Bonds (interest payable February 1 and August 1 of each year, commencing August 1, 2012) are payable by Zions Bank, Corporate Trust Department, Salt Lake City, Utah, as Paying Agent, to the registered owners thereof, initially DTC. See THE 2012 BONDS Book Entry System herein. The 2012 Bonds are subject to optional redemption prior to maturity. See THE 2012 BONDS Redemption Provisions herein. The 2012 Bonds are being issued to refund certain outstanding sale tax revenue bond previously issued by the County and the payment of costs associated with the issuance of the 2012 Bonds. See THE 2012 BONDS Plan Of Refunding herein. The 2012 Bonds and Outstanding Parity Bonds previously issued by the County will be equally and ratably secured under the Indenture. The 2012 Bonds are special limited obligations of the County, payable solely from and secured by a pledge of the revenues, moneys, securities and funds pledged therefore in the Indenture. The revenues consist of the Pledged Taxes. No assurance can be given that the Pledged Taxes will remain sufficient for the payment of principal and interest on the 2012 Bonds and the County is limited by Utah law in its ability to increase the rate of such taxes. See RISKS INHERENT IN THE OWNERSHIP OF THE 2012 BONDS herein. The 2012 Bonds do not constitute a general obligation indebtedness or a pledge of the ad valorem taxing power or full faith and credit of the County, and are not obligations of the State of Utah or any other agency or other political subdivision or entity of the State of Utah. The County will not mortgage or grant any security interest in all or any portion of the improvements financed or refinanced with the proceeds of the 2012 Bonds to secure payment of the 2012 Bonds. See SECURITY AND SOURCES OF PAY- MENT herein. Dated: Date of Delivery 1 Due: February 1, as shown on inside front cover See the inside front cover for the maturity schedule of the 2012 Bonds. The 2012 Bonds were awarded pursuant to competitive bidding received by means of the PARITY electronic bid submission system on June 7, 2012 (as set forth in the OFFICIAL NOTICE OF BOND SALE) to Citigroup Global Markets Inc., New York, New York; at a true interest rate of 2.13%. Zions Bank Public Finance, Salt Lake City, Utah, acted as Financial Advisor. 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 June 7, 2012, and the information contained herein speaks only as of that date. 1 The anticipated date of delivery is Wednesday, June 20, 2012.

2 $43,725,000 Sales Tax Revenue Refunding Bonds, Series 2012A Dated: Date of Delivery 1 Due: February 1, as shown below Due CUSIP Principal Interest February Amount Rate Yield EB8 $3,630, % 0.74% EC6 3,760, ED4 3,940, EE2 4,110, EF9 4,325, EG7 4,540, EH5 4,765, EJ1 5,015, EK8 5,295, EL6 4,345, The anticipated date of delivery is Wednesday, June 20, 2012.

3 Table Of Contents Page INTRODUCTION... 1 Public Sale/Electronic Bid... 1 Salt Lake County, Utah... 2 The 2012 Bonds... 2 Authority And Purpose Of The 2012 Bonds; Outstanding Parity Bonds... 2 Security And Source Of Payment... 3 Pledged Taxes... 3 Redemption Provisions... 4 Registration, Denominations, Manner Of Payment... 4 Tax Exempt Status Of The 2012 Bonds... 4 Professional Services... 4 Conditions Of Delivery, Anticipated Date, Manner, And Place Of Delivery... 5 Continuing Disclosure Undertaking... 5 Basic Documentation... 5 Contact Persons... 6 CONTINUING DISCLOSURE UNDERTAKING... 6 RISKS INHERENT IN THE OWNERSHIP OF THE 2012 BONDS... 7 Uncertainty Of Economic Activity And Sales Taxes... 7 The 2012 Bonds Are Limited Obligations... 7 Limitation On Increasing Rates For Pledged Taxes... 7 No Reserve Fund Deposit For The 2012 Bonds... 7 THE 2012 BONDS... 8 General... 8 Plan Of Refunding... 8 Sources And Uses Of Funds... 9 Redemption Provisions Registration And Transfer Book Entry System Debt Service On The 2012 Bonds SECURITY AND SOURCES OF PAYMENT Flow Of Funds Pledged Taxes Other Sales And Use Taxes; Municipal Energy Tax Debt Service Reserve Fund For The 2012 Bonds And Outstanding Parity Bonds Issuance Of Additional Bonds HISTORICAL AND PROJECTED DEBT SERVICE COVERAGE SALT LAKE COUNTY, UTAH General Form Of Government Employee Workforce And Retirement System; Other Post Employment Benefits; Compensated Absences Risk Management Investment Of Funds Population Employment, Income, Construction, And Sales Taxes Within Salt Lake County And The State Of Utah Largest Employers Rate Of Unemployment Annual Average DEBT STRUCTURE OF SALT LAKE COUNTY, UTAH Outstanding Sales Tax Revenue Bonded Indebtedness Outstanding Transportation Tax Revenue Bonded Indebtedness Outstanding General Obligation Bonded Indebtedness Page Outstanding Assessment District Bonded Indebtedness Debt Service Schedule Of Outstanding Sales Tax Revenue Bonds By Fiscal Year Debt Service Schedule Of Outstanding Transportation Tax Revenue Bonds By Fiscal Year Debt Service Schedule Of Outstanding General Obligation Bonds By Fiscal Year Debt Service Schedule of Outstanding Assessment Area Bonds By Fiscal Year Future Issuance Of Debt; Historical Tax And Revenue Anticipation Note Borrowing; Other Debt The Municipal Building Authority Of Salt Lake County, Utah Debt Service Schedule Of Outstanding Municipal Building Authority Of Salt Lake County, Utah Lease Revenue Bonds By Fiscal Year Overlapping And Underlying General Obligation Debt Debt Ratios General Obligation Legal Debt Limit And Additional Debt Incurring Capacity No Defaulted Obligations FINANCIAL INFORMATION REGARDING SALT LAKE COUNTY, UTAH Fund Structure; Accounting Basis Budget And Budgetary Accounting Financial Controls Financial Management Management s Current Discussion And Analysis Of Financial Operations Sources Of General Fund Revenues (Excludes Other Governmental Funds) Five Year Financial Summaries Taxable, Fair Market And Market Value Of Property Historical Summaries Of Taxable Value Of Property LEGAL MATTERS Absence Of Litigation Concerning The 2012 Bonds Tax Exemption General MISCELLANEOUS Bond Ratings Trustee Escrow Verification Financial Advisor Independent Auditors Additional Information APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR A 1 APPENDIX B THE GENERAL INDENTURE OF TRUST.. B 1 APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL... C 1 APPENDIX D PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING... D 1 APPENDIX E BOOK ENTRY SYSTEM... E 1 iii

4 Utah Salt Lake County Great Salt Lake Salt Lake City West Valley City 215 Taylorsville South Salt Lake Murray 80 Holladay Unincorporated County West Jordan 215 Midvale Cottonwood Heights South Jordan 15 Sandy Alta Riverton Draper Herriman Bluffdale

5 This OFFICIAL STATEMENT does not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of, the 2012 Bonds (as defined herein), by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than those contained herein, and if given or made, such other informational representations must not be relied upon as having been authorized by either Salt Lake County, Utah (the County ); Zions Bank, Corporate Trust Department, Salt Lake City, Utah (as Escrow Agent, Trustee, Bond Registrar and Paying Agent); Zions Bank Public Finance, Salt Lake City, Utah (as Financial Advisor); the successful bidder(s); or any other entity. All other information contained herein has been obtained from the County, The Depository Trust Company, New York, New York and from other sources which 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 the issuance, sale, delivery or exchange of the 2012 Bonds, shall under any circumstance create any implication that there has been no change in the affairs of the County since the date hereof. The 2012 Bonds have not been registered under the Securities Act of 1933, as amended, or any state securities laws in reliance upon exemptions contained in such act and laws. Neither the Securities and Exchange Commission nor any state securities commission has passed upon the accuracy or adequacy of this OFFICIAL STATEMENT. Any representation to the contrary is unlawful. The yields at which the 2012 Bonds are offered to the public may vary from the initial reoffering yields on the inside cover page of this OFFICIAL STATEMENT. In addition, the bidders may allow concessions or discounts from the initial offering prices of the 2012 Bonds to dealers and others. In connection with the offering of the 2012 Bonds, the bidders may engage in transactions that stabilize, maintain, or otherwise affect the price of the 2012 Bonds. Such transactions may include overallotments in connection with the purchase of 2012 Bonds, the purchase of 2012 Bonds to stabilize their market price and the purchase of 2012 Bonds to cover the bidders short positions. Such transactions, if commenced, may be discontinued at any time. Forward Looking Statements. Certain statements included or incorporated by reference in this OFFICIAL STATEMENT constitute forward looking 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, project, forecast, expect, estimate, budget or other similar words. The achievement of certain results or other expectations contained in such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. The County does not plan to issue any updates or revisions to those forward looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur. The CUSIP (the Committee on Uniform Securities Identification Procedures) identification numbers are provided on the inside cover page of this OFFICIAL STATEMENT and are being provided solely for the convenience of bondholders only, and the County makes no representation with respect to such numbers or undertakes any responsibility for their accuracy. The CUSIP numbers are subject to being changed after the issuance of the 2012 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the 2012 Bonds. The information available at Web sites referenced in this OFFICIAL STATEMENT has not been reviewed for accuracy and completeness. Such information has not been provided in connection with the offering of the 2012 Bonds and is not a part of this OFFICIAL STATEMENT. v

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7 OFFICIAL STATEMENT RELATED TO $43,725,000 Salt Lake County, Utah Sales Tax Revenue Refunding Bonds, Series 2012A INTRODUCTION This introduction is only a brief description of the 2012 Bonds, as hereinafter defined, the security and source of payment for the 2012 Bonds and certain information regarding Salt Lake County, Utah (the County ). The information contained herein is expressly qualified by reference to the entire OFFICIAL STATEMENT. Investors are urged to make a full review of the entire OFFICIAL STATEMENT as well as the documents summarized or described herein. See the following appendices that are attached hereto and incorporated herein by reference: APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY IN- FORMATION FOR FISCAL YEAR 2010; APPENDIX B THE GENERAL INDENTURE OF TRUST; APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL; APPEN- DIX D PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING; and APPEN- DIX E BOOK ENTRY SYSTEM. When used herein the terms Fiscal Year[s] 20YY or Fiscal Year[s] End[ed][ing] December 31, 20YY shall refer to the year beginning on January 1 and ending on December 31 of the year indicated. Unless otherwise indicated, capitalized terms used in this OFFICIAL STATEMENT shall have the meaning established in the Indenture (as hereinafter defined). See APPENDIX B THE GENERAL INDENTURE OF TRUST. Public Sale/Electronic Bid The 2012 Bonds will be awarded pursuant to competitive bidding received by means of the PARITY electronic bid submission system on June 7, 2012 (as set forth in the OFFICIAL NOTICE OF BOND SALE) to Citigroup Global Markets Inc., New York, New York. The 2012 Bonds may be offered and sold to certain dealers (including dealers depositing the 2012 Bonds into investment trusts) at prices lower than the initial public offering prices set forth on the inside cover page of the OFFICIAL STATEMENT and that such public offering prices may be changed from time to time. The successful bidder(s) and its respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The successful bidder(s) and its respective affiliates may in the future perform, various investment banking services for the County, for which they will receive customary fees and expenses. In the ordinary course of their various business activities, the successful bidder(s) and its respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or 1

8 related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the County. Salt Lake County, Utah The County, incorporated in 1896, covers an area of approximately 737 square miles and is located in the north central portion of the State of Utah (the State ). The County is bordered on the west by the Great Salt Lake and the Oquirrh Mountains and on the east by the Wasatch Mountains. The County had 1,048,985 residents according to the 2011 U.S. Census Bureau estimates, ranking the County as the most populated county in the State (out of 29 counties). Based on 2011 U.S. Census Bureau population estimates, the County has approximately 37% of the total population of the State. Salt Lake City, Utah is the County seat and the capital city of the State. See map of the State above. The 2012 Bonds This OFFICIAL STATEMENT, including the cover page, introduction and appendices, provides information in connection with the issuance and sale by the County of its $43,725,000 Sales Tax Revenue Refunding Bonds, Series 2012A (the 2012 Bonds or 2012 Bond ), initially issued in book entry form. Authority And Purpose Of The 2012 Bonds; Outstanding Parity Bonds The 2012 Bonds are being issued pursuant to: (i) the Utah Refunding Bonding Act, Title 11, Chapter 27, Utah Code Annotated (the Utah Code ) 1953, as amended; and (ii) a General Indenture of Trust, dated as of November 15, 2001, as previously supplemented and amended (the General Indenture ) between the County and Zions First National Bank, Corporate Trust Department, Salt Lake City, Utah ( Zions Bank ), as trustee (the Trustee ), as further supplemented by a Seventh Supplemental Indenture of Trust, dated as of June 1, 2012, between the County and the Trustee (the Seventh Supplemental Indenture ) providing for the issuance of the 2012 Bonds. The General Indenture, together with all amendments or supplements thereto, including without limitation the Seventh Supplemental Indenture, is sometimes referred to collectively herein, as the Indenture. The 2012 Bonds are being issued to refund certain sales tax revenue bonds previously issued by the County and the payment of costs associated with the issuance of the 2012 Bonds. See THE 2012 BONDS Plan Of Refunding below. The 2012 Bonds and Outstanding Parity Bonds (defined below) previously issued by the County will be equally and ratably secured under the Indenture. The County has outstanding under the Indenture its: (i) $14,700,000 (original principal amount) Sales Tax Revenue Bonds, Series 2004, dated November 23, 2004, currently outstanding in the aggregate principal amount of $10,420,000 (the 2004 Bonds ) (it is anticipated that the 2012 Bonds will refund in advance of their maturity a portion of the 2004 Bonds, as described herein); (ii) $57,095,000 (original principal amount) Sales Tax Revenue Bonds, Series 2005, dated June 22, 2005, currently outstanding in the aggregate principal amount of $47,175,000 (the 2005 Bonds ) (it is anticipated that the 2012 Bonds will refund in advance of their maturity a portion of the 2005 Bonds, as described herein); (iii) $8,855,000 (original principal amount) Sales Tax Revenue and Refunding Bonds, Series 2010A, dated August 25, 2010, currently outstanding in the aggregate principal amount of $7,770,000 (the 2010A Bonds ); 2

9 (iv) $33,020,000 (original principal amount) Sales Tax Revenue Bonds, Series 2010D, dated November 9, 2010, currently outstanding in the aggregate principal amount of $33,020,000 (the 2010D Bonds ); and (v) $1,917,804 (original principal amount) Sales Tax Revenue Bonds (Qualified Energy Conservation Bonds), Series 2011, dated August 10, 2011, currently outstanding in the aggregate principal amount of $1,825,000 (the 2011 Bonds and collectively with the 2004 Bonds, the 2005 Bonds, the 2010A Bonds, the 2010D Bonds, the Outstanding Parity Bonds ). The County expects that the outstanding aggregate principal amount of the Outstanding Parity Bonds (after the closing and delivery of the 2012 Bonds and the refunding of the 2004 Refunded Bonds and the 2005 Refunded Bond, both as hereinafter defined) will be $55,170,000 on the expected delivery date of the 2012 Bonds. Security And Source Of Payment The 2012 Bonds are special limited obligations of the County payable on a parity with the Outstanding Parity Bonds, solely from and secured solely by the Revenues, moneys, securities and funds pledged therefore under the Indenture between the County and the Trustee. The Revenues consist of all the revenues produced by the sales and use taxes levied by the County under the County Option Sales and Use Tax Act, Title 59, Chapter 12, Part 11, Utah Code (the County Option Sales and Use Tax Act ) (the Pledged Taxes ). No assurance can be given that the Pledged Taxes will remain sufficient for the payment of the principal of or interest on the 2012 Bonds and the County is limited by State law in its ability to increase the rate of such taxes. See RISKS INHERENT IN THE OWNERSHIP OF THE 2012 BONDS below. The 2012 Bonds do not constitute general obligation indebtedness or a pledge of the ad valorem taxing power or the full faith and credit of the County, and are not obligations of the State or any other agency or other political subdivision or entity of the State. The County will not mortgage or grant any security interest in any of the improvements financed or refinanced with the proceeds of the 2012 Bonds to secure payment of the 2012 Bonds. See SECURITY AND SOURCES OF PAYMENT below. The 2012 Bonds are secured on a parity lien with the Outstanding Parity Bonds and with any additional bonds, notes or other obligations that may be issued from time to time under the Indenture (the Additional Bonds ). See THE 2012 BONDS Issuance Of Additional Bonds below. The 2012 Bonds, the Outstanding Parity Bonds and any Additional Bonds which may be issued from time to time under the Indenture are collectively referred to herein as the Bonds. Pledged Taxes Pledged Taxes. The County presently levies a county option sales and use tax at the rate of ¼ of 1% (the maximum rate permitted by the County Option Sales and Use Tax Act) on all taxable sales of goods and services in the County. Collections. The county option sales and use tax are collected by the Utah State Tax Commission (the State Tax Commission ) and distributed monthly to the County, as provided by law. Pledged Taxes. The county option sales and use tax represents all of the Pledged Taxes. The Pledged Taxes for Fiscal Year 2011 were $44,533,898 and would, if maintained at that level, provide projected coverage of approximately 4.6 times the expected maximum debt service (approximately $9,772,000 occurring in Fiscal Year 2016) of the Bonds. Under the Indenture the County may not issue Additional Bonds unless total debt service on Bonds does not exceed 2.0 times (or 200%) of expected Pledged Taxes. See SECURITY AND SOURCES OF PAYMENT Pledged Taxes and HISTORICAL AND PROJECTED DEBT SERVICE COVERAGE below. 3

10 Redemption Provisions The 2012 Bonds are subject to optional redemption prior to maturity. See THE 2012 BONDS Redemption Provisions below. Registration, Denominations, Manner Of Payment The 2012 Bonds are issuable only as fully registered bonds 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 2012 Bonds. Purchases of 2012 Bonds will be made in book entry form only, in the principal amount of $5,000 or any whole multiple thereof, through brokers and dealers who are, or who act through, DTC s Participants (as defined herein). Beneficial Owners (as defined herein) of the 2012 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 2012 Bonds. Direct Participants, Indirect Participants and Beneficial Owners are defined under APPENDIX E BOOK ENTRY SYSTEM. Principal of and interest on the 2012 Bonds (interest payable February 1 and August 1 of each year, commencing August 1, 2012) are payable by Zions Bank, Corporate Trust Department, Salt Lake City, Utah, as paying agent (the Paying Agent ) for the 2012 Bonds, to the registered owners of the 2012 Bonds. So long as Cede & Co. is the sole registered owner, it will, in turn, remit such principal and interest to its Direct Participants, for subsequent disbursements to the Beneficial Owners of the 2012 Bonds, as described under APPENDIX E BOOK ENTRY SYSTEM. So long as DTC or its nominee is the sole registered owner of the 2012 Bonds, neither the County nor the Trustee will have any responsibility or obligation to any Direct or Indirect Participants of DTC, or the persons for whom they act as nominees, with respect to the payments to or the providing of notice for the Direct Participants, Indirect Participants or the Beneficial Owners of the 2012 Bonds. Under these same circumstances, references herein and in the Indenture to the Bondowners or Registered Owners of the 2012 Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the 2012 Bonds. Tax Exempt Status Of The 2012 Bonds Subject to compliance by the County with certain covenants, in the opinion of Chapman and Cutler LLP, Bond Counsel, under present law, interest on the 2012 Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the opinion of Bond Counsel, under the existing laws of the State of Utah, as presently enacted and construed, interest on the 2012 Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act. See LEGAL MATTERS Tax Exemption below for a more complete discussion. Professional Services In connection with the issuance of the 2012 Bonds, the following have served the County in the capacity indicated. 4

11 Trustee, Escrow Agent, Bond Registrar and Paying Agent Bond Counsel and Disclosure Counsel Zions Bank Chapman and Cutler LLP Zions Bank Building 201 S Main St Ste 2000 Corporate Trust Department Salt Lake City UT One S Main St 12 th Fl f Salt Lake City UT bjerke@chapman.com f david.vanwagoner@zionsbank.com Escrow Verification Agent Financial Advisor Grant Thornton LLP Zions Bank Public Finance Accountants and Management Consultants Zion Bank Building 500 Pillsbury Center One S Main St 18 th Fl Minneapolis MN Salt Lake City UT f f stephanie.seroogy@gt.com alan.westenskow@zionsbank.com Conditions Of Delivery, Anticipated Date, Manner, And Place Of Delivery The 2012 Bonds are offered, subject to prior sale, when, as and if issued and received by the successful bidder(s), subject to the approval of legality of the 2012 Bonds by Chapman and Cutler LLP, Bond Counsel to the County, and certain other conditions. Certain legal matters will be passed on for the County by the Chief Deputy District Attorney, Ralph Chamness. Certain legal matters regarding this OFFI- CIAL STATEMENT will be passed on for the County by Chapman and Cutler LLP. It is expected that the 2012 Bonds, in book entry form, will be available for delivery to DTC or its agent on or about Wednesday, June 20, Continuing Disclosure Undertaking The County will enter into a Continuing Disclosure Undertaking (the Disclosure Undertaking ) for the benefit of the Beneficial Owners of the 2012 Bonds to send certain information annually and to provide notice of certain events to the Municipal Securities Rulemaking Board ( MSRB ) through its Electronic Municipal Market Access system ( EMMA ) pursuant to the requirements of paragraph (b)(5) of Rule 15c2 12 (the Rule ) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. See CONTINUING DISCLOSURE UNDERTAKING below for further discussion and information regarding the Disclosure Undertaking and APPENDIX D PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING. Basic Documentation This OFFICIAL STATEMENT speaks only as of its date, and the information contained herein is subject to change. Brief descriptions of the County and the 2012 Bonds are included in this OFFICIAL STATEMENT. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Indenture and the 2012 Bonds are qualified in their entirety by reference to each such document. See APPENDIX B THE GENERAL INDENTURE OF TRUST. Descriptions of the Indenture and the 2012 Bonds are qualified by reference to bankruptcy and other laws affecting the remedies for the enforcement of the rights and security provided therein and the effect of the exercise of the police power by any entity having jurisdiction. See APPENDIX B THE GEN- ERAL INDENTURE OF TRUST. Other documentation authorizing the issuance of the 2012 Bonds and establishing the rights and responsibilities of the County and other parties to the transaction may be obtained from the contact persons as indicated below. 5

12 Contact Persons As of the date of this OFFICIAL STATEMENT, the chief contact person for the County concerning the 2012 Bonds is: Lance Brown, Director, Planning and Budget Salt Lake County 2001 S State St N 3300 Salt Lake City UT f slco.org As of the date of this OFFICIAL STATEMENT, additional requests for information may be directed to Zions Bank Public Finance, Salt Lake City, Utah (the Financial Advisor ) to the County: Jon Bronson, Managing Director, jon.bronson@zionsbank.com Alan Westenskow, Vice President, alan.westenskow@zionsbank.com Eric John Pehrson, Vice President, eric.pehrson@zionsbank.com Zions Bank Public Finance Zions Bank Building One S Main St 18 th Fl Salt Lake City UT f CONTINUING DISCLOSURE UNDERTAKING The County will enter into the Disclosure Undertaking for the benefit of the Owners of the 2012 Bonds to send certain information annually and to provide notice of certain events to MSRB through EMMA pursuant to the requirements of the Rule. The information to be provided on an annual basis, the events which will be noticed on an occurrence basis and other terms of the Disclosure Undertaking, including termination, amendment and remedies, are set forth in the form of Disclosure Undertaking in APPENDIX D PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING. The County has represented that it is in compliance with each and every undertaking previously entered into by it pursuant to the Rule. The Disclosure Undertaking requires the County to submits its annual comprehensive annual financial report (the CAFR ) (Fiscal Year Ending December 31) and other operating and financial information on or before July 18 th (not more than 200 days from the end of the Fiscal Year). The County will submit the Fiscal Year 2011 CAFR and other operating and financial information for the 2012 Bonds on or before July 18, 2012, and annually thereafter on or before each July 18 th. A failure by the County to comply with the Disclosure Undertaking will not constitute a default under the Indenture and the Beneficial Owners of the 2012 Bonds are limited to the remedies described in the Disclosure Undertaking. A failure by the County to comply with the annual disclosure requirements of the Disclosure Undertaking must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the 2012 Bonds in the secondary market. Consequently, such a failure may adversely affect the marketability and liquidity of the 2012 Bonds and their market price. Bond Counsel expresses no opinion as to whether the Disclosure Undertaking complies with the requirements of the Rule. 6

13 RISKS INHERENT IN THE OWNERSHIP OF THE 2012 BONDS The purchase of the 2012 Bonds involves certain investment risks. Accordingly, each prospective purchaser of the 2012 Bonds should make an independent evaluation of all of the information presented in this OFFICIAL STATEMENT in order to make an informed investment decision. Certain of these risks are described below; however, it is not intended to be a complete representation of all the possible risks involved. Uncertainty Of Economic Activity And Sales Taxes The amount of Pledged Taxes to be collected by the County is dependent on a number of factors beyond the control of the County, including, but not limited to, the state of the United States economy and the economy of the State and the County. Any one or more of these factors could result in the County receiving less Pledged Taxes than anticipated. During periods in which economic activity declines, Pledged Taxes are likely to fall as compared to an earlier year. In addition, Pledged Taxes are dependent on the volume of the transactions subject to the tax. From time to time, proposals have been made by the Utah State Legislature (the State Legislature ) to add or remove certain types of purchases from the sales tax and the State (like many other states) has recognized the potential reduction in sales tax revenues as a result of purchases made through the internet and other non traditional means. In addition, the State Legislature has, from time to time, considered legislation to revise the amount of sales tax to be levied or to adjust the method of allocating sales tax to local governmental entities. The County cannot predict what impact these items may have on the Pledged Taxes it receives. See SECURITY AND SOURCE OF PAYMENT Pledged Taxes below. The 2012 Bonds Are Limited Obligations The 2012 Bonds are special limited obligations of the County, payable solely from the Pledged Taxes, moneys, securities and funds pledged therefore in the Indenture. No assurance can be given that the amount of Pledged Taxes received by the County will remain sufficient for the payment of the principal or interest on the 2012 Bonds and the County is limited by State law in its ability to increase the rate of such taxes. The 2012 Bonds do not constitute general obligation indebtedness or a pledge of the ad valorem taxing power or the full faith and credit of the County, and are not obligations of the State or any other agency or other political subdivision or entity of the State. The County will not mortgage or grant any security interest in any of the projects financed or refinanced with the proceeds of the 2012 Bonds to secure payment of the 2012 Bonds. Limitation On Increasing Rates For Pledged Taxes The County currently levies the maximum rate allowed under the County Option Sales and Use Tax Act for all taxes making up the Pledged Taxes. No assurance can be given that the Pledged Taxes will remain sufficient for the payment of the principal of or interest on the 2012 Bonds and the County is limited by State law in its ability to increase the rate of such taxes. No Reserve Fund Deposit For The 2012 Bonds Pursuant to the Indenture, each Series of Bonds is secured (if at all) by a separate subaccount in the Debt Service Reserve Fund. Upon the issuance of the 2012 Bonds there will be no funding of a subaccount of the Debt Service Reserve Fund with respect to the 2012 Bonds. 7

14 THE 2012 BONDS General The 2012 Bonds are dated the date of delivery 1 thereof (the Dated Date ) and will mature on February 1 of the years and in the amounts as set forth on the inside cover page of this OFFICIAL STATE- MENT. The 2012 Bonds shall bear interest from the Dated Date at the rates set forth on the inside cover page of this OFFICIAL STATEMENT. Interest on the 2012 Bonds is payable semi annually on each February 1 and August 1, commencing August 1, Interest on the 2012 Bonds shall be computed on the basis of a 360 day year comprised of 12, 30 day months. In addition to being the initial Trustee and Paying Agent, Zions Bank is also the initial Bond Registrar with respect to the 2012 Bonds (in such capacity, the Bond Registrar ). The 2012 Bonds will be issued as fully registered bonds, initially in book entry form, in the denomination of $5,000 or any whole multiple thereof, not exceeding the amount of each maturity. Plan Of Refunding The County previously issued its: (i) 2004 Bonds, the original proceeds of which were used by the County for the expansion of the County owned Salt Palace Convention Center and (ii) 2005 Bonds, the original proceeds of which were used by the County for the expansion of the Salt Palace Convention Center and the County owned South Towne Exposition Center. Proceeds from the 2012 Bonds, together with other legally available moneys, in the aggregate amount of $51,998, will be deposited with Zions Bank, as Escrow Agent (the Escrow Agent ), pursuant to an Escrow Agreement dated as of June 1, 2012 (the Escrow Agreement ) to establish an irrevocable trust escrow account (the Escrow Account ), consisting of cash and noncallable direct full faith and credit obligations of the United States of America. Funds in the Escrow Account shall be used to refund in advance of their stated maturity certain of the outstanding 2004 Bonds and 2005 Bonds as follows: (i) Amounts in the Escrow Account shall be used to pay principal of and interest on all of the callable portion of the 2004 Bonds maturing on and after February 1, 2016 (the 2004 Refunded Bonds ), at a redemption price of 100% of the principal amount thereof on February 1, 2015 (the 2004 Redemption Date ). The 2004 Refunded Bonds mature on the dates and in the amounts, and bear interest at the rates, as follows: Scheduled Maturity Redemption CUSIP Principal Interest Redemption (February 1) Date Amount Rate Price February 1, 2015 BC 9 $ 760, % 100% February 1, 2015 BD 7 795, February 1, 2015 BE 5 835, February 1, 2015 BF 2 875, February 1, 2015 BG 0 915, February 1, 2015 BH 8 955, February 1, 2015 BJ 4 1,005, February 1, 2015 BK 1 1,060, February 1, 2015 BL 9 1,115, Totals... $8,315,000 1 The anticipated date of delivery is Wednesday, June 20,

15 The cash and investments held in the Escrow Account will be sufficient to pay (a) the interest falling due on the 2004 Refunded Bonds through the 2004 Redemption Date and (b) the redemption price of the 2004 Refunded Bonds, due and payable on the 2004 Redemption Date. (ii) Amounts in the Escrow Account shall be used to pay principal of and interest on all of the callable portion of the 2005 Bonds maturing on and after August 1, 2016 (the 2005 Refunded Bonds ), at a redemption price of 100% of the principal amount thereof on August 1, 2015 (the 2005 Redemption Date ). The 2005 Refunded Bonds mature on the dates and in the amounts, and bear interest at the rates, as follows: Scheduled Maturity Redemption CUSIP Principal Interest Redemption (August 1) Date Amount Rate Price August 1, 2015 BY 1 $ 2,925, % 100% August 1, 2015 BZ 8 3,050, August 1, 2015 CA 2 3,225, August 1, 2015 CB 0 3,375, August 1, 2015 CC 8 3,550, August 1, 2015 CD 6 3,725, August 1, 2015 CE 4 3,900, August 1, 2015 CF 1 4,100, August 1, 2015 CG 9 4,325, August 1, 2015 CH 7 4,550, Totals... $36,725,000 The cash and investments held in the Escrow Account will be sufficient to pay (a) the interest falling due on the 2005 Refunded Bonds through the 2005 Redemption Date and (b) the redemption price of the 2005 Refunded Bonds, due and payable on the 2005 Redemption Date. Certain mathematical computations regarding the sufficiency of and the yield on the investments held in the Escrow Account will be verified by Grant Thornton LLP, Minneapolis, Minnesota. See MISCEL- LANEOUS Escrow Verification below. Sources And Uses Of Funds The proceeds from the sale of the 2012 Bonds are estimated to be applied as set forth below: Sources: Par amount of 2012 Bonds... $43,725, Original issue premium... 8,161, Transfers from prior issues debt service funds , Total... $52,531, Uses: Deposit into Escrow Account... $51,998, Underwriter s discount , Costs of issuance (1) , Original issue discount... 46, Total... $52,531, (1) Includes legal fees, Financial Advisor fees, rating agency fees, Trustee, Escrow, Registrar and Paying Agent fees, escrow verification agent fees, rounding amounts and other miscellaneous costs of issuance. 9

16 Redemption Provisions Optional Redemption. The 2012 Bonds maturing on or after February 1, 2023, will be subject to optional redemption at the option of the County on February 1, 2022 (the First Redemption Date ), and on any date thereafter prior to maturity, in whole or in part, from such maturities or parts thereof as may be selected by the County, and at random within each maturity if less than the full amount of any maturity is to be redeemed, upon not less than 30 days prior written notice, at a redemption price equal to 100% of the principal amount of the 2012 Bonds to be redeemed, plus accrued interest thereon to the redemption date Bonds maturing on or prior to the First Redemption Date will not be subject to optional redemption. Selection for Redemption. If less than all 2012 Bonds of any maturity are to be redeemed, the particular 2012 Bonds or portion of 2012 Bonds of such maturity to be redeemed will be selected at random by the Trustee in such manner as the Trustee in its discretion may deem fair and appropriate. The portion of any registered 2012 Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or a whole multiple thereof, and in selecting portions of such 2012 Bonds for redemption, the Trustee will treat each such 2012 Bond as representing that number of 2012 Bonds of $5,000 denomination that is obtained by dividing the principal amount of such 2012 Bond by $5,000. Notice of Redemption. Notice of redemption shall be given by the Bond Registrar by first class mail, not less than 30 nor more than 60 days prior to the redemption date, to the owner, as of the Record Date, of each 2012 Bond which is subject to redemption, at the address of such owner as it appears on the registration books of the County kept by the Bond Registrar, or at such other address as is furnished to the Bond Registrar in writing by such owner on or prior to the Record Date. Each notice of redemption shall state the redemption date, the place of redemption, the redemption price and, if less than all of the 2012 Bonds are to be redeemed, the respective principal amounts to be redeemed, and shall also state that the interest on the 2012 Bonds in such notice designated for redemption shall cease to accrue from and after such redemption date and that on the redemption date there will become due and payable on each of the 2012 Bonds to be redeemed the principal thereof and interest accrued thereon to the redemption date. Each notice of optional redemption may further state that such redemption will be conditioned upon the receipt by the Paying Agent, on or prior to the date fixed for redemption, of moneys sufficient to pay the principal of and premium, if any, and interest on such 2012 Bonds to be redeemed and that if such moneys have not been so received the notice will be of no force or effect and the County will not be required to redeem such 2012 Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption will not be made and the Bond Registrar will within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. Any such notice mailed will be conclusively presumed to have been duly given, whether or not the Bondowner receives such notice. Failure to give such notice or any defect therein with respect to any 2012 Bond will not affect the validity of the proceedings for redemption with respect to any other 2012 Bond. In addition to the foregoing notice, further notice of such redemption will be given by the Trustee to DTC and certain registered securities depositories and national information services as provided in the Seventh Supplemental Indenture, but no defect in such further notice nor any failure to give all or any portion of such notice will in any manner affect the validity of a call for redemption if notice thereof is given as prescribed above and in the Seventh Supplemental Indenture. For so long as a book entry system is in effect with respect to the 2012 Bonds, the Bond Registrar will mail notices of redemption to DTC or its successor. Any failure of DTC to convey such notice to any Direct Participants or any failure of the Direct Participants or Indirect Participants to convey such notice to any Beneficial Owner will not affect the sufficiency of the notice or the validity of the redemption of 2012 Bonds. See THE 2012 BONDS Book Entry System below. 10

17 Registration And Transfer In the event the book entry only system is discontinued, any 2012 Bond may, in accordance with its terms, be transferred, upon the registration books kept by the Bond Registrar, by the person in whose name it is registered, in person or by such owner s duly authorized attorney, upon surrender of such 2012 Bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Bond Registrar. No transfer will be effective until entered on the registration books kept by the Bond Registrar. Whenever any 2012 Bond is surrendered for transfer, the Bond Registrar shall authenticate and deliver a new fully registered 2012 Bond or 2012 Bonds of the same series, designation, maturity and interest rate and of authorized denominations duly executed by the County, for a like aggregate principal amount. The 2012 Bonds may be exchanged at the principal corporate office of the Trustee for a like aggregate principal amount of fully registered 2012 Bonds of the same series, designation, maturity and interest rate of other authorized denominations. For every such exchange or transfer of the 2012 Bonds, the Trustee must make a charge sufficient to reimburse it for any tax or other governmental change required to be paid with respect to such exchange or transfer of the 2012 Bonds. Except as otherwise provided in a Supplemental Indenture with respect to a Series of Bonds, the Trustee will not be required to transfer or exchange any 2012 Bond (i) during the period 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 15 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 15 days prior to the mailing of notice calling any Bonds for redemption, to and including the date of such mailing, or (iv) at any time following the mailing of notice calling such Bond for redemption. Regular Record Date means, with respect to any Interest Payment Date for any Series of Bonds, the date specified as the Regular Record Date in the Supplemental Indenture authorizing the issuance of such Series of Bonds. (Regular Record Date as defined in the Seventh Supplemental Indenture means the fifteenth day immediately preceding each Interest Payment Date.) Special Record Date means such date as may be fixed for the payment of defaulted interest on the Bonds in accordance with the Indenture. The County, the Bond Registrar and the Paying Agent may treat and consider the person in whose name each 2012 Bond is registered in the registration books kept by the Bond Registrar as the holder and absolute owner of such 2012 Bond for the purpose of payment of principal, premium and interest with respect to such 2012 Bond and for all other purposes whatsoever. Book Entry System DTC will act as securities depository for the 2012 Bonds. The 2012 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered 2012 Bond certificate will be issued for each maturity of the 2012 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC or a fast agent of DTC. See APPENDIX E BOOK ENTRY SYSTEM for a more detailed discussion of the book entry system and DTC. In the event the book entry system is discontinued, interest on the 2012 Bonds will be payable by check or draft of the Paying Agent, mailed to the registered owners thereof at the addresses shown on the registration books of the County kept for that purpose by the Bond Registrar. The principal of all 2012 Bonds will be payable at the principal office of the Trustee, as Paying Agent. 11

18 Debt Service On The 2012 Bonds The 2012 Bonds Payment Date Principal Interest Period Total Fiscal Total August 1, $ 0.00 $ 223, $ 223, $ 223, February 1, , , August 1, , , ,964, February 1, , , August 1, , , ,964, February 1, , , August 1, , , ,964, February 1, ,630, , ,612, August 1, , , ,521, February 1, ,760, , ,669, August 1, , , ,503, February 1, ,940, , ,774, August 1, , , ,529, February 1, ,110, , ,865, August 1, , , ,518, February 1, ,325, , ,977, August 1, , , ,522, February 1, ,540, , ,084, August 1, , , ,515, February 1, ,765, , ,196, August 1, , , ,508, February 1, ,015, , ,327, August 1, , , ,513, February 1, ,295, , ,481, August 1, , , ,536, February 1, ,345, , ,399, ,399, Totals... $43,725, $16,461, $60,186, SECURITY AND SOURCES OF PAYMENT The 2012 Bonds are special limited obligations of the County, payable solely from and secured by a pledge of the Pledged Taxes and certain funds and accounts pledged therefore and established by the Indenture. The Pledged Taxes consist of all the revenues produced by the county option sales and use taxes levied by the County pursuant to the County Option Sales and Use Tax Act. No assurance can be given that the Pledged Taxes will remain sufficient for the payment of principal of and interest on the 2012 Bonds and the County is limited by State law in its ability to increase the rate of such taxes. See RISKS INHERENT IN THE OWNERSHIP OF THE 2012 BONDS above. The 2012 Bonds do not constitute general obligation indebtedness or a pledge of the ad valorem taxing power or full faith and credit of the County, and are not obligations of the State or any other agency or other political subdivision or entity of the State. The County will not mortgage or grant any security interest in any of the improvements financed or refinanced with the proceeds of the 2012 Bonds to secure payment of the 2012 Bonds. Upon the occurrence of an Event of Default specified in the Indenture, the Trustee or the Registered Owners of the Bonds may pursue certain remedies to enforce the obligations of the County under the Indenture. These remedies do not include the right to declare all of the principal of and interest on the Bonds to be immediately due and payable. See APPENDIX B THE GENERAL INDENTURE OF TRUST. 12

19 State Pledge of Nonimpairment In accordance with the provisions of the Local Government Bonding Act, Title 11 Chapter 14, Utah Code, the State pledges and agrees with the holders of the Bonds that it will not alter, impair or limit the Pledged Taxes in a manner that reduces the amounts to be rebated to the County which are devoted or pledged for the payment of the Bonds until the Bonds, together with applicable interest, are fully met and discharged; provided, however, that nothing shall preclude such alteration, impairment or limitation if and when adequate provision shall be made by law for the protection of the holders of the Bonds. The County notes that this provision has not been interpreted by a court of law and, therefore, the extent that such provision would (i) be upheld under constitutional or other legal challenge, (ii) protect the current rates and collection of all Pledged Taxes, or (iii) impact any other aspect of Pledged Taxes, cannot be predicted by the County. Flow Of Funds To secure timely payment of the principal of and interest on the 2012 Bonds, the County has pledged and assigned to the Trustee the Pledged Taxes and all moneys in certain funds and accounts established by the Indenture. The Indenture establishes a Construction Fund, Revenue Fund, a Bond Fund, and certain other funds and accounts. See APPENDIX B THE GENERAL INDENTURE OF TRUST Article V. Use of Funds Section 5.2 Application of Revenues. Pledged Taxes Under State law the 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. The 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. The 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. A sales and use tax due and unpaid constitutes a debt due from the vendor and may be collected, together with interest, penalty, and costs, by appropriate judicial proceeding within three years after the vendor is delinquent. Furthermore, if a sales and use tax is not paid when due and if the vendor has not followed the procedures to object to a notice of deficiency, the State Tax Commission may issue a warrant directed to the sheriff of any county commanding the sheriff to levy upon and sell the real and personal property of a delinquent taxpayer found within such county for the payment of the tax due. The amount of the warrant shall have the force and effect of an execution against all personal property of the delinquent taxpayer and shall become a lien upon the real property of the delinquent taxpayer in the same manner as a judgment duly rendered by any district court. Pledged Taxes. The County Option Sales and Use Tax Act currently provides that each county in the State may levy a sales and use tax of ¼ of 1% on the purchase price of taxable goods and services in that county. The legislative intent contained in the County Option Sales and Use Tax Act is to enable counties to carry out more effectively the counties statutorily defined roles as political and legal subdivisions of the State by improving the counties revenue raising capacities. County option sales and use taxes are collected by the State Tax Commission and distributed on a monthly basis to each county. The distributions are based on a formula that, in general, provides (i) 50% of each dollar of sales and use taxes collected will be distributed to the county in which the tax was col- 13

20 lected and (ii) 50% of each dollar of sales and use taxes collected shall be distributed proportionately among all counties imposing the tax, based on the total population of each county. Collections. The following table shows the amount of Pledged Taxes collected and received by the County for the past 10 Fiscal Years. The County s county option sales and use tax collection began in January 1998, the first year allowable by law. Fiscal Year Sales Tax % Increase (Decrease) Ended December 31 Revenue from Prior Year 2011 (1)... $44,533, % ,590, ,432,977 (11.0) ,532,140 (8.5) ,851, ,123, ,857, ,565, ,897,033 (1.0) ,243,096 (0.2) (1) Salt Lake County Auditor. (Source: The County s Comprehensive Annual Financial Reports.) Current Fiscal Year Collections. Currently, for Fiscal Year 2012 the County estimates that county option sales and use tax collections will be approximately $44.6 million, which amount is based on two months of actual Pledged Taxes received from January 2012 through and including February 2012 of $6,766,000 plus 10 months of projected Pledged Taxes from March 2012 through and including December 2012 of $37,834,000. There is no assurance that Pledged Tax collections for Fiscal Year 2012 will equal or exceed such amount. The Larger Sales Taxpayers. State law prohibits disclosure of actual dollar figures of sales and use tax collections by specific businesses. However, for the most current 12 months reported (May 2011 through April 2012) the largest 10 businesses collected approximately 20.5% of the total sales tax collected in the County. The largest tax collection by a single business was approximately 4%. Those larger sales tax payers include retail sales establishments, utility providers and automotive dealers. (Source: Salt Lake County Mayor, Operations Planning and Budget from data provided by the Utah State Tax Commission.) Other Sales And Use Taxes; Municipal Energy Tax Other Sales And Use Taxes. Within the County are other sales and use taxes which are not pledged to the repayment of the Bonds. For example, as of the date of this OFFICIAL STATEMENT, other current County wide tax levies include: (i) 1% local sales and use sales tax; (ii) 0.30% mass transit sales tax; (iii) 0.25% additional mass transit sales tax; (iv) 0.25% county option transportation sales tax; (v) 0.10% botanical, cultural, zoo sales tax; (vi) 4.75% transient room sales tax (4.25% transient room sales tax and a 0.50% tourism transient room sales tax); (vii) 9.50% tourism short term leasing sales tax (2.50% motor vehicle rental sales tax; 3% tourism short term leasing sales tax; and 4% tourism short term leasing population sales tax); (viii) 1% tourism restaurant sales tax; and (iv) 0.76% telecommunications sales tax (0.61% 14

21 E911 emergency sales tax; 0.08% state wide unified E911 sales tax; and 0.07% poison control sales tax). State Wide Sales and Use Tax. In addition to the above described sales and use taxes, the State levies a state wide sales and use tax, which is currently imposed at a rate of 4.70% of the purchase price of taxable goods and services and 3% on unprepared food and food ingredients. The State also imposes a 2.5% tax on all short term leases and rentals of motor vehicles. Sales of gas, electricity and fuel oil for residential use are taxed by the State at a rate of 2%. Additional Other Sales and Use Taxes. In addition to the state wide sales and use tax and the gas, electric and fuel oil sales tax, certain governmental entities may also levy a mass transit fixed guideway sales tax; supplemental state sales and use sales tax; county airport, highway, public transit sales tax; rural hospital sales tax; botanical, cultural, zoo (municipal) sales tax; highway tax sales tax; town option sales tax; city or town option sales tax; resort community sales tax; additional resort community sales tax; municipal transient room sales tax; additional municipal transient room sales tax; and municipal telecommunications license sales tax. A municipality, but not the County, may levy a local municipal energy sales tax of up to 6%. All other sales and use taxes levied and collected locally by the municipality or by the State Tax Commission are not pledged to the payment of the Bonds. Debt Service Reserve Fund For The 2012 Bonds And Outstanding Parity Bonds Pursuant to the Indenture, each Series of Bonds are secured by a separate subaccount in the Debt Service Reserve Fund as described below Bonds. Upon the issuance of the 2012 Bonds there will be no funding of an account of the Debt Service Reserve Fund with respect to the 2012 Bonds. Outstanding Parity Bonds. No subaccount of the Debt Service Reserve Fund has been required to be funded with respect to the Outstanding Parity Bonds. Issuance Of Additional Bonds No bonds payable out of the Pledged Taxes, funds and accounts pledged under the Indenture may be issued and secured with a lien senior to that of the Bonds without the consent of the owners of 100% of the Outstanding Bonds. The Indenture permits the issuance of Additional Bonds by the County that are payable on a parity with the Bonds out of the Pledged Taxes, funds and accounts pledged under the Indenture. The Indenture does not limit the amount of Additional Bonds that may be issued by the County, but requires that following requirements of the Indenture must be satisfied as a condition to the issuance of any Additional Bonds: (a) No Event of Default shall have occurred under the Indenture and be continuing under the Indenture on the date of authentication of any Additional Bonds. This shall not preclude the issuance of Additional Bonds if (i) the issuance of such Additional Bonds otherwise complies with the provisions of the Indenture and (ii) such Event of Default will cease to continue upon the issuance of Additional Bonds and the application of the proceeds thereof; and (b) The Pledged Taxes for any consecutive 12 month period in the 24 months immediately preceding the proposed date of issuance of such Additional Bonds were at least equal to 200% of the sum of (x) the maximum Aggregate Annual Debt Service Requirement on all Bonds and Additional Bonds to be Outstanding following the issuance of the Additional Bonds plus (y) the maximum annual installments due on all Reserve Instrument Repayment Obligations to be outstanding following the issuance of such Additional Bonds; provided, however, that such Revenue coverage test shall not 15

22 apply to the issuance of any Additional Bonds to the extent (i) they are issued for refunding Bonds issued under the Indenture, (ii) and the Average Aggregate Annual Debt Service for such Additional Bonds does not exceed the then remaining Average Aggregate Annual Debt Service for the Bonds being refunded and (iii) the maximum Aggregate Annual Debt Service Requirement of such Additional Bonds is less than the maximum Aggregate Annual Debt Service Requirement for the Bonds being refunded therewith. (c) All payments required by the Indenture to be made into the Bond Fund must have been made in full, and there must be in the Debt Service Reserve Fund, (taking into account any Reserve Instrument coverage) the full amount, required by the Indenture to be accumulated therein at such time; and (d) The proceeds of the Additional Bonds must be used (i) to refund Bonds issued under the Indenture or other obligations of the County (including the funding of necessary reserves and the payment of costs of issuance), or (ii) to finance or refinance a Project (including the funding of necessary reserves and the payment of costs of issuance). The Indenture does not limit or restrict the issuance of subordinate lien obligations by the County. (The remainder of this page has been intentionally left blank.) 16

23 HISTORICAL AND PROJECTED DEBT SERVICE COVERAGE The following table shows the debt service requirement for the 2012 Bonds and the Outstanding Parity Bonds, the historical (for 10 years) and projected Pledged Taxes and the historical and projected debt service coverage for the relevant Fiscal Year with respect to such Bonds (based on the assumptions contained therein). Fiscal Year Ending December 31 The Bonds Debt 2012 Bonds Outstanding Total Service Debt Parity Bonds Debt Pledged Cover- Service Debt Service (1) Service Taxes (2) age (3) Historical: 2002 $ 0 $ 516,347 $ 516,347 $ 35,243, X ,508,194 1,508,194 34,897, ,506,950 1,506,950 37,565, ,059,571 2,059,571 40,857, ,875,795 6,875,795 48,123, ,861,150 6,861,150 50,851, ,877,075 6,877,075 46,532, ,866,638 6,866,638 41,432, ,857,313 6,857,313 41,590, ,894,397 8,894,397 44,533, Projected: 2012 $ 223,715 $ 7,993,107 $ 8,216,822 $ 44,600, ,964,325 7,566,483 9,530,808 44,600, ,964,325 7,533,038 9,497,363 44,600, ,964,325 7,524,975 9,489,300 44,600, ,521,725 4,250,910 9,772,635 44,600, ,503,925 4,242,670 9,746,595 44,600, ,529,925 2,798,110 8,328,035 44,600, ,518,375 2,786,244 8,304,619 44,600, ,522,500 2,774,028 8,296,528 44,600, ,515,875 2,586,118 8,101,993 44,600, ,508,250 2,568,958 8,077,208 44,600, ,513,750 2,554,891 8,068,641 44,600, ,536,000 2,534,158 8,070,158 44,600, ,399,313 2,511,956 6,911,269 44,600, ,492,299 2,492,299 44,600, ,469,720 2,469,720 44,600, ,446,539 2,446,539 44,600, ,282,661 2,282,661 44,600, ,259,761 2,259,761 44,600, ,227,130 2,227,130 44,600, ,198,135 2,198,135 44,600, ,166,080 2,166,080 44,600, ,134,100 2,134,100 44,600, ,098,740 2,098,740 44,600, Projected Totals $ 60,186,327 $ 83,000,811 $ 143,187,138 (1) (2) (3) Total debt service after the refunding of the 2004 Bonds and 2005 Bonds. The Outstanding Parity Bonds has one bond (the 2010D Bonds) issued as federally taxable, 35% issuer subsidy, Build America Bonds. The Outstanding Parity Bonds totals do not include any federal interest subsidy payments. Fiscal Year 2012 is based on two months of actual Pledged Taxes received from January 2012 through and including February 2012 of $6,766,000 plus 10 months of projected Pledged Taxes from March 2012 through and including December 2012 of $37,834,000, which amounts total approximately $44.6 million. Projected Pledged Taxes after Fiscal Year 2012 are held constant. There is no assurance that Pledged Taxes in each year will equal or exceed such amount. Multiple of which Pledged Taxes exceed Total Debt Service. 17

24 SALT LAKE COUNTY, UTAH General Permanent settlement of the County began on July 24, 1847 when a party of 147 pioneers entered the Salt Lake Valley after a 1,500 mile trek westward. Within a few years, the Salt Lake Valley had become a major center for trade and commerce, with wagon trains carrying settlers and miners westward. Salt Lake City became the capital city of the territory and the county seat on January 6, The County is a metropolitan area with a population of approximately 1,050,000 people. The County is the most populous county in the State and comprises an area of approximately 737 square miles. The County is bordered on the west by the Great Salt Lake and the Oquirrh Mountains and on the east by the Wasatch Mountains. The principal cities in the County are Salt Lake City, West Valley City, Sandy City, West Jordan City and Murray City. Other communities include Alta Town, Bluffdale City, Cottonwood Heights City, Draper City, Herriman City, Holladay City, Midvale City, Riverton City, South Jordan City, South Salt Lake City and Taylorsville City. Form Of Government A County Mayor (the County Mayor ) and a nine member County Council (the County Council ) currently govern the County. This provides for a separation of executive and legislative powers. The County Mayor is elected at large and serves full time, performing traditional day to day executive/management duties. The powers of the County Mayor generally include, but are not limited to, managing County divisions and departments, enforcing programs, policies, regulations and ordinances of the County; negotiating County contracts; proposing a County budget; acting as an intergovernmental relations liaison; and considering and implementing long range planning, programs and improvements. The County Mayor also has general veto power including power of the line item veto. The County Council serves as the legislative branch of government. In general, the powers of the County Council include, but are not limited to, the consideration and adoption of ordinances, rules, regulations, resolutions, and policies; adoption of a budget, including the setting of tax rates and fees as may be necessary to fund the budget; conducting hearings of public concern and quasi judicial hearings on matters of planning, zoning, license revocation, and other similar matters as provided by statute, charter or ordinance; and generally performing every other legislative act as may be required by statute. In addition, the County Council serves as the Board of Trustees of the Municipal Building Authority, the County Board of Equalization, the Redevelopment Agency Board, and the Special Sanitation District Board. In addition to the County Mayor and County Council, other Countywide elected officials include the Assessor, Auditor, Clerk, District Attorney, Recorder, Sheriff, Surveyor and Treasurer. Current members of the County Council, officers and certain administrators of the County and their respective terms or appointment in office are as follows: (The remainder of this page has been intentionally left blank.) 18

25 Years Expiration Office/District Person of Service of Current Term Chair / District 3... David A. Wilde 12 January 2015 Vice Chair / District 5... Steve Debry 3 January 2015 Council Member / District 1... Arlyn Bradshaw 2 January 2015 Council Member / District 2... Michael H. Jensen 12 January 2013 Council Member / District 4... Jani Iwamoto 4 January 2013 Council Member / District 6... Max Burdick 4 January 2013 Council Member / At Large (1)... Jim Bradley 12 January 2013 Council Member / At Large (2)... Randy Horiuchi 12 January 2015 Council Member / At Large... Richard Snelgrove 2 January 2017 Mayor... Peter M. Corroon 8 January 2013 Assessor... Lee Gardner 18 January 2015 Auditor... Gregory P. Hawkins 2 January 2015 Clerk... Sherrie Swensen 22 January 2015 District Attorney... Sim Gill 2 January 2015 Recorder... Gary Ott 12 January 2015 Sheriff... Jim Winder 6 January 2015 Surveyor... Reid Demman 6 January 2015 Treasurer... K. Wayne Cushing 2 January 2015 Chief Administrative Officer... Linda Hamilton 2 Appointed Chief Financial Officer... Darrin Casper 7 Appointed Chief Deputy District Attorney... Ralph Chamness 2 Appointed Director, Planning and Budget... Lance Brown 12 Merit employee (1) Mr. Bradley previously served four years as a County Commissioner under the prior form of government. (2) Mr. Horiuchi previously served eight years as a County Commissioner under the prior form of government. 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, library services (excluding Salt Lake and Murray cities), jail services, criminal justice support, prosecution, civil services, aging services, health, mental health, parks and recreation, criminal justice and youth services, convention center, fine arts, planetarium, convention & visitors bureau, job training and development, administration and support services to county operations and flood control. Unincorporated area services (and other areas by contract). Animal services, justice courts, street lighting, highways, planning and zoning, traffic engineering, development services, business licenses and sanitation and misdemeanor prosecution. Effective January 1, 2010, police protection is provided by a new public agency (the Unified Police Department or UPD ) created by the County and several municipalities in the County pursuant to the Utah Interlocal Cooperation Act. The County has also established a local district covering the unincorporated area of the County that is responsible for funding police protection in the unincorporated area and representing that area in the UPD. 19

26 Employee Workforce And Retirement System; Other Post Employment Benefits; Compensated Absences Employee Workforce and Retirement System. The County employs approximately 3,600 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 A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR 2010 Notes To The Financial Statements Note 9. Pension Plans; and Note 10. Deferred Compensation Plans. Other Post Employment Benefits. The County offers post employment health care and life insurance benefits through a single employer defined benefit plan to eligible employees who retire from the County and qualify to retire from the Utah State Retirement System. The benefits, benefit levels, employee contributions, and employer contributions are governed by County policy, and can be amended at any time. The County currently pays for post employment benefits on a pay as you go basis (with contributions from both County funds and premiums paid by retirees) and for Fiscal Year 2011 the County paid approximately $5.9 million for post employment benefits of which $3.1 million was reimbursed by retirees via health insurance premiums paid. As of December 31, 2010 the County s unfunded accrued actuarial liability was $115.7 million. The corresponding annual required contribution is approximately $7.8 million which is projected to amortize the County s unfunded accrued liability over 30 years utilizing the level percentage of payroll method. Also, the County s consulting actuary adjusts the annual required contribution for interest on the net OPEB obligation. After an adjustment was made for Fiscal Year 2011, the County s adjusted annual required contribution was $8 million. For a detailed discussion regarding the post employment benefit plans see APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR 2010 Notes To The Financial Statements Note 11. Other Postemployment Benefits. Compensated Absences. The County pays, on a pay as you go basis, (a) 25% of accrued sick leave for retiring employees and (b) 100% of accrued vacation leave for retiring and terminated employees. For Fiscal Year 2011, the County budgeted $1.6 million to pay for accrued sick and vacation leave, actual expenditures for Fiscal Year 2011 were $980,452 (this number is unaudited and subject to change). The County Council adopted a policy requiring the County to maintain a reserve for accrued sick and vacation leave; provided that the reserve applies only to accrued sick and vacation leave within the County s governmental funds and not its proprietary funds. The total liability for compensated absences is the sum of (a) accrued sick leave adjusted for the number of employees expected to retire and (b) accrued vacation leave. For Fiscal Year 2011, the total sick leave liability is approximately $4.5 million and the total vacation leave liability is $12.6 million. The County reserves 40% of the sick leave liability, 15% of the vacation leave liability, and related employer social security and Medicare payroll taxes. Both calculations are based on the most recently completed Fiscal Year. For Fiscal Year 2011 the balance in the reserve was approximately $3.7 million. Risk Management The County is fully self insured for general liability, except for general liability claims relating to the Salt Palace Convention Center and Southtowne Exposition Center (County owned convention centers) where the County is insured through commercial insurance. The County is self insured for worker s compensation below $750,000. See APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTA- RY INFORMATION FOR FISCAL YEAR 2010 Notes To The Financial Statements Note 13. Risk Management. Investment Of Funds The State Money Management Act. The State Money Management Act, Title 51, Chapter 7 of the Utah Code (the Money Management Act ), governs and establishes criteria for the investment of all public funds held by public treasurers in the State. The Money Management Act provides a limited list of approved investments, including qualified in state and permitted out of state financial institutions, obligations of the State and political subdivisions of the State, U.S. Treasury and approved federal government agency and instrumentality securities, certain investment agreements and repurchase agreements and investments in corporate securi- 20

27 ties meeting certain ratings requirements. The Money Management Act establishes the State Money Management Council (the Money Management Council ) to exercise oversight of public deposits and investments. 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. The Utah Public Treasurers Investment Fund. A significant portion of County funds may be invested in the Utah Public Treasurers Investment Fund ( PTIF ). The PTIF is a local government investment fund, established in 1981, and managed by the State Treasurer. 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. Securities in the PTIF include certificates of deposit, commercial paper, short term corporate notes, and obligations of the U.S. Treasury and securities of certain agencies of the federal government. By policy, the maximum weighted average adjusted life of the portfolio is not to exceed 90 days and the maximum final maturity of any security purchased by the PTIF is limited to five years. Safekeeping and audit controls for all investments owned by the PTIF must comply with the Money Management Act. All securities purchased are delivered versus 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. Investment activity of the State Treasurer in the management of the PTIF is reviewed monthly by the Money Management Council and is audited by the State Auditor. The PTIF is not rated. See APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY IN- FORMATION FOR FISCAL YEAR 2010 Notes to the Financial Statements Note 2. Deposits and Investments. Population % % Change From Change From County Prior Period State of Utah Prior Period 2011 Estimate... 1,048, % 2,817, % 2010 Census... 1,029, ,763, Census , ,233, Census , ,722, Census , ,461, Census , ,059, Census , , Census , , Census , , Census , , Census , , Census , , (Source: U.S. Department of Commerce, Bureau of the Census.) 21

28 Employment, Income, Construction, and Sales Taxes within Salt Lake County and the State of Utah Labor Force, Nonfarm Jobs and Wages within Salt Lake County Calendar Year (1) % change from prior year 2011 (2) 2010 (3) Civilian labor force 551, , , , , ,491 (0.9) 0.5 (0.5) Employed persons 511, , , , , ,692 (0.8) (0.6) (3.4) Unemployed persons 40,254 41,312 35,140 19,691 14,717 15,799 (2.6) (6.8) Total nonfarm jobs 542, , , , , ,780 (5.1) (0.4) (4.9) Mining 2,872 2,628 2,527 2,908 2,450 2, (13.1) Construction 27,505 29,743 31,300 38,514 42,492 39,697 (7.5) (5.0) (18.7) (9.4) 7.0 Manufacturing 50,064 50,233 50,360 55,323 55,775 53,385 (0.3) (0.3) (9.0) (0.8) 4.5 Trade, transportation, utilities 116, , , , , ,294 (0.2) (1.4) (6.3) Information 16,104 16,291 16,545 17,214 18,468 18,423 (1.1) (1.5) (3.9) (6.8) 0.2 Financial activity 45,137 45,303 47,501 49,436 49,816 47,299 (0.4) (4.6) (3.9) (0.8) 5.3 Professional and business services 92,536 91,270 89,632 96,990 96,685 93, (7.6) Education and health services 66,141 65,241 63,454 61,098 57,845 54, Leisure and hospitality 17,295 46,607 46,847 48,521 47,911 46,135 (62.9) (0.5) (3.5) Other services. 17,827 17,766 18,016 18,884 18,734 18, (1.4) (4.6) Government 90,886 89,623 89,136 88,059 85,988 85, Total payroll (in millions) $ 6,180 $ 24,829 $ 24,435 $ 25,104 $ 24,571 $ 22,347 (75.1) 1.6 (2.7) Average monthly wage $ 3,798 $ 3,622 $ 3,551 $ 3,470 $ 3,406 $ 3, Average employment 542, , , , , ,771 (5.1) (0.4) (4.9) Establishments 33,798 35,625 36,493 37,717 37,727 37,887 (5.1) (2.4) (3.2) (0.0) (0.4) Personal Income; Per Capital Personal Income; Median Household Income within Salt Lake County and State of Utah Calendar Year (4) % change from prior year Total Personal Income (in $1,000 s): Salt Lake County $ 39,083,765 $ 37,679,403 $ 39,667,096 $ 37,817,581 $ 35,531,921 $ 32,325, (5.0) State of Utah... 90,250,233 86,930,461 90,610,323 85,105,668 78,378,401 71,529, (4.1) Total Per Capita Personal Income (in $): Salt Lake County 37,827 37,057 39,685 38,443 36,752 34, (6.6) State of Utah... 32,517 31,920 34,025 32,761 31,035 29, (6.2) Median Household Income(in $): Salt Lake County 56,664 56,954 59,168 56,378 52,951 48,398 (0.5) (3.7) State of Utah... 54,740 55,183 56,820 55,220 51,373 48,155 (0.8) (2.9) (e) estimate; (f) forcast; (p) preliminary; (r) revised. (1) Utah Department of Workforce Services. (2) Preliminary and subject to change. Information is from 1st Quarter; January through March (3) Preliminary and subject to change. (4) U.S. Department of Commerce; Bureau of Economic Analysis and U.S. Census Bureau. (Source: Utah State Tax Commission.) 22

29 Employment, Income, Construction, and Sales Taxes within Salt Lake County and the State of Utah continued. Construction within Salt Lake County (1) Calendar Year % change from prior year 2011 (4) Number new dwelling units 2, , , , , , (52.2) 29.0 (21.2) (27.2) New (in $1,000 s): Residential value $ 478,411.2 $ 396,367.2 $ 649,516.7 $ 588,477.5 $ 820,048.6 $ 1,087, (39.0) 10.4 (28.2) (24.6) Non residential value 625, , , , , , (45.4) (20.3) (16.6) 36.5 Additions, alterations, repairs (in $1,000 s): Residential value 50, , , , , ,070.2 (31.7) (12.2) 12.5 (24.2) 11.3 Non residential value 408, , , , , , (13.4) (26.2) 39.2 Total construction value (in $1,000 s) $ 1,562,590.3 $ 1,042,645.9 $ 1,545,119.4 $ 1,656,131.1 $ 2,153,637.9 $ 2,075, (32.5) (6.7) (23.1) 3.8 Sales Taxes Within Salt Lake County and the State of Utah (2) Calendar Year % change from prior year Gross Taxable Sales (in $1,000 s): Salt Lake County $ 18,688,337 $ 19,417,268 $ 20,457,525 $ 21,634,262 $ 20,328,814 $ 18,010,926 (3.8) (5.1) (5.4) State of Utah.. 41,527,957 44,409,394 47,360,540 47,690,034 44,795,780 39,241,252 (6.5) (6.2) (0.7) Fiscal Year % change from prior year Local Sales and Use Tax Distribution: Salt Lake County (and all cities)(in $) $ 166,606,416 $ 180,264,265 $ 196,624,877 $ 190,455,489 $ 171,843,710 $ 154,584,282 (7.6) (8.3) (1) University of Utah Bureau of Economic and Business Research, Utah Construction Report. (2) Utah State Tax Commission. 23

30 Largest Employers The County is the business and financial center for most of the major businesses and industries in the State. Major employers (over 1,000 employees) in the County area include: Approximate Range of Number of Employer (Location) Business Employees University of Utah (Salt Lake City)... Education services 13,000 19,000 State of Utah (county wide)... Public administration (1) 8,550 17,550 Granite School District (county wide)... Education services 6,100 13,250 LDS Church (county wide)... Other services (2) 6,000 12,000 Salt Lake County (county wide)... Public administration 5,000 7,000 University of Utah Hospital (Salt Lake City)... Health care and social assistance 4,550 6,250 Intermountain Health Care (county wide)... Health care and social assistance 4,400 8,050 Jordan School District (county wide)... Education services 4,200 9,300 Intermountain Medical Center (Murray City)... Health care and social assistance 4,000 5,000 The Canyons School District (county wide)... Education services 3,200 6,850 Wal Mart (county wide)... Retail trade 3,100 6,400 Salt Lake City School District (Salt Lake City)... Education services 3,050 6,450 L3 Communications Corp. (Salt Lake City)... Manufacturing 3,000 4,000 Delta Airlines (Salt Lake City)... Transportation and warehousing 2,500 4,000 ARUP Laboratories (Salt Lake City)... Health care and social assistance 2,400 3,850 U. S. Postal Service (county wide)... Transportation and warehousing 2,250 4,650 Salt Lake City (Salt Lake City)... Public administration 2,200 4,600 Kroger Group (county wide)... Retail trade 2,150 5,050 Discover Products (Salt Lake City)... Finance and insurance 2,000 3,000 Jet Blue Airways (Salt Lake City)... Administration/support/waste management 2,000 3,000 Intermountain Health Care (Primary) (Salt Lake City)... Health care and social assistance 2,000 3,000 Skywest Airlines (Salt Lake City)... Transportation and warehousing 2,000 3,000 Zions Bank (county wide)... Finance and insurance 1,950 3,950 Salt Lake Community College (county wide)... Education services 1,750 3,600 Larry H. Miller Enterprises (county wide)... Various services (3) 1,700 3,600 Wells Fargo Bank/Advisors (county wide)... Finance and insurance 1,700 2,950 United Parcel Service (Salt Lake/West Valley cities)... Transportation and warehousing 1,550 3,100 (1) Includes public administration; education services; arts, entertainment, and recreation; manufacturing; and health care and social assistance. (2) The Church of Jesus Christ of Latter day Saints. Estimated employment range, the church does not provide employment numbers. (3) Includes arts, entertainment, and recreation; retail trade; and information. 24

31 Largest Employers continued Approximate Range of Number of Employer (Location) Business Employees Convergys (Salt Lake/Taylorsville cities)... Management of companies and enterprises 1,500 2,050 Teleperformance USA (Salt Lake City)... Administration/support/waste management 1,500 3,000 Depart. of Veterans Affairs (Salt Lake/West Valley cities) Health care and social assistance (1) 1,400 2,850 Utah Transit Authority (county wide)... Transportation and warehousing 1,100 2,350 Overstock.com (Salt Lake City)... Retail trade (2) 1,250 2,500 Amex Card Services Company (West Valley City)... Finance and insurance 1,000 2,000 C.R. England Inc. (Salt Lake City)... Transportation and warehousing 1,000 2,000 Central Refrigerated Services (Salt Lake City)... Transportation and warehousing 1,000 2,000 Ebay (Draper City)... Retail trade 1,000 2,000 Fidelity Brokerage Services (Salt Lake City)... Finance and insurance 1,000 2,000 Intermountain Health Care (West Valley/Salt Lake cities). Management of companies and enterprises 1,000 2,000 Intermountain Health Care (LDS Hosp.) (Salt Lake City).. Health care and social assistance 1,000 2,000 Merit Medical (South Jordan City)... Manufacturing 1,000 2,000 Northern Utah Health Care (St. Marks) (Salt Lake City)... Health care and social assistance 1,000 2,000 The Sun Products Corporation (Salt Lake City)... Manufacturing 1,000 2,000 Department of Transportation (Salt Lake City)... Public administration (3) 1,000 2,000 Verizon Wireless (West Valley City)... Administration/support/waste management 1,000 2,000 (1) Also includes public administration. (2) Also includes Administration, support, and waste management. (3) Also includes transportation and warehousing. (Source: Utah Department of Workforce Services. Updated October 2011, reflecting information as of May 2011.) Rate Of Unemployment Annual Average Salt Lake State United Year County of Utah States 2012 (1) % 6.0% 8.1% 2011 (2) (1) Preliminary, subject to change. As of April 2012, seasonally adjusted. (2) Preliminary, subject to change. (Source: Utah Department of Workforce Services.) 25

32 DEBT STRUCTURE OF SALT LAKE COUNTY, UTAH Outstanding Sales Tax Revenue Bonded Indebtedness As of the date of this OFFICIAL STATEMENT, the County has outstanding the following sales tax revenue bonds: The Indenture. The County has issued the 2012 Bonds under the Indenture. The Bonds are not issued on a parity with the County s currently outstanding sales tax bonds issued under the 2010 Transportation Indenture (as defined below) nor do the Indenture and the 2010 Transportation Indenture share security in any revenues pledged therein. Original Current Principal Final Principal Series (1) Purpose Amount Maturity Date Outstanding 2012A... Refunding $43,725,000 February 1, 2025 $43,725, (2)... QECB/solar energy 1,917,804 February 1, ,825, D (3)... Building 33,020,000 November 1, ,020, A... Refund/storm drain 8,855,000 February 1, ,770, (4)... Convention center 57,095,000 August 1, 2025 (5) 10,450, (4)... Convention center 14,700,000 February 1, 2015 (5) 2,105,000 Total principal amount of outstanding debt (6)... $98,895,000 (1) All sales tax revenue bonds rated (unless otherwise indicated) AAA by Standard & Poor s Ratings Services, a Standard & Poor s Financial Services LLC business ( S&P ) and AA+ by Fitch Ratings ( Fitch ), as of the date of this OFFICIAL STATEMENT. (2) Private placement; issued as Qualified Energy Conservation Bonds with a 2.25% interest rate. (3) Federally taxable, 35% interest subsidy (direct pay), Build America Bonds. (4) Portions of this bond have been refunded by the 2012 Bonds. (5) Final maturity date after a portion of this bond has been refunded by the 2012 Bonds. (6) For accounting purposes, the net unamortized bond premium was $2,933,293 and the net deferred amount was $378,337 (as of December 31, 2011) and together with current outstanding sales tax revenue debt of $98,895,000, results in total outstanding net debt of $101,449,956. Outstanding Transportation Tax Revenue Bonded Indebtedness The 2010 Transportation Tax Revenue Indenture. In October 2010 the County issued transportation tax revenue bonds (collectively the Transportation Bonds ). The Transportation Bonds are special limited obligations of the County, payable solely from and secured by a pledge of the revenues, moneys, securities and funds pledged therefore in the 2010 Transportation Indenture (the 2010 Transportation Indenture ). The pledged revenues consist of certain highway fund revenues received by the County pursuant to an Interlocal Cooperation Agreement with the State. The most significant source of highway fund revenues is certain transportation related sales taxes and fees collected within the County. The 2010 Transportation Bonds are not issued on a parity with the County s currently outstanding sales tax bonds issued under the Indenture nor do the 2010 Transportation Indenture and the Indenture share security in any revenues pledged therein. 26

33 Original Current Principal Final Principal Series (1) Purpose Amount Maturity Date Outstanding 2010B (2)... Transportation $57,635,000 August 15, 2025 $57,635, A... Transportation 16,905,000 August 15, ,605,000 Total principal amount of outstanding debt... $74,240,000 (1) Rated AA by Fitch and AAA by S&P, as of the date of this OFFICIAL STATEMENT. (2) Federally taxable, 35% interest subsidy (direct pay), Build America Bonds. Outstanding General Obligation Bonded Indebtedness Original Current Principal Final Principal Series (1) Purpose Amount Maturity Date Outstanding Zoo/aviary $ 14,600,000 December 15, 2031 $ 14,600, C... Refunding 32,990,000 December 15, ,990, B... Refunding 10,645,000 December 15, ,645, A... Museum/aviary 25,000,000 December 15, ,705, B (2)... Zoo 14,450,000 December 15, ,450, A... Zoo 7,550,000 December 15, ,685, B (2)... Open space/aviary 18,625,000 December 15, ,625, A... Open space/aviary 11,375,000 December 15, ,155, Open space 24,000,000 December 15, ,275, Recreation 65,000,000 June 15, ,175, B (3)... Museum 15,000,000 December 15, 2013 (4) 2,045, Refunding 102,795,000 June 15, ,670,000 Total principal amount of outstanding direct general obligation debt (5)... $270,020,000 (1) All outstanding general obligation bonds of the County are rated AAA by Fitch; Aaa by Moody s Investors Service, Inc. ( Moody s); and AAA by S&P, as of the date of this OFFICIAL STATEMENT. (2) Federally taxable, 35% issuer subsidy (direct pay), Build America Bonds. (3) Principal portions of this bond were refunded by the 2011B Bonds. (4) Final maturity date after a portion of this bond was refunded by the 2011B Bonds. (5) For accounting purposes, the net unamortized bond premium was $6,428,017 and the net deferred amount was $4,153,718 (as of December 31, 2011), and together with current outstanding direct general obligation debt of $270,020,000, results in total outstanding net direct debt of $272,294,299. Outstanding Assessment District Bonded Indebtedness Original Current Principal Final Principal Series Purpose Amount Maturity Date Outstanding 2006 (1) Millcreek Fire $6,845,000 March 15, 2016 $1,520,000 (1) Rated AA by S&P, as of the date of this OFFICIAL STATEMENT. This bond issue is insured by Assured Guaranty Municipal Corp. 27

34 Debt Service Schedule Of Outstanding Sales Tax Bonds By Fiscal Year Fiscal Year Ending December 31 Issued under the Indenture (1) Series 2012A Series 2011 (2) Series 2010D Series 2010B (4) Series 2010A $43,725,000 $1,917,804 $33,020,000 $1,575,000 $8,855,000 Principal Interest Principal Interest Principal Interest (3) Principal Interest Principal Interest 2010 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ ,308,927 1,200,000 7, , , ,715 92,804 (5) 41, ,338, ,000 1, , , ,964,325 96,000 (5) 39, ,000 1,338,675 1,370, , ,964,325 98,000 (5) 37, ,000 1,328,675 1,410, , ,964, ,000 (5) 35, ,000 1,314,990 1,455, , ,630,000 1,891, ,000 (5) 33,289 1,215,000 1,299,709 1,500,000 99, ,760,000 1,743, ,000 (5) 30,949 1,230,000 1,275,409 1,555,000 46, ,940,000 1,589, ,000 (5) 28,564 1,250,000 1,244, ,000 12, ,110,000 1,408, ,000 (5) 26,123 1,275,000 1,207, ,000 7, ,325,000 1,197, ,000 (5) 23,625 1,305,000 1,165, ,000 2, ,540, , ,000 (5) 21,071 1,330,000 1,120, ,765, , ,000 (5) 18,461 1,360,000 (6) 1,073, ,015, , ,000 (5) 15,795 1,400,000 (6) 1,019, ,295, , ,000 (5) 13,061 1,435,000 (6) 963, ,345,000 54, ,000 (5) 10,260 1,470,000 (6) 905, ,000 (5) 7,403 1,510, , ,000 (5) 4,489 1,550, , ,000 (5) 1,508 1,595, , ,640, , ,695, , ,745,000 (7) 482, ,805,000 (7) 393, ,865,000 (8) 301, ,930,000 (8) 204, ,995,000 (8) 103,740 Totals $ 43,725,000 $ 16,461,327 $ 1,917,804 $ 388,979 $ 33,020,000 $ 22,942,796 $ 1,575,000 $ 9,275 $ 8,855,000 $ 1,254,776 Fiscal Year Ending December 31 Issued under the Indenture (1) Series 2005 Series 2004 Series 2001 (9) Totals $57,095,000 $14,700,000 $16,055,000 Total Total Total Debt Principal Interest Principal Interest Principal Interest Principal Interest Service 2010 $ 1,675,000 $ 2,536,125 $ 610,000 $ 531,475 $ 1,030,000 $ 474,713 $ 3,315,000 $ 3,542,313 $ 6,857, ,375,000 2,477, , , (11) 4,330,000 4,564,397 8,894, ,475,000 1,500, , , (11) 4,557,804 3,659,018 8,216, ,550, , ,000 69, (11) 5,491,000 4,039,808 9,530, ,650, , ,000 45, (11) 5,663,000 3,834,363 9,497, ,775, , ,000 16, (11) 5,875,000 3,614,300 9,489, (10) 0 0 (10) 0 0 (11) 6,448,000 3,324,635 9,772, (10) 0 0 (10) 0 0 (11) 6,650,000 3,096,595 9,746, (10) 0 0 (10) 5,452,000 2,876,035 8,328, (10) 0 0 (10) 5,655,000 2,649,619 8,304, (10) 0 0 (10) 5,907,000 2,389,528 8,296, (10) 0 0 (10) 5,985,000 2,116,993 8,101, (10) 0 0 (10) 6,242,000 1,835,208 8,077, (10) 0 0 (10) 6,535,000 1,533,641 8,068, (10) 0 0 (10) 6,853,000 1,217,158 8,070, (10) 5,941, ,269 6,911, ,638, ,299 2,492, ,681, ,720 2,469, ,729, ,539 2,446, ,640, ,661 2,282, ,695, ,761 2,259, ,745, ,130 2,227, ,805, ,135 2,198, ,865, ,080 2,166, ,930, ,100 2,134, ,995, ,740 2,098,740 Totals $ 14,500,000 $ 7,322,375 $ 4,000,000 $ 1,461,800 $ 1,030,000 $ 474,713 $ 108,622,804 $ 50,316,041 $ 158,938,845 (1) These bonds are issued on a parity basis under the Indenture. (2) Private placement; issued as Qualified Energy Conservation Bonds. (3) Federally taxable, 35% federal interest subsidy, Build America Bonds. Does not reflect the 35% federal interest subsidy payments. (4) This bond is included in this table because final principal and interest payments occurred in Fiscal Year (5) Mandatory sinking fund principal payments from a $1,917, % term bond due February 1, (6) Mandatory sinking fund principal payments from a $5,665, % term bond due November 1, (7) Mandatory sinking fund principal payments from a $3,550, % term bond due November 1, (8) Mandatory sinking fund principal payments from a $5,790, % term bond due November 1, (9) This bond is included in this table because final principal and interest payments occurred in Fiscal Year (10) Principal and interest has been refunded from bond proceeds from the 2012 Bonds. (11) Principal and interest has been refunded from bond proceeds from the 2010A and 2010B Bonds. 28

35 Debt Service Schedule Of Outstanding Transportation Bonds By Fiscal Year Fiscal Year Ending December 31 Issued under the Transportation Indenture Series 2010B Series 2010A Totals $57,635,000 $16,905,000 Total Total Total Debt Principal Interest (1) Principal Interest Principal Interest (2) Service (2) 2010 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ ,941, , , ,000 2,646,313 2,946, ,269, , , ,000 3,087,093 3,287, ,269, , ,083,093 3,083, ,269, , ,083,093 3,083, ,269, , , ,000 3,083,093 3,738, ,269,393 4,705, ,500 4,705,000 3,056,893 7,761, ,269,393 5,200, ,250 5,200,000 2,821,643 8,021, ,269,393 5,845, ,250 5,845,000 2,561,643 8,406, ,325,000 2,269, ,325,000 2,269,393 8,594, ,895,000 2,057, ,895,000 2,057,000 8,952, ,265,000 1,818, ,265,000 1,818,571 9,083, ,995,000 1,556, ,995,000 1,556,450 9,551, ,710,000 (3) 1,255, ,710,000 1,255,997 9,965, ,295,000 (3) 880, ,295, ,771 10,175, ,150,000 (3) 480, ,150, ,342 11,630,342 Totals $ 57,635,000 $ 28,145,868 $ 16,905,000 $ 5,595,521 $ 74,540,000 $ 33,741,390 $ 108,281,390 (1) Federally taxable, 35% federal interest subsidy, Build America Bonds. Does not reflect the 35% federal interest subsidy payments. (2) Does not reflect the 35% federal interest subsidy on the 2010B Bonds. (3) Mandatory sinking fund principal payments from a $29,155, % term bond due August 15,

36 Debt Service Schedule Of Outstanding General Obligation Bonds By Fiscal Year Fiscal Series 2012 Series 2011C Series 2011B Series 2011A Year Ending $14,600,000 $32,990,000 $10,645,000 $25,000,000 December 31 Principal Interest Principal Interest Principal Interest Principal Interest 2010 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ , ,090 1,295, , , ,324 7,480,000 1,649, , ,500 1,150, , , ,875 7,970,000 1,275, , ,200 1,200, , , ,675 8,495, ,000 1,870, ,600 1,250, , , ,175 9,045, ,250 1,910, ,200 1,300, , , ,575 1,980, ,800 1,345, , , ,675 2,055, ,600 1,400, , , ,475 1,285,000 51,400 1,445, , , ,075 1,490, , , ,375 1,540, , , ,475 1,585, , , ,175 1,625, , , ,375 1,680, , , ,475 1,735, , , ,375 1,800, , , , , , , , , , ,000 91, ,000 78, ,000 70, ,000 53, ,000 47, ,000 27, ,000 24,063 Totals $ 14,600,000 $ 3,795,849 $ 32,990,000 $ 4,643,715 $ 10,645,000 $ 1,843,390 $ 25,000,000 $ 8,222,034 Fiscal Series 2010B Series 2010A Series 2009B Series 2009A Year Ending $14,450,000 $7,550,000 $18,625,000 $11,375,000 December 31 Principal Interest (1) Principal Interest Principal Interest (1) Principal Interest 2010 $ 0 $ 565,354 $ 975,000 $ 127,054 $ 0 $ 1,103,098 $ 1,020,000 $ 314, , , , ,013 1,200, , , , , ,013 1,225, , , , , ,013 1,250, , , ,000 90, ,013 1,275, , , ,000 73, ,013 1,300, , , ,000 51, ,013 1,335, , ,978 1,000,000 27, ,013 1,365,000 79, ,025, , ,013 1,405,000 42, ,050, ,978 1,450, , ,080, ,403 1,485, , ,110, ,963 1,535, , ,140, ,123 1,580, , ,175, ,823 1,625, , ,210, ,773 1,680, , ,250, ,903 1,735, , ,285, ,903 1,790, , ,330, ,653 1,850, , ,375, ,158 1,915, , ,420,000 75,970 1,980, , Totals $ 14,450,000 $ 10,236,819 $ 7,550,000 $ 729,244 $ 18,625,000 $ 14,617,838 $ 11,375,000 $ 1,526,987 (1) Does not reflect a 35% federal interest rate subsidy on the Series 2010B Bonds and the Series 2009B Bonds which were issued as Build America Bonds. 30

37 Debt Service Schedule Of Outstanding General Obligation Bonds By Fiscal Year continued Fiscal Series 2008 Series 2007 Series 2004B Series 2004 Year Ending $24,000,000 $65,000,000 $15,000,000 $102,795,000 December 31 Principal Interest Principal Interest Principal Interest Principal Interest 2010 $ 900,000 $ 827,050 $ 5,150,000 $ 2,326,813 $ 925,000 $ 444,050 $ 9,100,000 $ 4,096, , ,800 5,625,000 2,111, , ,725 9,555,000 3,629, , ,300 6,100,000 1,876,813 1,000,000 81,800 10,060,000 3,139, ,000, ,050 6,625,000 1,614,031 1,045,000 41,800 10,570,000 2,623, ,025, ,050 7,175,000 1,329, (2) 11,120,000 2,081, ,050, ,300 7,750,000 1,031, (2) 5,580,000 1,664, ,100, ,175 8,400, , (2) 5,840,000 1,407, ,125, ,050 9,125, , (2) 6,075,000 1,169, ,175, , (2) 6,345, , ,200, ,081 6,630, , ,250, ,081 5,480, , ,300, ,081 4,970, , ,375, , ,425, , ,475, , ,525, , ,600, , ,675,000 71, Totals $ 22,125,000 $ 9,152,550 $ 55,950,000 $ 11,184,344 $ 3,935,000 $ 831,375 $ 91,325,000 $ 21,779,894 Fiscal Series 2001 Totals Year Ending $73,810,000 (3) Total Total Total Debt December 31 Principal Interest Principal Interest (1) Service 2010 $ 7,200,000 $ 2,456,550 $ 25,270,000 $ 12,260,505 $ 37,530, ,620,000 1,270,800 28,100,000 11,258,567 39,358, (4) 30,290,000 10,940,691 41,230, (4) 31,970,000 9,642,086 41,612, (4) 33,770,000 8,229,275 41,999, (4) 29,515,000 6,915,078 36,430, ,620,000 5,612,528 27,232, ,805,000 4,695,328 27,500, ,350,000 3,961,128 17,311, ,505,000 3,435,296 15,940, ,530,000 2,949,046 14,479, ,215,000 2,492,920 13,707, ,460,000 2,150,134 8,610, ,650,000 1,905,234 8,555, ,855,000 1,646,684 8,501, ,080,000 1,369,985 8,449, ,050,000 1,077,993 7,127, ,275, ,975 7,085, ,750, ,118 5,280, ,905, ,570 5,213, ,550,000 75,188 1,625, ,000 24, ,063 Totals $ 14,820,000 $ 3,727,350 $ 323,390,000 $ 92,291,389 $ 415,681,389 (1) Does not reflect a 35% federal interest rate subsidy on the Series 2010B Bonds and the Series 2009B Bonds which were issued as Build America Bonds. (2) Principal and interest have been refunded by the 2011B Bonds. (3) This bond is included in this table because final principal and interest payments occurred in Fiscal Year (4) Principal and interest have been refunded by the 2011C Bonds. 31

38 Debt Service Schedule Of Outstanding Assessment Area Bonds By Fiscal Year (1) Fiscal Year Ending December 31 Series 2006 $6,845,000 Total Debt Principal (2) Interest Service 2010 $ 585,000 $ 136,029 $ 721, ,000 99, , ,000 77, , ,000 54, , ,000 39, , ,000 24, , ,000 8, ,353 Totals $ 3,025,000 $ 439,638 $ 3,464,638 (1) Because these bonds are callable at any time, total principal and interest calculation payments for each Fiscal Year may not match actual principal and interest amounts being paid. (2) Remaining principal outstanding as of October

39 Future Issuance Of Debt; Historical Tax And Revenue Anticipation Note Borrowing; Other Debt Future issuance of debt. The County may issue additional sales tax revenue bonds in the approximate amount of $37 million in the fall of Fiscal Year Tax and Revenue Anticipation Notes. The County has issued tax and revenue anticipation notes throughout the past 10 Fiscal Years as follows (for Fiscal Years 2005 through 2008 the County did not issue tax and revenue anticipation notes): Fiscal Year Series Amount Date of Sale Rating (1) $35,000,000 June 28, 2011 MIG ,000,000 July 20, 2010 MIG ,000,000 October 1, 2009 Not rated ,500,000 June 15, 2004 Not rated ,000,000 June 17, 2003 Not rated ,000,000 June 18, 2002 Not rated ,000,000 June 12, 2001 Not rated (1) Moody s rating. The County will issue approximately $50 million of tax and revenue anticipation notes for Fiscal Year 2012 in June Other Debt. The County has no capital leases outstanding of December 31, See APPEN- DIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMA- TION OF SALT LAKE COUNTY, UTAH FOR FISCAL YEAR 2010 Notes To The Financial Statements Note 8. Long Term Liabilities and Note 15. Joint Ventures. The Municipal Building Authority Of Salt Lake County, Utah The Municipal Building Authority of Salt Lake County, Utah (the Authority ) is a body politic and corporate, operating under the Local Building Authority Act. The Authority was created in 1992 for the purpose of acquiring, constructing, improving or extending projects on behalf of the County pursuant to the predecessor to Local Building Authority Act. The Authority s debt does not constitute legal debt within the meaning of any constitutional provision or statutory limitation of the County. The Authority has entered into certain annual leases with the County for each project on an all or none basis. The leases may be terminated by the County in any year and payments by the County may be made only from moneys which are annually budgeted and appropriated by the County for such purpose. As of the date of this OFFICIAL STATEMENT, the Authority has outstanding the following lease revenue bonds: 2009 Indenture and 2009 Master Lease. In 2009, the Authority issued lease revenue bonds under a 2009 Indenture (the 2009 Indenture ), which bond proceeds were used for the acquisition, construction, improvements and equipping a public works building, libraries and senior centers (collectively, the 2009 Projects ). The Authority may, from time to time, issue additional bonds under the 2009 Indenture. The Authority has leased the 2009 Projects to the County, pursuant to a 2009 Master Lease (the 2009 Master Lease ). All of the lease revenue bonds issued under the 2009 Master Lease are cross collateralized in that the Authority has granted to a trustee, for the benefit of the owners of all of the lease 33

40 revenue bonds issued under the 2009 Master Lease, a security interest in all of the Authority s right, title and interest in the projects financed with the lease revenue bonds issued under the 2009 Indenture. Original Current Principal Final Principal Series (1) Purpose Amount Maturity Date Outstanding 2009B (2).. Public works/libraries/senior centers $58,390,000 December 1, 2029 $58,390, A... Public works/libraries/senior centers 22,165,000 December 1, ,760,000 Total principal amount of outstanding bonds under the 2009 Indenture... $79,150,000 (1) Rated AA+ by Fitch; Aa1 by Moody s; and AA+ by S&P, as of the date of this OFFICIAL STATE- MENT. (2) Federally taxable, 35% interest subsidy (direct pay), Build America Bonds Indenture and 1992 Master Lease. The Authority has issued various series of lease revenue bonds under a 1992 Indenture (the 1992 Indenture ). Proceeds from the various series of lease revenue bonds were used to finance or refinance portions of the cost of the acquisition of real estate and the acquisition, construction, improvements and equipping of certain buildings, facilities and other improvements (collectively, the Projects ). The Authority may, from time to time, issue additional bonds under the 1992 Indenture. The Authority has leased the Projects to the County, pursuant to a 1992 Master Lease (the 1992 Master Lease ). All of the lease revenue bonds issued under the 1992 Master Lease are cross collateralized in that the Authority has granted to a trustee, for the benefit of the owners of all of the lease revenue bonds issued under the 1992 Master Lease, a security interest in all of the Authority s right, title and interest in the projects financed with the lease revenue bonds issued under the 1992 Indenture. Original Current Principal Final Principal Series Purpose Amount Maturity Date Outstanding 1997 (1)... Refunding (Riverbend) $7,835,000 October 1, 2012 $700,000 Total principal amount of outstanding bonds under the 1992 Indenture... $700,000 (1) Rated AA+ by Fitch; Aa1 by Moody s; and AA+ by S&P, as of the date of this OFFICIAL STATE- MENT. This bond issue is insured by AMBAC Assurance Corporation. Summary of the Authority s Lease Revenue Bonds. Bonds issued under the 2009 Indenture and the 1992 Indenture are not secured on a parity basis. Total principal amount of outstanding bonds under the 2009 Indenture... $79,150,000 Total principal amount of outstanding bonds under the 1992 Indenture ,000 Total principal amount of all lease revenue bonds outstanding (1)... $79,850,000 (1) Generally accepted accounting principles require that bond premium/discount and the amount relating to the defeasance in a refunding bond issue be amortized over the life of the bonds. For accounting purposes, the outstanding direct debt as shown above is increased by the premium associated with debt issued and reduced by deferred amounts on refundings that are reported in the long term debt notes of the County s financial statements. Thus, for accounting purposes, the net unamortized premium was $2,111,333 and the total deferred amount was $1,667 (as of December 31, 2011) and together with current outstanding lease revenue debt of $79,850,000, results in total outstanding net debt of $81,959,

41 Debt Service Schedule Of Outstanding Municipal Building Authority Of Salt Lake County Lease Revenue Bonds By Fiscal Year Issued under Issued under 2009 Indenture (1) 2002 Indenture (2) Fiscal Series 2009B Series 2009A Series 2002 Year Ending $58,390,000 $22,165,000 Total Debt $13,390,000 Total Debt December 31 Principal Interest (a) Principal Interest Service (a) Principal Interest Service 2010 $ 0 $ 2,891,749 $ 570,000 $ 875,477 $ 4,337,226 $ 399,000 $ 292,114 (2) $ 691, ,135, , ,213 4,902, (2) ,135,631 3,145, ,250 7,189, (2) ,135,631 3,225, ,900 7,175, (2) ,135,631 3,360, ,900 7,181, (2) ,135,631 3,500, ,500 7,187, (2) ,135,631 3,675, ,500 7,187, (2) ,135,631 3,855, ,750 7,183, (2) ,050,000 3,135,631 7,185, (2) ,165,000 2,952,166 7,117, (2) ,300,000 2,757,244 7,057, (2) ,425,000 2,551,704 6,976, (2) ,570,000 (3) 2,335,764 6,905, (2) ,725,000 (3) 2,094,468 6,819, (2) ,895,000 (3) 1,844,988 6,739, (2) ,060,000 (4) 1,586,532 6,646, (2) ,235,000 (4) 1,292,040 6,527, (2) ,450,000 (4) 987,363 6,437, (2) ,650,000 (4) 670,173 6,320, ,865,000 (4) 341,343 6,206,343 Totals $ 58,390,000 $ 47,390,582 $ 22,165,000 $ 5,338,490 $ 133,284,071 $ 399,000 $ 292,114 $ 691,114 (a) Does not reflect a 35% federal interest rate subsidy on the Authority's Series 2009B Bonds which were sold as Build America Bonds. (1) These bonds were issued on a parity basis under the 2009 Indenture and are not issued on a parity with the Authority s other outstanding lease revenue obligations. (2) This bond is included in this table because final principal and interest payments occurred in Fiscal Year These bonds were called and retired on August 2, (3) Mandatory sinking fund principal payments from a $14,190, % term bond due December 1, (4) Mandatory sinking fund principal payments from a $27,260, % term bond due December 1,

42 Debt Service Schedule Of Outstanding Municipal Building Authority Of Salt Lake County Lease Revenue Bonds By Fiscal Year continued Fiscal Year Ending December 31 Issued under 1992 Indenture (1) Series 2001A Series 1997 Totals $34,240,000 $7,835,000 Total Total Total Debt Principal Interest Principal Interest Principal Interest Service 2010 $ 6,475,000 $ 618,474 $ 635,000 $ 98,065 $ 7,110,000 $ 716,539 $ 7,826, , , ,000 67,585 1,460, ,084 1,699, (3) 700,000 35, ,000 35, , (3) (3) (2) 0 (3) (2) 0 (3) (2) 0 (3) Totals $ 7,270,000 $ 789,973 $ 2,000,000 $ 200,650 $ 9,270,000 $ 990,623 $ 10,260,623 (1) These bonds were issued on a parity basis under the 1992 Indenture and are not issued on a parity with the Authority s other outstanding lease revenue obligations. (2) Mandatory sinking fund principal payments on a $2,970, % term bond due October 1, (3) Principal and interest have been refunded by the County s 2011B General Obligation Bonds. 36

43 Debt Service Schedule Of Outstanding Municipal Building Authority Of Salt Lake County Lease Revenue Bonds By Fiscal Year continued Fiscal Year Ending December 31 Total All Lease Revenue Totals (1) Total Total Total Debt Principal Interest (2) Service 2010 $ 8,079,000 $ 4,775,879 $ 12,854, ,295,000 4,306,928 6,601, ,845,000 4,079,881 7,924, ,225,000 3,950,531 7,175, ,360,000 3,821,531 7,181, ,500,000 3,687,131 7,187, ,675,000 3,512,131 7,187, ,855,000 3,328,381 7,183, ,050,000 3,135,631 7,185, ,165,000 2,952,166 7,117, ,300,000 2,757,244 7,057, ,425,000 2,551,704 6,976, ,570,000 2,335,764 6,905, ,725,000 2,094,468 6,819, ,895,000 1,844,988 6,739, ,060,000 1,586,532 6,646, ,235,000 1,292,040 6,527, ,450, ,363 6,437, ,650, ,173 6,320, ,865, ,343 6,206,343 Totals $ 90,224,000 $ 54,011,809 $ 144,235,809 (1) The total principal of and interest on the lease revenue bonds is for informational purposes only. These total amount of lease revenue bonds are secured by bonds issued under separate and distinct indentures of trust and pledge, master leases and security documents. (2) Does not reflect a 35% federal interest rate subsidy on the Authority s Series 2009B Bonds which were sold as Build America Bonds. 37

44 Overlapping And Underlying General Obligation Debt Entity s 2011 County s County s General County s Taxable Portion of Tax- Per- Obligation Portion of Taxing Entity Value (1) able Value centage Debt G.O. Debt Overlapping: State of Utah... $193,170,017,535 $73,222,023, % $3,487,680,000 $1,321,830,720 CUWCD (2) ,913,112,627 73,222,023, ,744, ,501,082 Total overlapping... 1,505,331,802 Underlying: School District: Granite... 21,355,172,990 21,355,172, ,705, ,705,000 Salt Lake City... 18,352,021,472 18,352,021, ,280, ,280,722 Canyons... 15,458,832,384 15,458,832, ,872, ,872,600 Jordan... 15,151,540,309 15,151,540, ,157, ,157,400 Murray... 2,904,456,037 2,904,456, ,815,000 17,815,000 Salt Lake City... 18,354,027,720 18,354,027, ,920, ,920,000 Draper City (3)... 3,517,533,065 3,374,970, ,385,000 5,164,215 Sandy Suburban Imp. District... 2,921,245,444 2,921,245, ,390,000 11,390,000 Cottonwood Heights Parks and Rec.... 1,833,855,390 1,833,855, ,705,000 7,705,000 Midvale City... 1,592,302,497 1,592,302, ,705,000 2,705,000 White City Water Imp. District (4) ,226, ,226, ,120,000 0 Total Underlying ,714,937 Total overlapping and underlying general obligation debt... $2,308,046,739 Total overlapping general obligation debt (excluding the State) (5)... $183,501,082 Total direct general obligation bonded indebtedness ,020,000 Total direct and overlapping general obligation debt (excluding the State)... $453,521,082 This table excludes any additional principal amounts attributable to unamortized original issue bond premium and deferred amount on refunding. (1) Preliminary; subject to change. Taxable value used in this table excludes the taxable value used to determine uniform fees on tangible personal property. See FINANCIAL INFORMATION REGARDING SALT LAKE COUNTY, UTAH Taxable, Fair Market And Market Value Of Property below. (2) Central Utah Water Conservancy District ( CUWCD ) outstanding general obligation bonds are limited ad valorem tax bonds. Certain portions of the principal of and interest on CUWCD s general obligation bonds are paid from sales of water. (3) Includes portions of the city located in Utah County. (4) The County s portion of overlapping general obligation debt does not include general obligation debt expected to be paid from other revenue sources. (5) The State s general obligation debt is not included in overlapping debt because the State currently levies no property tax for payment of its general obligation bonds. Debt Ratios The following table sets forth the ratios of general obligation debt (excluding any additional principal amounts attributable to unamortized original issue bond premium and deferred amount on refunding) that is expected to be paid from taxes levied specifically for such debt and not from other revenues over the taxable value of property within the County, the estimated market value of such property and the popula- 38

45 tion of the County. The State s general obligation debt is not included in the debt ratios because the State currently levies no property tax for payment of general obligation debt. To 2011 To 2011 To 2011 Estimated Estimated Population Taxable Market Estimate Per Value (1) Value (2) Capita (3) Direct General Obligation Debt % 0.26% $257 Direct and Overlapping General Obligation Debt (1) Based on an estimated 2011 Taxable Value of $73,222,023,192, which value excludes the taxable value used to determine uniform fees on tangible personal property. (2) Based on an estimated 2011 Market Value of $104,859,402,837, which value excludes the taxable value used to determine uniform fees on tangible personal property. (3) Based on 2011 estimate of 1,048,985 by the U.S. Census Bureau. See FINANCIAL INFORMATION REGARDING SALT LAKE COUNTY, UTAH Taxable, Fair Market And Market Value Of Property below. General Obligation Legal Debt Limit And Additional Debt Incurring Capacity The general obligation indebtedness of the County is limited by State law to 2% of the fair market value of taxable property in the County. The debt limit and additional debt incurring capacity of the County shown below are based on the estimated fair market value for 2011 and the calculated valuation from 2010 uniform fees, and are calculated as follows: Estimated 2011 Fair Market Value... $104,859,402, valuation from Uniform Fees (1)... 4,259,441,440 Estimated 2011 Fair Market Value for Debt Incurring Capacity... $109,118,844,277 Fair Market Value for Debt Incurring Capacity times 2% equals (the Debt Limit ). $2,182,376,886 Less: currently outstanding general obligation debt (net) (2)... (272,294,299) Additional debt incurring capacity... $1,910,082,587 (1) Final information for 2011 is not available. For debt incurring capacity only, in computing the fair market value of taxable property in the County, the value of all motor vehicles and state assessed commercial vehicles (which value is determined by dividing the uniform fee revenue by 1.5%) will be included as a part of the fair market value of the taxable property in the County. (2) For accounting purposes, the net unamortized bond premium was $6,428,017 and the net deferred amount was $4,153,718 (as of December 31, 2011), and together with current outstanding direct general obligation debt of $270,020,000, results in total outstanding net direct debt of $272,294,299. No Defaulted Obligations The County has never failed to pay principal of and interest on any of its financial obligations when due. 39

46 FINANCIAL INFORMATION REGARDING SALT LAKE COUNTY, UTAH Fund Structure; Accounting Basis 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 Budgetary Accounting The budget and appropriation process of the County is governed by the Uniform Fiscal Procedures Act for Counties, Title 17, Chapter 36, Utah Code (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 (ensuing fiscal) year. Each budget is required to specify, in tabular form, 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. The County Mayor is the Budget Officer of the County. On or before November 15 th of each year, the County Mayor is required to submit a Proposed Budget to the County Council for all funds for the fiscal year commencing January 1. Various actual and estimated budget data are required to be set forth in the proposed budget including estimated revenue from non property tax sources available for each fund and the revenue from general property taxes required by each fund. After the Proposed Budget is submitted by the Mayor, the County Council then makes appropriation decisions. The recommended final budget is then made available to citizens at least 10 days prior to a public hearing. After public notice and hearing, the final budget is adopted by the County Council. If the County proposes to budget an increased amount of property tax revenue exclusive of revenues from new growth, the County Council shall comply with the certain notice and hearing requirements contained in the Property Tax Act, Chapter 2, Title 59, Utah Code (the Property Tax Act ) in adopting the budget. Once the final budget is adopted by the County Council, the County Mayor may veto a line item in the final budget. Budget items vetoed by the County Mayor may be overridden by the County Council. 40

47 On or before December 31 in each year, the final budgets for all funds are adopted by the County Council. The Fiscal Procedures Act prohibits the County Council 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 County Council 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. 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 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. If the legislative body intends to adopt a tax rate that exceeds the certified tax rate, the legislative body must comply with the Property Tax Act in adopting the rate. 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 (the County falling within this parameter), 20% of the total revenues of the general fund for the current fiscal period; or (b) for any other 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 or may be placed into a Disaster Recovery Fund established by the County. 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 Mayor 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 Mayor 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 Mayor for sufficient appropriations. Financial Management The County Mayor is statutorily empowered with certain financial duties and powers. These responsibilities include responsibilities as finance officer and County budget officer. As budget officer, the Mayor is responsible for revenue projections and preparation of a proposed budget which is presented to the County Council. The County Council may adjust the proposed budget prior to final budget adoption. Due to recent legislative changes and decisions by the County Council, certain responsibilities previously under the Auditor were transferred to the Mayor. The responsibilities transferred include County budget officer and the accounting functions. The remaining duties the Auditor is responsible for include internal auditing and certain functions relating to operation of the property tax system The Mayor now performs all central accounting and financial reporting, processes County payroll, and pays financial obligations. The County Council has adopted financial goals and policies which formalize the County s commitment to financial best practice and compliance with relevant statutory and ordinance requirements. The 41

48 financial goals and policies address the key financial operations of the County in the following areas: (i) operating and capital budgeting; (ii) debt issuance; (iii) revenues; (iv) minimum reserves; (v) investments; and (vi) accounting, financial reporting, and auditing. The County s most significant financial management policies including: (i) a county wide cost allocation plan; (ii) a long range budget and planning process which projects revenues, budgets, and minimum fund balances three years into the future; and (iii) the creation of a Debt Review Committee, consisting of eight representatives (two from the County Auditor, one from the County Treasurer, one from the District Attorney, two from the County Mayor, and two representatives from the County Council) which reviews all forms of debt requests, and forwards its recommendations to the County Council. Reserves (Undesignated Fund Balances). The County has a policy of maintaining minimum fund balance reserves or rainy day funds. These undesignated fund balances for the indicated County s funds are summarized as follows: Minimum Annual Ending Balance For December 31 (in $1,000) 2012 Budget Budget Prelim. Fund Reserves 2012 (1) 2011 (2) County wide (3)... $25,617 $31,717 $39,895 $57,617 $44,646 $39,241 $49,801 $66,249 % change over previous year % 13.8% (21.2)% (24.8)% 6.8% Municipal services... $2,213 $5,802 $3,625 $8,862 $4,309 $7,581 $20,587 $26,008 % change over previous year % (43.2)% (63.2)% (20.8)% 38.1% Library... $1,726 $3,538 $9,523 $10,462 $8,684 $5,633 $9,805 $8,989 % change over previous year % 54.2% (42.5)% 9.1% 8.1% (1) Undesignated ending fund balances for Fiscal Year 2012 are budgeted as of December These budgets are based on the latest information available and are subject to change. (2) Preliminary Fiscal Year 2011 ending fund balances are unaudited and subject to change. (3) Includes general fund, capital improvement, flood, health and planetarium undesignated fund balances. (Source: County Auditor.) The unrestricted net assets for the County s proprietary funds are summarized as follows: Ending Balance For December 31 (in $1,000) Fund Internal service funds... $25,572 $27,597 $38,368 $45,667 $42,991 % change over previous year... (7.3)% (28.1)% (16.0)% 6.2% 8.8% Enterprise funds (1)... $15,796 $35,772 $31,824 $33,563 $35,563 % change over previous year... (55.8)% 12.4% (5.2)% (5.6)% (15.0)% (1) For Fiscal Year 2010, the Enterprise funds include golf courses and sanitation funds only (prior years included the solid waste fund). Beginning in Fiscal Year 2010, the solid waste fund is included in the government wide financial statements (for Fiscal Year 2010 the unrestricted fund balance was $21,108,157). (Source: County Mayor s Office of Financial Administration.) See in this section Management s Current Discussion And Analysis Of Financial Operations Fund Balances below. 42

49 Capital Planning Process. The County employs a facilities management staff to annually review and assess the County s buildings and physical plant for capital maintenance/project needs. Facilities management staff compiles the data, which is presented to the Capital Projects Committee, to prioritize all project and maintenance needs of the County within appropriations set by the County Council. Previously identified but unfunded capital projects and maintenance needs are reviewed and reprioritized in subsequent years along with all newly identified capital project and maintenance needs. Capital Projects Revolving Fund. The County utilizes a Capital Projects Revolving Fund to provide an internal mechanism for carrying out capital purchases. Moneys borrowed from the Capital Projects Revolving Fund are to be repaid at a rate equal to the County Treasurer s monthly net yield. The Capital Projects Revolving Fund also provides a mechanism for pay as you go projects. The Capital Projects Revolving Fund allows for interest earning deposits to reduce the principal amount required to fund various capital projects. Management s Current Discussion And Analysis Of Financial Operations Fund Balances. The undesignated fund balance in the General Fund at the end of the Fiscal Year 2010 is $45.7 million which is substantially greater than the Fiscal Year 2009 amount of $31.3 million. This increase is attributable to a series of policy decisions by the Mayor and Council to reduce operating costs and a one time $7 million fund balance transfer from the Solid Waste Management Fund in Fiscal Year The County Council has adopted a minimum reserve policy of 10% of budgeted expenditures in the General Fund. This 10% policy was exceeded in Fiscal Years 2001 through The County expects the minimum reserve policy to again be exceeded in Fiscal Year For Fiscal Year 2012, the budgeted ending fund balance is $26.7 million which, on a budgetary basis, exceeds the minimum reserve policy. Property Tax Collections. For Fiscal Years 2002 through 2010, property tax revenues in the General Fund increased each year. However, for Fiscal Year 2009, the collection rate (for current year property taxes) declined 1.4% in comparison with the prior year. This decline was offset with additional revenue attributable to new growth in the County. For Fiscal Year 2010, the collection rate improved 2.3%. Sales Tax Collections. After significant declines in Fiscal Years 2008 and 2009, County option sales tax revenues increased 0.38% in the General Fund during Fiscal Year 2010 and 7% in Fiscal Year For Fiscal Year 2012, year to date revenues through February have increased 4% in comparison with the corresponding period in the prior year. Overall, revenues are projected to increase approximately 3% during Fiscal Year Capital Projects Fund. The County maintains a Capital Projects Revolving Fund for the purpose of accumulating funds for capital projects financed on a pay as you go basis, and for accounting for the costs of constructing these projects. For Fiscal Year 2010, the ending unreserved fund balance for this fund is $1.1 million. The majority of cash on deposit in this fund has been designated for specific projects and has been accumulated from pre payments for such projects. Projects financed in prior years from this fund include recreation and park projects, construction of new libraries, and construction of a new health clinic. The County is financing the development and implementation of a new property tax system from funds designated for this purpose several years ago. The administration of the County prepared a narrative discussion, overview, and analysis of the financial activities of the County for Fiscal Year See APPENDIX A BASIC FINANCIAL STATE- MENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR 2010 Management s Discussion and Analysis (after the Independent Auditor s Report). 43

50 Sources Of General Fund Revenues (Excludes Other Governmental Funds) 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 Fiscal Year 2010 period (total general fund revenues were $227,964,562). Taxes and Fees Approximately 68% (or $155,499,975) of general fund revenues are from taxes (general property taxes approximately 47% (or $106,579,374) and sales taxes approximately 18% (or $41,590,792)); and approximately 3% (or $7,329,809) of general fund revenues are from motor vehicles fees. Interfund charges Approximately 11% (or $24,418,943) of general fund revenues are collected from interfund charges. Charges for Services Approximately 9% (or $20,906,936) of general fund revenues are from charges for services. Intergovernmental and Grant Revenue Approximately 5% (or $11,383,745) of general fund revenues are from federal and State shared revenues. Interest, rents, and concessions Approximately 5% (or $11,171,926) of general fund revenues are collected from interest, rents and concessions. Fines and Forfeitures Approximately 1% (or $2,366,873) of general fund revenues are collected from fines, forfeitures and other sources. Licenses and Permits; and Other Approximately 1% (or $2,216,164) of general fund revenues are collected from licenses, permits and other revenues. Five Year Financial Summaries The summaries contained herein were extracted from the County s audited basic financial statements and required supplementary information. The summaries themselves have not been unaudited. See FI- NANCIAL INFORMATION REGARDING SALT LAKE COUNTY, UTAH Management s Current Discussion And Analysis Of Financial Operations above and APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR The County s annual financial report for Fiscal Year 2011 must be completed under State law by June 30, (The remainder of this page has been intentionally left blank.) 44

51 Salt Lake County Statement of Net Assets (This summary has not been audited) As of December (1) Assets Cash and investments: Pooled cash and investments $ 183,778,249 $ 170,908,121 $ 201,385,515 $ 231,708,445 $ 244,148,375 Restricted cash and investments 187,696, ,649,992 86,035, ,629,078 53,977,665 Other cash. 1,029,320 1,005,823 3,020,000 1,267,299 1,943,645 Receivables: Taxes and receivable 33,809,131 31,531,283 30,652,895 36,075,292 36,609,302 Due from other governments 12,891,922 18,063,454 15,898,631 16,092,625 15,474,662 Accrued revenue 15,736,287 8,864,500 8,188,843 5,446,423 4,085,883 Other receivables 26,180,397 26,725,995 21,682,553 82,229,854 83,120,294 Allowance for uncollectible accounts (57,368,139) (57,368,139) Inventories.. 543, , ,031 1,219,584 1,177,701 Investment in joint ventures 21,581,188 22,868,092 22,892,110 22,124,353 22,311,315 Prepaid expenses 4,478,208 Other assets 5,684,975 73,261 7,435,992 7,290,791 Bond issuance costs, net of accumulated amortization 2,726,139 1,760,874 1,344,371 Restricted deposit 34,710 3,149,112 3,177,721 Capital assets: Land, roads, and construction in progress 431,299, ,849, ,337, ,896, ,341,781 Buildings, improvements, equipment and other depreciable assets net of accumulated depreciation 622,284, ,683, ,379, ,679, ,144,483 Total assets 1,544,035,488 1,453,227,380 1,390,565,232 1,432,585,509 1,362,435,479 Liabilities: Accounts payable 23,316,762 23,731,923 20,012,082 25,427,334 21,626,708 Accrued expenses 14,031,010 17,984,469 25,137,685 Accrued interest 1,338,159 2,050,896 2,507,675 Unearned revenue 3,969, ,140 18,159 Accrued liabilities 42,861,272 46,918,941 Deferred revenue 1,528,176 75,212 Bonds, notes and leases payable 30,632,400 24,923,750 Compensated absences... 9,436,352 9,238,935 Long term liabilities: Portion due or payable within one year 49,113,797 47,492,946 43,447,106 Portion due or payable after one year 547,810, ,976, ,683,316 Bonds, notes and leases payable 347,194, ,918,162 Net OPEB obligation... 8,145,953 Compensated absences... 9,963,678 9,675,143 Total liabilities 639,579, ,125, ,806, ,189, ,376,851 Net Assets: Invested in capital assets, net of related debt 684,892, ,754, ,370, ,093, ,586,670 Restricted for: Capital improvements.. 13,948,150 22,534,450 31,132,410 86,874,696 2,120,984 Debt service.. 26,894,012 31,349,449 25,384,537 15,606,344 Housing.. 21,930,926 23,218,398 24,215,179 Roads.. 4,985,139 6,080,654 5,409,186 Libraries.. 10,112,892 8,693,680 5,864,035 Health.. 6,321,450 5,452,310 5,894,536 3,149,112 3,177,721 Convention and tourism.. 8,905,357 8,569,537 19,317,776 Municipal services.. 10,620,293 8,247,468 11,823,471 Pet adoption: Expendable 2,756 Nonexpendable 1,575,000 Other purposes.. 16,040,201 15,524,984 15,626,698 Drug and alcohol enforcement/services.. 1,034,078 1,025,092 Contractual obligations 290, ,417 Judgment levies 323, ,112 Revolving loans.. 2,867,115 3,571,435 Unrestricted... 98,227,052 82,676,723 88,720, ,157, ,948,197 Total net assets.. $ 904,456,127 $ 897,102,318 $ 924,759,209 $ 957,395,854 $ 937,058,628 (1) Due to changes in the County's accounting procedures, certain line item descriptions and related figures are not stictly comparable to those of prior years. (Source: Information extracted from the County s basic financial statements and required supplementary information which have been audited.) 45

52 Salt Lake County Statement of Activities (1) (This summary has not been audited) Net (Expense) Revenue and Changes in Net Assets Fiscal Year Ended December Primary government Governmental activities: General government $ (7,097,566) $ (14,902,937) $ (13,055,174) $ (8,152,598) $ (11,710,948) Public safety and criminal justice (154,037,686) (153,325,868) (156,409,072) (154,968,113) (133,644,680) Social services (28,821,686) (27,302,548) (29,781,894) (28,628,637) (22,966,620) Education, recreation, and cultural (100,043,581) (94,981,889) (94,867,791) (92,898,042) (84,091,671) Health and regulatory (10,692,876) (15,330,866) (16,794,839) (13,367,212) (11,855,940) Public works..... (12,174,303) (10,589,855) (12,194,210) (3,433,897) 357,429 Tax administration (19,091,383) (20,320,593) (19,435,011) (15,634,894) (15,238,609) Interest on long term debt (18,981,583) (14,875,687) (17,200,554) (16,420,887) (16,494,525) Total governmental activities (350,940,664) (351,630,243) (359,738,545) (333,504,280) (295,645,564) Business type activities: Golf (683,251) (683,955) (927,374) (227,802) (267,463) Sanitation 566, ,670 1,129,026 (884,274) (229,681) Solid Waste Management 837,905 1,481, , ,186 Total business type activities (116,549) 699,620 1,683,031 (1,265,982) 496,042 Total county (351,057,213) (350,930,623) (358,055,514) (334,770,262) (295,149,522) General revenues: Property taxes 218,805, ,668, ,875, ,497, ,980,259 Sales taxes 101,874,162 99,160, ,901, ,742, ,663,274 Transient room taxes 12,458,550 12,077,146 14,372,704 15,615,048 12,419,989 Tax equivalent payments. 15,044,225 14,740,568 Cable television taxes. 1,097,280 1,069,713 1,018, , ,267 Tax increment 16, ,158 56, ,023 Total taxes and tax equivalents 349,279, ,733, ,283, ,852, ,173,812 Unrestricted investment earnings 3,076,329 1,692,854 8,994,759 16,103,435 12,856,269 Transfers 152,013 Total general revenues and transfers 352,356, ,426, ,278, ,107, ,030,081 Change in net assets 1,299,080 (28,504,127) (35,777,463) 20,337,226 41,880,559 Net assets beginning (restated) ,157, ,606, ,536, ,058, ,178,069 Net assets ending.. $ 904,456,127 $ 897,102,318 $ 924,759,209 $ 957,395,854 $ 937,058,628 (1) This report is presented in summary format concerning the single item of Net (Expense) Revenue and Changes in Net Assets and is not intended to be complete. For a detailed itemized report see APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR 2010 Statement of Activities for Fiscal Year 2010 below. (Source: Information extracted from the County s basic financial statements and required supplementary information which have been audited.) 46

53 Salt Lake County Balance Sheet Summary General Fund (This summary has not been audited) Fiscal Year Ended December Assets Cash and investments: Pooled cash and investments $ 34,704,572 $ 25,458,495 $ 23,284,715 $ 29,790,243 $ 42,021,275 Restricted cash and investments 1,781,977 1,019,368 1,235,821 1,084,449 1,027,253 Other cash 482, , , , ,785 Receivables: Taxes and tax equivalents. 14,352,856 14,099,049 13,689,321 15,425,467 16,268,876 Due from other governments 553,304 2,412,103 1,815,676 2,480,907 1,877,963 Accrued revenue 8,091,026 1,612, , ,210 1,837,559 Other receivables (1). 366, , ,857 57,889,603 57,865,059 Less allowance for uncollectible amounts (1) (57,368,139) (57,368,139) Due from other funds 12,043,715 7,716,936 1,726,400 9, ,135 Investment in joint ventures 85,837 86,504 88,592 Total assets $ 72,376,449 $ 53,005,570 $ 43,419,268 $ 50,625,973 $ 64,721,358 Liabilities and Fund Balances Liabilities: Accounts payable $ 4,392,720 $ 3,200,392 $ 3,967,900 $ 3,631,218 $ 3,881,764 Accrued expenditures 4,067,199 5,144,607 5,126,085 4,758,321 4,854,412 Due to other funds 1,338,467 1,395,637 1,409,006 1,234,423 1,164,736 Deferred revenue 7,367,335 7,041,638 5,382,020 5,223,558 3,836,212 Total liabilities 17,165,721 16,782,274 15,885,011 14,847,520 13,737,124 Fund balances: Reserved for: Encumbrances 1,869,211 1,626,538 2,433,140 2,209,469 2,562,019 Drug and vice enforcement 1,537,174 1,121,988 1,157, , ,765 Monument preservation 665, , , , ,488 Contractual obligations 97,850 48,742 26,742 40,000 55,417 Governmental immunity 134,351 1,053,287 Joint venture 85,837 86,504 88,592 Unreserved: Designated for: Capital improvements 37, , , , ,566 Judgment levies 284, , ,282 Special programs 5,101, , ,167 Undesignated 45,768,169 31,322,056 22,787,879 31,325,280 46,828,220 Total fund balances 55,210,728 36,223,296 27,534,257 35,778,453 50,984,234 Total liabilities and fund balances $ 72,376,449 $ 53,005,570 $ 43,419,268 $ 50,625,973 $ 64,721,358 (1) The large receivable and allowance for the uncollectible accounts receivable from 2006 through 2007 represented jail billings to various municipalities within the County for housing their prisoners in the County jail. The municipalities did not pay the billings because they did not consider them to be legal obligations; therefore, the amount was fully reserved in the allowance for uncollectible accounts. In 2008 the County determined it was no longer necessary to carry this amount on the General Fund balance sheet because it has no financial reporting significance. (Source: Information extracted from the County s basic financial statements and required supplementary information which have been audited.) 47

54 Salt Lake County Statement of Revenues, Expenditures and Changes in Fund Balance General Fund (This summary has not been audited) Fiscal Year Ended December Revenues: Taxes: General property taxes.. $ 106,579,374 $ 98,204,709 $ 97,186,640 $ 90,920,752 $ 89,202,799 Sales taxes 41,590,792 41,432,977 46,532,140 50,851,250 48,123,004 Tax equivalent payments 7,329,809 7,516,869 Tax increment 40,386 General property taxes prior years 2,451,711 3,082,158 Penalties and interest on delinquent taxes 1,457,157 1,596,696 Total taxes and tax equivalents 155,499, ,154, ,759, ,680, ,004,657 Licenses and permits 541, ,803 9,000,673 9,145,518 8,944,629 Fines and forfeitures 2,366,873 2,380,754 1,988,956 2,204,508 2,272,206 Intergovernmental and grant revenue 11,383,745 9,308,062 10,510,708 10,535,023 10,070,586 Charges for services 20,906,936 21,989,991 21,242,655 20,469,832 20,013,583 Interest, rents, and concessions 11,171,926 2,927,042 2,949,404 3,338,263 2,917,334 Interfund charges 24,418,943 23,583,731 21,372,138 19,588,048 20,332,743 Other 1,675, , , , ,265 Total revenues 227,964, ,198, ,242, ,292, ,906,003 Expenditures: Current: General government 29,476,358 32,343,762 36,124,973 33,356,519 39,939,493 Public safety and criminal justice 142,505, ,404, ,570, ,904, ,262,216 Social services 797, , ,589 1,026, ,935 Education, recreation, and cultural 38,342,446 37,798,971 37,724,366 35,880,618 34,644,953 Total expenditures 211,121, ,512, ,306, ,167, ,254,597 Excess (deficiency) of revenues over (under) expenditures 16,842,942 (1,313,491) (1,063,495) 16,124,879 22,651,406 Other financing sources (uses): Proceeds from sale of property 669, ,703 24,361 80,646 54,583 Sales tax revenue bonds issued. 1,781,976 Transfers in 28,245,336 38,865,130 26,834,780 9,034,474 11,879,239 Transfers out (32,194,438) (29,094,303) (34,061,000) (40,445,780) (31,167,753) Total other financing sources (uses) (1,497,357) 10,002,530 (7,201,859) (31,330,660) (19,233,931) Net change in fund balance 15,345,585 8,689,039 (8,265,354) (15,205,781) 3,417,475 Fund balance beginning of year (restated) 39,865,143 27,534,257 35,799,611 50,984,234 47,566,759 Fund balance end of year $ 55,210,728 $ 36,223,296 $ 27,534,257 $ 35,778,453 $ 50,984,234 (Source: Information extracted from the County s basic financial statements and required supplementary information which have been audited.) 48

55 Taxable, Fair Market And Market Value Of Property % Change % Change Taxable Over Fair Market/ Over Year Value (1) Prior Year Market Value (2) Prior Year 2011 (3)... $73,222,023,192 (1.2)% $104,859,402,837 (1.1)% ,075,699, ,992,173,608 (0.5) ,790,083,869 (11.3) 106,546,954,325 (11.4) ,180,314, ,270,938, ,440,848, ,520,682, ,686,175, ,719,872, (1) Taxable valuation includes redevelopment agency valuation. The estimated redevelopment agency valuation for Calendar Year 2010 was approximately $4.3 billion; for Calendar Year 2009 was approximately $4 billion; for Calendar Year 2008 was approximately $4.5 billion; for Calendar Year 2007 was approximately $3.8 billion; and for Calendar Year 2006 was approximately $3.1 billion. (Source: Reports from the State Tax Commission.) (2) Estimated fair market values were calculated by dividing the taxable value of primary residential property by 55%, which eliminates the 45% exemption on primary residential property granted under the Property Tax Act. (Source: Financial Advisor.) (3) Preliminary; subject to change. See in this section Historical Summaries Of Taxable Value Of Property below. (The remainder of this page has been intentionally left blank.) 49

56 Historical Summaries Of Taxable Values Of Property 2011 (1) Taxable % of Taxable Taxable Taxable Taxable Set by State Tax Commission Value T.V. Value Value Value Value (Centrally Assessed) Total centrally assessed $ 7,104,120, % $ 7,333,677,834 $ 5,096,701,236 $ 6,181,404,977 $ 5,422,923,271 Set by County Assessor (Locally Assessed) Real property: Primary residential 38,607,908, ,945,307,586 39,968,408,811 45,267,322,229 42,812,321,683 Other residential 2,415,000, ,473,099,800 2,873,330,880 3,388,144,760 2,665,643,210 Commercial and industrial 20,210,000, ,455,804,380 20,588,446,370 23,576,078,400 21,184,740,580 FAA 1,800, ,826,420 1,828,230 6,998,833 2,137,270 Unimproved non FAA 55,000, ,410,290 65,093,760 79,543,785 75,640,020 Agricultural 6,000, ,747,350 6,941,400 8,301,070 9,412,290 Total real property 61,295,708, ,943,195,826 63,504,049,451 72,326,389,077 66,749,895,053 Personal property: Primary mobile homes 60,000, ,716,927 67,766,191 65,662,709 63,031,200 Secondary mobile homes 10,000, ,902,486 9,651,350 8,128,914 5,081,370 Other business personal 4,752,193, ,724,205,933 5,111,915,641 4,598,728,970 4,199,917,921 Total personal property 4,822,193, ,798,825,346 5,189,333,182 4,672,520,593 4,268,030,491 Total locally assessed 66,117,902, ,742,021,172 68,693,382,633 76,998,909,670 71,017,925,544 Total taxable value $ 73,222,023, % $ 74,075,699,006 $ 73,790,083,869 $ 83,180,314,647 $ 76,440,848,815 (1) Preliminary; subject to change. (Source: Property Tax Division, Utah State Tax Commission.) 50

57 LEGAL MATTERS Absence Of Litigation Concerning The 2012 Bonds There is no litigation pending or threatened questioning or in any manner relating to or affecting the validity of the 2012 Bonds. On the date of the execution and delivery of the 2012 Bonds, certificates will be delivered by the County to the effect that to the knowledge of the County, there is no action, suit, proceeding or litigation pending or threatened against the County, which in any way materially questions or affects the validity or enforceability of the 2012 Bonds or any proceedings or transactions relating to their authorization, execution, authentication, marketing, sale or delivery or which materially adversely affects the existence or powers of the County. A non litigation opinion issued by Ralph Chamness, Chief Deputy District Attorney, dated the date of closing, will be provided stating, among other things, that there is not now pending, or to her knowledge threatened, any action, suit, proceeding, inquiry, or any other litigation or investigation, at law or in equity, before or by any court, public board or body, challenging the creation, organization or existence of the County, or the ability of the County, or its respective officers to authenticate, execute or deliver the 2012 Bonds or such other documents as may be required in connection with the issuance and sale of the 2012 Bonds, or to comply with or perform their respective obligations thereunder, or seeking to restrain or enjoin the issuance, sale or delivery of the 2012 Bonds, or directly or indirectly contesting or affecting the proceedings or the authority by which the 2012 Bonds are issued, the legality of the purpose for which the 2012 Bonds are issued, or the validity of the 2012 Bonds or the issuance and sale thereof. Tax Exemption Federal Income Taxation Federal tax law contains a number of requirements and restrictions which apply to the 2012 Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters. The County has covenanted to comply with all requirements that must be satisfied in order for the interest on the 2012 Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the 2012 Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the 2012 Bonds. Subject to the County s compliance with the above referenced covenants, under present law, in the opinion of Bond Counsel, interest on the 2012 Bonds is excludable from the gross income of the owners thereof for federal income tax purposes, and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but interest on the 2012 Bonds is taken into account, however, in computing an adjustment in determining the federal alternative minimum tax for certain corporations. In rendering its opinion, Bond Counsel will rely upon certifications of the County with respect to certain material facts within the County s knowledge and upon the mathematical computation of the yield on the 2012 Bonds and on certain investments by Grant Thornton LLP, Certified Public Accountants. Bond Counsel s opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result. The Internal Revenue Code of 1986, as amended (the Code ), includes provisions for an alternative minimum tax ( AMT ) for corporations in addition to the corporate regular tax in certain cases. The AMT, if any, depends upon the corporation s alternative minimum taxable income ( AMTI ), which is the corporation s taxable income with certain adjustments. One of the adjustment items used in compu- 51

58 ting the AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess of such corporation s adjusted current earnings over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). Adjusted current earnings would include certain tax exempt interest, including interest on the 2012 Bonds Ownership of the 2012 Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax exempt obligations. Prospective purchasers of the 2012 Bonds should consult their tax advisors as to applicability of any such collateral consequences. The issue price (the Issue Price ) for each maturity of the 2012 Bonds is the price at which a substantial amount of such maturity of the 2012 Bonds is first sold to the public. The Issue Price of a maturity of the 2012 Bonds may be different from the price set forth, or the price corresponding to the yield set forth, on the inside cover page hereof. If the Issue Price of a maturity of the 2012 Bonds is less than the principal amount payable at maturity, the difference between the Issue Price of each such maturity, if any, of the 2012 Bonds (the OID 2012 Bonds ) and the principal amount payable at maturity is original issue discount. For an investor who purchases an OID 2012 Bond in the initial public offering at the Issue Price for such maturity and who holds such OID 2012 Bond to its stated maturity, subject to the condition that the County complies with the covenants discussed above, (a) the full amount of original issue discount with respect to such OID 2012 Bond constitutes interest which is excludable from the gross income of the owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or market discount upon payment of such OID 2012 Bond at its stated maturity; (c) such original issue discount is not included as an item of tax preference in computing the alternative minimum tax for individuals and corporations under the Code, but is taken into account in computing an adjustment used in determining the alternative minimum tax for certain corporations under the Code, as described above; and (d) the accretion of original issue discount in each year may result in an alternative minimum tax liability for corporations or certain other collateral federal income tax consequences in each year even though a corresponding cash payment may not be received until a later year. Owners of OID 2012 Bonds should consult their own tax advisors with respect to the state and local tax consequences of original issue discount on such OID 2012 Bonds. Owners of 2012 Bonds who dispose of 2012 Bonds prior to the stated maturity (whether by sale, redemption or otherwise), purchase 2012 Bonds in the initial public offering, but at a price different from the Issue Price or purchase 2012 Bonds subsequent to the initial public offering should consult their own tax advisors. If a 2012 Bond is purchased at any time for a price that is less than the 2012 Bond s stated redemption price at maturity or, in the case of an OID 2012 Bond, its Issue Price plus accreted original issue discount (the Revised Issue Price ), the purchaser will be treated as having purchased a 2012 Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a 2012 Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID 2012 Bond for a price that is less than its Revised Issue Price. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such 2012 Bond. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the 2012 Bonds. 52

59 An investor may purchase a 2012 Bond at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as bond premium and must be amortized by an investor on a constant yield basis over the remaining term of the 2012 Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax exempt bond. The amortized bond premium is treated as a reduction in the tax exempt interest received. As bond premium is amortized, it reduces the investor s basis in the 2012 Bond. Investors who purchase a 2012 Bond at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the 2012 Bond s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the 2012 Bond. There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or affect the market value of the 2012 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment. Prospective purchasers of the 2012 Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. The Internal Revenue Service (the Service ) has an ongoing program of auditing tax exempt obligations to determine whether, in the view of the Service, interest on such tax exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the 2012 Bonds. If an audit is commenced, under current procedures the Service may treat the County as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the 2012 Bonds until the audit is concluded, regardless of the ultimate outcome. Payments of interest on, and proceeds of the sale, redemption or maturity of, tax exempt obligations, including the 2012 Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any 2012 Bond owner who fails to provide an accurate Form W 9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any 2012 Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Utah Income Taxation In the opinion of Bond Counsel, under the existing laws of the State, as presently enacted and construed, interest on the 2012 Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act. Bond Counsel expresses no opinion with respect to any other taxes imposed by the State or any political subdivision thereof. Ownership of the 2012 Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the 2012 Bonds. Prospective purchasers of the 2012 Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. General Certain legal matter incident to the authorization, issuance and sale of the 2012 Bonds are subject to the approving legal opinion of Chapman and Cutler LLP, Bond Counsel to the County. Certain legal matters will be passed upon for the County by the Chief Deputy District Attorney, Ralph Chamness. Certain legal matters regarding this OFFICIAL STATEMENT will be passed on for the County by Chapman and Cutler LLP. The approving opinion of Bond Counsel will be delivered with the 2012 Bonds. A copy of the opinion of Bond Counsel in substantially the form set forth in APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL of this OFFICIAL STATEMENT will be made available upon request from the contact persons as indicated under INTRODUCTION Contact Persons above. 53

60 The employment of Bond Counsel is limited to the review of the transcripts of legal proceedings authorizing the issuance of the 2012 Bonds and to the issuance of the legal opinion, in conventional form, relating solely to the validity of the 2012 Bonds pursuant to such authority and the excludibility of interest on the 2012 Bonds for income tax purposes as described above. Except for said legal matters, which will be specifically covered in its opinion, Bond Counsel has assumed no responsibility for the accuracy or completeness of any information furnished to any person in connection with or any offer or sale of the 2012 Bonds in the OFFICIAL STATEMENT or otherwise. The various legal opinions to be delivered concurrently with the delivery of the 2012 Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Bond Ratings MISCELLANEOUS As of the date of this OFFICIAL STATEMENT, the 2012 Bonds have been rated AAA by S&P and AA+ by Fitch. An explanation of the ratings may be obtained from S&P and Fitch. The County has not directly applied to Moody s for a rating on the 2012 Bonds. Such ratings do not constitute a recommendation by the rating agencies to buy, sell or hold the 2012 Bonds. Such ratings reflect only the views of S&P and Fitch and any desired explanation of the significance of such ratings should be obtained from S&P and Fitch. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that the ratings given the 2012 Bonds will continue for any given period of time or that the ratings will not be revised downward or withdrawn entirely by the rating agencies if, in their judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2012 Bonds. Trustee The obligations and duties of the Trustee are described in the Indenture and the Trustee has undertaken only those obligations and duties that are expressly set out in the Indenture. The Trustee has not independently passed upon the validity of the 2012 Bonds, the security therefore, the adequacy of the provisions for payment thereof or the exclusion from gross income for federal tax purposes of the interest on the 2012 Bonds. The Trustee may resign or be removed or replaced as provided in the Indenture. See APPENDIX B THE GENERAL INDENTURE OF TRUST. Escrow Verification Grant Thornton LLP, Minneapolis, Minnesota, Certified Public Accountants, will verify the accuracy of the mathematical computations concerning the adequacy of the maturing principal amounts of and interest earned on the obligations of the United States of America, together with other escrowed moneys to be placed in the Escrow Account to pay when due pursuant to prior redemption the redemption price of, and interest on the 2004 Refunded Bonds and the 2005 Refunded Bonds and the mathematical computations of the yield on the 2012 Bonds and the yield on the government obligations purchased with a portion of the proceeds of the sale of the 2012 Bonds. Such verifications shall be based in part upon information supplied by the successful bidder(s). 54

61 Financial Advisor The County has entered into an agreement with the Financial Advisor whereunder the Financial Advisor provides financial recommendations and guidance to the County with respect to preparation for sale of the 2012 Bonds, timing of sale, taxable and tax exempt bond market conditions, costs of issuance and other factors related to the sale of the 2012 Bonds. The Financial Advisor has read and participated in the drafting of certain portions of this OFFICIAL STATEMENT and has supervised the completion and editing thereof. The Financial Advisor has not audited, authenticated or otherwise verified the information set forth in the OFFICIAL STATEMENT, or any other related information available to the County, with respect to accuracy and completeness of disclosure of such information, and the Financial Advisor makes no guaranty or warranty respecting the accuracy and completeness of the OFFICIAL STATEMENT or any other matter related to the OFFICIAL STATEMENT. Independent Auditors The basic financial statements and required supplementary information of the County as of December 31, 2010 and for the year then ended, included in this OFFICIAL STATEMENT, have been audited by Squire & Company, PC, Certified Public Accountants and Business Consultants, Orem, Utah ( Squire ), as stated in their report in APPENDIX A BASIC FINANCIAL STATEMENTS AND RE- QUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR Squire has not participated in the preparation or review of this OFFICIAL STATEMENT. Based upon their non participation, they have not consented to the use of their name in this OFFICIAL STA- TEMENT. Additional Information All quotations contained herein from and summaries and explanations of, the State Constitution, statutes, programs, laws of the State, court decisions and the Indenture, do not purport to be complete, and reference is made to said State Constitution, statutes, programs, laws, court decisions and the Indenture for full and complete statements of their respective provisions. Any statements in this OFFICIAL STATEMENT involving matters of opinion, whether or not expressly so stated, are intended as such and not as a representation of fact. The appendices attached hereto are an integral part of this OFFICIAL STATEMENT and should be read in conjunction with the foregoing material. This OFFICIAL STATEMENT and its distribution and use have been duly authorized by the County. Salt Lake County, Utah By: /s/ Peter M. Corroon Peter M. Corroon, Mayor 55

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63 APPENDIX A BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION FOR FISCAL YEAR 2010 The basic financial statements and required supplementary information of the County, as extracted from the Comprehensive Annual Financial Report for Fiscal Year 2010, are contained herein and such page numbers may not be in numerical order. Copies of current and prior financial reports are available upon request from the County s contact person as indicated under INTRODUCTION Contact Persons above. The County s Comprehensive Annual Financial Report for Fiscal Year 2011 must be completed under State law by June 30, Government Finance Officers Association; Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada ( GFOA ) have awarded a Certificate of Achievement for Excellence in Financial Reporting to the County for its CAFR for the 25 th consecutive year, beginning with Fiscal Year 1986 through Fiscal Year In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. (The remainder of this page has been intentionally left blank.) A 1

64 1329 South 800 East Orem, Utah (801) Fax (801) Independent Auditor s Report Honorable Mayor Peter Corroon and Members of the County Council of Salt Lake County, Utah We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of Salt Lake County, Utah (County) as of and for the year ended December 31, 2010, 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 opinions 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, and the aggregate remaining fund information of the County as of December 31, 2010, and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparisons for the General Fund, Municipal Services Fund, and Grant Programs 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 June 28, 2011, 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. Management s discussion and analysis on pages 16 through 29 and required supplementary information on pages 84 through 86 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.