NEW ISSUE Ratings: Moody s: Aa1 Book-Entry S&P: AA PRELIMINARY OFFICIAL STATEMENT $71,000,000*

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1 NEW ISSUE Ratings: Moody s: Aa1 Book-Entry S&P: AA PRELIMINARY OFFICIAL STATEMENT $71,000,000* CITY OF MURFREESBORO, TENNESSEE General Obligation Bonds, Series 2018 OFFERED FOR SALE NOT SOONER THAN Tuesday, March 20, 2018 at 10:15 A.M. E.D.T./ 9:15 A.M. C.D.T. Through the Facilities of PARITY and at the offices of Cumberland Securities Company, Inc. Knoxville, Tennessee Cumberland Securities Company, Inc. Municipal Advisor March 13, 2018 * Preliminary, subject to change.

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3 PRELIMINARY OFFICIAL STATEMENT DATED MARCH 13, 2018 NEW ISSUE Ratings: Moody s: Aa1 S&P: AA BOOK-ENTRY-ONLY (See MISCELLANEOUS-Rating ) In the opinion of Bond Counsel, based on existing law and assuming compliance with certain tax covenants of the City, interest on the Bonds will be excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. For an explanation of certain tax consequences under federal law which may result from the ownership of the Bonds, see the discussion under the heading "LEGAL MATTERS - Tax Matters" herein. Under existing law, the Bonds and the income therefrom will be exempt from all state, county and municipal taxation in the State of Tennessee. (See "LEGAL MATTERS - Tax Matters herein). $71,000,000* CITY OF MURFREESBORO, TENNESSEE General Obligation Bonds, Series 2018 Dated: Date of Delivery (assume April 10, 2018) Due: June 1 (as indicated below) The $71,000,000* General Obligation Bonds, Series 2018 (the Bonds ) of the City of Murfreesboro, Tennessee (the City ) shall be issued as book-entry-only Bonds in denominations of $5,000 and authorized integral multiples thereof. The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ) except as otherwise described herein. DTC will act as securities depository of the Bonds. So long as Cede & Co. is the registered owner of the Bonds, as the nominee for DTC, principal and interest with respect to the Bonds shall be payable to Cede & Co., as nominee for DTC, which will, in turn, remit such principal and interest to the DTC participants for subsequent disbursements to the beneficial owners of the Bonds. Individual purchases of the Bonds will be made in book-entry-only form, in denominations of $5,000 or integral multiples thereof and will bear interest at the annual rates as shown below. Interest on the Bonds is payable semi-annually from the date thereof commencing on June 1, 2018 and thereafter on each June 1 and December 1 by check or draft mailed to the owners thereof as shown on the books and records of U.S. Bank National Association, Nashville, Tennessee, the registration and paying agent (the Registration Agent ). In the event of discontinuation of the book-entry system, principal of and interest on the Bonds are payable at the designated corporate trust office of the Registration Agent. The Bonds shall be payable from unlimited ad valorem taxes to be levied on all taxable property within the corporate limits of the City. For the prompt payment of principal and interest on the Bonds, the full faith and credit of the City are irrevocably pledged. The Bonds maturing June 1, 2026 and thereafter are subject to optional redemption prior to maturity on or after June 1, Maturity (June 1) Amount* Interest Rate Yield CUSIPS ** Maturity (June 1) Amount* 2019 $ 3,820, $ 4,835, ,930, ,980, ,050, ,130, ,170, ,285, ,295, ,445, ,425, ,605, ,560, ,775, ,695,000 Interest Rate Yield CUSIPS ** This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire PRELIMINARY OFFICIAL STATEMENT to obtain information essential to make an informed investment decision. The Bonds are offered when, as and if issued by the City, subject to the approval of the legality thereof by Bass, Berry & Sims PLC, Nashville, Tennessee, bond counsel, whose opinion will be delivered with the Bonds. Certain legal matters will be passed upon by Craig D. Tindall, City Attorney. It is expected that the Bonds, will be available for delivery through the facilities of DTC, New York, New York, on or about April, March, 2018 Cumberland Securities Company, Inc. Municipal Advisor * Preliminary, subject to change.

4 This Preliminary Official Statement speaks only as of its date, and the information contained herein is subject to change. This Preliminary Official Statement may contain forecasts, projections, and estimates that are based on current expectations but are not intended as representations of fact or guarantees of results. If and when included in this Official Statement, the words "expects," "forecasts," "projects," "intends," "anticipates," "estimates," and analogous expressions are intended to identify forward-looking statements as defined in the Securities Act of 1933, as amended, and any such statements inherently are subject to a variety of risks and uncertainties, which could cause actual results to differ materially from those contemplated in such forward-looking statements. These forward-looking statements speak only as of the date of this Official Statement. The Issuer disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Issuer's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. This Preliminary Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Issuer, the Bonds, the Resolution, the Disclosure Certificate (as defined herein), and the security and sources of payment for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions and statutes, the Resolution, the Disclosure Certificate, and other documents are intended as summaries only and are qualified in their entirety by reference to such documents and laws, and references herein to the Bonds are qualified in their entirety to the forms thereof included in the Resolution. The Bonds have not been registered under the Securities Act of 1933, as amended, and the Resolution has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such acts. This Preliminary Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. No dealer, broker, salesman, or other person has been authorized by the Issuer or the Underwriter to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Issuer or the Underwriter. Except where otherwise indicated, all information contained in this Preliminary Official Statement has been provided by the Issuer. The information set forth herein has been obtained by the Issuer from sources which are believed to be reliable but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of the Underwriter. The information contained herein is subject to change without notice, and neither the delivery of this Preliminary Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Issuer, or the other matters described herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given. In connection with this offering, the Underwriter may over-allot or effect transactions which stabilize or maintain the market prices of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. ** These CUSIP numbers have been assigned by S&P CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc., and are included solely for the convenience of the Bond holders. The City is not responsible for the selection or use of these CUSIP numbers, nor is any representation made as to their correctness on the Bonds or as indicated herein.

5 CITY OF MURFREESBORO, TENNESSEE OFFICIALS Shane McFarland Jim Crumley Jennifer Moody Melissa Wright Craig Tindall Mayor Interim City Manager Assistant City Manager City Recorder City Attorney COUNCIL MEMBERS Madelyn Scales Harris, Vice Mayor Eddie Smotherman Bill Shacklett Rick LaLance Kirt Wade BOND COUNSEL Bass, Berry & Sims PLC Nashville, Tennessee REGISTRATION AND PAYING AGENT U.S. Bank National Association Nashville, Tennessee MUNICIPAL ADVISOR Cumberland Securities Company, Inc. Knoxville, Tennessee

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7 TABLE OF CONTENTS SUMMARY STATEMENT... i SUMMARY NOTICE OF SALE... iii DETAILED NOTICE OF SALE... iv EXHIBIT FORM... x BID FORM... xii SECURITIES OFFERED Authority and Purpose... 1 Description of the Bonds... 1 Security... 2 Optional Redemption... 2 Mandatory Redemption... 2 Notice of Redemption... 3 Payment of Bonds... 4 BASIC DOCUMENTATION Registration Agent... 5 Book-Entry-Only System... 5 Discontinuance of Book-Entry-Only System... 7 Disposition of Bond Proceeds... 8 Discharge and Satisfaction of Bonds... 8 Remedies of Bond Holders LEGAL MATTERS Litigation Tax Matters Federal State Changes in Federal and State Tax Law Closing Certificates Approval of Legal Proceedings MISCELLANEOUS Rating Competitive Public Sale Municipal Advisor Debt Record Additional Debt Continuing Disclosure Five-Year History of Filing Content of Annual Report Reporting of Significant Events Termination of Reporting Obligation Amendment; Waiver Default Additional Information CERTIFICATION OF ISSUER APPENDIX A: FORM OF LEGAL OPINION

8 APPENDIX B: SUPPLEMENTAL INFORMATION STATEMENT City of Murfreesboro General Information Location... B-1 General... B-1 Transportation... B-1 Education... B-2 Healthcare... B-3 Manufacturing and Commerce... B-4 Major Employers in the City... B-6 Employment Information... B-7 Economic Data... B-8 Parks and Recreation... B-8 Recent Developments... B-9 Debt Structure Summary of Bonded Indebtedness... B-11 Indebtedness and Debt Ratios... B-12 Debt Service Requirements - General Obligation... B-14 Debt Service Requirements Water and Sewer... B-15 Debt Service Requirements Electric... B-16 Financial Operations Introduction... B-17 Basis of Accounting and Presentation... B-17 Budgetary Process... B-17 Fund Balances and Retained Earnings... B-18 Five-Year Summary of Revenues, Expenditures and Changes in Fund Balance General Fund... B-19 Investment and Cash Management Practices... B-20 Real Property Assessment, Tax Levy and Collection Procedures State Taxation of Property... B-20 City Taxation of Property... B-21 Assessment of Property... B-21 Periodic Reappraisal and Equalization... B-22 Valuation for Property Tax Purposes... B-23 Certified Tax Rate... B-23 Tax Freeze for the Elderly Homeowners... B-24 Tax Collection and Tax Lien... B-24 Assessed Valuations... B-25 Property Tax Rates and Collections... B-25 Ten Largest Taxpayers... B-26 Sales Tax... B-26 Charter Debt Margin... B-27 Pension Plans... B-28 Unfunded Accrued Liability for Post-Employment Benefits Other Than Pensions... B-29 APPENDIX C: GENERAL PURPOSE FINANCIAL STATEMENTS

9 SUMMARY STATEMENT The information set forth below is provided for convenient reference and does not purport to be complete and is qualified in its entirety by the information and financial statements appearing elsewhere in this Preliminary Official Statement. This Summary Statement shall not be reproduced, distributed or otherwise used except in conjunction with the remainder of this Preliminary Official Statement. Issuer... City of Murfreesboro, Tennessee (the City, Municipality or Issuer ). See APPENDIX B contained herein. The Bonds... The $71,000,000* General Obligation Bonds, Series 2018 (the Bonds ) of the City, dated the date of delivery (estimated to be April 10, 2018). The Bonds will mature each June 1 beginning June 1, 2019 through June 1, 2033, inclusive, See the section herein entitled SECURITIES OFFERED Authority and Purpose. Security... The Bonds are payable from taxes to be levied on all taxable property within the corporate limits of the Issuer without limitation as to rate and amount. For the prompt payment of such principal and interest, the full faith and credit of the City of Murfreesboro, Tennessee are irrevocably pledged. Purpose... The Bonds are being issued for purposes of financing (a) all or a portion of the costs of certain public works projects, consisting of the acquisition of land for and the construction, improvement, acquisition, extension, and renovation of the following: (1) City Hall and other public buildings and related equipment, (2) community technology center, (3) airport terminal, facilities, and related equipment, (4) fire and rescue buildings, vehicles, and related equipment, (5) police headquarters, facilities, vehicles, and related equipment, (6) parks and recreation buildings, facilities and related equipment, (7) solid waste equipment, (8) streets, roads, bridges, plazas, sidewalks, lighting, drainage, streetscapes, and signage and related department vehicles and equipment, (9) public works vehicles and related equipment, and (10) communication and technology improvements related to or in connection with the foregoing public works projects; (b) acquisition, construction and improvement of all other property, real and personal, appurtenant thereto or connected therewith, including all utilities, infrastructure and vehicles related to the foregoing public works projects; (c) all legal, fiscal, administrative, architectural, and engineering costs incident thereto; (d) reimbursement, if any, for prior expenditures for any and all of the foregoing; and (e) costs incident to issuing the Bonds. Optional Redemption... The Bonds are subject to optional redemption prior to maturity on or after June 1, 2025, at the redemption price of par plus accrued interest. See section entitled SECURITIES OFFERED - Optional Redemption. Tax Matters... In the opinion of Bond Counsel, based on existing law and assuming compliance with certain tax covenants of the City, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. Interest on the Bonds will be exempt from certain taxation in Tennessee, all as more fully described in the section entitled LEGAL MATTERS-Tax Matters and APPENDIX A (form of opinion) included herein. Ratings... Moody s: Aa1. S&P: AA. See the section entitled MISCELLANEOUS - Ratings for more information. Registration and Paying Agent... U.S. Bank National Association, Nashville, Tennessee (the Registration Agent ). Bond Counsel... Bass, Berry & Sims PLC, Nashville, Tennessee. Municipal Advisor... Cumberland Securities Company, Inc., Knoxville, Tennessee. See the section entitled MISCELLANEOUS - Municipal Advisor, Related Parties; Other herein. Underwriter.... * Preliminary, subject to change. i

10 Book-Entry-Only... The Bonds will be issued under the Book-Entry System except as otherwise described herein. For additional information, see the section entitled BASIC DOCUMENTATION Book-Entry System. General... The Bonds are being issued in full compliance with applicable provisions of Title 9, Chapter 21, Tennessee Code Annotated, as supplemented and revised. See the section entitled SECURITIES OFFERED herein. The Bonds will be issued with CUSIP numbers and delivered through the facilities of the Depository Trust Company, New York, New York. Disclosure... In accordance with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, the City will provide the Municipal Securities Rulemaking Board ( MSRB ) through the operation of the Electronic Municipal Market Access system ( EMMA ) and the State Information Depository ( SID ), if any, annual financial statements and other pertinent credit or event information, including Comprehensive Annual Financial Reports, see the section entitled MISCELLANEOUS-Continuing Disclosure. Other Information... The information in this Preliminary Official Statement is deemed final within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 as of the date which appears on the cover hereof except for the omission of certain pricing and other information. For more information concerning the City, or the PRELIMINARY OFFICIAL STATEMENT, Shane McFarland, Mayor, P.O. Box 1139, 111 West Vine Street, Murfreesboro, TN 37133, Telephone: (615) ; or the City's Municipal Advisor, Cumberland Securities Company, Inc., Knoxville, Tennessee, Telephone: (865) Additional information regarding BiDCOMP /PARITY may be obtained from PARITY, 1359 Broadway - 2 nd Floor, New York, NY 10018, Telephone: GENERAL FUND BALANCES Summary of Changes In Fund Balances For the Fiscal Year Ended June Beginning Fund Balance $52,758,488 $52,623,369 $56,249,193 $61,938,107 $67,585,192 Revenues 107,921, ,742, ,766, ,557, ,305,270 Expenditures 77,716,209 84,180,110 88,995,111 94,082, ,920,753 Excess of Revenues Over (under) Expenditures 30,204,864 33,562,224 30,771,776 35,475,508 31,384,517 Other Financing Sources: Land Sales & Other Sources - - 2,762, Transfers In 2,870,868 3,047,251 3,120,100 3,259,859 3,124,547 Transfers Out (31,047,956) (33,021,769) (31,279,650) (33,351,989) (38,244,637) Excess of Revenues Over (Under) Expenditures 2,027,776 3,587,706 5,374,736 5,383,378 (3,735,573) Prior Period Adjustments (2,162,895) 38, , ,707 - Ending Fund Balance $52,623,369 $56,249,193 $61,938,107 $67,585,192 $63,849,619 Source: City of Murfreesboro Financial Statements with Report of Certified Public Accountants. ii

11 SUMMARY NOTICE OF SALE $71,000,000* CITY OF MURFREESBORO, TENNESSEE General Obligation Bonds, Series 2018 NOTICE IS HEREBY GIVEN that the Mayor of the City of Murfreesboro, Tennessee (the City ) will receive electronic or written sealed bids until 10:15 a.m. E.D.T. / 9:15 A.M. C.D.T. on Tuesday, March 20, 2018 for the purchase of all, but not less than all, of the City's $71,000,000* General Obligation Bonds, Series 2018 (the Bonds ). Electronic bids must be submitted through PARITY as described in the Detailed Notice of Sale. In case of written bids, bids will be received by the City s Municipal Advisor, Cumberland Securities Company, Inc., via facsimile at Prior to accepting bids, the City reserves the right to adjust the principal amount and maturity amounts of the Bonds being offered as set forth in the Detailed Notice of Sale, to postpone the sale to a later date, or to cancel the sale based upon market conditions via Bloomberg News Service and/or the PARITY System not later than 9:30 a.m., Eastern Daylight Time, on the day of the bid opening. Such notice will specify the revised principal amounts, if any, and any later date selected for the sale, which may be postponed or cancelled in the same manner. If the sale is postponed, a later public sale may be held at the hour and place and on such date as communicated upon at least forty-eight hours notice via Bloomberg News Service and/or the PARITY System. Electronic bids must be submitted through PARITY via the BiDComp Competitive Bidding Service as described in the Detailed Notice of Sale and no other provider of electronic bidding services will be accepted. For the purposes of the bidding process, both written and electronic, the time maintained by PARITY shall constitute the official time with respect to all bids. To the extent any instructions or directions set forth in PARITY conflict with the terms of the Detailed Notice of Sale and this Summary Notice of Sale, the Detailed Notice of Sale and this Summary Notice of Sale shall prevail. The Bonds will be issued in book-entry form (except as otherwise described in the Detailed Notice of Sale) and dated the date of issuance (assume April 10, 2018). The Bonds will mature on June 1 in the years 2019 through 2033, inclusive, with term bonds optional, with interest payable on June 1 and December 1 of each year, commencing June 1, 2018, and will be subject to optional redemption prior to maturity on or after June 1, 2025 at the redemption price of par plus accrued interest. Bidders must bid not less than ninety-nine percent (99.00%) of par or more than one hundred and twenty-five percent (125%) of par for the Bonds. The approving opinion for the Bonds will be furnished at the expense of the City by Bass, Berry & Sims, PLC, Bond Counsel, Nashville, Tennessee. No rate or rates bid for the Bonds shall exceed five percent (5.00%) per annum. In the event that the competitive sale requirements are not satisfied, the City will reject all bids and cancel the sale. Additional information, including the PRELIMINARY OFFICIAL STATEMENT in near final form and the Detailed Notice of Sale, may be obtained through or from the City s Municipal Advisor, Cumberland Securities Company, Inc., Knoxville, Tennessee (865) Further information regarding PARITY may be obtained from i-deal LLC, 1359 Broadway, 2 nd Floor, New York, New York 10018, Telephone: CITY OF MURFREESBORO, TENNESSEE By: Shane McFarland, Mayor iii * Preliminary, subject to change.

12 DETAILED NOTICE OF SALE $71,000,000* CITY OF MURFREESBORO, TENNESSEE General Obligation Bonds, Series 2018 NOTICE IS HEREBY GIVEN that the Mayor of the City of Murfreesboro, Tennessee (the City ) will receive electronic or written sealed bids until 10:15 a.m. E.D.T. / 9:15 C.D.T. on Tuesday, March 20, 2018 for the purchase of all, but not less than all, of the City's $71,000,000* General Obligation Bonds, 2016 (the Bonds ). Electronic bids must be submitted through PARITY as described in the Detailed Notice of Sale. In case of written bids, bids will be received by the City s Municipal Advisor, Cumberland Securities Company, Inc., via facsimile at Prior to accepting bids, the City reserves the right to adjust the principal amount and maturity amounts of the Bonds being offered as set forth herein, to postpone the sale to a later date, or to cancel the sale based upon market conditions via Bloomberg News Service and/or the PARITY System not later than 9:30 a.m., Eastern Daylight Time, on the day of the bid opening. Such notice will specify the revised principal amounts, if any, and any later date selected for the sale, which may be postponed or cancelled in the same manner. If the sale is postponed, a later public sale may be held at the hour and place and on such date as communicated upon at least forty-eight hours notice via Bloomberg News Service and/or the PARITY System. Description of the Bonds. The Bonds will be issued in book-entry-only form without coupons and will be issued or reissued upon transfer, in $5,000 denominations or multiples thereof, as shall be requested by the purchaser or registered owner thereof, as applicable. Interest on the Bonds will be payable on June 1 and December 1 of each year, commencing June 1, The Bonds will mature and be payable on June 1 of each year as follows: YEAR (JUNE 1) AMOUNT* YEAR (JUNE 1) AMOUNT* 2019 $ 3,820, $ 4,835, ,930, ,980, ,050, ,130, ,170, ,285, ,295, ,445, ,425, ,605, ,560, ,775, ,695,000 Registration and Depository Participation. The Bonds, when issued, will be registered in the name of Cede & Co., DTC s partnership nominee. When the Bonds are issued, ownership interests will be available to purchasers only through a book-entry system maintained by DTC (the Book-Entry-Only System ). One fully-registered bond certificate will be issued for each maturity (the Bond Certificates ), in the entire aggregate principal amount of the Bonds and will be deposited with DTC. The Book-Entry-Only System will evidence beneficial ownership interests of the Bonds in the principal amount of $5,000 for the Bonds and any integral multiple of $5,000, with transfers of beneficial ownership interest effected on the records of DTC participants and, if necessary, in turn by DTC pursuant to rules and procedures established by DTC and its participants (the DTC Participants or Participants of DTC ). The successful bidder, as a condition to delivery of the Bonds, shall be required to deposit the bond certificates with DTC, registered in the name of Cede & Co., nominee of DTC. The Bonds will be payable, at maturity or upon earlier redemption to DTC or its nominee as registered iv * Preliminary, subject to change.

13 owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC, and transfer of principal and interest payments (as applicable) to beneficial owners of the Bonds by Participants of DTC, will be the responsibility of such participants and of the nominees of beneficial owners. The City will not be responsible or liable for such transfer of payments or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. Notwithstanding the foregoing, if the winning bidder certifies that it intends to hold the Bonds for its own account and has no present intent to re-offer the Bonds, the use the Book-Entry-Only System is not required. In the event that the Book-Entry Only System for the Bonds is discontinued and a successor securities depository is not appointed by the City, Bond Certificates in fully registered form will be delivered to, and registered in the names of, the DTC Participants or such other persons as such DTC participants may specify (which may be the indirect participants or beneficial owners), in authorized denominations of $5,000 for the Bonds or integral multiples thereof. The ownership of Bonds so delivered shall be registered in registration books to be kept by the Registration Agent (named herein) at its principal corporate trust office, and the City and the Registration Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in such registration books as of the appropriate dates, as the owners thereof for all purposes described herein and in the Resolution authorizing the Bonds. Security Pledged. The Bonds are payable from taxes to be levied on all taxable property within the corporate limits of the Issuer without limitation as to rate and amount. For the prompt payment of such principal and interest, the full faith and credit of the City of Murfreesboro, Tennessee are irrevocably pledged. Purpose. The Bonds are being issued for purposes of financing (a) all or a portion of the costs of certain public works projects, consisting of the acquisition of land for and the construction, improvement, acquisition, extension, and renovation of the following: (1) City Hall and other public buildings and related equipment, (2) community technology center, (3) airport terminal, facilities, and related equipment, (4) fire and rescue buildings, vehicles, and related equipment, (5) police headquarters, facilities, vehicles, and related equipment, (6) parks and recreation buildings, facilities and related equipment, (7) solid waste equipment, (8) streets, roads, bridges, plazas, sidewalks, lighting, drainage, streetscapes, and signage and related department vehicles and equipment, (9) public works vehicles and related equipment, and (10) communication and technology improvements related to or in connection with the foregoing public works projects; (b) acquisition, construction and improvement of all other property, real and personal, appurtenant thereto or connected therewith, including all utilities, infrastructure and vehicles related to the foregoing public works projects; (c) all legal, fiscal, administrative, architectural, and engineering costs incident thereto; (d) reimbursement, if any, for prior expenditures for any and all of the foregoing; and (e) costs incident to issuing the Bonds. Optional Redemption. The Bonds maturing on June 1, 2026, and thereafter, will be subject to optional redemption prior to maturity at the option of the City on and after June 1, 2025, as a whole or part, at any time, at the redemption price of par plus accrued interest as provided herein. Term Bond Option; Mandatory Redemption. Bidders shall have the option to designate certain consecutive serial maturities of the Bonds as one or more term bonds ( Term Bonds ) bearing a single interest rate. If the successful bidder for the Bonds designates certain consecutive serial maturities of such Bonds to be combined as one or more Term Bonds as allowed herein, then each Term Bond shall be subject to mandatory sinking fund redemption by the City at a redemption price equal to one hundred percent (100%) of the principal amount thereof, together with accrued interest to the date fixed for redemption at the rate stated in the Term Bonds to be redeemed. Each such mandatory sinking fund redemption shall be made on the date on which a consecutive maturity included as part of a Term Bond is payable in accordance with the proposal of the successful bidder for the Bonds and in the amount of the maturing principal installment for the Bonds listed herein for such principal payment date. Term Bonds to be redeemed within a single maturity shall be selected in the manner provided above for optional redemption of Bonds within a single maturity. v

14 Bidding Instructions. The City will receive electronic or written bids for the purchase of all, but not less than all, of the Bonds. Bidders for the Bonds are requested to name the interest rate or rates the Bonds are to bear in multiples of one-eighth of one percent and/or one-hundredth of one percent (.01%) or one (1) basis point, but no rate specified shall be in excess of five percent (5.00%) per annum. There will be no limitation on the number of rates of interest that may be specified in a single bid for the Bonds but a single rate shall apply to each single maturity of the Bonds. Bidders must bid not less than ninety-nine percent (99.00%) of par or more than one hundred and twenty-five percent (125%) of par. Electronic bids must be submitted through PARITY via BiDCOMP Competitive Bidding System and no other provider of electronic bidding services will be accepted. Subscription to the i-deal LLC Dalcomp Division s BiDCOMP Competitive Bidding System is required in order to submit an electronic bid. The City will not confirm any subscription nor be responsible for the failure of any prospective bidder to subscribe. For the purposes of the bidding process, the time as maintained by PARITY shall constitute the official time with respect to all bids whether in electronic or written form. To the extent any instructions or directions set forth in PARITY conflict with the terms of the Detailed Notice of Sale, this Notice shall prevail. An electronic bid made through the facilities of PARITY shall be deemed an offer to purchase in response to the Detailed Notice of Sale and shall be binding upon the bidder as if made by a signed, written bid delivered to the City. The City shall not be responsible for any malfunction or mistake made by or as a result of the use of the electronic bidding facilities provided and maintained by PARITY. The use of PARITY facilities are at the sole risk of the prospective bidders. For further information regarding PARITY, potential bidders may contact i-deal LLC at 1359 Broadway, 2 nd Floor, New York, NY 10018, Telephone: In the event of a system malfunction in the electronic bidding process only, bidders may submit bid prior to the established date and time by FACSIMILE transmission sent to the City s Municipal Advisor, Cumberland Securities Company, Inc. at Any facsimile submission is made at the sole risk of the prospective bidder. The City and the Municipal Advisor shall not be responsible for confirming receipt of any facsimile bid or for any malfunction relating to the transmission and receipt of such bids. Separate written bids should be submitted by facsimile to the City s Municipal Advisor, at Written bids must be submitted on the Bid Forms included with the PRELIMINARY OFFICIAL STATEMENT. The City reserves the right to reject all bids for the Bonds and to waive any informalities in the bids accepted. Acceptance or rejection of Bids for Bonds for the Bonds will not obligate the City to accept or reject Bids for Bonds. Unless all bids for the Bonds are rejected, the Bonds will be awarded by the Mayor of the City to the bidder whose bid complies with this notice and results in the lowest true interest rate on the Bonds to be calculated as that rate that, when used in computing the present worth of all payments of principal and interest on the Bonds (compounded semi-annually from the date of the Bonds), produces an amount equal to the purchase price of the Bonds exclusive of accrued interest. For purposes of calculating the true interest cost, the principal amount of Term Bonds scheduled for mandatory sinking fund redemption as part of the Term Bond shall be treated as a serial maturity in such year. In the event that two or more bidders offer to purchase the Bonds at the same lowest true interest rate, the Mayor shall determine in his sole discretion which of the bidders shall be awarded the Bonds. After receipt of the bids, the City reserves the right to make adjustments and/or revisions to the Bonds, as described below. Adjustment and/or Revision. While it is the City s intention to sell and issue the approximate par amounts of the Bonds as offered herein, there is no guarantee that adjustment and/or revision may not be necessary in order to properly size the Bonds. Accordingly, the Mayor reserves the right, in his sole discretion, to vi

15 adjust down the original par amount of the Bonds by up to $15,000,000. The primary factor in adjusting the par amount will be the amount of any premium that is bid. Among other factors the Mayor may (but shall be under no obligation to) consider in sizing the par amounts and individual maturities of the Bonds is the size of individual maturities or sinking fund installments and/or other preferences of the City. Additionally, the Mayor reserves the right to change the dated date of the Bonds. In the event of any such adjustment and/or revision with respect to the Bonds, no rebidding will be permitted, and the portion of such premium or discount (as may have been bid for the Bonds) shall be adjusted in the same proportion as the amount of such revision in par amount of the Bonds bears to the original par amount of such Bonds offered for sale. The successful bidder for the Bonds will be tentatively notified by not later than 5:00 p.m. (Eastern Daylight Time), on the sale date of the exact revisions and/or adjustments required, if any. Good Faith Deposit. No good faith check will be required to accompany any bid submitted. The successful bidder shall be required to deliver to the City's Municipal Advisor (via wire transfer or certified check) the amount of two percent (2%) of the aggregate principal amount of the Bonds offered for sale which will secure the faithful performance of the terms of the bid. A certified check or wire transfer must be received by the City's Municipal Advisor no later than the close of business on the day following the competitive sale. A wire transfer may be sent to First Tennessee Bank, ABA Number: First Tenn Mem, FAO Cumberland Securities Company, Inc., Account No , for further credit to Good Faith Trust Account. The good faith deposits shall be applied (without interest) to the purchase price of the Bonds. If the successful bidder should fail to accept or pay for the Bonds when tendered for delivery and payment, the good faith deposit will be retained by the City as liquidated damages. In the event of the failure of the City to deliver the Bonds to the purchaser in accordance with the terms of this Notice within forty-five (45) days after the date of the sale, the good-faith deposit will be promptly returned to the purchaser unless the purchaser directs otherwise. Establishment of Issue Price General. The winning bidder shall assist the City in establishing the issue price of the Bonds as more fully described herein. All actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the City by the City s Municipal Advisor identified herein and any notice or report to be provided to the City may be provided to the City s Municipal Advisor. Anticipated Compliance with Competitive Sale Requirements. The City anticipates that the provisions of Treasury Regulation Section (f)(3)(i) (defining competitive sale for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the competitive sale requirements ) because: the City shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; all bidders shall have an equal opportunity to bid; the City expects to receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest interest cost), as set forth in this Notice of Sale. Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. vii

16 In the event that the competitive sale requirements are not satisfied, the City will reject all bids and cancel the sale. Issue Price Certificate. The winning bidder will be required to provide the City, at closing, with an issue price certificate consistent with the foregoing. A form of the issue price certificate is attached to this Detailed Notice of Sale as Exhibit A. Provision of Information for the Official Statement. The successful bidder must furnish the following information to the City to complete the Official Statement in final form within two (2) hours after receipt and award of the bid for the Bonds: 1. The offering prices or yields for the Bonds (expressed as a price or yield per maturity, exclusive of any accrued interest, if applicable); 2. Selling compensation (aggregate total anticipated compensation to the underwriters expressed in dollars, based on the expectation that all Bonds are sold at the prices or yields as provided above); 3. The identity of the underwriters if the successful bidder is part of a group or syndicate; and 4. Any other material information necessary to complete the Official Statement in final form but not known to the City. As a condition to the delivery of the Bonds, the successful bidder will be required to deliver a certificate to the City as is described above relating to reoffering price. Legal Opinion. The approving opinion of Bass, Berry & Sims, PLC, Nashville, Tennessee, Bond Counsel along with other certificates including, but not limited to, a tax certificate and a continuing disclosure certificate dated as of the date of delivery of the Bonds will be furnished to the purchaser at the expense of the City. As set forth in the Preliminary Official Statement, Bond Counsel's opinion with respect to the Bonds will state that interest on the Bonds will be excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal law alternative minimum tax imposed on individuals. As set forth in the Preliminary Official Statement, the owners of the Bonds, however, may be subject to certain additional taxes or tax consequences arising with respect to ownership of the Bonds, reference is hereby made to the Preliminary Official Statement and the form of the opinion contained in Appendix A. Continuing Disclosure. At the time the Bonds are delivered, the City will execute a Continuing Disclosure Certificate in which it will covenant for the benefit of holders and beneficial owners of the Bonds to provide certain financial information relating to the City by not later than twelve months after each of the City's fiscal years, (the Annual Report ), and to provide notice of the occurrence of certain enumerated events. The Annual Report (and audited financial statements, if filed separately) will be filed with the Municipal Securities Rulemaking Board (the MSRB ) through the operation of the Electronic Municipal Market Access system (the EMMA ) and any State Information Depository established in the State of Tennessee (the SID ). If the City is unable to provide the Annual Report to the MSRB and the SID by the date required, notice of each failure will be sent to the MSRB and the SID on or before such date. The notices of events will be filed by the City either with the MSRB and the SID. The specific nature of the information to be contained in the Annual Report or the notices of material events will be summarized in the City's Official Statement to be prepared and distributed in connection with the sale of the Bonds. Delivery of Bonds. Delivery of the Bonds is expected within forty-five (45) days. At least five (5) days notice will be given to the successful bidder. Delivery will be made in book-entry form through the facilities of The Depository Trust Company, New York, New York. Payment for the Bonds must be made in Federal Funds or other immediately available funds. Delivery is expected on or about April 10, viii

17 CUSIP Numbers. CUSIP numbers will be assigned to the Bonds at the expense of the City. The City will assume no obligation for assignment of such numbers or the correctness of such numbers and neither failure to record such numbers on Bonds nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and make payment for the Bonds. Official Statements; Other. The City has deemed the PRELIMINARY OFFICIAL STATEMENT to be final as of its date within the meaning of Rule 15c2-12 of the U.S. Securities and Exchange Commission (the SEC ) except for the omission of certain pricing and other information. The City will furnish the successful bidder at the expense of the City a reasonable number of copies of the Official Statement in final form, containing the pricing and other information to be supplied by the successful bidder and to be dated the date of the sale, to be delivered by the successful bidder to the persons to whom such bidder and members of its bidding group initially sell the Bonds. Acceptance of the bid will constitute a contract between the City and the successful bidder for the provision of such copies within seven business days of the sale date. Further Information. Additional information, including the Preliminary Official Statement, the Detailed Notice of Sale and the Official Bid Form, may be obtained from the City s Municipal Advisor, Cumberland Securities Company, Inc., Knoxville, Tennessee, Telephone: Further information regarding PARITY may be obtained from i-deal LLC, 1359 Broadway, 2 nd Floor, New York, New York 10018, Telephone: CITY OF MURFREESBORO, TENNESSEE By: Shane McFarland City Mayor (The remainder of this page left blank intentionally.) ix

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19 Exhibit A to Detailed Notice of Sale CITY OF MURFREESBORO, TENNESSEE $71,000,000* GENERAL OBLIGATION BONDS, SERIES 2018 ISSUE PRICE CERTIFICATE The undersigned, on behalf of [NAME OF UNDERWRITER] (the Underwriter ), hereby certifies as set forth below with respect to the sale of the above-captioned obligations (the Bonds ). 1. Reasonably Expected Initial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by the Underwriter are the prices listed below (the Expected Offering Prices ). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Underwriter in formulating its bid to purchase the Bonds. Attached as Exhibit A is a true and correct copy of the bid provided by the Underwriter to purchase the Bonds including the Expected Offering Prices submitted by the Underwriter on the Sale Date. (b) The Underwriter was not given the opportunity to review other bids prior to submitting its bid. (c) The bid submitted by the Underwriter constituted a firm offer to purchase the Bonds. 2. Defined Terms. (a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) Issuer means City of Murfreesboro, Tennessee. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term related party for purposes of this Certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Sale Date means the first day on which there is a binding contract in writing for the sale or exchange the Bonds. The Sale Date of the Bonds is March 20, (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bass, Berry & Sims PLC in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal x * Preliminary, subject to change.

20 Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: [Issue Date] [UNDERWRITER], as Underwriter By: Name: xi

21 BID FORM The Honorable Shane McFarland, Mayor March 20, 2018 P.O. Box West Vine Street (37130) Murfreesboro, Tennessee Dear Mayor McFarland: For your legally issued, properly executed $71,000,000* General Obligation Bonds, Series 2018 (the Bonds ) of the City of Murfreesboro, Tennessee, in all respects as more fully outlined in your Notice of Sale, which by reference are made a part hereof, we will pay you a sum of ($ ). The Bonds shall be dated the date of issuance (assume April 10, 2018) and shall be callable in accordance with the DETAILED NOTICE OF SALE. The Bonds shall mature on June 1 and bear interest at the following rates: Maturity (June 1) Amount* Rate xii Maturity (June 1) Amount* Rate 2019 $ 3,820, $ 4,835, ,930, ,980, ,050, ,130, ,170, ,285, ,295, ,445, ,425, ,605, ,560, ,775, ,695,000 We have the option to designate two or more consecutive serial maturities as term bond maturities as indicated: Term Bond 1: Maturities from June 1, 20 through June 1, %. Term Bond 2: Maturities from June 1, 20 through June 1, %. Term Bond 3: Maturities from June 1, 20 through June 1, %. Term Bond 4: Maturities from June 1, 20 through June 1, %. Term Bond 5: Maturities from June 1, 20 through June 1, %. Term Bond 6: Maturities from June 1, 20 through June 1, %. It is our understanding that the Bonds are offered for sale subject to the final approving opinion of Bass, Berry & Sims PLC, Bond Counsel, Nashville, Tennessee, whose opinion together with the executed Bonds, will be furnished by the City without cost to us. If our bid is accepted, we agree to provide a good faith deposit for 2% of the aggregate principal amount of Bonds on which we have bid by the close of business on the date following the competitive public sale as outlined in the Detailed Notice of Sale. Should for any reason we fail to comply with the terms of this bid, this good faith deposit shall be forfeited by us as full liquidated damages. Otherwise, this good faith deposit shall be applied to the purchase price of the Bonds on which we have bid. This bid is a firm offer for the purchase of the Bonds identified in the Notice of Sale, on the terms set forth in this bid form and the Notice of Sale, and is not subject to any conditions, except as permitted by the Notice of Sale. By submitting this bid, we confirm that we have an established industry reputation for underwriting new issuances of municipal bonds. [If the bidder cannot confirm an established industry reputation for underwriting new issuances of municipal bonds, the preceding sentence should be crossed out.] Accepted for and on behalf of the City of Murfreesboro, Tennessee, this 20 th day of March, 2018 Respectfully submitted, Total interest cost from Shane McFarland, Mayor April 10, 2018 to final maturity $ Less: Premium /plus discount, if any $ Net Interest Cost... $ True Interest Rate % The computations of net interest cost and true interest rate are for comparison purposes only and are not to be considered as part of this proposal. * Preliminary, subject to change.

22

23 $71,000,000* CITY OF MURFREESBORO, TENNESSEE General Obligation Bonds, Series 2018 SECURITIES OFFERED AUTHORITY AND PURPOSE This PRELIMINARY OFFICIAL STATEMENT which includes the Summary Statement hereof and appendices hereto is furnished in connection with the offering by the City of Murfreesboro, Tennessee (the City, Municipality or Issuer ) of its $71,000,000* General Obligation Bonds, Series 2018 (the Bonds ). The Bonds are authorized to be issued pursuant to the provisions of Title 9, Chapter 21, Tennessee Code Annotated, as amended, and other applicable provisions of the law and pursuant to resolutions adopted by the City Council (the City Council ). The initial and detailed bond resolutions (collectively, the Resolutions ) were adopted by the City Council on February 15, The Bonds are being issued for the purposes of financing (a) all or a portion of the costs of certain public works projects, consisting of the acquisition of land for and the construction, improvement, acquisition, extension, and renovation of the following: (1) City Hall and other public buildings and related equipment, (2) community technology center, (3) airport terminal, facilities, and related equipment, (4) fire and rescue buildings, vehicles, and related equipment, (5) police headquarters, facilities, vehicles, and related equipment, (6) parks and recreation buildings, facilities and related equipment, (7) solid waste equipment, (8) streets, roads, bridges, plazas, sidewalks, lighting, drainage, streetscapes, and signage and related department vehicles and equipment, (9) public works vehicles and related equipment, and (10) communication and technology improvements related to or in connection with the foregoing public works projects; (b) acquisition, construction and improvement of all other property, real and personal, appurtenant thereto or connected therewith, including all utilities, infrastructure and vehicles related to the foregoing public works projects; (c) all legal, fiscal, administrative, architectural, and engineering costs incident thereto; (d) reimbursement, if any, for prior expenditures for any and all of the foregoing; and (e) costs incident to issuing the Bonds. DESCRIPTION OF THE BONDS The Bonds will be initially dated and bear interest from the date of issuance (assume April 10, 2018). Interest on the Bonds will be payable semi-annually on June 1 and December 1, commencing June 1, The Bonds are issuable in registered book-entry form only and in $5,000 denominations or integral multiples thereof as shall be requested by each respective registered owner. * Preliminary, subject to change. 1

24 The Bonds shall be signed by the Mayor and shall be attested by the Mayor. No Bond shall be valid until it has been authenticated by the manual signature of an authorized representative of the Registration Agent and the date of authentication noted thereon. SECURITY The Bonds are payable from taxes to be levied on all taxable property within the corporate limits of the City without limitation as to rate and amount. For the prompt payment of such principal and interest, the full faith and credit of the City are irrevocably pledged. The City, through its governing body, shall annually levy and collect a tax on all taxable property within the City, in addition to all other taxes authorized by law, sufficient to pay the principal of and interest on the Bonds when due. Principal and interest on the Bonds falling due at any time when there are insufficient funds from such tax shall be paid from the current funds of the City and reimbursement therefore shall be made out of taxes provided by the Resolution when the same shall have been collected. The Bonds will not be obligations of the State of Tennessee. OPTIONAL REDEMPTION Bonds maturing June 1, 2026, and thereafter, shall be subject to optional redemption prior to maturity at the option of the City on June 1, 2025 and thereafter, as a whole or in part, at any time, at the redemption price of par plus accrued interest to the redemption date. If less than all the Bonds shall be called for redemption, the maturities to be redeemed shall be designated by the City Council, in its discretion. If less than all the principal amount of the Bonds of a maturity shall be called for redemption, the interests within the maturity to be redeemed shall be selected as follows: (i) if the Bonds are being held under a Book-Entry System by DTC, or a successor Depository, the amount of the interest of each DTC Participant in the Bonds to be redeemed shall be determined by DTC, or such successor Depository, by lot or such other manner as DTC, or such successor Depository, shall determine; or (ii) if the Bonds are not being held under a Book-Entry System by DTC, or a successor Depository, the Bonds within the maturity to be redeemed shall be selected by the Registration Agent by lot or such other random manner as the Registration Agent in its discretion shall determine. MANDATORY REDEMPTION The bidders have the option of creating term bonds pursuant to the Detailed Notice of Sale. If term bonds are created, then the following provisions will apply. Subject to the credit hereinafter provided, the City shall redeem Bonds maturing June 1, 20, and June 1, 20 on the redemption dates set forth below opposite the maturity date, in aggregate principal amounts equal to the 2

25 respective dollar amounts set forth below opposite the respective redemption dates at a price of par plus accrued interest thereon to the date of redemption. The Bonds to be so redeemed shall be selected in the manner described above as The Bonds within a maturity to be so redeemed shall be selected in the same manner as is described above relating to optional redemption. The dates of redemption and principal amount of Bonds to be redeemed on said dates are as follows: Principal Amount Redemption of Bonds Maturity Date Redeemed *Final Maturity At its option, to be exercised on or before the forty-fifth (45) day next preceding any such redemption date, the City may (i) deliver to the Registration Agent for cancellation Bonds of the maturity to be redeemed, in any aggregate principal amount desired, and/or (ii) receive a credit in respect of its redemption obligation for any Bonds of the maturity to be redeemed which prior to said date have been purchased or redeemed (otherwise than through the operation of this section) and canceled by the Registration Agent and not theretofore applied as a credit against any redemption obligation. Each Bond so delivered or previously purchased or redeemed shall be credited by the Registration Agent at 100% of the principal amount thereof on the obligation of the City on such payment date and any excess shall be credited on future redemption obligations in chronological order, and the principal amount of Bonds to be redeemed by operation shall be accordingly reduced. The City shall on or before the forty-fifth (45) day next preceding each payment date furnish the Registration Agent with its certificate indicating whether or not and to what extent the provisions of clauses (i) and (ii) of this subsection are to be availed of with respect to such payment and confirm that funds for the balance of the next succeeding prescribed payment will be paid on or before the next succeeding payment date. NOTICE OF REDEMPTION Notice of call for redemption, whether optional or mandatory, shall be given by the Registration Agent on behalf of the City not less than twenty (20) nor more than sixty (60) days prior to the date fixed for redemption by sending an appropriate notice to the registered owners of the Bonds to be redeemed by first-class mail, postage prepaid, at the addresses shown on the Bond registration records of the Registration Agent as of the date of the notice; but neither failure to mail such notice nor any defect in any such notice so mailed shall affect the sufficiency of the proceedings for redemption of any of the Bonds for which proper notice was given. As long as DTC, or a successor Depository, is the registered owner of the Bonds, all redemption notices shall be mailed by the Registration Agent to DTC, or such successor Depository, as the registered owner of the Bonds, as and when above provided, and neither the City nor the Registration Agent shall be responsible for mailing notices of redemption to DTC Participants or Beneficial Owners. The Failure of DTC, or any successor Depository, to provide notice to any DTC Participant or Beneficial Owner will not affect the validity of such redemption. The Registration Agent shall mail said notices as and when directed by the City pursuant to written instructions from an 3

26 authorized representative of the City (other than for a mandatory sinking fund redemption, notices of which shall be given on the dates provided herein) given at least forty-five (45) days prior to the redemption date (unless a shorter notice period shall be satisfactory to the Registration Agent). From and after the redemption date, all Bonds called for redemption shall cease to bear interest if funds are available at the office of the Registration Agent for the payment thereof and if notice has been duly provided as set forth herein. PAYMENT OF BONDS The Bonds will bear interest from their date or from the most recent interest payment date to which interest has been paid or duly provided for, on the dates provided herein, such interest being computed upon the basis of a 360-day year of twelve 30-day months. Interest on each Bond shall be paid by check or draft of the Bond Registrar to the person in whose name such Bond is registered at the close of business on the 15th day of the month next preceding the interest payment date. The principal of and premium, if any, on the Bonds shall be payable in lawful money of the United States of America at the principal corporate trust office of the Bond Registrar. (The remainder of this page left blank intentionally.) 4

27 BASIC DOCUMENTATION REGISTRATION AGENT The Registration Agent, U.S. Bank National Association, Nashville, Tennessee, its successor or the City will make all interest payments with respect to the Bonds on each interest payment date directly to Cede & Co., as nominee of DTC, the registered owner as shown on the Bond registration records maintained by the Registration Agent, except as described below. However, if the winning bidder certifies to the City that it intends to hold the Bonds for its own account and has no present intent to reoffer the Bonds, then the use of the Book-Entry System is not required. So long as Cede & Co. is the Registered Owner of the Bonds, as nominee of DTC, references herein to the Bondholders, Holders or Registered Owners of the Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Bonds. For additional information, see the following section. BOOK-ENTRY-ONLY SYSTEM The Registration Agent, its successor or the Issuer will make all interest payments with respect to the Bonds on each interest payment date directly to Cede & Co., as nominee of DTC, the registered owner as shown on the Bond registration records maintained by the Registration Agent as of the close of business on the fifteenth day of the month next preceding the interest payment date (the Regular Record Date ) by check or draft mailed to such owner at its address shown on said Bond registration records, without, except for final payment, the presentation or surrender of such registered Bonds, and all such payments shall discharge the obligations of the Issuer in respect of such Bonds to the extent of the payments so made, except as described above. Payment of principal of the Bonds shall be made upon presentation and surrender of such Bonds to the Registration Agent as the same shall become due and payable. So long as Cede & Co. is the Registered Owner of the Bonds, as nominee of DTC, references herein to the Bondholders, Holders or Registered Owners of the Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Bonds. The Bonds, when issued, will be registered in the name of Cede & Co., DTC s partnership nominee, except as described above. When the Bonds are issued, ownership interests will be available to purchasers only through a book-entry system maintained by DTC (the Book-Entry-Only System ). One fully-registered bond certificate will be issued for each maturity, in the entire aggregate principal amount of the Bonds and will be deposited with DTC. DTC and its Participants. DTC, the world s largest securities depository, is a limitedpurpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of 5

28 U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P rating of AA+. The DTC Rules applicable to its Participants are on file with the U.S. Securities and Exchange Commission. More information about DTC can be found at Purchase of Ownership Interests. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Security ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. Payments of Principal and Interest. Principal and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts, upon DTC s receipt of funds and corresponding detail information from the Registration Agent on the payable date in accordance with their respective holdings shown on DTC s records, unless DTC has reason to believe it will not receive payment on such date. Payments by Direct and Indirect Participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with municipal securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Issuer or the Registration Agent subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal, tender price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Registration Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the beneficial owners shall be the responsibility of Direct and Indirect Participants. 6

29 Notices. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds f or their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as practicable after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). NONE OF THE ISSUER, THE UNDERWRITER, THE BOND COUNSEL, THE MUNICIPAL ADVISOR OR THE REGISTRATION AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO SUCH PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE PAYMENT TO, OR THE PROVIDING OF NOTICE FOR, SUCH PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES. Transfers of Bonds. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. None of the Issuer, the Bond Counsel, the Registration Agent, the Municipal Advisor or the Underwriter will have any responsibility or obligation, legal or otherwise, to any party other than to the registered owners of any Bond on the registration books of the Registration Agent. DISCONTINUANCE OF BOOK-ENTRY-ONLY SYSTEM In the event that (i) DTC determines not to continue to act as securities depository for the Bonds or (ii) to the extent permitted by the rules of DTC, the Issuer determines to discontinue the 7

30 Book-Entry-Only System, the Book-Entry-Only System shall be discontinued. Upon the occurrence of the event described above, the Issuer will attempt to locate another qualified securities depository, and if no qualified securities depository is available, Bond certificates will be printed and delivered to Beneficial Owners. No Assurance Regarding DTC Practices. The foregoing information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer, the Bond Counsel, the Registration Agent, the Municipal Advisor and the Underwriter do not take any responsibility for the accuracy thereof. So long as Cede & Co. is the registered owner of the Bonds as nominee of DTC, references herein to the holders or registered owners of the Bonds will mean Cede & Co. and will not mean the Beneficial Owners of the Bonds. None of the Issuer, the Bond Counsel, the Registration Agent, the Municipal Advisor or the Underwriter will have any responsibility or obligation to the Participants, DTC or the persons for whom they act with respect to (i) the accuracy of any records maintained by DTC or by any Direct or Indirect Participant of DTC, (ii) payments or the providing of notice to Direct Participants, the Indirect Participants or the Beneficial Owners or (iii) any other action taken by DTC or its partnership nominee as owner of the Bonds. For more information on the duties of the Registration Agent, please refer to the Resolution. Also, please see the section entitled SECURITIES OFFERED Redemption. DISPOSITION OF BOND PROCEEDS The proceeds of the sale of the Bonds shall be deposited with a financial institution regulated by the Federal Deposit Insurance Corporation or similar federal agency in a special fund known as the 2018 Construction Fund (the "Construction Fund"), or such other designation as shall be determined by the Mayor to be kept separate and apart from all other funds of the Municipality. The Municipality shall disburse funds in the Construction Fund to pay costs of issuance of the Bonds, including necessary legal, accounting and fiscal expenses, printing, engraving, advertising and similar expenses, administrative and clerical costs, Registration Agent fees, bond insurance premiums, if any, and other necessary miscellaneous expenses incurred in connection with the issuance and sale of the Bonds. Notwithstanding the foregoing, costs of issuance of the Bonds may be withheld from the good faith deposit or purchase price of the Bonds and paid to the Municipal Advisor to be used to pay costs of issuance of the Bonds. The remaining funds in the Construction Fund shall be disbursed solely to pay the costs of the Projects and to reimburse the Municipality for any funds previously expended for costs of the Projects. Money in the Construction Fund shall be secured in the manner prescribed by applicable statutes relative to the securing of public or trust funds, if any, or, in the absence of such a statute, by a pledge of readily marketable securities having at all times a market value of not less than the amount in said Construction Fund. Money in the Construction Fund shall be invested in such investments as shall be permitted by applicable law to the extent permitted by applicable law. DISCHARGE AND SATISFACTION OF BONDS If the City shall pay and discharge the indebtedness evidenced by any of the Bonds in any one or more of the following ways: 8

31 1. By paying or causing to be paid, by deposit of sufficient funds as and when required with the Registration Agent, the principal of and interest on such Bonds as and when the same become due and payable; 2. By depositing or causing to be deposited with any trust company or financial institution whose deposits are insured by the Federal Deposit Insurance Corporation or similar federal agency and which has trust powers ( an Agent ; which Agent may be the Registration Agent) in trust or escrow, on or before the date of maturity or redemption, sufficient money or Defeasance Obligations, as hereafter defined, the principal of and interest on which, when due and payable, will provide sufficient moneys to pay or redeem such Bonds and to pay interest thereon when due until the maturity or redemption date (provided, if such Bonds are to be redeemed prior to maturity thereof, proper notice of such redemption shall have been given or adequate provision shall have been made for the giving or such notice); or 3. By delivering such Bonds to the Registration Agent for cancellation by it; and if the City shall also pay or cause to be paid all other sums payable hereunder by the City with respect to such Bonds, or make adequate provision therefor, and by resolution of the governing body of the City instruct any such escrow agent to pay amounts when and as required to the Registration Agent for the payment of principal of and interest on such Bonds when due, then and in that case the indebtedness evidenced by such Bonds shall be discharged and satisfied and all covenants, agreements and obligations of the City to the holders of such Bonds shall be fully discharged and satisfied and shall thereupon cease, terminate and become void; and if the City shall pay and discharge the indebtedness evidenced by any of the Bonds in the manner provided in either clause (a) or clause (b) above, then the registered owners thereof shall thereafter be entitled only to payment out of the money or Defeasance Obligations (defined herein) deposited as aforesaid. Except as otherwise provided in this section, neither Defeasance Obligations nor moneys deposited with the Registration Agent nor principal or interest payments on any such Defeasance Obligations shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal and interest on said Bonds; provided that any cash received from such principal or interest payments on such Defeasance Obligations deposited with the Registration Agent, (A) to the extent such cash will not be required at any time for such purpose, shall be paid over to the City as received by the Registration Agent and (B) to the extent such cash will be required for such purpose at a later date, shall, to the extent practicable, be reinvested in Defeasance Obligations maturing at times and in amounts sufficient to pay when due the principal and interest to become due on said Bonds on or prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall be paid over to the City, as received by the Registration Agent. For the purposes hereof, Defeasance Obligations shall mean direct obligations of, or obligations, the principal of and interest on which are guaranteed by, the United States of America, or any agency thereof, obligations of any agency or instrumentality of the United States or any other obligations at the time of the purchase thereof are permitted investments under Tennessee law for the purposes described herein, which 9

32 bonds or other obligations shall not be subject to redemption prior to their maturity other than at the option of the registered owner thereof. REMEDIES OF BONDHOLDERS Under Tennessee law, any Bondholder has the right, in addition to all other rights: (1) By mandamus or other suit, action or proceeding in any court of competent jurisdiction to enforce its rights against the City, including, but not limited to, the right to require the City to assess, levy and collect taxes adequate to carry out any agreement as to, or pledge of, such taxes, fees, rents, tolls, or other charges, and to require the City to carry out any other covenants and agreements, or (2) By action or suit in equity, to enjoin any acts or things which may be unlawful or a violation of the rights of such Bondholder. (The remainder of this page left blank intentionally.) 10

33 LEGAL MATTERS LITIGATION There are no suits threatened or pending challenging the legality or validity of the Bonds or the right of the City to sell or issue the Bonds. See the subsection entitled Closing Certificates for additional information. TAX MATTERS Federal General. Bass, Berry & Sims PLC, Nashville, Tennessee, is Bond Counsel to the City for the Bonds. Their opinion under existing law, relying on certain statements by the City and assuming compliance by the City with certain covenants, is that interest on the Bonds: is excluded from a bondholder's federal gross income under the Internal Revenue Code of 1986, as amended (the Code), and is not treated as an item of preference in calculating the federal alternative minimum tax imposed on individuals under the Code. The Code imposes requirements on the Bonds that the City must continue to meet after the Bonds are issued. These requirements generally involve the way that Bond proceeds must be invested and ultimately used. If the City does not meet these requirements, it is possible that a bondholder may have to include interest on the Bonds in its federal gross income on a retroactive basis to the date of issue. The City has covenanted to do everything necessary to meet these requirements of the Code. A bondholder who is a particular kind of taxpayer may also have additional tax consequences from owning the Bonds. This is possible if a bondholder is: an S corporation, a United States branch of a foreign corporation, a financial institution, a property and casualty or a life insurance company, an individual receiving Social Security or railroad retirement benefits, an individual claiming the earned income credit or a borrower of money to purchase or carry the Bonds. If a bondholder is in any of these categories, it should consult its tax advisor. Bond Counsel is not responsible for updating its opinion in the future. It is possible that future events or changes in applicable law could change the tax treatment of the interest on the Bonds or affect the market price of the Bonds. See also in the section below "CHANGES IN FEDERAL AND STATE LAW" below. 11

34 Bond Counsel expresses no opinion on the effect of any action taken or not taken in reliance upon an opinion of other counsel on the federal income tax treatment of interest on the Bonds, or under State, local or foreign tax law. Bond Premium. If a bondholder purchases a Bond for a price that is more than the principal amount, generally the excess is "bond premium" on that Bond. The tax accounting treatment of bond premium is complex. It is amortized over time and as it is amortized a bondholder's tax basis in that Bond will be reduced. The holder of a Bond that is callable before its stated maturity date may be required to amortize the premium over a shorter period, resulting in a lower yield on such Bonds. A bondholder in certain circumstances may realize a taxable gain upon the sale of a Bond with a bond premium, even though the Bond is sold for an amount less than or equal to the owner's original cost. If a bondholder owns any Bonds with a bond premium, it should consult its tax advisor regarding the tax accounting treatment of a bond premium. Original Issue Discount. A Bond will have "original issue discount" if the price paid by the original purchaser of such Bond is less than the principal amount of such Bond. Bond Counsel's opinion is that any original issue discount on these Bonds as it accrues is excluded from a bondholder's federal gross income under the Internal Revenue Code. The tax accounting treatment of an original issue discount is complex. It accrues on an actuarial basis and as it accrues a bondholder's tax basis in these Bonds will be increased. If a bondholder owns one of these Bonds, it should consult its tax advisor regarding the tax treatment of original issue discount. Information Reporting and Backup Withholding. Information reporting requirements apply to interest on tax-exempt obligations, including the Bonds. In general, such requirements are satisfied if the interest recipient completes, and provides the payor with a Form W-9, "Request for Taxpayer Identification Number and Certification," or if the recipient is one of a limited class of exempt recipients. A recipient not otherwise exempt from information reporting who fails to satisfy the information reporting requirements will be subject to "backup withholding," which means that the payor is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code. For the foregoing purpose, a "payor" generally refers to the person or entity from whom a recipient receives its payments of interest or who collects such payments on behalf of the recipient. If an owner purchasing a Bond through a brokerage account has executed a Form W-9 in connection with the establishment of such account, as generally can be expected, no backup withholding should occur. In any event, backup withholding does not affect the excludability of the interest on the Bonds from gross income for Federal income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit against the owner's Federal income tax once the required information is furnished to the Internal Revenue Service. State Taxes Under existing law, the Bonds and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) Tennessee excise taxes on interest on 12

35 the Bonds during the period the Bonds are held or beneficially owned by any organization or entity, or other than a sole proprietorship or general partnership doing business in the State of Tennessee, and (b) Tennessee franchise taxes by reason of the inclusion of the book value of the Bonds in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee. CHANGES IN FEDERAL AND STATE TAX LAW From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. 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. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation. Prospective purchasers of the Bonds should consult their own tax advisors regarding the foregoing matters. CLOSING CERTIFICATES Upon delivery of the Bonds, the City will execute in a form satisfactory to Bond Counsel, certain closing certificates including the following: (i) a certificate as to the Official Statement, in final form, signed by the Mayor acting in his official capacity to the effect that to the best of his knowledge and belief, and after reasonable investigation, (a) neither the Official Statement, in final form, nor any amendment or supplement thereto, contains any untrue statements of material fact or omits to state any material fact necessary to make statements therein, in light of the circumstances in which they are made, misleading, (b) since the date of the Official Statement, in final form, no event has occurred which should have been set forth in such a memo or supplement, (c) there has been no material adverse change in the operation or the affairs of the City since the date of the Official Statement, in final form, and having attached thereto a copy of the Official Statement, in final form, and (d) there is no litigation of any nature pending or threatened seeking to restrain the issuance, sale, execution and delivery of the Bonds, or contesting the validity of the Bonds or any proceeding taken pursuant to which the Bonds were authorized; (ii) certificates as to the delivery and payment, signed by the Mayor acting in his official capacity, evidencing delivery of and payment for the Bonds; (iii) a signature identification and incumbency certificate, signed by the 13

36 Mayor and City Recorder acting in their official capacities certifying as to the due execution of the Bonds; and, (iv) a Continuing Disclosure Certificate regarding certain covenants of the City concerning the preparation and distribution of certain annual financial information and notification of certain material events, if any. APPROVAL OF LEGAL PROCEEDINGS Certain legal matters relating to the authorization and the validity of the Bonds are subject to the approval of Bass, Berry & Sims, PLC, Nashville, Tennessee, Bond Counsel. Bond counsel has not prepared the Preliminary Official Statement or the Official Statement, in final form, or verified their accuracy, completeness or fairness. Accordingly, Bond Counsel expresses no opinion of any kind concerning the Preliminary Official Statement or Official Statement, in final form, except for the information in the section entitled LEGAL MATTERS - Tax Matters. The opinion of Bond Counsel will be limited to matters relating to authorization and validity of the Bonds and to the tax-exemption of interest on the Bonds under present federal income tax laws, both as described above. The legal opinion will be delivered with the Bonds and the forms of the opinion are included in APPENDIX A. For additional information, see the section entitled MISCELLANEOUS Competitive Public Sale, Additional Information and Continuing Disclosure. (The remainder of this page left blank intentionally.) 14

37 MISCELLANEOUS RATINGS Moody s Investor Services, Inc. ( Moody s ) and S&P Global Ratings ( S&P ) have given the Bonds the ratings of Aa1 and AA, respectively. There is no assurance that such ratings will continue for any given period of time or that the ratings may not be suspended, lowered or withdrawn entirely by S&P and Moody s, if circumstances so warrant. Due to the ongoing uncertainty regarding the economy of the United States of America, including, without limitation, matters such as the future political uncertainty regarding the United States debt limit, obligations issued by state and local governments, such as the Bonds, could be subject to a rating downgrade. Additionally, if a significant default or other financial crisis should occur in the affairs of the United States or of any of its agencies or political subdivisions, then such event could also adversely affect the market for and ratings, liquidity, and market value of outstanding debt obligations, including the Bonds. Any such downward change in or withdrawal of the rating may have an adverse effect on the secondary market price of the Bonds. The ratings reflect only the views of S&P and Moody s and any explanation of the significance of such ratings should be obtained from S&P and Moody s. COMPETITIVE PUBLIC SALE The Bonds were offered for sale at competitive public bidding on March 20, Details concerning the public sale were provided to potential bidders and others in the Preliminary Official Statement that was dated March 13, The successful bidder for the Bonds was an account led by,, (the Underwriters ) who contracted with the City, subject to the conditions set forth in the Official Notice of Sale and Bid Form to purchase the Bonds at a purchase price of $ (consisting of the par amount of the Bonds, less an underwriter s discount of $ and less an original issue discount of $ ) or % of par. MUNICIPAL ADVISOR; RELATED PARTIES; OTHER Municipal Advisor. Cumberland Securities Company, Inc., Knoxville, Tennessee, has served as Municipal Advisor (the Municipal Advisor ) to the City for purposes of assisting with the development and implementation of a bond structure in connection with the issuance of the Bonds. The Municipal Advisor has not been engaged by the City to compile, create, or interpret any information in the PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT relating to the City, including without limitation any of the City s financial and operating data, whether historical or projected. Any information contained in the PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT concerning the City, any of its affiliated or constractors and any outside parties has not been independently verified by the Municipal Advisor, and inclusion of such information is not, and should not be construed as, a representation by the Muncipal Advisor as to its accuracy or completeness or otherwise. The Municipal Advisor is not a public accounting firm and has not been engaged by the City to review 15

38 or audit any information in the PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT in accordance with accounting standards. U.S. Bank National Association. U.S. Bank National Association (the Bank ) provides, among other services, commercial banking, investments and corporate trust services to private parties and to State and local jurisdictions, including serving as registration, paying agent or filing agent related to debt offerings. The Bank will receive compensation for its role in serving as Registration and Paying Agent for the Bonds. In instances where the Bank serves the City in other normal commercial banking capacities, it will be compensated separately for such services. Official Statements. Certain information relative to the location, economy and finances of the Issuer is found in the Preliminary Official Statement, in final form and the Official Statement, in final form. Except where otherwise indicated, all information contained in this Official Statement has been provided by the Issuer. The information set forth herein has been obtained by the Issuer from sources which are believed to be reliable but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Municipal Advisor or the Underwriter. The information contained herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Issuer, or the other matters described herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given. Cumberland Securities Company, Inc. distributed the Preliminary Official Statement, in final form, and the Official Statement, in final form on behalf of the City and will be compensated and/or reimbursed for such distribution and other such services. Bond Counsel. From time to time, Bass, Berry & Sims PLC has represented the Bank on legal matters unrelated to the City and may do so again in the future. Other. Among other services, Cumberland Securities Company, Inc. and the Bank may also assist local jurisdictions in the investment of idle funds and may serve in various other capacities, including Cumberland Securities Company s role as serving as the City s Dissemination Agent. If the City chooses to use one or more of these other services provided by Cumberland Securities Company, Inc. and/or the Bank, then Cumberland Securities Company, Inc. and/or the Bank may be entitled to separate compensation for the performance of such services. DEBT RECORD There is no record of default on principal or interest payments of the Issuer. Additionally, no agreements or legal proceedings of the Issuer relating to securities have been declared invalid or unenforceable. ADDITIONAL DEBT The City has not authorized the issuance of any additional debt but has various public improvement needs that probably will require the issuance of additional debt in the future. 16

39 CONTINUING DISCLOSURE The City will at the time the Bonds are delivered execute a continuing disclosure certificate (the Disclosure Certificate ) under which it will covenant for the benefit of holders and beneficial owners of the Bonds to provide certain financial information and operating data relating to the City by not later than twelve months after the end of each fiscal year commencing with the fiscal year ending June 30, 2018 (the "Annual Report"), and to provide notice of the occurrence of certain significant events not later than ten business days after the occurrence of the events and notice of failure to provide any required financial information of the City. The issuer will provide notice in a timely manner to the MSRB of a failure by the City to provide the annual financial information on or before the date specified in the continuing disclosure agreement. The Annual Report (and audited financial statements if filed separately) and notices described above will be filed by the City with the Municipal Securities Rulemaking Board ("MSRB") at and with any State Information Depository which may be established in Tennessee (the "SID"). The specific nature of the information to be contained in the Annual Report or the notices of events is summarized below. These covenants have been made in order to assist the Underwriters in complying with Securities Exchange Act Rule 15c2-12(b), as it may be amended from time to time (the "Rule 15c2-12"). Five-Year History of Filing. While it is believed that all appropriate filings were made with respect to the ratings of the City s outstanding bond issues, some of which were insured by the various municipal bond insurance companies, no absolute assurance can be made that all such rating changes of the bonds or various insurance companies which insured some transaction were made or made in a timely manner as required by Rule 15c2-12. The City does not deem any of the forgoing omissions to be material, and therefore, in the judgment of the City, for the past five years, the City has complied in all material respects with its existing continuing disclosure agreements in accordance with Rule 15c2-12. Content of Annual Report. The City's Annual Report shall contain or incorporate by reference the General Purpose Financial Statements of the City for the fiscal year, prepared in accordance with generally accepted auditing standards, provided, however, if the City's audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed when available. The Annual Report shall also include an update to the following information included in APPENDIX B entitled SUPPLEMENTAL INFORMATION STATEMENT. i. Fund Balances ii. iii. iv. Rutherford County Top Principal Employers Property Tax Rates, Levies, Collections Assessed Value, and Estimated Acutal Value of Taxable Property Principal Taxpayers 17

40 v. Local Option Sales Tax vi. vii. viii. ix. State Sales Tax Employee Pension Plans & Post-Employment Benefits Long Term Debt Service Requirements Statement of Bonded Debt x. Charter Debt Margin xi. Statements of Revenues, Expenditures, and Changes in Fund Balances Any or all of the items listed above may be incorporated by reference from other documents, including OFFICIAL STATEMENTS in final form for debt issues of the City or related public entities, which have been submitted to each of the MSRB or the U.S. Securities and Exchange Commission. If the document incorporated by reference is an OFFICIAL STATEMENT, in final form, it will be available from the MSRB. The City shall clearly identify each such other document so incorporated by reference. Reporting of Significant Events. The City will file notice regarding material events with the MSRB and the SID, if any, as follows: 1. Upon the occurrence of a Listed Event (as defined in (3) below), the City shall in a timely manner, but in no event more than ten (10) business days after the occurrence of such event, file a notice of such occurrence with the MSRB and SID, if any. Notwithstanding the foregoing, notice of Listed Events described in subsection (3)(h) and (i) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Resolution. 2. For Listed Events where notice is only required upon a determination that such event would be material under applicable Federal securities laws, the City shall determine the materiality of such event as soon as possible after learning of its occurrence. 3. The following are the Listed Events: a. Principal and interest payment delinquencies; b. Non-payment related defaults, if material; c. Unscheduled draws on debt service reserves reflecting financial difficulties; d. Unscheduled draws on credit enhancements reflecting financial difficulties; 18

41 e. Substitution of credit or liquidity providers, or their failure to perform; f. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; g. Modifications to rights of Bondholders, if material; h. Bond calls, if material, and tender offers; i. Defeasances; j. Release, substitution, or sale of property securing repayment of the securities, if material; k. Rating changes; l. Bankruptcy, insolvency, receivership or similar event of the obligated person; m. The consummation of a merger, consolidation or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and n. Appointment of a successor or additional trustee or the change of name of a trustee, if material. Termination of Reporting Obligation. The City's obligations under the Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Amendment; Waiver. Notwithstanding any other provision of the Disclosure Certificate, the City may amend the Disclosure Certificate, and any provision of the Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions concerning the Annual Report and Reporting of Significant Events it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at 19

42 the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds. In the event of any amendment or waiver of a provision of the Disclosure Certificate, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Default. In the event of a failure of the City to comply with any provision of the Disclosure Certificate, any Bondholder or any beneficial owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under the Disclosure Certificate. A default under the Disclosure Certificate shall not be deemed an event of default, if any, under the Resolution, and the sole remedy under the Disclosure Certificate in the event of any failure of the City to comply with the Disclosure Certificate shall be an action to compel performance. ADDITIONAL INFORMATION Use of the words "shall," "must," or "will" in the PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT in summaries of documents or laws to describe future events or continuing obligations is not intended as a representation that such event will occur or obligation will be fulfilled but only that the document or law contemplates or requires such event to occur or obligation to be fulfilled. Any statements made in the PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither the PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT nor any statement which may have been made orally or in writing is to be construed as a contract with the owners of the Bonds. The references, excerpts and summaries contained herein of certain provisions of the laws of the State of Tennessee, and any documents referred to herein, do not purport to be complete statements of the provisions of such laws or documents, and reference should be made to the complete provisions thereof for a full and complete statement of all matters of fact relating to the Bonds, the security for the payment of the Bonds, and the rights of the holders thereof. 20

43 The PRELIMINARY OFFICIAL STATEMENT and OFFICIAL STATEMENT, in final form, and any advertisement of the Bonds, is not to be construed as a contract or agreement between the City and the purchasers of any of the Bonds. Any statements or information printed in this PRELIMINARY OFFICIAL STATEMENT or the OFFICIAL STATEMENT, in final form, involving matters of opinions or of estimates, whether or not expressly so identified, is intended merely as such and not as representation of fact. The City has deemed this PRELIMINARY OFFICIAL STATEMENT as final as of its date within the meaning of Rule 15c2-12 of the U.S. Securities and Exchange Commission except for the omission of certain pricing information allowed to be omitted pursuant to Rule 15c2-12. (The remainder of this page left blank intentionally.) 21

44 (The remainder of this page left blank intentionally.)

45 CERTIFICATION OF ISSUER On behalf of the City, we hereby certify that to the best of our knowledge and belief, the information contained herein as of this date is true and correct in all material respects, and does not contain an untrue statement of material fact or omit to state a material fact required to be stated where necessary to make the statement made, in light of the circumstance under which they were made, not misleading. /s/ Mayor ATTEST: /s/ City Recorder 22

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47 FORM OF LEGAL OPINION APPENDIX A

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49 (Proposed Form of Opinion of Bond Counsel) 150 Third Avenue South, Suite 2800 Nashville, TN (615) (Closing Date) City Council of the City of Murfreesboro Murfreesboro, Tennessee [Purchaser] Ladies and Gentlemen: We have acted as bond counsel to the City of Murfreesboro, Tennessee (the "Issuer") in connection with the issuance of the Issuer s $ General Obligation Bonds, Series 2018, dated the date hereof (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify such facts by independent investigation. Based on our examination, we are of the opinion, as of the date hereof, as follows: 1. The Bonds have been duly authorized, executed and issued in accordance with the constitution and laws of the State of Tennessee and constitute valid and binding general obligations of the Issuer. 2. The resolutions of the City Council of the Issuer authorizing the Bonds have been duly and lawfully adopted, are in full force and effect and are valid and binding agreements of the Issuer enforceable in accordance with their terms. 3. The principal of and interest on the Bonds are payable from unlimited ad valorem taxes to be levied on all taxable property within the corporate limits of the Issuer. The Bonds constitute a general obligation of the Issuer for the payment of which the Issuer has validly and irrevocably pledged its full faith and credit. 4. Interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax A-1

50 purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the Code ), and interest on the Bonds is not treated as an item of tax preference in calculating the alternative minimum tax imposed on individuals under the Code. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause interest on the Bonds to be so included in gross income retroactive to the date of issuance of the Bonds. The Issuer has covenanted to comply with all such requirements. Except as set forth in this Paragraph 4, we express no opinion regarding other federal tax consequences arising with respect to the Bonds. 5. Under existing law, the Bonds and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) Tennessee excise taxes on all or a portion of the interest on any of the Bonds during the period such Bonds are held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee, and (b) Tennessee franchise taxes by reason of the inclusion of the book value of the Bonds in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership doing business in the State of Tennessee. It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds and the resolutions authorizing the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. We express no opinion herein as to the accuracy, adequacy or completeness of the Official Statement relating to the Bonds. This opinion is given as of the date hereof, and we assume no obligation to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Yours truly, A-2

51 APPENDIX B SUPPLEMENTAL INFORMATION STATEMENT OF CITY OF MURFREESBORO, TENNESSEE

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53 GENERAL INFORMATION LOCATION The City of Murfreesboro (the City ) is the County Seat of Rutherford County (the County ). The City is located about 30 miles from the State capital of Nashville, and the County is adjacent to the southern boundary of Metropolitan Nashville and Davidson County. The County is also bordered by Wilson County to the north, Cannon County to the east, Bedford and Coffee Counties to the south and Marshall and Williamson Counties to the west. The land area of the County is approximately 619 square miles. Other incorporated cities in the County include the Town of Smyrna and the City of LaVergne. The City of Murfreesboro is located in the geographic center of the State. It is also home to the Middle Tennessee State University, the second largest university in the State, which has a large and positive economic impact on the County. GENERAL The County is part of the Nashville-Murfreesboro Metropolitan Statistical Area (the MSA ), which includes Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson and Wilson Counties. According to the 2010 US Census the MSA had a population of 1,571,860. The County is also part of the Nashville-Murfreesboro Combined Statistical Area (the CSA ) which includes Maury, Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson and Wilson Counties. According to the 2010 Census, the CSA had a population of 1,674,191. The City of Nashville, the State Capital, is the largest city in the CSA with a population of 626,681 according to the 2010 Census. The 2010 Census puts Rutherford County s population at 262,604. The City of Murfreesboro, the largest city in the County, had a 2010 Census of 108,755. The following table shows past and current population figures for the City and County: Population Growth * Murfreesboro 26,360 32,845 44,922 68, , ,947 Rutherford County 59,428 84, , , , ,251 * 2016 Estimates from U.S. Census Bureau Source: U.S. Census Bureau. TRANSPORTATION Interstate I-24 and I-840 run through the County. SR-840 gives easy access to I-40 and I-65. U.S. Highways 41, 70 and 231 and State Highways 96, 99, 266, 268 and 269 run through the County. The close proximity to Nashville gives the County access to several forms transportation B-1

54 located in the State Capital. The CSX Transportation Group links 20 states and operates a major inter modal yard (Radnor Intermodal Yard) in Nashville with 90 trains daily. The Port of Nashville on the Cumberland River provides a nine-foot navigation channel. The Southern Inland Waterway offers access to the Gulf of Mexico. And the Nashville International Airport provides commercial air services to many cities and countries. EDUCATION There are two school systems in the County. The Murfreesboro City School System has 12 schools and is a K-6 school system. In the fall of 2016 the city system enrolled about 8,466 students with 582 teachers. The Rutherford County School System has 47 schools. The county system also runs one school for the arts. In the fall of 2016 the county system enrolled about 44,067 students with 2,969 teachers. Source: Tennessee Department of Education and the Rutherford County School Fact Book. Middle Tennessee State University. The Middle Tennessee State University ( MTSU ) in Murfreesboro was founded in 1911 as one of three state normal schools for teacher training. MTSU is the oldest public university in Middle Tennessee, and is a Tennessee Board of Regents Institution. The campus consists of 137 buildings on 504 acres and had a fall 2016 enrollment of 22,159. Today, MTSU is a Carnegie Doctoral Research Intensive University that occupies more than 1,000 acres in Rutherford County including a 500-acre main campus, an agricultural campus, an aerospace facility at the Murfreesboro Airport, and the Miller Horse Science Center. MTSU houses a wide variety of nationally recognized academic degree programs at the baccalaureate, master s, and doctoral levels. The University is composed of eight undergraduate colleges offering more than 40 departments and more than 140 degree programs. The College of Graduate Studies offers more than 100 degree programs. MTSU is the No. 1 producer of graduates in the Tennessee Board of Regents system; the second-largest producer of graduates in the state among public universities; the No. 1 producer of adult (25 years old and older) and low-income (Pell Grant eligible) graduates in the state; and the most efficient producer of graduates among the state's public universities, helping more students reach their educational goals with fewer tax dollars. MTSU is one of just 108 colleges and universities recognized by the Chronicle of Higher Education for producing Fulbright scholars in , placing it alongside universities such as Duke, Harvard, and Yale. No other Tennessee institution made the list. Source: Middle Tennessee State University. The Tennessee Technology Center at Murfreesboro. The Tennessee Technology Center at Murfreesboro is part of a statewide system of 26 vocational-technical schools. The Tennessee Technology Center meets a Tennessee mandate that no resident is more than 50 miles from a vocational-technical shop. The institution s primary purpose is to meet the occupational and technical training needs of the citizens including employees of existing and prospective businesses and industries in the region. The Technology Center at Murfreesboro serves the central region of the state including Rutherford, Wilson, Cannon, and Coffee Counties. The Technology Center at Murfreesboro began operations in 1967, and the main campus is located in Rutherford County. Fall enrollment was 6,022 students. Source: Tennessee Technology Center at Murfreesboro. B-2

55 Motlow State Community College Smyrna Center. Motlow State Community College is an accredited public comprehensive community college that had a fall 2016 enrollment of 5,851 students. The College was founded in 1969 and is located in Tullahoma in Coffee County, Tennessee. The associate degree program offers students an opportunity to earn an Associate of Arts or Associate of Science degree designed for transfer to a four-year-college or university. Motlow State has offices and classrooms in Fayetteville, McMinnville and Smyrna. Source: Motlow State Community College. The Nashville Metropolitan Statistical Area has 15 colleges and universities, including Vanderbilt University, Belmont University, Tennessee State University, David Lipscomb University, Meharry Medical College, Nashville State Technical Institute and Fisk University. Total higher education enrollment exceeds 65,000 students annually. Seven of Nashville's institutions of higher education offer graduate programs. Nashville is also a leading center for medical research and education with Vanderbilt University emphasizing medical research in addition to its programs in other disciplines and with Meharry Medical College specializing in health care delivery. HEALTHCARE Saint Thomas Rutherford Hospital (formerly Middle Tennessee Medical Center). Located in Murfreesboro, the Saint Thomas Rutherford Hospital is a full-service hospital that has served the County since A new $268 million facility equipped with state-of-the-art technology opened in The hospital provides 286 all-private patient rooms and is designed to facilitate a healing and spiritual environment. There are about 1,400 associates with 320 affiliated physicians. Saint Thomas Rutherford Hospital provides both physical and financial support for many community programs. Saint Thomas Rutherford Hospital gives an average of $40 million in charity care a year. Saint Thomas mission is to serve all persons, with special attention to those who are poor and vulnerable, while improving the health of individuals and communities. Saint Thomas Health's regional health system consists of nine hospitals and a comprehensive network of affiliated joint ventures in diagnostics, cardiac services and ambulatory surgery as well as medical practices, clinics and rehabilitation facilities. Saint Thomas Health is a member of Ascension Health, a Catholic organization that is the largest not-for-profit health system in the United States. Source: Saint Thomas Rutherford Hospital. TriStar StoneCrest Medical Center. TriStar StoneCrest opened in 2003 in Smyrna. The facility is equipped with 109 beds and offers a full array of acute care services, including emergency care, general surgery, cardiology, obstetrics, intensive care, diagnostic services and cancer care. The hospital has continued to expand since its opening with the addition of The Sarah Cannon Cancer Center oncology program, a sleep medicine facility, a robotics surgery program, and a level IIB neonatal intensive care unit. The facility has an accredited chest pain center, award winning cancer program, certificate of distinction for primary stroke centers and recognition by The Joint Commission as one of the nation s top performers on key quality measures. The emergency department treated a record number of patients in 2012, yet continues to maintain an average wait time less than half the national average. More than 300 physicians are on staff, many with offices located a short walking distance from the facility. B-3

56 TriStar Sarah Cannon Cancer Centers. Located at the TriStar StoneCrest Medical Center, TriStar Sarah Cannon Cancer Centers is a network of eight affiliated medical facilities in Tennessee and Bowling Green, Kentucky that provides diagnosis and treatment to cancer patients. The network consists of over 100 medical oncologists, gynecologists, hematologists, radiation oncologists, pathologists and surgeons. TriStar Sarah Cannon has grown to become the largest community based, privately funded, diagnostic and treatment center in the country. The history of TriStar Sarah Cannon Cancer Center starts in 1983 when Sarah Cannon was diagnosed with breast cancer. Sarah Cannon, known worldwide for her Grand Ole Opry character "Minnie Pearl", became an advocate for early detection, patient education and research-based treatment. In 1991, she gave her name to the cancer center. TriStar Health is the region's largest, most comprehensive healthcare provider and is based in Brentwood, TN. TriStar Health System provides health services to Tennessee and Kentucky: 13 hospitals, 57 TriStar medical group offices, 12 Care Now Urgent Care Centers, 21 imaging centers, 3 freestanding ERs, 7 outpatient surgery centers, and 7 medical parks with an average of 1,600 physicians, 3,800 nurses and 142,000 patients treated. TriStar provides affordable healthcare by consolidating business and financial services and allowing medical centers and hospitals to focus on delivering quality healthcare. The Nashville-based Hospital Corporation of America (the HCA ) was one of the nation's first hospital companies in 1968 and owns the TriStar Health System. Today, HCA is one of the nation's leading providers of healthcare services. The company is comprised of locally managed facilities that include about 162 hospitals and 113 freestanding surgery centers in 20 states and England and employing approximately 199,000 people. Approximately four to five percent of all inpatient care delivered in the country today is provided by HCA facilities. Source: Tri-Star Health System and Hospital Corporation of America. MANUFACTURING AND COMMERCE As of 2014, an average of 80,909 persons were employed in the manufacturing industries in the MSA, engaging in a wide range of activities and producing a variety of products, including automotive, food, tobacco, textiles and furnishings, lumber and paper, printing and publishing, chemical and plastics, leather, concrete, glass, stone, primary metals, machinery and electronics, measuring and controlling devices, and consumer products. Nashville MSA's largest manufacturing employers include Nissan North America, Bridgestone Americas, Electrolux Home Products, A.O. Smith Water Products and Vought Aircraft Industries. Nashville is the major wholesale and retail trade center for the MSA and some 50 counties in the central region of the State, southern Kentucky and northern Alabama, a retail trade area of more than 2.3 million people with retail sales of over $32.0 billion. Major regional shopping centers register more than $3.0 billion in retail sales annually, placing Nashville in the nation's top 50 markets. In the Nashville region, there are 245 shopping centers with 37.3 million square feet of gross leasable area. Nine of these centers are super-regional and 15 are regional centers. Two of the super-regional centers are located in or near the City. Opry Mills Mall located nearby, but outside the City recently reopened following repairs resulting from the May 2010 flood and now includes B-4

57 several new stores. Rivergate Mall, one of the MSA s largest shopping centers with nearly 200 stores is located in Goodlettsville and is a major economic engine for the MSA. Source: Official Statements of The Metropolitan Government, the City and various reference sites. A diversified economy is credited for the stability of local employment and wages. Employment by industry (excluding self-employed) for the Nashville MSA in 2014: Industry Employment Number Government 127,781 Health Care/Social Assistance 123,854 Retail Trade 113,650 Accommodation /Food Services 90,468 Administrative Services 87,259 Manufacturing 80,909 Professional/Scientific/Technical Services 76,270 Other Services 68,239 Finance/Insurance 63,128 Real Estate/Rental/Leasing 51,624 Construction 58,235 Wholesale Trade 42,102 Transportation/Warehousing 41,948 Arts/Entertainment/Recreation 37,089 Educational Services 33,264 Information 25,212 Management of Companies/Enterprises 15,990 Agriculture/Forestry/Fishing/Hunting 15,484 Natural Resources/Mining 1,417 Utilities 1,168 TOTAL 1,155,091 Source: Nashville Area Chamber of Commerce Nashville Region s Vital Signs [balance of page left blank] B-5

58 The following chart is a list of the major employers in the County: Company Product Employment Nissan Motor Mfg. Corp USA Small Trucks & Cars 8,500 Rutherford County Schools Education 6,220 Middle Tennessee State University Higher Education 2,182 Ingram Book Company Books, Audio Tapes 1,807 Alvin C. York VA Medical Center Hospital 1,745 Amazon Distribution 1,724 State Farm Insurance Insurance 1,650 St. Thomas Rutherford Hospital Hospital 1,315 Asurion Customer Service 1,200 City of Murfreesboro Government 1,164 City of Murfreesboro School System Education 1,138 Verizon Wireless Wireless Device 1,068 Rutherford County Government 1,038 General Mills / Pillsbury Refrigerated Baked Goods 1,028 Bridgestone / Firestone Inc. Tires 1,007 Adient Automotive Seating 1,000 Square D/Schneider Electric Distribution & Manufacturer 900 Schneider Electric Electric Dist. & Control 900 Taylor Farms Tennessee Value-Added Fresh Produce 770 Vi-Jon Personal Care Products 728 Federal Mogul Auto. Components 500 MAHLE Filter Systems Automotive Systems 491 WWL Vehicle Srvs. Americas, Inc. Auto Processing 480 Quality Industries Metal Fabrication 465 Saks Distribution / Online Retail 454 Franke Foodservice Systems, Inc. Foodservice Equipment 350 Rich Products Refrigerated Baked Goods 330 Cardinal Health, Inc. Medical Pharmaceutical 300 Enovate Medical Medical Work Stations 300 Ajax Turner Alcohol Distribution 250 Parthenon Metal Works Steel Tubing Solutions 250 Source: The Middle Tennessee Industrial Development Association and the Murfreesboro Comprehensive Annual Financial Report B-6

59 EMPLOYMENT INFORMATION For the month of December 2017, the unemployment rate for Murfreesboro stood at 2.3% with 70,630 persons employed out of a labor force of 72,290. For the month of December 2017, the unemployment rate for Rutherford County stood at 2.3% with 164,310 persons employed out of a labor force of 168,210. The Nashville-Murfreesboro MSA s unemployment for December 2017 was at 2.4% with 990,350 persons employed out of a labor force of 1,014,530. As of December 2017, the unemployment rate in the Nashville-Murfreesboro CSA stood at 2.4%, representing 1,42,890 persons employed out of a workforce of 1,068,870. The following charts show unemployment trends in the City, County, MSA and CSA for the last 5 years: Annual Average Annual Average Unemployment Annual Average Annual Average Annual Average National 8.1% 7.4% 6.2% 5.3% 4.9% Tennessee 8.0% 8.2% 6.7% 5.8% 4.8% Murfreesboro 6.7% 6.6% 5.4% 4.7% 3.9% Index vs. National Index vs. State Rutherford County 6.5% 6.6% 5.3% 4.6% 3.8% Index vs. National Index vs. State Nashville-Murfreesboro MSA 6.6% 6.5% 5.2% 4.6% 3.8% Index vs. National Index vs. State Nashville-Murfreesboro CSA 6.7% 6.6% 5.4% 5.9% 3.9% Index vs. National Index vs. State Source: Tennessee Department of Employment Security, CPS Labor Force Estimates Summary. [balance of page left blank] B-7

60 ECONOMIC DATA Per Capita Personal Income National $42,453 $44,267 $44,462 $46,414 $48,112 Tennessee $37,452 $38,771 $38,806 $40,233 $42,094 Rutherford County $32,543 $34,462 $34,818 $35,948 $37,654 Index vs. National Index vs. State Nashville-Murfreesboro MSA $43,505 $44,859 $44,897 $47,594 $50,635 Index vs. National Index vs. State Nashville-Murfreesboro CSA $42,535 $43,912 $44,015 $46,615 $49,563 Index vs. National Index vs. State Source: U.S. Department of Commerce, Bureau of Economic Analysis. Social and Economic Characteristics National Tennessee Rutherford County Murfreesboro Median Value Owner Occupied Housing $184,700 $146,000 $164,800 $186,200 % High School Graduates or Higher Persons 25 Years Old and Older 87.0% 86.0% 90.8% 92.2% % Persons with Income Below Poverty Level 12.7% 15.8% 10.3% 16.0% Median Household Income $55,322 $46,574 $58,032 $53,241 Source: U.S. Census Bureau State & County QuickFacts PARKS AND RECREATION J. Percy Priest Lake. J. Percy Priest Lake is a key project in the development of the Cumberland River Basin. J. Percy Priest Lake is about 42 miles long and covers portions of Davidson, Rutherford, and Wilson Counties. It consists of 14,200 surface acres of water. The water is surrounded by 18,854 acres of public lands; 10,000 acres are devoted to wildlife management. Source: US Army Corps of Engineers B-8

61 Long Hunter State Park. Located in Davidson County on the county lines of Wilson and Rutherford Counties, Long Hunter State Park is along the shore of J. Percy Priest Lake. The park lays just seven miles south of Mt. Juliet. Picnicking, swimming, hiking, backpacking, boating, fishing, nature photography and wildlife observation are among the activities available to visitors on the 2,600-acre park. Planned activities include interpretive and recreation programs for the general public and environmental education programs for school and other interested groups. The park offers a meeting facility, picnic areas, hiking trails, campsites, and a state archaeological site at Sellars Farm. Percy Priest Lake offers swimming, boating and fishing for the park visitors as well. Source: Tennessee State Parks. RECENT DEVELOPMENTS Murfreesboro Amazon. Completed in the spring of 2013, Amazon s Murfreesboro fulfillment center has hired 500 more employees in 2015 to bring the total employment up to 1,550. A second center in Lebanon has also opened a facility and has hired about 1,000 workers. The State Funding Board approved $7 million in grants to make infrastructure improvements at the sites in Murfreesboro and Lebanon. Amazon's investment in the two sites totals $145 million. General Mills. General Mills invested $250 million in 2015 to increase capacity at its Murfreesboro facility, creating 117 new jobs in Rutherford County. The project is expected to be completed in General Mills is one of the world s leading food companies, operating in more than 100 countries around the world. Its brands include Cheerios, Fiber One, Häagen-Dazs, Nature Valley, Yoplait, Betty Crocker, Pillsbury, Green Giant, Old El Paso, Wanchai Ferry, Yoki and more. Headquartered in Minneapolis, Minn., USA, General Mills had fiscal 2014 worldwide sales of US $17.9 billion. Middle Tennessee State University. A 250,000-square-foot, $147 million Science Building, opened in the 2015 spring semester, represents one of the most significant investments made by the state of Tennessee toward the enhancement of science and technology education. Source: The Tennessean. Rutherford County Calsonic Kansei North America. Nissan s largest North American parts supplier, Calsonic, underwent a $109 million expansion that will brought 1,200 new jobs to the region at the end of The expansion occured at the company s three Tennessee locations in Lewisburg, Shelbyville and Smyrna. Calsonic s products include automotive climate control electronics, cooling and exhaust systems. In 2014 the company invested $57.6 million at its Shelbyville facility, which manufactures exhaust units, catalytic converters and manifolds. The company also invested $49.8 million in the Lewisburg location added 526 new jobs. As part of the expansion, the company built a new 300,000- square-foot warehouse facility. Lastly, the firm invested $2.1 million at its Smyrna facility, which is located within the Nissan plant and places Calsonic products into the Nissan vehicles. A total of 183 new jobs were created. B-9

62 M-Tek Inc. The Manchester auto supplier, M-Tek, has its headquarters located in Murfreesboro. In 2015 M-Tek won a $147 million contract to build interior door panels for a new midsize sedan that Volkswagen plans to assemble in Chattanooga. Volkswagen s $1 billion facility opened in Despite the ailing auto industry, the Chattanooga plant is a key part of the carmaker's long-term plan to nearly quadruple its U.S. sales to about 800,000 annually by M- Tek is a wholly owned subsidiary of the Kasai Kogyo Co. Ltd., a Japanese automotive parts manufacturer of over forty years, with facilities located throughout North America, Europe, and Asia. Nissan North America Inc. Nissan broke ground in the summer of 2010 for a lithium-ion battery plant as part of a plan to build a five-passenger all-electric car, the Leaf, and create up to 1,300 jobs in Tennessee. The battery plant is part of a $1.7 billion investment to manufacture the Leaf. In September 2012 Nissan began limited production of its Leaf electric car at the Smyrna plant. The batteries manufactured at the site are being installed in the new cars. In summer of 2013 the Nissan plant hired an extra 900 employees to begin production of the model Rogue. Nissan Motor Co. announced plans early 2015 to build a new $160 million supplier park at its Tennessee assembly plant that the Japanese automaker projects to attract more than 1,000 jobs. The automaker's plans call for the new 1.5 million-square-foot logistics center to be built in phases starting in 2016 and completed by the end of More than 8,400 people work at the Smyrna Nissan plant that built 648,000 vehicles in 2014, making it the highest-producing plant in North America. The plant, which opened in 1983, makes the Altima, Maxima, Leaf, Rogue, Pathfinder and Infiniti QX60. Schwan Cosmettics USA. Schwan Cosmetics consolidated its U.S. operations with a new facility in Murfreesboro in The new $38 million, 173,000-square-foot plant merged its Cosmolab facility in Lewisburg, Tenn., and its facility in Piscataway, N.J. and was completed in The new facility is expected to create 250 new jobs over the next five years, in addition to the 200 workers transferring from Lewisburg. The 250 new jobs include manufacturing and office positions. Schwan Cosmetics is the leading private label manufacturer of cosmetic pencils and products worldwide. Founded in 1855, the Schwan-Stabilo group is a family owned company with more than 4,400 employees worldwide with headquarters in Heroldsberg, Germany. Topre America. Topre America officials announced plans to invest $53.3 million to build a new manufacturing facility in Smyrna, expanding on their current operations based inside the Nissan Smyrna plant. Construction on the new facility began in 2015, with production up and running by June The company plans to begin hiring for these new positions in October This expansion will allow the automotive parts manufacturer to increase production efficiency and create 100 new jobs in Rutherford County. Topre America provides automotive stamping and assemblies for body structures for Nissan, Honda and Toyota. This new facility allows Topre America to increase its stamping capabilities and production efficiencies. [balance of page left blank] B-10

63 CITY OF MURFREESBORO, TENNESSEE SUMMARY OF BONDED INDEBTEDNESS Due Interest Outstanding (1) Purpose Date Rate As of June 30, 2017 $65, General Obligation Refunding Bonds, Series 2009 June 2020 Fixed $ 10,100,000 $29,355,000 General Obligation Improvement Bonds, Series 2014 April 2029 Fixed 24,700,000 $1,000,000 Energy Efficient School Loan, Series #1 June 2022 Fixed 441,689 $971,518 Energy Efficient School Loan, Series #2 June 2023 Zero 542,430 $68,650,000 TMBF Loan #2 (3) May 2021 Variable 22,607,907 $4,640,000 TMBF Loan #3 (3) May 2021 Variable 1,594,000 $60,000,000 TMBF Loan #4 (3) May 2024 Variable 30,661,000 $40,700,000 TMBF Loan #6 Oct Fixed 31,162,000 $5,100,000 TMBF Loan #7 Oct Fixed 2,253,000 $10,430,000 TMBF Loan #8 (5) June 2018 Variable 2,023,169 $1,870,000 General Obligation Airport Ref. C.O.N., Series 2013 (Federally Taxable) August 2019 Fixed 620,000 $79,000,000 General Obligation Bonds, Series 2016 June 2031 Fixed 75,425,000 $27,430,000 General Obligation Refunding Bonds, Series 2016B Dec 2025 Fixed 27,430,000 $2,140,000 Energy Efficient School Loan, Series 2017 June 2029 Fixed 2,111,959 $40,860,000 Water and Sewer System Revenue and Tax Refunding Bonds, Series 2009 (2) June 2019 Fixed 4,845,000 $28,610,000 Water and Sewer Revenue and Tax Refunding Bonds, Series 2013A (2) June 2021 Fixed 14,690,000 $8,000,000 Water and Sewer TMBF Loan #1 (2) & (3) May 2023 Variable 3,063,000 $41,440,000 Water and Sewer TMBF Loan #2 (2) & (3) May 2027 Variable 25,207,000 $7,530,000 State Revolving Loan, Series CWF (Est Ammo Based on Full Draw) (2) Feb Fixed 6,917,390 $23,000,000 State Revolving Loan, Series SRF (Est Ammo Based on Full Draw) (2) Feb Fixed 21,596,114 $3,600,000 State Revolving Loan, Series CWF (2) Nov Fixed 3,171,768 $4,000,000 State Revolving Loan, Series CG (Est Ammo Based on Full Draw) (2) Dec Fixed 3,734,716 $32,500,000 State Revolving Loan, Series SRF (Est Ammo Based on Full Draw) (2) & (4) Estimated 2037 Fixed 32,500,000 $17,015,000 Water and Sewer System Revenue and Tax Refunding Bonds, Series 2016C (2) June 2026 Fixed 16,915,000 $15,445,000 Electric System Revenue and Tax Refunding Bonds, Series 2009 (2) June 2021 Fixed 1,460,000 $10,000,000 Electric Department TMBF Loan #1 May 2023 Variable 4,891,000 TOTAL BONDED DEBT $ 370,663,142 General Obligation Bonds, Series 2018 June 2033 Fixed $ 71,000,000 Less: Revenue Supported Debt (138,990,988) NET BONDED DEBT $ 302,672,154 (1) The above figures do not include short-term notes outstanding, if any. For more information, see the notes to the Financial Statements in the GENERAL PURPOSE FINANCIAL STATEMENTS included herein. All debt is supported by the City's full faith and credit. (2) Revenue-supported debt. In the case of deficiency in revenues to pay debt service, the bonds and/or loans are backed by the City's full, faith and credit general obligation pledge. (3) The City budgets for interest rate risk. (4) Assumes all funds have been drawn to complete the project. (5) City does not expect to draw additional funds. Figures reflect amount to fully retire all outstanding loan debt. B-11

64 CITY OF MURFREESBORO, TENNESSEE Indebtedness and Debt Ratios INTRODUCTION The information set forth in the following table is based upon information derived in part from the GENERAL PURPOSE FINANCIAL STATEMENTS which are included herein and the table should be read in conjunction with those statements. After For Fiscal Year Ended June 30 Issuance INDEBTEDNESS TAX SUPPORTED General Obligation Bonds & Notes $ 218,416,176 $ 226,860,335 $ 204,836,560 $ 260,281,343 $ 231,672,154 $ 302,672,154 TOTAL TAX SUPPORTED $ 218,416,176 $ 226,860,335 $ 204,836,560 $ 260,281,343 $ 231,672,154 $ 302,672,154 REVENUE SUPPORTED (1) Water & Sewer Revenue Bonds $ 96,331,543 $ 89,386,000 $ 101,752,609 $ 142,871,189 $ 132,639,988 $ 132,639,988 Electric Revenue Bonds 7,440,000 9,299,000 8,353,000 7,371,000 6,351,000 6,351,000 TOTAL REVENUE SUPPORTED $ 103,771,543 $ 98,685,000 $ 110,105,609 $ 150,242,189 $ 138,990,988 $ 138,990,988 TOTAL DEBT $ 322,187,719 $ 325,545,335 $ 314,942,169 $ 410,523,532 $ 370,663,142 $ 441,663,142 Less: Revenue Supported Debt $ (103,771,543) $ (98,685,000) $ (110,105,609) $ (150,242,189) $ (138,990,988) $ (138,990,988) Less: Debt Service Fund (4,427,052) (3,861,500) (2,776,002) (3,241,272) (2,125,690) (2,125,690) NET DIRECT DEBT $ 213,989,124 $ 222,998,835 $ 202,060,558 $ 257,040,071 $ 229,546,464 $ 300,546,464 OVERLAPPING DEBT (2) $ 159,225,524 $ 163,687,632 $ 161,891,801 $ 155,825,570 $ 161,891,801 $ 192,283,987 NET DIRECT & OVERLAPPING DEBT $ 373,214,648 $ 386,686,467 $ 363,952,359 $ 412,865,641 $ 391,438,265 $ 492,830,451 PROPERTY TAX BASE (3) Estimated Actual Value $ 8,711,106,884 $ 9,222,664,238 $ 9,040,827,328 $ 10,064,325,398 $ 11,615,113,424 $ 11,615,113,424 Appraised Value 8,711,106,884 9,222,664,238 9,040,827,328 10,064,325,398 10,563,945,659 10,563,945,659 Assessed Value 2,633,451,736 2,824,021,180 2,711,139,886 3,096,131,674 3,256,569,094 3,256,569,094 (1) Revenue-supported debt. In the case of deficiency in revenues to pay debt service, the bonds and/or loans are backed by the City's full, faith and credit general obligation pledge. (2) OVERLAPPING DEBT Includes the City's share of Rutherford County, Tennessee's debt. (3) Sources: Tax Aggregate Report of Tennessee from the State Board of Equalization Source: General Purpose Financial Statements and City Officials. B-12

65 After For Fiscal Year Ended June 30 Issuance DEBT RATIOS TOTAL DEBT to Estimated Actual Value 3.70% 3.53% 3.48% 4.08% 3.19% 3.80% TOTAL DEBT to Appraised Value 3.70% 3.53% 3.48% 4.08% 3.51% 4.18% TOTAL DEBT to Assessed Value 12.23% 11.53% 11.62% 13.26% 11.38% 13.56% NET DIRECT DEBT to Estimated Actual Value 8.13% 7.90% 7.45% 8.30% 7.05% 9.23% NET DIRECT DEBT to Appraised Value 2.46% 2.42% 2.23% 2.55% 2.17% 2.85% NET DIRECT DEBT to Assessed Value 8.13% 7.90% 7.45% 8.30% 7.05% 9.23% OVERLAPPING DEBT to Estimated Actual Value 1.83% 1.77% 1.79% 1.55% 1.39% 1.66% OVERLAPPING DEBT to Appraised value 1.83% 1.77% 1.79% 1.55% 1.53% 1.82% OVERLAPPING DEBT to Assessed Value 6.05% 5.80% 5.97% 5.03% 4.97% 5.90% NET DIRECT & OVERLAPPING DEBT to Estimated Actual Value 4.28% 4.19% 4.03% 4.10% 3.37% 4.24% NET DIRECT & OVERLAPPING DEBT to Appraised Value 4.28% 4.19% 4.03% 4.10% 3.71% 4.67% NET DIRECT & OVERLAPPING DEBT to Assessed Value 14.17% 13.69% 13.42% 13.33% 12.02% 15.13% PER CAPITA RATIOS POPULATION (1) 117, , , , , ,947 PER CAPITA PERSONAL INCOME (2) $ 34,818 $ 35,948 $ 37,654 $ 37,654 $ 37,654 $ 37,654 Estimated Actual Value to POPULATION $ 74,426 $ 76,251 $ 71,685 $ 76,276 $ 88,029 $ 88,029 Assessed Value to POPULATION $ 22,500 $ 23,348 $ 21,497 $ 23,465 $ 24,681 $ 24,681 Total Debt to POPULATION $ 2,753 $ 2,692 $ 2,497 $ 3,111 $ 2,809 $ 3,347 Net Direct Debt to POPULATION $ 1,828 $ 1,844 $ 1,602 $ 1,948 $ 1,740 $ 2,278 Overlapping Debt to POPULATION $ 1,360 $ 1,353 $ 1,284 $ 1,181 $ 1,227 $ 1,457 Net Direct & Overlapping Debt to POPULATION $ 3,189 $ 3,197 $ 2,886 $ 3,129 $ 2,967 $ 3,735 Total Debt Per Capita as a percent of PER CAPITA PERSONAL INCOME 7.91% 7.49% 6.63% 8.26% 7.46% 8.89% Net Direct Debt Per Capita as a percent of PER CAPITA PERSONAL INCOME 5.25% 5.13% 4.25% 5.17% 4.62% 6.05% Overlapping Debt Per Capita as a % of PER CAPITA PERSONAL INCOME 3.91% 3.76% 3.41% 3.14% 3.26% 3.87% Net Direct & Overlapping Debt Per Capita as a % of PER CAPITA PERSONAL INCOME 9.16% 8.89% 7.66% 8.31% 7.88% 9.92% (1) Per Capita computations are based upon POPULATION data according to the U.S. Census. (2) PER CAPITA PERSONAL INCOME is based upon the most current data available from the U. S. Department of Commerce. B-13

66 CITY OF MURFREESBORO, TENNESSEE BONDED DEBT SERVICE REQUIREMENTS - General Obligation % Series % All F.Y. Existing Debt - General Obligation (1) General Obligation 2018 Total Bonded Debt Principal Ended Estimated as of June 30, 2017 Bonds, Series 2018 Principal Service Requirements (1) & (2) Repaid 6/30 Principal Interest (2) TOTAL Principal Interest (3) TOTAL Repaid Principal Interest TOTAL Repaid 2018 $ 27,996,643 $ 6,745,168 $ 6,745,168 $ - $ 325,417 $ 325, % $ 27,996,643 $ 7,070,585 $ 35,067, % ,466,764 5,927,261 5,927,261 3,820,000 2,130,000 2,130,000 30,286,764 8,057,261 38,344, ,137,063 5,071,866 30,208,929 3,930,000 2,015,400 5,945,400 29,067,063 7,087,266 36,154, ,131,279 4,358,998 27,490,276 4,050,000 1,897,500 5,947,500 27,181,279 6,256,498 33,437, ,558,399 3,663,723 21,222,122 4,170,000 1,776,000 5,946,000 21,728,399 5,439,723 27,168, ,206,541 3,092,816 21,299,357 4,295,000 1,650,900 5,945, % 22,501,541 4,743,716 27,245, % ,949,209 2,456,165 21,405,375 4,425,000 1,522,050 5,947,050 23,374,209 3,978,215 27,352, ,385,558 1,898,044 16,283,602 4,560,000 1,389,300 5,949,300 18,945,558 3,287,344 22,232, ,775,917 1,507,026 16,282,943 4,695,000 1,252,500 5,947,500 19,470,917 2,759,526 22,230, ,488,286 1,198,537 12,686,823 4,835,000 1,111,650 5,946,650 16,323,286 2,310,187 18,633, ,751, ,845 12,693,510 4,980, ,600 5,946, % 16,731,665 1,908,445 18,640, % ,824, ,720 9,478,549 5,130, ,200 5,947,200 13,954,830 1,470,920 15,425, ,400, ,000 6,790,000 5,285, ,300 5,948,300 11,685,000 1,053,300 12,738, ,600, ,000 6,798,000 5,445, ,750 5,949,750 12,045, ,750 12,747, ,605, ,400 5,946,400 5,605, ,400 5,946, ,775, ,250 5,948, % 5,775, ,250 5,948, % $ 231,672,154 $ 38,103,169 $ 215,311,916 $ 71,000,000 $ 18,537,217 $ 85,717,217 $ 302,672,154 $ 56,640,386 $ 359,312,540 NOTES: (1) The above figures do not include short-term notes outstanding, if any. For more information, see the notes to the Financial Statements in the GENERAL PURPOSE FINANCIAL STATEMENTS included herein. Does not include an Energy Efficient School Loan for $2,140,000 that the City is in the process of completing. (2) The City budgets to account for interest rate risk. Variable rate loans utilize a budget interest rate of 1.50% for purposes of this chart. (3) Estimated Average Coupon of 3%. B-14

67 CITY OF MURFREESBORO, TENNESSEE BONDED DEBT SERVICE REQUIREMENTS - Murfreesboro Water Resources As of June 30, 2017 % All F.Y. As of June 30, 2017 Estimated Amortization Total Bonded Debt Principal Ended Existing Debt - Water Resources (1) State Revolving Loan (3) Service Requirements (1) & (2) & (3) Repaid 6/30 Principal Interest (2) State Fees TOTAL Principal Interest State Fees TOTAL Principal Interest State Fees TOTAL Repaid 2018 $ 10,345,624 $ 1,856,197 $ 28,490 $ 12,230,312 $ 1,432,283 $ 413,986 $ 24,521 $ 1,870,790 $ 11,777,907 $ 2,270,183 $ 53,011 $ 14,101, % ,625,675 1,630,657 27,117 12,283,449 1,451, ,255 23,339 1,869,608 12,076,689 2,025,912 50,457 14,153, ,694,893 1,397,424 25,729 12,118,046 1,469, ,279 22,145 1,868,414 12,164,883 1,773,703 47,874 13,986, ,994,281 1,167,002 24,326 12,185,608 1,489, ,055 20,936 1,867,205 12,483,495 1,524,057 45,262 14,052, ,507, ,247 22,906 8,458,994 1,508, ,579 19,714 1,865,983 9,016,530 1,265,827 42,621 10,324, ,778, ,565 21,471 8,530,609 1,528, ,849 18,479 1,864,748 9,306,993 1,048,414 39,950 10,395, % ,489, ,537 20,019 8,034,037 1,548, ,861 17,229 1,863,498 9,037, ,398 37,248 9,897, ,233, ,188 18,551 6,659,304 1,568, ,611 15,966 1,862,235 7,802, ,799 34,517 8,521, ,411, ,746 17,067 6,744,640 1,589, ,097 14,688 1,860,957 8,001, ,842 31,755 8,605, ,962, ,548 15,566 5,199,383 1,609, ,314 13,396 1,859,665 6,572, ,862 28,961 7,059, ,931, ,188 14,048 2,103,130 1,631, ,259 12,089 1,858,358 3,562, ,447 26,137 3,961, % ,950, ,380 12,512 2,101,595 1,652, ,929 10,768 1,857,037 3,603, ,309 23,280 3,958, ,969, ,385 10,960 2,100,043 1,673, ,320 9,432 1,855,701 3,643, ,706 20,391 3,955, ,988, ,204 9,390 2,098,473 1,695, ,429 8,080 1,854,349 3,684, ,633 17,470 3,952, ,008,250 80,832 7,802 2,096,885 1,718, ,251 6,714 1,852,983 3,726, ,084 14,516 3,949, ,027,813 61,270 6,197 2,095,280 1,740, ,783 5,332 1,851,601 3,768, ,053 11,529 3,946, % ,047,569 41,514 4,573 2,093,656 1,763,247 83,022 3,934 1,850,203 3,810, ,536 8,507 3,943, ,952,143 21,831 2,943 1,976,918 1,786,306 59,963 2,532 1,848,801 3,738,450 81,794 5,475 3,825, ,219,008 4,290 1,399 1,224,697 1,809,667 36,602 1,202 1,847,471 3,028,675 40,891 2,601 3,072, ,833,334 12, ,846,635 1,833,334 12, ,847, % $ 100,139,988 $ 9,904,005 $ 291,493 $ 110,335,485 $ 32,500,000 $ 4,425,380 $ 250,863 $ 37,176,243 $ 132,639,988 $ 14,329,385 $ 542,356 $ 147,511,728 NOTES: (1) The above figures do not include short-term notes outstanding, if any. Includes the State Revolving Loan, Series SRF , State Revolving Loan, Series CG and State Revolving Loan, Series CWF For more information, see the notes to the Financial Statements in the GENERAL PURPOSE FINANCIAL STATEMENTS included herein. Does not include the State Revolving Loan, Series SRF Revenue-supported debt. In the case of deficiency in revenues to pay debt service, the bonds and/or loans are backed by the City's full, faith and credit general obligation pledge. (2) The City budgets to account for interest rate risk. Variable rate loans utilize a budget interest rate of 1.50% for purposes of this chart. (3) The City's Water Resources borrowed an additional $32,500,000 from the State of Tennessee for capital projects. Under the terms of the loan agreements, the loans will bear an interest rate of 1.30% and be payable over twenty (20) years. The State has deferred principal payment until the project is substantially complete. Revenue-supported debt. In the case of deficiency in revenues to pay debt service, the bonds and/or loans are backed by the City's full, faith and credit general obligation pledge. B-15

68 % All F.Y. Total Bonded Debt Principal Ended Service Requirements (1) & (2) Repaid 6/30 Principal Interest TOTAL Repaid 2018 $ 1,069,000 $ 119,965 $ 1,188, % ,115,000 98,680 1,213, % ,163,000 76,105 1,239, % ,212,000 52,185 1,264, % ,000 26, , % ,000 13, , % $ 6,351,000 $ 387,585 $ 6,738,585 NOTES: CITY OF MURFREESBORO, TENNESSEE BONDED DEBT SERVICE REQUIREMENTS - Electric Department As of June 30, 2017 (1) The above figures do not include short-term notes outstanding, if any. For more information, see the notes to the Financial Statements in the GENERAL PURPOSE FINANCIAL STATEMENTS included herein. Revenue-supported debt. In the case of deficiency in revenues to pay debt service, the bonds and/or loans are backed by the City's full, faith and credit general obligation pledge. (2) The City budgets to account for interest rate risk. Variable rate loans utilize a budget interest rate of 1.50% for purposes of this chart. B-16

69 FINANCIAL INFORMATION INTRODUCTION As required by generally accepted accounting principles (GAAP), all City funds and account groups are organized according to standards established by the Government Accounting Standards Board (GASB). All City financial statements are audited annually by independent certified public accountants. The City's General Purpose Financial Statements, which is an extract of the Comprehensive Annual Financial Report included herein. BASIS OF ACCOUNTING AND PRESENTATION All governmental funds are accounted for using the modified accrual basis of accounting. Revenues are recognized when they become measurable and available as a net current asset. Expenditures are generally recognized when the related fund liability is incurred. Exceptions to this general ruling include: (1) sick pay which is not 100% accrued; and (2) principal and interest on general long-term debt which is recognized when due. BUDGETARY PROCESS The City Manager in a timely manner is required to submit to the City Council a proposed operating budget for the fiscal year which begins on the following July 1. A public hearing is conducted by the City Council to obtain citizen comment on the proposed budget. Prior to June 30th, the budget must be adopted. All annual appropriations lapse at the end of the fiscal year. Amendments which revise the total expenditures of any fund may occur at any time during the fiscal year. The City Manager may, on his own authority, transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. [balance of page left blank] B-17

70 FUND BALANCES, NET POSITION The City maintains fund balances, net position in most major operating funds. Additionally, several reserves have been established to address specific needs of the City. The table below depicts fund balances and net position for the last five fiscal years ending June 30: For the year ended June 30 _ Fund Type Governmental Funds: General $ 52,623,369 $ 56,563,371 $ 62,201,814 $ 67,585,192 $ 63,849,619 School Fund 6,018,810 7,310,830 2,813,315 3,298,138 4,793,854 Debt Service 4,427,052 3,861,500 2,776,002 3,241,272 2,125,690 TMBF Bond Fund 49,134,546 38,709,845 23,390,127 92,047,000 21,965,350 Other Governmental 5,287,964 8,560,500 13,058,157 10,149,058 10,986,787 Total $117,491,741 $115,006,046 $104,239,415 $176,320,660 $103,721,300 Proprietary Net Position: Water/Sewer $301,859,696 $313,692,902 $324,235,900 $350,768,317 $369,255,465 Electric 136,693, ,301, ,074, ,549, ,618,127 Nonmajor 8,909,622 10,050,418 9,994,643 10,127,696 10,981,415 Total $447,463,272 $472,044,545 $495,305,314 $532,445,867 $560,855,007 Source: Comprehensive Annual Financial Reports of the City of Murfreesboro, Tennessee. [balance of page left blank] B-18

71 CITY OF MURFREESBORO, TENNESSEE FIVE YEAR SUMMARY OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - General Fund For the Fiscal Year Ended June Revenues: Local taxes $ 78,302,123 $ 80,374,346 $ 83,758,245 $ 89,213,117 $ 93,897,667 Intergovernmental Revenue 14,544,500 21,197,215 17,545,124 21,496,459 22,198,299 Charges for Service 4,514,223 4,491,113 4,642,216 5,786,627 6,368,849 Donations - - 2,465, , ,826 Interest and Investment Earnings 51,173 35,993 41,404 50, ,655 Licenses and Permits 5,536,778 6,060,119 5,911,533 6,480,093 5,954,352 Miscellaneous 4,972,276 5,583,548 5,402,944 6,260,357 6,068,622 Total Revenues $ 107,921,073 $ 117,742,334 $ 119,766,887 $ 129,557,850 $ 135,305,270 Expenditures and Other Uses: General Government $ 8,454,711 $ 8,363,816 $ 9,143,076 $ 11,312,397 $ 12,749,023 Police 24,581,855 25,154,026 25,947,269 26,764,399 28,824,269 Fire 14,872,249 15,598,308 16,130,072 17,303,000 18,450,837 Judicial 446, , , , ,170 Engineering - 6,702,549 6,850,831 8,619,498 9,967,941 State Street Aid 4,018,116 2,767,337 2,196,271 2,204,354 2,605,724 Planning 1,735, ,529 1,137,183 1,170,359 1,219,254 Building and Codes 1,663,480 1,747,137 1,867,817 1,824,265 1,820,890 Solid Waste 4,266,166 3,959,760 4,125,198 4,088,139 4,352,696 Transportation 3,078,509 2,455,001 2,254,624 2,284,855 2,594,705 Urban Environmental 963,107 1,025, ,480 1,120,873 1,252,127 Public Health, Education and Welfare 1,793,767 2,163,154 2,586,700 2,160,002 2,310,740 Community Services 1,460,832 1,462,445 1,572,888 1,932,905 2,053,153 Recreation and Parks 10,380,908 10,705,833 12,900,236 11,780,820 14,067,897 Community / Economic Development - 991, ,336 1,030,539 1,096,327 Debt Service Capital Projects Total Expenditures $ 77,716,209 $ 84,180,110 $ 88,995,111 $ 94,082,342 $ 103,920,753 Excess of Revenues & Over (under) Expenditures $ 30,204,864 $ 33,562,224 $ 30,771,776 $ 35,475,508 $ 31,384,517 Other Financing Sources (Uses): Proceeds from Sale of Land $ - $ - $ 2,762,510 $ - $ - Transfers - In 2,870,868 3,047,251 3,120,100 3,259,859 3,124,547 Transfers - Out (31,047,956) (33,021,769) (31,279,650) (33,351,989) (38,244,637) Total Other Financing Sources (Uses) $ (28,177,088) $ (29,974,518) $ (25,397,040) $ (30,092,130) $ (35,120,090) Excess of Revenue and Other Sources over (Under) Expenditures and Other Sources $ 2,027,776 $ 3,587,706 $ 5,374,736 $ 5,383,378 $ (3,735,573) Fund Balance July 1 $ 52,758,488 $ 52,623,369 $ 56,249,193 $ 61,938,107 $ 67,585,192 Prior Period Adjustment and Restatements (2,162,895) 38, , ,707 - Fund Balance June 30 $ 52,623,369 $ 56,249,193 $ 61,938,107 $ 67,585,192 $ 63,849,619 Source: Comprehensive Annual Financial Report for City of Murfreesboro, Tennessee B-19

72 INVESTMENT AND CASH MANAGEMENT PRACTICES Investment of idle City operating funds is controlled by State statute and local policies. Generally, such policies limit investment instruments to direct U.S. Government obligations, those issued by U.S. Agencies or Certificates of Deposit. The City is not authorized to invest in reverse repurchase agreements or derivative products. No investment may be made for a period greater that two years without written permission of the State Director of Local Finance. As required by prevailing statutes, all demand deposits or Certificates of Deposit are secured by similar grade collateral pledged at 110% of market value for amounts in excess of that guaranteed through federally sponsored insurance programs. Deposits with savings and loan associations must be collateralized as outlined above, by an irrevocable letter of credit issued by the Federal Home Loan Bank or by providing notes secured by the first mortgages or first deeds for trust upon residential property in the state equal to at least 150 percent of the amount of uninsured deposits. All collateral must be held in a third party escrow account for the benefit of the City. For reporting purposes, all investments are stated at cost, which approximates market value. REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES State Taxation of Property; Classifications of Taxable Property; Assessment Rates Under the Constitution and laws of the State of Tennessee, all real and personal property is subject to taxation, except to the extent that the General Assembly of the State of Tennessee (the "General Assembly") exempts certain constitutionally permitted categories of property from taxation. Property exempt from taxation includes federal, state and local government property, property of housing authorities, certain low cost housing for elderly persons, property owned and used exclusively for certain religious, charitable, scientific and educational purposes and certain other property as provided under Tennessee law. Under the Constitution and laws of the State of Tennessee, property is classified into three separate classes for purposes of taxation: Real Property; Tangible Personal Property; and Intangible Personal Property. Real Property includes lands, structures, improvements, machinery and equipment affixed to realty and related rights and interests. Real Property is required constitutionally to be classified into four sub classifications and assessed at the rates as follows: (a) (b) (c) Public Utility Property (which includes all property of every kind used or held for use in the operation of a public utility, such as railroad companies, certain telephone companies, freight and private car companies, street car companies, power companies, express companies and other public utility companies), to be assessed at 55% of its value; Industrial and Commercial Property (which includes all property of every kind used or held for use for any commercial, mining, industrial, manufacturing, business or similar purpose), to be assessed at 40% of its value; Residential Property (which includes all property which is used or held for use for dwelling purposes and contains no more than one rental unit), to be assessed at 25% of its value; and B-20

73 (d) Farm Property (which includes all real property used or held for use in agriculture), to be assessed at 25% of its value. Tangible Personal Property includes personal property such as goods, chattels and other articles of value, which are capable of manual or physical possession and certain machinery and equipment. Tangible Personal Property is required constitutionally to be classified into three sub classifications and assessed at the rates as follows: (a) (b) (c) Public Utility Property, to be assessed at 55% of its value; Industrial and Commercial Property, to be assessed at 30% of its value; and All other Tangible Personal Property (including that used in agriculture), to be assessed at 5% of its value, subject to an exemption of $7,500 worth of Tangible Personal Property for personal household goods and furnishings, wearing apparel and other tangible personal property in the hands of a taxpayer. Intangible Personal Property includes personal property, such as money, any evidence of debt owed to a taxpayer, any evidence of ownership in a corporation or other business organization having multiple owners and all other forms of property, the value of which is expressed in terms of what the property represents rather than its own intrinsic value. The Constitution of the State of Tennessee empowers the General Assembly to classify Intangible Personal Property into sub classifications and to establish a ratio of assessment to value in each class or subclass and to provide fair and equitable methods of apportionment of the value to the State of Tennessee for purposes of taxation. The Constitution of the State of Tennessee requires that the ratio of assessment to value of property in each class or subclass be equal and uniform throughout the State of Tennessee and that the General Assembly direct the method to ascertain the value and definition of property in each class or subclass. Each respective taxing authority is constitutionally required to apply the same tax rate to all property within its jurisdiction. City Taxation of Property The City is authorized to levy a tax on all property within the City without limitation as to rate or amount. All real and personal property within the City is assessed in accordance with the state constitutional and statutory provisions by the County Property Tax Assessors except most utility property, which is assessed by the Office of State Assessed Properties. The City property tax is levied each September 1 on the assessed values as of the prior January 1 for all real property located in the City. Assessment of Property County Assessments; County Board of Equalization. The function of assessment is to assess all property (with certain exceptions) to the person or persons owning or claiming to own such property on January I for the year for which the assessment is made. All assessment of real and personal property are required to be made annually and as of January 1 for the year to which the assessment applies. Not later than May 20 of each year, the assessor of property in each county is required to (a) make an assessment of all property in the county and (b) note upon the assessor's B-21

74 records the current classification and assessed value of all taxable property within the assessor's jurisdiction. The assessment records are open to public inspection at the assessor's office during normal business hours. The assessor is required to notify each taxpayer of any change in the classification or assessed value of the taxpayer's property and to cause a notice to be published in a newspaper of general circulation stating where and when such records may be inspected and describing certain information concerning the convening of the county board of equalization. The notice to taxpayers and such published notice are required to be provided and published at least 10 days before the local board of equalization begins its annual session. The county board of equalization is required (among other things) to carefully examine, compare and equalize the county assessments; assure that all taxable properties are included on the assessments lists and that exempt properties are eliminated from the assessment lists; hear and act upon taxpayer complaints; and correct errors and assure conformity to State law and regulations. State Assessments of Public Utility Property; State Board of Equalization. The State Comptroller of the Treasury is authorized and directed under Tennessee law to assess for taxation, for State, county and municipal purposes, all public utility properties of every description, tangible and intangible, within the State. Such assessment is required to be made annually as of the same day as other properties are assessed by law (as described above) and takes into account such factors as are prescribed by Tennessee law. On or before the first Monday in August of each year, the assessments are required to be completed and the State Comptroller of the Treasury is required to send a notice of assessment to each company assessable under Tennessee law. Within ten days after the first Monday in August of each year, any owner or user of property so assessed may file an exception to such assessment together with supporting evidence to the State Comptroller of the Treasury, who may change or affirm the valuation. On or before the first Monday in September of each year, the State Comptroller of the Treasury is required to file with the State Board of Equalization assessments so made. The State Board of Equalization is required to examine such assessments and is authorized to increase or diminish the valuation placed upon any property valued by the State Comptroller of the Treasury. The State Board of Equalization has jurisdiction over the valuation, classification and assessment of all properties in the State. The State Board of Equalization is authorized to create an assessment appeals commission to hear and act upon taxpayer complaints. The action of the State Board of Equalization is final and conclusive as to all matters passed upon by the Board, subject to judicial review consisting of a new hearing in chancery court. Periodic Reappraisal and Equalization Tennessee law requires reappraisal in each county by a continuous six-year cycle comprised of an on-site review of each parcel of real property over a five-year period, or, upon approval of the State Board of Equalization, by a continuous four-year cycle comprised of an one-site review of each parcel of real property over a three-year period, followed by revaluation of all such property in the year following completion of the review period. Alternatively, if approved by the assessor and adopted by a majority vote of the county legislative body, the reappraisal program may be completed B-22

75 by a continuous five-year cycle comprised of an on-site review of each parcel of real property over a four-year period followed by revaluation of all such property in the year following completion of the review period. After a reappraisal program has been completed and approved by the Director of Property Assessments, the value so determined must be used as the basis of assessments and taxation for property that has been reappraised. The State Board of Equalization is responsible to determine whether or not property within each county of the State has been valued and assessed in accordance with the Constitution and laws of the State of Tennessee. Valuation for Property Tax Purposes County Valuation of Property. The value of all property is based upon its sound, intrinsic and immediate value for purposes of sale between a willing seller and a willing buyer without consideration of speculative values. In determining the value of all property of every kind, the assessor is to be guided by, and follow the instructions of, the appropriate assessment manuals issued by the division of property assessments and approved by the State Board of Equalization. Such assessment manuals are required to take into account various factors that are generally recognized by appraisers as bearing on the sound, intrinsic and immediate economic value of property at the time of assessment. State Valuation of Public Utility Property. The State Comptroller of the Treasury determines the value of public utility property based upon the appraisal of the property as a whole without geographical or functional division of the whole (i.e., the unit rule of appraisal) and on other factors provided by Tennessee law. In applying the unit rule of appraisal, the State Comptroller of the Treasury is required to determine the State's share of the unit or system value based upon factors that relate to the portion of the system relating to the State of Tennessee. Certified Tax Rate Upon a general reappraisal of property as determined by the State Board of Equalization, the county assessor of property is required to (1) certify to the governing bodies of the county and each municipality within the county the total assessed value of taxable property within the jurisdiction of each governing body and (2) furnish to each governing body an estimate of the total assessed value of all new construction and improvements not included on the previous assessment roll and the assessed value of deletions from the previous assessment roll. Exclusive of such new construction, improvements and deletions, each governing body is required to determine and certify a tax rate (herein referred to as the "Certified Tax Rate") which will provide the same ad valorem revenue for that jurisdiction as was levied during the previous year. The governing body of a county or municipality may adjust the Certified Tax Rate to reflect extraordinary assessment changes or to recapture excessive adjustments. Tennessee law provides that no tax rate in excess of the Certified Tax Rate may be levied by the governing body of any county or of any municipality until a resolution or ordinance has been adopted by the governing body after publication of a notice of the governing body's intent to exceed the Certified Tax Rate in a newspaper of general circulation and the holding of a public hearing. B-23

76 The Tennessee Local Government Public Obligations Act of 1986 provides that a tax sufficient to pay when due the principal of and interest on general obligation bonds (such as the Bonds) shall be levied annually and assessed, collected and paid, in like manner with the other taxes of the local government as described above and shall be in addition to all other taxes authorized or limited by law. Bonds issued pursuant to the Local Government Public Obligations Act of 1986 may be issued without regard to any limit on indebtedness provided by law. Tax Freeze for the Elderly Homeowners The Tennessee Constitution was amended by the voters in November 2006 to authorize the Tennessee General Assembly to enact legislation providing property tax relief for homeowners age 65 and older. The General Assembly subsequently adopted the Property Tax Freeze Act permitting (but not requiring) local governments to implement a program for "freezing" the property taxes of eligible taxpayers at an amount equal to the taxes for the year the taxpayer becomes eligible. For example, if a taxpayer's property tax bill is $500 for the year in which he becomes eligible, his property taxes will remain at $500 even if property tax rates or appraisals increase so long as he continues to meet the program's ownership and income requirements. The City of Murfreesboro adopted the Property Tax Freeze Program, setting 2015 tax year as the base year for all applicants. Tax Collection and Tax Lien Property taxes are payable the first Monday in October of each year. The taxes assessed by the State of Tennessee, a county, a municipality, a taxing district or other local governmental entity, upon any property of whatever kind, and all penalties, interest and costs accruing thereon become and remain a first lien on such property from January 1 of the year for which such taxes are assessed. In addition, property taxes are a personal debt of the property owner as of January and, when delinquent, may be collected by suit as any other personal debt. Tennessee law prescribes the procedures to be followed to foreclose tax liens and to pursue legal proceedings against property owners whose property taxes are delinquent. [balance of page left blank] B-24

77 Assessed Valuations. According to the Tax Aggregate Report, property in the County and City reflected a ratio of appraised value to true market value of The following table shows pertinent data for tax year Class Assessed Valuation Rate Appraised Value Public Utilities $ 77,456,717 55% $ 177,449,523 Commercial and Industrial 1,451,340,740 40% 3,989,391,809 Personal Tangible 202,420,435 30% 739,745,640 Residential and Farm 1,525,351,202 25% 6,708,526,452 Total $3,256,569,094 $11,615,113,424 The estimated assessed value of property in the City for the fiscal year ending June 30, 2017 (tax year 2016) is $3,256,569,094 compared to $3,096,131,674 for the fiscal year ending June 30, 2016 (tax year 2015). The estimated actual value of all taxable property for tax year 2016 is $11,615,113,424 compared to $10,064,325,398 for tax year The tax year coincides with the calendar year, so tax year 2016, for example is actually fiscal year Source: 2016 Tax Aggregate Report for Tennessee and the City. Property Tax Rates and Collections. The following table shows the property tax rates and collections of the City for tax years 2013 through 2017 as well as the aggregate uncollected balances for each fiscal year ending June 30. PROPERTY TAX RATES AND COLLECTIONS Fiscal Yr Collections Aggregate Uncollected Balance Tax Year 2 Assessed Valuation Tax Rates Taxes Levied Amount Pct as of June 30, 2017 Amount Pct 2013 $2,824,021,180 $ $35,924,769 $35,235, % N/A ,711,139, ,595,836 35,967, % N/A ,096,131, ,421,756 36,850, % N/A ,256,569, ,330,214 38,737, % $592, % ,400,751,732* ,033,470* IN PROGRESS * Estimated Source: Tax Aggregate Report for Tennessee and the City. 2 The tax year coincides with the calendar year, so tax year 2017, for example is actually fiscal year B-25

78 Largest Taxpayers. For the fiscal year ending June 30, 2017 (tax year 2016), the ten largest taxpayers in the City are as follows: Taxpayer Business Type Assessment % of Total Assessment 1. General Mills / Pillsbury Co. Food Manufacture $64,330, % 2. Hines Global Reit Real Estate 56,827, % 3. Middle TN Electric Membership Public Utility 26,347, % 4. Wal-Mart Retail 23,437, % 5. Embassy Suites Hotel 18,514, % 6. Mahle Filter Systems Automotive 18,127, % 7. Stones River Mall Property Retail 17,844, % 8. Murfreesboro Medical Property Healthcare 17,470, % 9. Villages at Henley Station Real Estate 17,240, % 10. Kroger Retail 15,648, % Total $275,786, % Source: Comprehensive Annual Financial Reports of the City of Murfreesboro, Tennessee. SALES TAX Local Option Sales Tax. One of the main revenue streams in addition to property tax is the local options sales tax, as the State of Tennessee does not have an income tax. Pursuant to applicable provisions of Title 67, Chapter 6, Part 7 of Tennessee Code Annotated, as amended, (the "Act"), the County levies a county-wide local option sales tax. Under the Act, counties and incorporated cities may levy a sales tax on the same privileges on which the State levies its sales tax. The rate of any sales tax levied by a county or city is limited under State law to two and three-fourths percent (2 3/4%). Pursuant to the Act, the levy of a sales tax by a county precludes any city from within the county from levying a sales tax, but a city may levy a sales tax in addition to the county's sales tax a rate not exceeding the difference between the county sales tax rate and the maximum local option sales tax rate of two and three fourths percent (2 3/4%). If a city is located in more than one county, each portion of the city that is located in a separate county is treated as a separate city for purposes of determining the maximum sales tax rate. The chart below indicates the trend of revenues from this tax over the last five years. In September of 2000, the Municipality and County raised sales tax to its current local rate of 2.75% (9.75% when combined with the state rate). The joint effort was approved by a public referendum with the Municipality portion given partially to the County on a sliding scale for the County educational system until the fall of 2008, when the agreement ended. B-26

79 The City's share of the County-wide local option sales tax for the most recent five fiscal years indicated as follows: Local Option Sales Tax $33,623,222 $35,373,537 $37,583,362 $41,068,791 $43,676,526 Source: Comprehensive Annual Financial Reports of the City of Murfreesboro, Tennessee. The Act authorizes a local jurisdiction, by resolution of its governing body, to pledge proceeds raised by the power and authority granted by the Act to the punctual payment of principal of and interest on bonds, notes or other evidence of indebtedness issued for purposes for which such proceeds were intended to be spent. The City Council of the City has not pledged any local option sales tax proceeds to bonded indebtedness of the City. State Sales Tax. The general fund's third largest source of revenue is state sales tax. Effective July 1, 2017 the state introduced a new gasoline tax to improve infrastructure, which will be shared with local governments. In addition, the state reduced the state sales tax on groceries from 5 percent to 4 percent. Overall, the state maintains it general sales tax at 7 percent, which a portion earmarked for education. Cities receive percent of the state sales tax revenue after deductions. It is distributed based on population. The City's share of the County-wide state sales tax for the most recent five fiscal years indicated as follows: State Sales Tax $7,546,185 $7,800,978 $8,268,321 $8,828,093 $9,047,316 Source: Comprehensive Annual Financial Reports of the City of Murfreesboro, Tennessee. CHARTER DEBT MARGIN Debt Limit 1 $421,778,747 $424,202,942 $454,939,850 $465,208,992 $488,966,328 Total Net Debt Applicable to Limit 214,123, ,998, ,060, ,040, ,163,455 Charter Debt Margin $207,654,993 $201,204,108 $252,879,293 $208,168,920 $257,832,873 Total Net Debt Applicable to Limit as a % of Debt Limit 50.77% 52.57% 44.41% 55.25% 47.27% Source: Comprehensive Annual Financial Reports of the City of Murfreesboro, Tennessee - page Under the City of Murfreesboro's charter, the Municipality's general obligation debt should not exceed 15% of total assessed property value. Bonds may be issued under state law, notwithstanding and without regard to any limit on indebtedness provided in the Municipality's charter. B-27

80 Charter Debt Margin Calculation for Fiscal Year 2017 Assessed Value $3,259,975,518 Debt limit (15% of assessed value) $ 488,996,328 Debt applicable to limit: General Obligation Bonds $ 137,655,000 Bank Note 620,000 Energy Efficient School Loan 3,095,685 TN Municipal Bond Fund Loans 91,918,460 Less: Debt Service Fund (2,125,690) Total Debt Applicable to limit $ 231,163,455 Charter Debt Margin $ 257,832,873 Source: Comprehensive Annual Financial Reports of the City of Murfreesboro, Tennessee, page 168. PENSION PLANS The City maintains two single employer defined benefit pension plans (the City of Murfreesboro Employees' Pension Plan and the Murfreesboro Electric Department Employee Pension). The City also provides two defined contribution plans (the City of Murfreesboro Employees Pension Plan Defined Contribution and the Murfreesboro Electric Department Employees Pension Plan Defined Contribution) and participates in the Tennessee Consolidated Retirement System, an agent, multiple-employer public employee retirement system (PERS). The City of Murfreesboro Employees' Pension Plan and the Murfreesboro Electric Department Employee Pension are included in the accompanying financial statements as pension trust funds. The defined benefit pension plan covers all City employees except those employees of the school system, the Evergreen Cemetery Commission and electric department. All other departments of the City, including the water and sewer department, are covered by the plan. The funds of the retirement plan are invested in trust funds managed by Pinnacle Financial Partners. In accordance with the City Code, subject to approval by the City Council, pension plan provisions may be established or amended by the pension committee. The pension committee is an eight-member board appointed by City Council to oversee the city s pension plan. At least two of the board members must be participants in the plan. The current pension committee is comprised of three city employees, and one City Council member. The remaining board members have backgrounds in banking, investment advising and insurance. Effective July 1, 2010, a defined contribution plan has been implemented by the City. In accordance with the City code, subject to approval by the City Council, pension plan provisions (including contribution requirements) may be established or amended by the pension committee. The defined contribution plan covers all full-time City employees, except those employees of the school system, Evergreen Cemetery Commission and the electric department, hired on or after July 1, The provisions of this plan require a three percent mandatory employee contribution. The City B-28

81 matches 100% of the employee contributions up to eight percent. Employees become 100% vested in the plan after five years of full-time employment. Both the member contributions and the employer contribution for the year ended June 30, 2017 is $1,034,124. For additional information on the funding status, trend information and actuarial status of the City's retirement programs, please refer to the appropriate Notes to Financial Statements located in the General Purpose Financial Statements of the City attached herein. UNFUNDED ACCRUED LIABILITY FOR POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS GASB Statement 45 establishes standards for the measurement, recognition, and display of Other Post-Employment Benefits ( OPEB ) in the financial reports of state and local government employers. GASB 45 requires the recognition of the accrued liability for the respective year, plus the disclosure of the total unfunded liability. Cash funding of the unfunded liability is not required. For more information, see the Notes to the General Purpose Financial Statements located herein. [balance of page left blank] B-29

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83 APPENDIX C GENERAL PURPOSE FINANCIAL STATEMENTS OF CITY OF MURFREESBORO, TENNESSEE FOR THE FISCAL YEAR ENDED JUNE 30, 2017

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85 CITY OF MURFREESBORO, TENNESSEE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2017 MELISSA B. WRIGHT CITY RECORDER/CITY TREASURER/FINANCE DIRECTOR

86 C O N T E N T S INTRODUCTORY SECTION Letter of Transmittal... City Officials... Organization Chart... Certificate of Achievement... i - vii viii ix x FINANCIAL SECTION Independent Auditor's Report... Page 1-2 Management s Discussion and Analysis Basic Financial Statements- Government-wide Financial Statements- Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet Governmental Funds Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Purpose School Fund Statement of Net Position Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds Statement of Cash Flows Proprietary Funds Statement of Net Position Fiduciary Funds Statement of Changes in Net Position Fiduciary Funds Notes to Financial Statements

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88 ... creating a better quality of life January 26, 2018 To the Honorable Mayor, Members of City Council and Citizens of Murfreesboro The Comprehensive Annual Financial Report (CAFR) of the City of Murfreesboro, Tennessee for the fiscal year June 30, 2017, is hereby submitted as required by state statutes. These statutes require that all general-purpose local governments publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, the Comprehensive Annual Financial Report of the City of Murfreesboro for the fiscal year ended June 30, 2017 has been completed. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Jobe, Hastings & Associates, Certified Public Accountants, have issued an unmodified ( clean ) opinion on the City of Murfreesboro s financial statements for the year ended June 30, The independent auditor s report is located at the front of the financial section of this report. Management s discussion and analysis (MD&A) immediately follows the independent auditor s report and provides a narrative introduction, overview and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. PROFILE OF THE GOVERNMENT The City operates under a Council-Manager form of government. The governing body is the City Council, which consists of a Mayor and six members who serve four-year terms of office. Non-partisan elections for City Council are held in even numbered years on a staggered basis. City Council members are elected at large. The City Council is responsible for adopting ordinances, the annual budget, appointing committees and establishing policies. The City Council appoints a City Manager, who is responsible for carrying out the policies and ordinances of the City Council and the day-to-day operations. The City Manager appoints and supervises the various department heads of the City. LOCAL ECONOMY The City s strong and diverse economy has continued to propel population growth in the City and in surrounding Rutherford County. The United States Census Bureau estimates for 2016 indicate Murfreesboro has grown in population to 131,947 residents, a 4.6% increase over the 2015 Census estimate and a 21.3 percent increase over the 2010 census. This pace of growth makes Murfreesboro the tenth fastest growing city in the United States with a population of over 50,000 people. Location plays a major role in the City's growth. Only 35 miles from Nashville, Murfreesboro is the geographic center of Tennessee and is at the intersection of Interstate 24 and Interstate 840. Transportation access by rail, air or highway in any direction is excellent. Finance and Tax Administration 111 West Vine Street * P. O. Box 1139 * Murfreesboro, Tennessee * Phone * Fax TDD i -

89 The unemployment rate previously climbed during the recession to a peak of 11.1 percent in June Steady improvement since that date has the June 30, 2017 unemployment rate at 3.3 percent. The 3.3 percent unemployment rate is lower than comparable national and state figures. The most recent data available, October 2017, has seen the unemployment rate continue to decline to 2.3 percent, below the State s average of 3.0 percent. With the growth in jobs has come additional demand for housing. Commercial and residential expansion have returned to pre-recession levels and continue to exhibit a broad range of development types within major construction projects. Rutherford County has been recognized as one of the top places in the country to find work. However, like much of the country, lots available for construction is beginning to decrease. From 2013 to 2017, the available lots decreased from 984 to 535, a 45.6 percent decrease. For FY 17, 1,030 new single family building permits have been issued, up from 1,022 in FY This compares to the FY 11 low of 329 single family permits for the entire year. Multi-family unit permits increased by 177 percent from 445 to 1,233. More people are choosing to rent due to the high costs of construction and high land values. Murfreesboro, like most Tennessee cities, depends on the Local Option Sales Tax to provide significant budget income. Approximately 30% of Murfreesboro s FY 17 budgeted revenue is derived from local retail sales. Local sales taxes improved in FY 17 as compared to FY 16 by approximately $2.6 million or 6.3 percent from the previous year, setting a new record collection of $43.7 million. In March 2016, Moody s Investor Service upgraded Murfreesboro s long term rating to Aa1. The rating reflected Moody s assessment of a strong economy in a broad and diverse metropolitan area, strong management with good financial policies and practices, strong budgetary performance with operating surpluses, very strong budgetary flexibility with over 50% of annual operating costs in reserve and very strong liquidity. Standard & Poor s Rating Service reaffirmed their rating of AA citing the same basic factors. LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES BUDGET PROCESS At the start of the budget process, the City Council communicates its goals and objectives to the City Manager. These goals and objectives are shaped by input members have received from Murfreesboro residents throughout the year. The preliminary steps in the budget also include a review of current economic conditions, revenue projections, community input, program initiatives, long range plans and Federal and State mandates. The City Manager will communicate the goals, objectives and priorities of the City Council and community to the department heads, who will prepare the budget estimates for their department. Several City departments have citizen boards or commissions who may also provide input into the budget. The departmental budget requests are submitted to the Finance Department. These budget requests are reviewed by the City Manager, Assistant City Managers, Finance Director and Assistant Finance Director. The City Charter provides that the City Manager must prepare a proposed budget and submit it to the City Council no later than May 15 each year. The City Council reviews the proposed budget each spring through a series of meetings with the City Manager and department heads. The City Council makes changes to the City Manager s proposed budget as it deems necessary. Prior to adoption of the budget, the City Council conducts a public hearing on the proposed budget to obtain additional citizen input on the spending plan. Following the public hearing, the City Council adopts a budget ordinance. Budget amendments are adopted by City Council on an as needed basis. CAPITAL IMPROVEMENT In addition to the annual operating budget, the City Manager presents the City Council a Capital Improvement Plan (CIP) at least every two years. This plan is used to determine any future construction projects, equipment purchases and property acquisitions and is projected over a 5 year period. City Council has the opportunity through CIP workshops to amend the plan. Once approved, the CIP is used to determine the amount of future loans and/or bond issues. PLANNING FOR GROWTH Murfreesboro has recognized the return of growth in the local economy. The Center for Business and Economic Research at the University of Tennessee has identified Rutherford County and Murfreesboro as one of only five Tennessee counties predicted to experience a 50% or greater population increase in the next 20 years. With the evidence that the local - ii -

90 economy is seeing new and vigorous growth, City Council and City management are turning more focus on the items needed to prepare the City for the future. The start of a comprehensive plan (Murfreesboro 2035) to begin understanding and preparing for the challenges of the next twenty years began in 2014 with the hiring of Kendig Keast Collaborative (KKC) of Sugarland, TX. Additionally, on the KKC team are Smith, Seckman and Reid to perform utilities planning and Neil-Schaefer and Associates performing an update to the master transportation plan including a computer model. The last comprehensive planning document was completed in 1989 when Murfreesboro s population was approximately 45,000. Now with a population of over 125,000 and projections that the number of people here could grow more than 50% in the next twenty years, the need for an examination of existing service levels and a plan for service delivery to an expanded population has created the impetus for a new comprehensive plan for the City. Murfreesboro 2035 was approved in early FY 18. FINANCIAL PLANNING A major goal of the City Council is to maintain strong and sustainable financial and economic health. While preparing for growth, the City has been progressive in managing its long term cost drivers. The City Council adopted a comprehensive set of financial policies during FY 11. The financial policies set forth guidelines against which current budgetary performance can be measured and proposals for future programs can be evaluated. These publicly adopted financial policies are also intended to demonstrate to residents, the credit rating industry, municipal bond investors, auditors and the State Comptroller that the City is committed to sound financial management and fiscal integrity. The City depends on its employees to deliver the services expected by its residents and customers. Changing job requirements, changing workforce demographics, changing expectations about performance and the changes in the economy are driving cities to move away from traditional step plans to new pay systems driven by performance and goals. The City closed its defined benefit retirement plan and opened a defined contribution pension plan to employees hired beginning July 1, The new plan has both mandatory and voluntary contributions from employees that are matched by the City. The now-closed defined benefit plan required the City to accept all risk of investment performance, salary growth and improvements in the longevity of retirees. In the defined contribution plan, the City s employees bear all risk but offers portability for employees that leave the City s service prior to full retirement age. For the City, the new plan offers surety in the budget process for future City retirement contributions. As of June 30, 2017, 313 employees of the City s 986 full time employees were covered by the defined contribution pension plan, as compared to 285 of 980 at June 30, The City s first goal remains safe and livable neighborhoods. The Fire and Rescue Department provided an accelerated inhouse program in conjunction with Motlow State Community College and trained 23 personnel in emergency medical technician training. In addition, the department began providing complete Basic Life Support services (medication administration and procedures) in early FY 17. Fire Station 10 (Veterans Parkway) opened in July 2016 to serve the fastgrowing southwest side of Murfreesboro. Future plans call for relocating Fire Station 4 to the Gateway area and the construction of Fire Station 11 in the Joe B. Jackson industrial area. The Police Department continues to be the City s largest operating department. During FY 14, the City acquired the former Murfreesboro Medical Clinic, a 120,000 square foot office building to renovate to a new Police Headquarters. The renovation project began in FY 16 and is scheduled to be completed in February In addition to relocating the Police Department to the facility, it will free up over 30,000 square feet of office space that can house city departments currently needing additional space. Targeted enforcement efforts, including automated red lights cameras, traffic control and gang eradication continue. The Doug Young Public Safety Training Center is under construction on the ten acres of the previous Franklin Heights public housing site. Its construction has been funded in the 2016 bond issue and is anticipated to be a part of the next 3 bond issues starting with the 2018 issue for completion. The site will have training areas for police officers as well as staff of the fire and rescue department. The City s parks system is a point of pride and differentiates Murfreesboro from other communities in the livability measures. Continuing our focus on livability, the new Miracle Field, in partnership with Project One Four, opened in May The complex serves children with special needs and features a rubberized turf field and an inclusive playground, as - iii -

91 well as a covered seating area, concession/restrooms, a plaza and central kugel ball water feature. David Price, currently pitching for the Boston Red Sox, wanted to give back to his home town and was the driving force for the ball field being constructed while providing large donations through his foundation. To meet the needs in the rapidly growing west side of Murfreesboro, Parks and Recreation began the search for between 300 and 600 acres, in one or more tracts, to provide recreation facilities in that underserved part of the community. Approximately 123 acres of the former Larry McDonald farm were purchased by the City in the Blackman community on July 25, 2016 at a price of $4.92 million. An additional 154 acres were purchased off Highway 96, west of Interstate 24 in FY 17 to be used for a possible recreational park, fire station site and public works use. In early FY 18, Governor Bill Haslam and Tennessee Department of Transportation (TDOT) Commissioner John Schroer announced the award of a $1,027,178 transportation alternative grant to the City for the Mercury Boulevard Sidewalk Project. The project will provide a complete sidewalk linkage from SE Broad Street to Middle Tennessee Boulevard along Mercury Boulevard. All 7,200 feet of sidewalks will be ADA compliant, and will include pedestrian crosswalks at the signalized intersections along Mercury Boulevard. In addition, the City has been selected by TDOT to receive a $6 million IMPROVE Act Competitive Transit Capital Grant for final design and construction of a new Transit Facility. The $11.5 million full-service Rover bus facility is planned on a potential 2.89-acre site located at West Main Street and Bridge Avenue. The City hopes to open the approximately 12,700 square feet facility, including offices, by The IMPROVE Act legislation also reduces the State sales tax on grocery items from 5 percent to 4 percent (a 20 percent reduction), reduces the Hall Income tax on interest and dividend income by one percent each year until the tax is eliminated and increase the gas tax over the next three years by six cents for gas and ten cents for diesel. The new fuel tax revenues will be used to fund major road and infrastructure projects. ORGANIZATIONAL DEVELOPMENT AND PLANNING The City s adopted comprehensive financial policies establish various performance measures. A comparison of the City s financial position against its policies shows that the City remains well managed and that its financial condition is strong. For instance, the City will pay off 85.6 percent of its existing debt in the next 10 years and is within the policy guidelines in terms of debt versus assessed value, debt per capita, variable debt ratios and debt as a percent of budget. The City already communicates with our residents in many ways. City TV, the City s website, press releases, Parks and Recreation user surveys, neighborhood open houses, public hearings, presentations to civic groups, and Citizen Police and Fire academies are among the many ways the City reaches out to our residents and listens to our citizens. The City s use of Facebook, Twitter and a homepage that received over 1.8 million hits are helping the City provide useful information to its residents. ROAD IMPROVEMENTS The City has completed the first phase of improving Lytle Street to serve as the new entrance to Downtown Murfreesboro. A second phase of Lytle Street improvement will extend the project past Rutherford County s new six-story, 200,000 square foot Judicial Center and four-story parking garage. This $73 million project by County government will anchor the north side of Downtown, while the City Hall/Public Library Plaza supports the south. Estimated completion of the City s $7.75 million Lytle Street project is expected to be complete mid-summer The improvements to Middle Tennessee Boulevard between Main Street and Greenland Drive as the new front door to Middle Tennessee State University will be entering a third year of construction during FY Approximately $15.1 million is budgeted for participating construction elements with approximately 80% of the funding provided by Federal transportation dollars along with matching funding provided by the City and Middle Tennessee State University. Construction is expected to be complete by mid The extension of Cherry Lane as a five-lane connector roadway between NW Broad Street (US 41/70) and Memorial Boulevard (US 231) and includes an interchange at Interstate 840, is in the final design stage and after completion will be submitted to the Tennessee Department of Transportation to be advanced to the right-of-way phase. - iv -

92 The City has worked with the State of Tennessee on a project popularly known as the bridge over Broad. This bridge is expected to resolve heavy congestion at a major intersection (Broad Street and Memorial Blvd/Old Fort Parkway) near the downtown area. This is a State project and construction reached a completion stage that allowed the bridge to be opened for travel in December The Bradyville Pike widening project (State Route 99) from SE Broad Street to Rutherford Blvd. has been submitted to the Tennessee Department of Transportation awaiting the right-of-way phase to be issued. This phase is expected to begin in the Spring of 2018 and will take approximately 2 years before the construction phase will begin. This is a State funded project with City participation through a match percentage. OTHER CAPITAL INVESTMENTS TrustPoint Hospital began construction of a 148-bed hospital expansion, representing a $57 million investment. The addition to its existing location in Murfreesboro s Gateway District will support the hospital s growth and creation of close to 400 new jobs within the next five years, which have an average annual salary of $67,808. Nissan, located in neighboring Smyrna, continues to contribute to the local economic engine. Their record sales bode well for the regional economy and their success in the marketplace is having a trickle-down effect on the Murfreesboro economy. Many of their suppliers call Murfreesboro home, some of whom are looking to expand and add jobs. The City saw six companies expand in 2017, including Key Oil and Sasayama USA, bringing a total of $34 million in capital spending and over 150 jobs. Federal Express will build a 1 million square foot distribution facility in Murfreesboro, The $189.5 million investment will create an estimated 41 full-time jobs with an average wage of $53,500 and 160 full-time equivalent, part-time jobs at $24,000 annually. The job estimates do not include contract employees, like long-haul truck drivers. Two major hotels join the existing Embassy Suites in the Gateway district by adding in excess of 250 rooms. There are now over 3,500 hotel rooms in Murfreesboro to support the local, regional and state markets Auto dealers have been some of the first to build new facilities (Toyota and Chevrolet) or completely remodel their existing stores (Ford and City Auto). Auto and auto related sales make up over 25% of all retail activity. The construction of new dealerships has made way for different auto brands to enter the local market, including Hyundai, Kia and Volkswagen. Several of the new dealerships are located in the Gateway district. The City sold the land to developers that made the Fountains at Gateway a reality. Phase I of this 31 acre development opened in 2017, bringing additional office and retail space to the Medical Center area. In addition, a 100-unit residential apartment building and a hotel are expected in Phases II and III. Moving forward, the City will continue to focus its planning and marketing efforts on the City s Gateway (Medical Center Parkway, Thompson Lane, and Fortress Boulevard). OPERATING IMPROVEMENTS In keeping with the format of the City s operating budget document, these categorized improvements are being implemented in FY 18 by various City departments. It is anticipated these improvements will continue to put the City in a position to maintain, and in some cases elevate, service levels expected by our citizens. PRIORITY 1: Safe And Livable Neighborhoods Highlights Open the new Police Headquarters Begin development of the park on former McDonald property Implement a new pothole patching program Launch Advanced Life Support (ALS) by Fire & Rescue New personnel additions in Police and Fire & Rescue Construction of a relocated Fire Station Four and the Doug Young Public Safety Training Facility Progress toward full implementation of a 700 MHz two-way radio system for public safety Complete city-wide design guidelines for development - v -

93 PRIORITY 2: Strong And Sustainable Financial And Economic Health Highlights Helping low and moderate income residents through Community Development s affordable housing and down payment assistance programs Select land development management software Create 3-D virtual reality mapping for economic development initiatives Implement Murfreesboro 2035, Bottoms and Highlands studies and design guidelines to attract and retain jobs Participate in Destination Rutherford to grow the City s economy Study and analyze options for disposal of solid waste due to the expected closure of MiddlePoint Landfill Finalize the major thoroughfare plan Landscape the new Lytle Street roundabout Develop a small business enterprise to encourage local businesses to participate in the City s purchasing opportunities Final adoption of the Major Thoroughfare Plan Maintaining the existing and improved level of services on the same effective property tax rate. The FY18 proposed budget is the 19 th consecutive year without a property tax increase. Redevelopment of the former First Methodist Church/Franklin Synergy site Study tax increment financing districts as a method to encourage re-development Recruiting new jobs and employers to the Gateway Constructing Lytle Street, Jones Boulevard, St. Clair Street, Middle Tennessee Boulevard, Kingdom Drive Bridge, Greenway, Perlino Bridge PRIORITY 3: Excellent Services With A Focus On Customer Service Highlights Overhaul the City s website for a more attractive and easy to use interface Renovate the Building and Codes Department to relocate all five permit clerks to the front counter. Partner with Motlow Community College to train Emergency Medical Technicians in-house. Begin construction of the Doug Young Public Safety Training Center Transfer responsibilities from Fire Captains to 3 new Fire and Life Safety Specialists Initiate a Customer First Always program in Golf Expand functionality of Munis for FMLA, benefits enrollment and more Launch compliance training for all employees, including automating training records Utilize the Unmanned Aircraft System during weather emergencies, emergency response and public safety events Complete the energy efficient program to reduce the City s energy costs Move to a 40-hour work schedule and 7-day tour of duty in Police Study and select a compressed workweek with significant employee input Fully implement holiday signal timing plan for Medical Center, Old Fort and Mall Circle Drive Recognizing our employees as our customers and better engaging them in the workplace Selecting new land development management software for Planning and Building and Codes Continuing Service Excellence, the City s customer service training program for City employees PRIORITY 4: Engaging Our Community Highlights Continue holding City Council neighborhood meetings throughout the City Continue holding neighborhood meetings on planning issues, including annexations, rezoning and planned development Use the new city website to better integrate social media Use social media and other measures to solicit citizen input on the landfill disposal issue Connect with our residents and customers of Parks and Recreation to develop a master plan Using social media, technology and neighborhood meetings to educate and continue development of the comprehensive plan - vi -

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96 CITY OF MURFREESBORO, TENNESSEE CITY OFFICIALS June 30, 2017 MAYOR Shane McFarland Madelyn Scales Harris, Vice Mayor Bill Shacklett CITY COUNCIL Kirt Wade Eddie Smotherman Rick Lalance CITY OFFICERS CITY MANAGER. Robert Lyons ASSISTANT CITY MANAGER.. James Crumley ASSISTANT CITY MANAGER.. Jennifer Moody CITY RECORDER / CITY TREASURER / FINANCE DIRECTOR.. Melissa Wright CITY ATTORNEY Craig Tindall CITY JUDGE Ewing Sellers PRINCIPAL DIRECTORS AND ADMINISTRATORS AIRPORT MANAGER.. Chad Gehrke CITY ENGINEER Chris Griffith DIRECTOR - BUILDING... Robert Holtz DIRECTOR - COMMUNICATIONS Alan Bozeman DIRECTOR - COMMUNITY DEVELOPMENT. John Callow DIRECTOR - ELECTRIC PD Mynatt DIRECTOR - FLEET SERVICES. Jack Hyatt DIRECTOR - GOLF. Marty McCurry DIRECTOR - HUMAN RESOURCES (Interim) Sherry Carpenter DIRECTOR - INFORMATION TECHNOLOGY Chris Lilly DIRECTOR - PLANNING... Gary Whitaker DIRECTOR - PURCHASING Paul Boyer DIRECTOR - RECREATION. Angela Jackson DIRECTOR - SCHOOLS.. Linda Gilbert DIRECTOR - SENIOR CITIZENS CENTER Connie Rigsby DIRECTOR - SOLID WASTE. Joey Smith DIRECTOR - TRANSPORTATION.... Jim Kerr DIRECTOR - URBAN ENVIRONMENTAL. Cynthia Holloway DIRECTOR - WATER/WASTEWATER.. Darren Gore FIRE AND RESCUE CHIEF.... Mark Foulks POLICE CHIEF Karl Durr - viii -

97 City of Murfreesboro Organization Chart June 30, 2017 Legislative Body Mayor Shane McFarland, Vice Mayor Madelyn Scales Harris, Rick LaLance, Bill Shacklett, Eddie Smotherman, Kirt Wade City Recorder/City Treasurer/Finance Director Melissa Wright City Manager Robert Lyons City Attorney Craig Tindall City Judge Ewing Sellers Assistant City Manager James Crumley Assistant City Manager Jennifer Moody Airport Manager Chad Gehrke City Engineer Chris Griffith Director Building & Codes Robert Holtz Director Communications Alan Bozeman Director Community Development John Callow Director Fleet Services Jack Hyatt Director Golf Marty McCurry Director Human Resources Sherry Carpenter Director Information Technology Chris Lilly Director Planning Gary Whitaker Director Purchasing Paul Boyer Director Recreation Angela Jackson Director Senior Citizens Center Connie Rigsby Director Solid Waste Joey Smith Director Transportation Jim Kerr Director Urban Environmental Cynthia Holloway Director Water/Wastewater Darren Gore Fire & Rescue Chief Mark Foulks Police Chief Karl Durr - ix -

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100 JOBE, HASTINGS & ASSOCIATES Certified Public Accountants James R. Jobe, CPA 745 S 745 SOUTH CHURCH STREET BELMONT PARK Donna K. Hastings, CPA (inactive) P.O. BOX 1175 MURFREESBORO, TN Joel H. Jobe ( ) (615) FAX: (615) INDEPENDENT AUDITOR S REPORT Honorable Mayor and City Council City of Murfreesboro, Tennessee Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Murfreesboro, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City of Murfreesboro, Tennessee s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Murfreesboro City Schools, the Murfreesboro Electric Department, the Murfreesboro Electric Department Pension Plan, and the Evergreen Cemetery Commission whose statements reflect total assets and deferred outflows of resources of $135,802,835, $233,441,292, $23,877,094, and $3,115,800 respectively, and total revenues of $83,152,028, $169,569,603, $3,446,620, and $773,549 respectively. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Murfreesboro City Schools, the Murfreesboro Electric Department, the Murfreesboro Electric Department Pension Plan, and the Evergreen Cemetery Commission, is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the reports of other auditors, 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 City of Murfreesboro, Tennessee, as of June 30, 2017, and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetary comparisons for the General Fund and the General Purpose School Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America