Hutchinson, Shockey, Erley & Co.

Transcription

1 NEW ISSUE Book-Entry-Only Rating: Moody s Investors Services: A1 TAX STATUS: In the opinion of Miller, Canfield, Paddock and Stone, P.L.C., Bond Counsel, under existing law, assuming compliance with certain covenants by the County, the interest on the Bonds is excludable from gross income for federal income tax purposes and the Bonds and interest thereon are exempt from all taxation by the State of Michigan or by any taxing authority within the State of Michigan except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. See TAX MATTERS and FORM OF APPROVING OPINION herein for a description of certain provisions of the Internal Revenue Code of 1986, as amended (the Code ) which may affect the tax treatment of interest on the Bonds for certain Bondholders. COUNTY OF GENESEE STATE OF MICHIGAN $7,870,000 SEWAGE DISPOSAL SYSTEM (INTERCEPTORS AND TREATMENT FACILITIES) REVENUE REFUNDING BONDS (LIMITED TAX GENERAL OBLIGATION) SERIES 2011C PURPOSE AND SECURITY: The Bonds are issued under the provisions of Act 94, Public Acts of Michigan, 1933, as amended, Act 342, Public Acts of Michigan, 1939, as amended and certain ordinances of the Genesee County Board of Commissioners, for the purpose of paying the cost of refunding certain prior bonds of the County of Genesee (the County) originally issued to pay for the costs of acquiring and constructing improvements to the County s Sewage Disposal System (Interceptors and Treatment Facilities) (the System ). The Bonds are payable primarily from the net revenues of the System (the Net Revenues ), and a statutory first lien on the Net Revenues is established by said ordinances. The Bonds are of equal standing and priority of lien as to the Net Revenues of the System with certain outstanding bonds of the County, as more particularly described in the Official Statement for the Bonds. The County has covenanted and agreed to fix and maintain at all times while any of such Bonds shall be outstanding such rates for service furnished by the System as shall be sufficient to provide for payment of the necessary expenses of operation, maintenance and administration of the System, payment of the principal and interest on the Bonds when due, and to provide for such other expenditures and funds for the System as are required by said ordinances. As additional security for the payment of the principal of and interest on the Bonds, the County has irrevocably pledged its full faith and credit for the prompt payment of the principal of and interest on the Bonds. If the Net Revenues of the System are insufficient for the payment of such principal and interest when due, the County shall advance the amount of the insufficiency from its general funds as a first budget obligation. The County is obligated, to the extent necessary, to levy ad valorem taxes on all taxable property in the County for such purpose, subject to applicable statutory and constitutional tax limitations as to rate and amount. The rights or remedies of bondholders may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors rights generally, now existing or hereafter enacted, and by the application of general principles of equity, including those relating to equitable subordination. BOOK-ENTRY-ONLY: The Bonds are issuable only as fully registered Bonds without coupons, and when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry only form, in the denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their beneficial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See BOOK-ENTRY ONLY SYSTEM herein. PAYMENT OF BONDS: Interest on the Bonds will be payable semiannually on May 1 and November 1 of each year commencing on May 1, The Bonds will be registered Bonds, of the denomination of $5,000 or multiples thereof not exceeding for each maturity the principal amount of such maturity. The principal and interest shall be payable at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., Detroit, Michigan (the Transfer Agent ) or such other Transfer Agent as the County may hereafter designate by notice mailed to the registered owner not less than sixty (60) days prior to any interest payment date. Interest shall be paid when due by check or draft mailed to the registered owner as shown by the registration books as of the fifteenth day of the month preceding the payment date for each interest payment. Payment of principal and interest to Beneficial Owners shall be made as described in BOOK-ENTRY ONLY SYSTEM herein. Dated: September 14, 2011 Principal Due: May 1 of each year as shown below MATURITY SCHEDULE (Base CUSIP ) Year Amount $1,450,000 1,455,000 1,465,000 Interest Rate 2.000% Yield 1.000% CUSIP RC6 RD4 RE2 Year Amount $1,500,000 1,000,000 1,000,000 Interest Rate 2.000% Yield 1.750% CUSIP RF9 RG7 RH5 Hutchinson, Shockey, Erley & Co. NO OPTIONAL REDEMPTION: The Bonds of this issue shall not be subject to optional redemption prior to maturity. BOND COUNSEL: The Bonds will be offered when, as and if issued by the County subject to the approving legal opinion of Miller, Canfield, Paddock and Stone, P.L.C., Detroit, Michigan. This cover page contains information for a quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Additional information relative to this Bond issue may be obtained from Stauder, BARCH & ASSOCIATES, Inc. Official Statement Dated: September 14, 2011 Municipal Bond Financial and Marketing Consultants 3989 Research Park Drive Ann Arbor, Michigan

2 COUNTY OF GENESEE G-4610 Beecher Road Flint, Michigan Telephone #: (810) Fax #: (810) Chairperson Jamie W. Curtis Vice-Chairperson Ted Henry Archie H. Bailey Miles T. Gadola Patrick F. Gleason BOARD OF COMMISSIONERS Omar A. Sims Brenda Clack Joseph Graves John Northrup TREASURER Deborah L. Cherry COUNTY CLERK Michael J. Carr DRAIN COMMISSIONER Jeffrey Wright DIRECTOR, DIVISION OF WATER & WASTE SERVICES John F. O Brien CONTROLLER George Martini PROFESSIONAL SERVICES TRANSFER AGENT...The Bank of New York Mellon Trust Company, N.A. BOND COUNSEL... Miller, Canfield, Paddock & Stone, P.L.C. FINANCIAL ADVISOR...Stauder, BARCH & ASSOCIATES, Inc.

3 TABLE OF CONTENTS Page PURPOSE AND SECURITY...1 PLAN OF REFUNDING...2 SOURCES AND USES OF FUNDS...3 NO OPTIONAL REDEMPTION...3 BOOK-ENTRY ONLY SYSTEM...3 TRANSFER AGENT AND BOND REGISTRATION...5 TRANSFER OUTSIDE BOOK-ENTRY-ONLY SYSTEM...5 LITIGATION...5 TAX MATTERS...6 Tax Treatment of Accruals on Original Issue Discount Bonds...7 Amortizable Bond Premium...7 Market Discount...7 Information Reporting and Backup Withholding...7 Future Developments...8 QUALIFIED BY THE MICHIGAN DEPARTMENT OF TREASURY...8 BOND COUNSEL S RESPONSIBILITY...8 CONTINUING DISCLOSURE...8 LEGAL OPINION...9 FINANCIAL CONSULTANT S OBLIGATION...9 CREDIT RATING...9 GENESEE COUNTY SEWAGE DISPOSAL SYSTEM (INTERCEPTORS AND TREATMENT FACILITIES)...11 TOTAL ESTIMATED BILLABLE WASTEWATER VOLUME...15 TEN LARGEST CUSTOMERS...15 COUNTY OF GENESEE GENERAL FINANCIAL INFORMATION...17 AREA...17 POPULATION...17 PROPERTY VALUATIONS...17 Historical Valuation...18 Per Capita Valuation...18 Tax Abatements...18 Tax Increment Authorities...18 Tax Base Composition...19 Property Tax Reform Proposals...19 MAJOR TAXPAYERS...19 Page CONSTITUTIONAL ROLLBACK AND ASSESSMENT CAPS...20 TAX RATES (Per $1,000 of Valuation)...20 TAX RATE LIMITATION...20 TAX LEVIES AND COLLECTIONS...21 REVENUES FROM THE STATE OF MICHIGAN.. 21 General...21 County Reserve Fund...22 General Fund Revenues From the State...22 LABOR FORCE...23 RETIREMENT PLANS...23 DEBT STATEMENT...24 DEBT RATIOS...25 DEBT HISTORY...26 FUTURE FINANCING...26 VACATION LIABILITIES...26 SHORT TERM BORROWING...26 LEASE OBLIGATIONS...26 LEGAL DEBT MARGIN...26 GENERAL ECONOMIC INFORMATION...27 LOCATION AND AREA...27 FORM OF GOVERNMENT...27 POPULATION BY AGE...27 INCOME...28 EMPLOYMENT CHARACTERISTICS...28 EMPLOYMENT BREAKDOWN...29 UNEMPLOYMENT...29 TRANSPORTATION...30 HIGHER EDUCATION...30 CULTURAL/RECREATIONAL...31 UTILITIES...31 BANKING...32 APPENDIX A - GENERAL FUND BUDGET SUMMARY...A-1 APPENDIX B - AUDITS... B-1 APPENDIX C - FORM OF CONTINUING DISCLOSURE UNDERTAKING... C-1 APPENDIX D - DRAFT LEGAL OPINION...D-1 APPENDIX E - SUMMARY OF THE ORDINANCES.. E-1

4 NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE COUNTY OF GENESEE TO GIVE ANY INFORMATION OR THE MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COUNTY. THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT HAS BEEN PREPARED FROM SOURCES WHICH ARE DEEMED TO BE RELIABLE, BUT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS. THE INFORMATION AND EXPRESSIONS OF OPINION IN THIS OFFICIAL STATEMENT ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT NOR ANY SALE MADE UNDER IT SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COUNTY SINCE THE DATE OF THIS OFFICIAL STATEMENT.

5 DATE OF SALE: September 14, 2011 FIRST INTEREST: May 1, 2012 PURCHASE PRICE: TRANSFER AGENT: PRINCIPAL DUE: COUNTY OF GENESEE STATE OF MICHIGAN $7,870,000 SEWAGE DISPOSAL SYSTEM (INTERCEPTORS AND TREATMENT FACILITIES) REVENUE REFUNDING BONDS (LIMITED TAX GENERAL OBLIGATION) SERIES 2011C Not less than 99% nor more than 101% of the par value The Bank of New York Mellon Trust Company, N.A., Detroit, Michigan May 1, annually as shown on front cover PURPOSE AND SECURITY Purpose and Source of Payment The Bonds are issued under the provisions of Act 94, Public Acts of Michigan, 1933, as amended, Act 342, Public Acts of Michigan, 1939, as amended, and certain ordinances adopted by the County, for the purpose of paying the cost of refunding certain prior bonds of the County originally issued to pay for the costs of acquiring and constructing improvements to the County's Sewage Disposal System (Interceptors and Treatment Facilities) (the "System"). The Bonds are payable primarily from the net revenues of the System (the "Net Revenues"), and a statutory first lien on the Net Revenues is established by said ordinances. The Bonds are of equal standing and priority of lien as to the Net Revenues of the System with certain outstanding bonds of the County, as more particularly described in the Official Statement for the Bonds. The County has covenanted and agreed to fix and maintain at all times while any of such Bonds shall be outstanding such rates for service furnished by the System as shall be sufficient to provide for payment of the necessary expenses of operation, maintenance and administration of the System, payment of the principal and interest on the Bonds when due, and to provide for such other expenditures and funds for the System as are required by said ordinances. As additional security for the payment of the principal of and interest on the Bonds, the County has irrevocably pledged its full faith and credit for the prompt payment of the principal of and interest on the Bonds. If the Net Revenues of the System are insufficient for the payment of such principal and interest when due, the County shall advance the amount of the insufficiency from its general funds as a first budget obligation. The County is obligated, to the extent necessary, to levy ad valorem taxes on all taxable property in the County for such purpose, subject to applicable statutory and constitutional tax limitations as to rate and amount. The rights or remedies of bondholders may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors' rights generally, now existing or hereafter enacted, and by the application of general principles of equity, including those relating to equitable subordination. No Bond Reserve Account The County has not established and will not maintain the Bond Reserve Account to secure payment of the Bonds. Rate Covenant The County has covenanted and agreed in the Ordinances to fix and maintain at all times while any of the Bonds are outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the expenses of administration and operation of the System and such expenses for maintenance of the System as are necessary to preserve the System in good repair and working order, to provide for the payment of the principal of and interest on the Bonds and the Outstanding Bonds as the same become due and payable, and to provide for all other obligations, expenditures and funds for the System required by law and the Ordinances. System Information; Funds and Accounts For a description of the System and certain statistical and summary financial information related to the operation of the System, see "GENESEE COUNTY SEWAGE DISPOSAL SYSTEM (INTERCEPTORS AND TREATMENT FACILITIES) herein and APPENDIX B - AUDITS hereto. For a complete description of the funds and accounts of the System established by the Ordinances and the application of Revenues of the System, reference is made to APPENDIX E "SUMMARY OF THE ORDINANCES." 1

6 Additional Bonds For the terms upon which additional bonds of equal standing with the Bonds and the outstanding bonds of the County as to the Net Revenues of the System may be issued, reference is made to the above-described ordinances. (a) For the acquisition and construction of subsequent repairs, extensions, enlargements, additions and improvements to the System or for the purpose of refunding all or a part of any outstanding bonds or any debt incurred by the County for any purpose for which Additional Bonds may be issued under the Ordinances, and paying costs of issuing such Additional Bonds including deposits, if any, which may be required to be made to the Bond Reserve Account, and for payment of interest on such Additional Bonds. Additional Bonds for such purposes shall not be issued pursuant to this paragraph (a) unless the actual or augmented Net Revenues of the System (not including investment earnings on the various funds and accounts established under the Ordinances but including investment earnings on the Bond Reserve Account, if any) for the then last preceding Fiscal Year shall be equal to at least one hundred percent (100%) of the Maximum Annual Debt Service on any outstanding bonds and the Additional Bonds then being issued. If the Additional Bonds are to be issued in whole or in part for refunding of outstanding bonds, the annual principal and interest requirements shall be determined by deducting from the principal and interest requirements for each Fiscal Year the annual principal and interest requirements of any bond or bonds to be refunded from the proceeds of the Additional Bonds. For purposes of this paragraph (a), the County may elect to use as the last preceding Fiscal Year any Fiscal Year ending not more than sixteen months prior to the date of delivery of the Additional Bonds for which an audit is available. If any change in the rates, fees or charges of the System shall be authorized at or prior to the time of the ordinance or order authorizing the sale of any Additional Bonds, the Net Revenues for the preceding Fiscal Year shall be augmented by an amount reflecting the effect of such change had the System's billings during such Fiscal Year been at the adopted rates. In addition, the actual Net Revenues for the preceding audited Fiscal Year may be augmented by the estimated increase in Net Revenues to accrue as a result of the acquisition and construction of the repairs, enlargements, extensions, additions and improvements to the System to be paid for, in whole or in part, from the proceeds of the Additional Bonds or resulting from any repair, enlargement, extension, addition or improvement which was made to the System subsequent to the end of the last audited Fiscal Year. Determination by the County as to the existence of conditions permitting the issuance of Additional Bonds shall be conclusive; provided, however, that with respect to augmentation of Net Revenues, the County shall engage the services of and receive the certificate of a consulting engineer (with experience in advising municipalities with respect to setting rates and charges for the use of sewage disposal systems) regarding the existence of such conditions, or, if no augmentation is required, the County may rely on audited financial statements. No Additional Bonds shall be issued pursuant to this paragraph (a) if the County shall then be in default in making its required payments to any funds or accounts created under the Ordinances. (b) For refunding all or a part of any outstanding bonds issued under the Ordinances and paying costs of issuing such Additional Bonds including deposits which may be required to be made to the Bond Reserve Account. No Additional Bonds shall be issued pursuant to this paragraph (b) unless the total amount of principal and interest falling due in the then current Fiscal Year and each Fiscal Year thereafter until maturity of all bonds which have not been refunded after giving effect to such refunding shall be not greater than the total amount of principal and interest maturing in the then current Fiscal Year and each Fiscal Year thereafter until maturity prior to giving effect to such refunding. (c) To provide for the accession of Junior Lien Bonds to the status of complete parity with the Bonds and the Outstanding Bonds, as provided in the Ordinances. PLAN OF REFUNDING A portion of the proceeds of the Bonds, together with other available funds of the County, will be used to pay certain costs of issuance related to the issuance of the Bonds and the refunding of certain maturities of the County s Sewage Disposal System (Interceptors and Treatment Facilities) Full Faith and Credit Revenue Bonds, Series 2000 (the Series 2000 Bonds ) and the County s Sanitary Sewage Disposal System (Interceptors and Treatment Facilities) Revenue Bonds, 2002A (Limited Tax General Obligation) (the Series 2002A Bonds ) together with the Series 2000 Bonds, (the Prior Bonds ), which are callable on November 1, 2011and are due and payable 2012, through 2017 (the Refunded Bonds ) and to establish an escrow fund (the Escrow Fund ) composed of cash and non-callable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or other obligations the principal of and interest on which are fully secured by the foregoing. The Escrow fund will be held by The Bank of New York Trust Company, N.A. Detroit, Michigan as escrow agent (the Escrow Agent ) and will be used to pay the principal of and interest on the Refunded Bonds when due or at call for redemption. The Escrow Fund will be held by the Escrow Agent pursuant to an escrow agreement (the Escrow Agreement ) which irrevocably directs the Escrow Agent to make the payment of the principal of and interest on the Refunded Bonds when due or at call for redemption. The Escrow Fund will be such that the cash and the principal and interest payments received on the investments will be sufficient, without reinvestment, except as may be provided in the Escrow Agreement, to pay the principal of and interest on the Refunded Bonds as they become due or are called for earlier redemption, as set forth in the table below. 2

7 Principal of and Interest on the Prior Bonds to paid from the Escrow Account Date Principal Interest& Premium Total 11/1/2011 $7,740, $178, $7,918, Total $7,740, $178, $7,918, The accuracy of the mathematical computations of the adequacy of cash and certain obligations to be held in the Escrow Fund and used, together with the earnings thereon, to pay the principal of and interest on the Refunded Bonds will be verified by Robert Thomas CPA, LLC, Shawnee Mission, Kansas. Such verification of the accuracy of the computations shall be based upon information supplied by the County s Financial Advisor and on interpretations of Section 148 of the Internal Revenue Code of 1986, as amended, as provided by Bond Counsel. SOURCES AND USES OF FUNDS Sources Par Amount of Bonds $7,870,000 Net Premium 57,071 Contribution from Debt Funds 168,553 Total Sources $8,038,553 Uses Deposit to Escrow Account $7,918,803 Underwriter s Discount 83,377 Cost of Issuance 93,344 Total Uses $8,095,624 NO OPTIONAL REDEMPTION The Bonds of this issue shall not be subject to optional redemption prior to maturity. BOOK-ENTRY ONLY SYSTEM The information in this section has been furnished by The Depository Trust Company, New York, New York ("DTC"). No representation is made by County and the Transfer Agent as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. No attempt has been made by the County or the Transfer Agent to determine whether DTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the County nor the Transfer Agent will have any responsibility or obligation to Direct Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment thereof. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world's largest securities depository, is a limited-purpose 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 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 3

8 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 Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities 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 Securities 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 Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities 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 Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities 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. 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 Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for 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 Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Securities 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 County or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with 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, Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to Tender/Re marketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to Tender/Remarketing Agent's DTC account. 4

9 DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the County or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof. TRANSFER AGENT AND BOND REGISTRATION Principal and interest shall be payable and the Bonds shall be registered and transferred as described under the heading BOOK-ENTRY ONLY SYSTEM above until the book-entry only system is discontinued. The County has appointed the Transfer Agent shown on the cover. In the event the book-entry only system is discontinued, the Transfer Agent will also act as bond registrar and transfer agent. TRANSFER OUTSIDE BOOK-ENTRY-ONLY SYSTEM In the event that the book-entry-only system is discontinued, the following provisions would apply to the Bonds. The Transfer Agent shall keep the registration books for the Bonds (the Bond Register ) at its corporate trust office. Subject to the further conditions contained in the Ordinance, the Bonds may be transferred or exchanged for one or more Bonds in different authorized denominations upon surrender thereof at the corporate trust office of the Transfer Agent by the registered owners or their duly authorized attorneys; upon surrender of any Bonds to be transferred or exchanged, the Transfer Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in authorized denominations; during the 15 days immediately preceding the date of mailing (the Record Date ) of any notice of redemption or any time following the mailing of any notice of redemption, the Transfer Agent shall not be required to effect or register an transfer or exchange of any Bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion; the County and Transfer Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owners of such Bonds for all purposes under the Ordinance. No transfer or exchange made other than as described above in the Ordinance shall be valid or effective for any purposes under the Ordinance. LITIGATION Pending Litigation In Grand Blanc Community Schools, et. al. v. Jeffrey Wright, Genesee County Circuit Court No , seven school districts within the boundaries of the County brought a claim against the Drain Commissioner of the County alleging that the water and sewer connection fees charged by the County are unconstitutional. The districts also alleged that the water and sewer usage fees charged by their local municipalities, pursuant to the municipalities' contracts with the County, are unconstitutional. Five of the seven districts dismissed their claims without prejudice. The Court determined the two remaining districts needed to ripen their claims by appearing in front of the County's Board of Review, and stayed litigation pending completion of that review. The administrative hearing in front of the County's Board of Review occurred in the Fall of The Board of Review found that the Drain Commissioner's methods for charging water and sewer connection fees are fair. It found that the Drain Commissioner's methods for estimating water and sewer usage when actual data is not available are fair. Because actual data had become available for the Grand Blanc School District, the Board reviewed the data and reduced the Grand Blanc District's connection fee. The Board was unable to make any recommendations regarding the Linden District's fee as that District did not provide any actual usage data. The case then went forward in the trial court. In January 2010, the Court granted the Drain Commissioner's motion to dismiss the claims of both school districts. Because the Drain Commissioner has a process to adjust users' connection fees once actual usage data becomes available, and the Grand Blanc District's fees had been adjusted using this process, its claims were dismissed with prejudice. Because the Linden District had not gathered any actual usage data and its fees could not be adjusted at this time, its claims were dismissed without prejudice. In February 2010, the school districts appealed the Genesee County Circuit Court's decision to the Michigan Court of Appeals, case number The school districts also appealed the decision of the Board of Review to the Circuit Court, but this appeal was dismissed as untimely. In March 2010, the Drain Commissioner's Office reached a settlement with the Linden District. The Linden District has agreed to dismiss its appeal in the Court of Appeals. The appeal of the Grand Blanc District is going forward. The parties have filed briefs and are awaiting notice of oral argument. The Court of Appeals has not yet set a date for that 5

10 hearing. The County is unable at this stage of litigation to predict the outcome of the case or the impact that an adverse decision would have on the existing rate structure of the System or the methodology employed in the establishment of rates and charges for the use of the County's System. Other Litigation On December 28, 1998, in Bolt v City of Lansing, the Michigan Supreme Court decided that the City of Lansing's stormwater user fee, imposed to defray the capital costs of the City of Lansing's stormwater system, was an unconstitutional tax levied without the approval of the electors of the City of Lansing in violation of the Headlee Amendment to the Michigan Constitution. The Court articulated certain principles in reaching its decision which, if extended to all enterprise systems, could, in certain instances, result in a finding that fees charged to the users of such enterprise systems are taxes which may not be imposed without the approval of the electors of the municipality. Although the Bolt opinion did not address user charges relating to enterprise systems generally, subsequent lower court decisions have applied the principles articulated in Bolt to other enterprise systems, including sewage disposal systems. Because of the confusion caused by the language of the Bolt decision and subsequent lower court decisions, it is not possible to predict with certainty what impact, if any, Bolt and subsequent decisions would have on any legal challenge to the rates and charges imposed by the County for use of the System. TAX MATTERS In the opinion of Miller, Canfield, Paddock and Stone, P.L.C., Bond Counsel, under existing law, the interest on the Bonds is excludable 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 and corporations. It should be noted, however, that with respect to corporations (as defined for federal income tax purposes) such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. Bond Counsel is also of the opinion that, under existing law, the Bonds and the interest thereon are exempt from all taxation by the State of Michigan or by any taxing authority within the State of Michigan except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. Bond Counsel will express no opinion regarding any other federal or state tax consequences arising with respect to the Bonds and the interest thereon. The opinion on federal tax matters is based on the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the County contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Bonds are and will remain obligations the interest on which is excludable from gross income for federal income tax purposes. The County has covenanted to take the actions required of it for the interest on the Bonds to be and to remain excludable from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. Bond Counsel's opinion assumes the accuracy of the County's certifications and representations and the continuing compliance with the County's covenants. Noncompliance with these covenants by the County may cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. After the date of issuance of the Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel's attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or the market prices of the Bonds. The opinion of Bond Counsel is based on current legal authority and covers certain matters not directly addressed by such authority. It represents Bond Counsel's legal judgment as to the excludability of interest on the Bonds from gross income for federal income tax purposes but is not a guarantee of that conclusion. The opinion is not binding on the Internal Revenue Service ("IRS") or any court. Bond Counsel cannot give and has not given any opinion or assurance about the effect of future changes in the Internal Revenue Code of 1986, as amended (the "Code"), the applicable regulations, the interpretations thereof or the enforcement thereof by the IRS. Ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry the Bonds. Bond Counsel will express no opinion regarding any such consequences. 6

11 Tax Treatment of Accruals on Original Issue Discount Bonds Under existing law, if the initial public offering price to the public (excluding bond houses and brokers) of a Bond is less than the stated redemption price of such Bonds at maturity, then such Bond is considered to have "original issue discount" equal to the difference between such initial offering price and the amount payable at maturity (such Bonds are referred to as "OID Bonds"). Such discount is treated as interest excludable from federal gross income to the extent properly allocable to each registered owner thereof. The original issue discount accrues over the term to maturity of each such OID Bonds on the basis of a constant interest rate compounded at the end of each six-month period (or shorter period) from the date of original issue with straight-line interpolations between compounding dates. The amount of original issue discount accruing during each period is added to the adjusted basis of such OID Bonds to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such OID Bonds. The Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of OID Bonds who purchase such OID Bonds after the initial offering of a substantial amount thereof. Owners who do not purchase such OID Bonds in the initial offering at the initial offering prices should consult their own tax advisors with respect to the tax consequences of ownership of such OID Bonds. All holders of the OID Bonds should consult their own tax advisors with respect to the allowance of a deduction for any loss on a sale or other disposition of an OID Bond to the extent such loss is attributable to accrued original issue discount. Amortizable Bond Premium For federal income tax purposes, the excess of the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold over the amount payable at maturity thereof constitutes for the original purchasers of such Bonds (collectively, the "Original Premium Bonds") an amortizable bond premium. Bonds other than Original Premium Bonds may also be subject to an amortizable bond premium determined generally with regard to the taxpayer's basis (for purposes of determining loss on a sale or exchange) and the amount payable on maturity or, in certain cases, on an earlier call date (such bonds being referred to herein collectively with the Original Premium Bonds as the "Premium Bonds"). Such amortizable bond premium is not deductible from gross income. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of the taxpayer's yield to maturity determined by using the taxpayer's basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the taxpayer's adjusted basis of such Premium Bonds to determine taxable gain upon disposition (including sale, redemption or payment at maturity) of such Premium Bonds. All holders of the Premium Bonds should consult with their own tax advisors as to the amount and effect of the amortizable bond premium. Market Discount The "market discount rules" of the Code apply to the Bonds. Accordingly, holders acquiring their Bonds subsequent to the initial issuance of the Bonds will generally be required to treat market discount recognized under the provisions of the Code as ordinary taxable income (as opposed to capital gain income). Holders should consult their own tax advisors regarding the application of the market discount provisions of the Code and the advisability of making any of the elections relating to market discount allowed by the Code. Information Reporting and Backup Withholding Information reporting requirements apply to interest paid after March 31, 2007 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 unless the recipient is one of a limited class of exempt recipients, including corporations. 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 the Bonds through a brokerage account has executed a Form W-9 in connection with the establishment of such account 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 IRS. 7

12 Future Developments Bond Counsel's engagement with respect to the Bonds ends with the issuance of the Bonds and, unless separately engaged, bond counsel is not obligated to defend the County in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Bonds, under current IRS procedures, the IRS will treat the County as the taxpayer and the beneficial owners of the Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. NO ASSURANCE CAN BE GIVEN THAT ANY FUTURE LEGISLATION OR CLARIFICATIONS OR AMENDMENTS TO THE CODE, IF ENACTED INTO LAW, WILL NOT CONTAIN PROPOSALS WHICH COULD CAUSE THE INTEREST ON THE BONDS TO BE SUBJECT DIRECTLY OR INDIRECTLY TO FEDERAL OR STATE OF MICHIGAN INCOME TAXATION, ADVERSELY AFFECT THE MARKET PRICE OR MARKETABILITY OF THE BONDS, OR OTHERWISE PREVENT THE HOLDERS FROM REALIZING THE FULL CURRENT BENEFIT OF THE STATUS OF THE INTEREST THEREON. O NE SUCH PROPOSAL IS THE "AMERICAN JOBS ACT OF 2011" (THE "BILL"). THE PRESIDENT SUBMITTED THE BILL TO CONGRESS ON SEPTEMBER 12, 2011, AND IT WAS INTRODUCED IN THE SENATE ON SEPTEMBER 13, AS INTRODUCED, THE BILL WOULD AFFECT CERTAIN INDIVIDUAL HOLDERS OF TAX-EXEMPT BONDS, INCLUDING THE BONDS. FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2013, IN THE CASE OF CERTAIN HIGHER INCOME INDIVIDUALS, THE BILL WOULD REDUCE THE VALUE OF CERTAIN DEDUCTIONS AND EXCLUSIONS, INCLUDING THE EXCLUSION FROM GROSS INCOME OF TAX-EXEMPT INTEREST, BY IMPOSING ADDITIONAL TAX ON SUCH INDIVIDUALS. FURTHER, NO ASSURANCE CAN BE GIVEN THAT ANY FUTURE LEGISLATION, INCLUDING THE BILL, OR ANY ACTIONS OF THE INTERNAL REVENUE SERVICE, INCLUDING, BUT NOT LIMITED TO, SELECTION OF THE BONDS FOR AUDIT EXAMINATION, OR THE COURSE OR RESULT OF ANY EXAMINATION OF THE BONDS, OR OTHER BONDS WHICH PRESENT SIMILAR TAX ISSUES, WILL NOT AFFECT THE MARKET PRICE OF THE BONDS. INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS. QUALIFIED BY THE MICHIGAN DEPARTMENT OF TREASURY The County has received a letter from the Department of Treasury of the State of Michigan stating that the County is in material compliance with the criteria of the Revised Municipal Finance Act, Act No. 34, Public Acts of Michigan, 2001 ( Act 34") for a municipality to be granted qualified status. The County may therefore proceed to issue the Bonds without further approval from the Department of Treasury of the State of Michigan. BOND COUNSEL S RESPONSIBILITY The fees of Miller, Canfield, Paddock and Stone, P.L.C. ( Bond Counsel ) for services rendered in connection with its approving opinion are expected to be paid from Bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the Bonds and tax matters relating to the Bonds and the interest thereon, and except as stated below, Bond Counsel has not been retained to examine or review, and has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial documents, statements or materials. Bond Counsel has reviewed the statements made in this Official Statement on the cover page and under the heading Information for Bidders. Except as otherwise disclosed on pages herein, Bond Counsel has not been retained to review and has not reviewed any other portion of this Official Statement for accuracy or completeness, and has not made inquiry of any official or employee of the County or any other person and has made no independent verification of such other portions hereof, and further has not expressed and will not express an opinion as to any portions hereof. CONTINUING DISCLOSURE Prior to the delivery of the Bonds, the County will execute a Continuing Disclosure Undertaking (the Undertaking ) for the benefit of the holders of the Bonds or Beneficial Owners to send certain information annually and to provide notice of certain events to certain information repositories pursuant to the requirements of Rule 15c2-12(b)(5) (the Rule ) adopted by the Securities and Exchange Commission under the Securities Exchange Act of The information to be provided on an annual basis, the events which will be noticed on an occurrence basis, and the other terms of the Undertaking are set forth in APPENDIX D - FORM OF CONTINUING DISCLOSURE UNDERTAKING to this Official Statement. 8