WEST RANKIN UTILITY AUTHORITY CONTINUING DISCLOSURE ANNUAL REPORT FISCAL YEAR ENDING SEPTEMBER 30, 2011 THE AUTHORITY

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1 $6,000,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS (WEST RANKIN METROPOLITAN SEWER AUTHORITY PROJECT), SERIES 2002, AND RELATED $6,000,000 WEST RANKIN METROPOLITAN SEWER AUTHORITY REVENUE BOND, SERIES 2002, DATED DECEMBER 1, 2002; AND $24,000,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS (WEST RANKIN UTILITY AUTHORITY PROJECT), SERIES 2008, AND RELATED $24,000,000 WEST RANKIN UTILITY AUTHORITY REVENUE BOND, SERIES 2008, DATED APRIL 1, 2008 WEST RANKIN UTILITY AUTHORITY CONTINUING DISCLOSURE ANNUAL REPORT FISCAL YEAR ENDING SEPTEMBER 30, 2011 THE AUTHORITY The Authoirty was created as a political subdivision of the State pursuant to Chapter 977, Local and Private Laws of 1994, as last amended by Senate Bill 3234, 2007 Regular Session, (the "Authoirty Act"), and by judgment and decree of the Chancery Court of Rankin County, Mississippi (the "County"), in Cause No. 40,871. The Authoirty was created for the purpose of carrying out a cooperative effort by eligible municipalities, public agencies and political subdivisions in the County for the acquisition, construction and operation of a system or systems for the collection, transportation, treatment and disposal of waste and wastewater to prevent and control the pollution of waters in the State. The cities of Brandon, Mississippi ("Brandon"), Flowood, Mississippi ("Flowood"), Pearl, Mississippi ("Pearl") and Richland, Mississippi ("Richland"), and the Mississippi Department of Mental Health ("Mental Health"), the Pearl River Valley Water Supply District ("Pearl River") and the Jackson Municipal Airport Authoirty ("Airport") currently comprise the membership of the Authoirty (each a "Member" and collectively "Members" or "Contracting Parties"). Pursuant to its powers under the Authority Act, the Authoirty has entered into a Service Agreement for the Treatment of Wastewater (the "Service Agreement") with all of its Members for the collection transportation, treatment and disposal of their wastewater. Also pursuant to its powers under the Authoirty Act, the Authority has entered into an Agreement for the Treatment of Wastewater and for the Transfer of Certain Assets Designated as the West Rankin County Sewer System Between City of Jackson, Mississippi (the "City") and West Rankin Metropolitan Sewer Authoirty (the "Sale and Treatment Agreement"). Administration and Operations The Executive Director, Bruce Stephens, is entirely responsible for the day-to-day operation, maintenance and management of the assets of the System, including all interceptors, interconnects to local systems and meteirng stations, the pump station and force main and associated valves, appurtenances, easements and irghts-of- way, under the direction of the Authority Board. The Authority engineers, Engineering Associates, Inc., review all construction plans and specifications and major operation and maintenance decisions. The Authority Board meets once a month, or as otherwise needed, to approve and/or decide on action to be taken on the operation and maintenance of the System. {i } - 1 -

2 Budgeting and Allocation of Costs. The Authority, through its members, is the sole owner of the System, and is entirely responsible for the costs of the System, including debt service and operation and maintenance costs. In addition, the Authoirty is responsible for a pro-rata share of the operation and maintenance cost and any new capital costs related to Savanna, which receives the lfow from the System. Computation of Fiscal Year 2007 Payments Party Flows in Fiscal Year % of Total Share of Fiscal Year 2007 (mgd) 2007 Payments Airport $ 62,871 Brandon ,112,176 Flowood ,064,901 Pearl ,322,232 Mental Health ,264 Pearl River ,268 Richland ,978 Total % $4,873,690 Computation of Fiscal Year 2008 Payments Party Flows in Fiscal Year % of Total Share of Fiscal Year 2008 (mgd) 2008 Payments Airport % $ 64,501 Brandon % 1,143,121 Flowood % 1,094,432 Pearl % 1,358,797 Mental Health % 425,478 Pearl River % 504,796 Richland % 417,188 Total % $5,008,313 {i } - 2 -

3 Computation of Fiscal Year 2009 Payments Party Flows in Fiscal Year % of Total Share of Fiscal Year 2009 (mgd) 2009 Payments Airport % $ 64,501 Brandon % 1,143,120 Flowood % 1,094,436 Pearl % 1,358,796 Mental Health % 425,478 Pearl River % 504,796 Richland % 417,192 Total % $5,008,319 Computation of Fiscal Year 2010 Payments Party Flows in Fiscal Year % of Total Share of Fiscal Year 2010 (mgd) 2010 Payments Airport.10.78% $ 49,036 Brandon % 1,510,321 Flowood % 1,642,719 Pearl % 1,833,961 Mental Health % 446,231 Pearl River % 421,713 Richland % 402,098 Total % $6,306,079 {i } - 3 -

4 Computation of Fiscal Year 2011 Payments Party Flows in Fiscal Year 2011 (mgd) % of Total Share of Fiscal Year 2011 Payments Airport.10.78% $ 49,036 Brandon % 1,510,321 Flowood % 1,642,719 Pearl % 1,833,961 Mental Health % 446,231 Pearl River % 421,713 Richland % 402,098 Total % $6,306,079 SOURCE: The Authority The System and System Capacity The System is defined as all of the existing System from time to time acquired constructed or used by the Authority, including all renewals, replacements, repairs, modifications improvements, additions, extensions and betterments thereto. The System consists of the Authority's interceptors which collect wastewater from each Member and transport the same to Savanna for treatment. The System does not include any facilities for the treatment of wastewater. Each of the Members has entered into a Service Agreement with the Authoirty for the transportation of wastewater through the Authoirty's pump station to the City of Jackson's Savanna Wastewater Treatment Facility. Under the Service Agreement, each Member has made a commitment to the Authoirty to send all wastewater from the Member to the Authority. The Authority has entered into a Transportation and Treatment Agreement with the City of Jackson for the treatment of Authoirty wastewater for a period of 30 years, terminable at the option of the Authority in 2015 and again in Pursuant to the Sale and Treatment Agreement and the Service Agreement, each Member will terminate its agreement with City. Under the Service Agreement, Members agree to send all wastewater to the Authoirty for treatment and the Authoirty agrees to receive and transport for treatment all wastewater through the System and to provide the necessary metering and sampling stations. The term of the Service Agreement is for 30 years which term runs concurrently with the term of the Authority's treatment Agreement with the City of Jackson. Capacity. The average flow through the System duirng Fiscal Year 2011 was less than the design capacity. The design capacity, average lfow and average percentage of capacity of the System is determined by a variety of factors, including the size of the pumping station and the capacity of the single force main connecting the pumping station to Savanna. The current design capacity of Savanna is 52 million gallons per day ("mgd"), with an average permitted daily lfow of 46 mgd. The average daily {i } - 4 -

5 lfows from the Authoirty are established under the Sale and Treatment Agreement as 10 mgd. To date, the cumulative lfow from the Members to the System annually averages between 10 mgd and 11 mgd. Following is the percentage contribution of each Member to the total annual lfow of the Authority for the past several years: FY 2007 Flow (million gal) FY 2008 Flow (million gal) FY 2009 Flow (million gal) FY 2010 Flow (million gal) FY 2011 Flow (million gal) % of % of % of % of % of Member Total Total Total Total Total Total Total Total Total Total Entity Flow Flow Flow Flow Flow Flow Flow Flow Flow Flow Airport Brandon Flowood Pearl State Hospital Reservoir Richland % % % % % West Rankin % % % % % Future Use Demand. The Treatment Agreement with the City of Jackson provides a mechanism for Savanna to accommodate the anticipated increase in lfows from the System to Savanna. At any time that the Authoirty desires additional capacity at Savanna, the Authority may request and pay for a capacity expansion at Savanna. In lieu of paying for a capacity expansion, the Authority may purchase additional capacity available from Savanna by increasing the cost of treatment by a premium of 35% (prior to 2007) or 50% (after 2007) on the actual cost of treatment. The Authoirty's estimate for the average daily wastewater flow for the year 2012 for each of the Authority's service areas is provided below. Service Area Projected Average Daily Flow (mgd) in Year 2012 Brandon 3.08 Flowood 3.35 Pearl 3.74 Richland 0.82 Airport 0.10 Mental Health 0.91 Pearl River 0.86 Total to the Authority: SOURCE: The Authority Member Rate Structure. Under the Service Agreement, each Member agrees to pay to the Authority the Annual Payments established by the Authoirty relating to charges for usage of the System and treatment of the wastewater. The Annual Payments include monthly, pro rata charges for capital costs relating to the System and monthly charges for treatment of wastewater at Savanna and charges not otherwise included in such capital costs. {i } - 5 -

6 Non-Member Rate Structure. In addition to its Members, the Authority has certain Non-Member customers. A Non-Member Customer may be a municipality, a state agency, or a provider of wastewater services holding a certificate of public convenience and necessity from the Mississippi Public Service Commission for the delivery of both sewer and water services. No service shall be provided except to those who directly hold certificates for both sewer and water within the area to be serviced. The Non- Member Customer shall be required to make monthly payments in accordance with its Non-Member Customer Agreement with the Authoirty and shall be comprised of three components: (1) the budgeted cost each month; (2) a unit cost proportional to its lfow in the system equal to total Member cost (O&M and Debt Service) plus 35%; and (3) a provision for year-end adjustment should costs be raised to the Members at the end of the fiscal year. System Development Charge. In 2006, the Authoirty established System Development Charges to be paid by each member of the Authority for each connection for wastewater service as such is connected to any Member's local system which ultimately discharges into the Authoirty System for the purpose of repair, improvement and extension of sanitary, storm, drainage and sewerage systems as a part of the total sewage disposal system currently owned and operated by the Authoirty and for related purposes. The above charges provide revenues sufficient to pay the costs of the Authority's administration, debt service on evidences of indebtedness of the Authoirty and operation and general overhead and planning costs associated with the System. The Annual Payments established by the Authority are not subject to review by any federal, state or local agency. The following chart shows the amounts paid by the Members to the City for Fiscal Years 2007 through Annual Payments to Authority Member FY '07 FY '08 FY '09 FY '10 FY '11 Brandon 1,112,176 1,143,121 1,143,120 1,510,321 1,510,321 Flowood 1,064,901 1,094,432 1,094,436 1,642,719 1,642,719 Pearl 1,322,232 1,358,797 1,358,796 1,833,961 1,833,961 Richland 405, , , , ,098 Airport 62,871 64,501 64,501 49,036 49,036 Mental Health 414, , , , ,231 Pearl River 491, , , , ,713 TOTALS $4,873,690 $5,008,313 $5,008,319 $6,306,079 $6,306,079 SOURCE: The Authority {i } - 6 -

7 THE MEMBERS The Members of the Authoirty are pirmarily located in Rankin County, Mississippi (the "County") in central Mississippi. The current members are the cities of Brandon, Mississippi ("Brandon"), Flowood, Mississippi ("Flowood"), Pearl, Mississippi ("Pearl") and Richland, Mississippi ("Richland"), and the Mississippi Department of Mental Health ("Mental Health"), the Pearl River Valley Water Supply District ("Pearl River") and the Jackson Municipal Airport Authoirty ("Airport Authority"). Assessed Valuations of Member Cities Automobiles/ Real Personal Mobile Public 2007 FY Property Property Homes Utilities Total Brandon $117,544,887 $14,059,608 $58,956,320 $3,792,829 $194,353,644 Flowood 125,952,852 38,396,802 19,010,800 7,385, ,745,933 Pearl 112,753,969 42,845,616 38,507,660 8,009, ,116,674 Richland 44,645,911 26,915,712 14,603,370 2,713,462 88,878,455 TOTAL RCA', $MX',M ' $131,078,1 ) $21,901, $676,094,706 Automobiles/ Real Personal Mobile Public 2008 FY Property Property Homes Utilities Total Brandon $153,833,859 $14,980,131 $40,886,530 $88,432 $213,166,660 Flowood 159,616,491 41,805,395 18,404,142 9,736, ,562,472 Pearl 142,546,237 34,742,682 36,563,636 8,344, ,197,313 Richland 44,645,911 26,915,712 14,603,370 2,713,462 88,878,455 TOTAL $500,642,4 $118,4,920 $110,457,678 $20,883,096 $153,804,900 Automobiles/ Real Personal Mobile Public 2009 FY Property Property Homes Utilities Total Brandon $155,702,041 $15,309,277 $39,279,340 $3,466,140 $213,756,798 Flowood 163,627,477 39,111,030 17,540,871 10,113, ,393,114 Pearl 143,945,551 34,718,585 34,486,232 8,344, ,495,126 Richland 58,638,360 25,844,425 13,022,608 3,175, ,680,415 TOTAL $521,913,429 $ $ $ $ {i } - 7 -

8 Automobiles/ Real Personal Mobile Public 2010 FY Property Property Homes Utilities Total Brandon $157,992,850 $16,569,657 $37,302,818 $ 5,474,465 $217,339,790 Flowood 163,627,477 39,111,030 17,111,030 10,113, ,963,273 Pearl 147,577,351 31,811,606 32,657,122 7,932, ,978,227 Richland 60,852,684 27,985,474 11,882,158 3,298, ,019,000 TOTAL $530,050,362 $115,477,767 $98,953,128 $26,819,033 $771,300,290 Automobiles/ Real Personal Mobile Public 2011 FY Property Property Homes Utilities Total Brandon $158,867,020 $15,993,409 $36,791,608 $5,298,240 $216,950,277 Flowood 179,085,425 40,231,338 17,644,397 9,371, ,332,769 Pearl 156,244,757 30,119,716 31,208,534 8,663, ,236,469 Richland 61,109,341 26,175,121 12,093,342 3,480, ,858,098 TOTAL $555,306,543 $112,519,584 $97,737,881 $26,813,605 $792,377,613 Mississippi Department of Mental Health 2011 Report Information. For the State's fiscal year 2011, Mental Health has an operating budget of $562,769,000, which is composed of a State General Fund appropiration of $202,874,000, Healthcare Expendable Trust Funds (Tobacco Trust Funds) of $13,952,000 and other projected collections consisting mostly of Medicaid and federal grants totaling $345,943,000. Pearl River Valley Water Supply District 2011 Report Information. Pearl River's main sources of revenues are from long-term leases on real estate, campground fees and utility fees. Its general fund revenues for fiscal year 2011 were $7,887,522 with general fund expenditures totaling $8,292,843. In addition, Pearl River maintains an enterpirse fund to which it deposits water and sewer and garbage collection fees that have histoircally been sufficient to cover its payments for wastewater treatment to Jackson. Jackson Municipal Airport Authority 2011 Report Information. Operating revenues of the Airport Authority are composed pirmarily of airline and aviation charges and concessions, charges at Hawkins Field and other related charges. For fiscal year 2011, the Airport Authority's total operating revenues were $16,287,920, with operating expenses of $12,809,179. {i } - 8 -

9 The following chart shows the Authoirty's net revenues available for debt service and debt service coverage ratios based on budgeted revenues, expenses and capital outlay for Fiscal Years 2006 through 2010: WEST RANKIN UTILITY AUTHORITY SCHEDULE OF REVENUES AND EXPENDITURES AND DEBT SERVICE COVERAGE FOR FISCAL YEAR ENDING 2006 AUDITED 2007 AUDITED 2008 AUDITED 2009 AUDITED 2010 AUDITED REVENUES Sewer Charges Other Income 3,920, ,097 4,501, ,907 4,976, ,120 5,020, ,578 6,207, ,124 TOTAL INCOME 4,546,368 5,286,597 5,525,050 5,309,207 6,441,798 EXPENSES Sewer Treatment 1,811,829 2,509,506 1,950,440 1,894,499 2,655,157 Operating Expenses 866, ,538 1,393,547 1,957,453 1,439,861 TOTAL EXPENSES 2,678,723 3,486,044 3,343,987 3,851,952 4,095,018 AVAILABLE FOR DEBT SERVICE 1,867,645 1,800,553 2,181,063 1,457,255 2,346,780 DEBT SERVICE 1,020,092 1,036, , , ,885 DEBT SERVICE COVERAGE Dated: January 30, 2012 {i } - 9 -

10 WEST RANKIN UTILITY AUTHORITY Audited financial statements for fiscal year ending September 30, 2011 are not available at this time. The Authority will provide such audited financial statements as soon as they become available, but not later than 350 days after the end of such fiscal year. MEMBERS Audited Financial Statements, Management's Discussion and Analysis and Auditor's Report on Intenral Control, Compliance and Other Matters for Fiscal Year Ending September 30, 2011 for the Members listed below are not available at this time. These Members will provide such audited financial statements as soon as they become available, but not later than 350 days after the end of such fiscal year. Brandon, MS Flowood, MS Pearl, MS Richland, MS Audited Financial Statements, Management's Discussion and Analysis and Auditor's Report on Intenral Control, Compliance and Other Matters for Fiscal Year Ending June 30, 2011 for the Pearl River Valley Water Supply District are being filed separately. Audited Financial Statements, Management's Discussion and Analysis and Auditor's Report on Intenral Control, Compliance and Other Matters for Fiscal Year Ending September 30, 2011 for the Jackson Municipal Airport Authority are being filed separately. {i }