BofA Merrill Lynch FTN Financial Capital Markets Morgan Stanley Raymond James

Transcription

1 NEW ISSUE Book Entry Only RATINGS: MOODY S: Aa2 FITCH: AA (stable outlook) (See Ratings herein) In the opinion of Bond Counsel, interest on the Series 2016A Bonds is includable in gross income for federal income tax purposes. In the opinion of Bond Counsel, based on existing law and assuming compliance with certain tax covenants of the County, interest on the Series 2016B 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 and corporations; however, such interest is taken into account in determining the adjusted current earnings of certain corporations for purposes of the alternative minimum tax on corporations. 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 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, except Tennessee franchise and excise taxes. (See Tax Matters herein). BLOUNT COUNTY, TENNESSEE $8,920,000 TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016A $117,010,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016B Dated: Delivery Date The Bonds Due: June 1, as shown on the inside front cover Interest on the Taxable General Obligation Refunding Bonds, Series 2016A (the Series 2016A Bonds ) and the General Obligation Refunding Bonds, Series 2016B (the Series 2016B Bonds and collectively with the Series 2016A Bonds, the Bonds ) is payable semi-annually on June 1 and December 1, commencing June 1, Denominations are $5,000 or any integral multiple thereof. Book-Entry Only System Security The Depository Trust Company. See THE BONDS - Book Entry System herein. The Bonds will be direct general obligations of the County, and the County has pledged its full faith, credit and unlimited taxing power to the punctual payment of the principal of and interest on the Bonds. See THE BONDS - Security and Remedies herein. Redemption The Bonds are subject to optional redemption as described herein. See THE BONDS - Optional Redemption herein. Tax Matters Bond Counsel Underwriters Counsel Delivery Date Interest on the Series 2016A Bonds is includable in gross income for federal income tax purposes. Interest on the Series 2016B Bonds is excludable from gross income for federal income tax purposes to the extent and subject to the conditions, limitations and continuing compliance with tax covenants as described herein. The Bonds and the interest thereon are exempt from Tennessee taxes to the extent described herein, subject to certain exceptions. See TAX MATTERS as described herein. Bass, Berry & Sims PLC, Knoxville, Tennessee. McGuireWoods LLP, Raleigh, North Carolina. It is expected that the Bonds will be available for delivery in New York, New York, through the facilities of The Depository Trust Company on or about December 1, This cover page contains certain information for quick reference only. It is not a summary of the issues. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered, subject to prior sale, when, as and if issued and received by the Underwriters and subject to certain conditions, including the issuance of the approving opinions of Bass, Berry & Sims PLC, Bond Counsel, Knoxville, Tennessee. Certain legal matters will be passed upon for the County by its counsel, Craig Garrett, Esquire. Certain legal matters will be passed upon for the Underwriters by McGuireWoods LLP, counsel to the Underwriters. BofA Merrill Lynch FTN Financial Capital Markets Morgan Stanley Raymond James November 9, 2016

2 $8,920,000 BLOUNT COUNTY, TENNESSEE TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016A Maturity Schedule Maturity (June 1) Principal Amount Interest Rate Yield CUSIP** 2017 $370, % 0.97% RS , RT , RU , RV , RW , SG , SH , RX , RY , RZ , SA , SB , SC , SD , SE , SJ , SK , SL , SM , SN , SF0 ** CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright 2016 CUSIP Global Services. All rights reserved. CUSIP data herein is provided by S&P Capital IQ, a division of McGraw-Hill Financial, Inc. The CUSIP data herein is provided solely for the convenience of reference only. None of the County or the Underwriters is responsible for selection or use of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Bonds.

3 $117,010,000 BLOUNT COUNTY, TENNESSEE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016B Maturity Schedule Maturity (June 1) Principal Amount Interest Rate Yield CUSIP ** 2017 $2,655, % 0.72% SP ,670, SQ ,910, SR , SS , ST ,005, SU ,350, SV ,135, SW ,460, SX ,780, SY ,090, * SZ ,895, * TA ,255, * TB ,175, * TC ,770, * TD ,220, * TE ,570, * TF ,865, * TG ,275, * TH ,690, * TJ1 * Yield to first optional call date of June 1, ** CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright 2016 CUSIP Global Services. All rights reserved. CUSIP data herein is provided by S&P Capital IQ, a division of McGraw-Hill Financial, Inc. The CUSIP data herein is provided solely for the convenience of reference only. None of the County or the Underwriters is responsible for selection or use of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Bonds.

4 IN CONNECTION WITH THIS OFFERING, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, FTN FINANCIAL CAPITAL MARKETS, MORGAN STANLEY & CO. LLC, AND RAYMOND JAMES & ASSOCIATES, INC. (COLLECTIVELY, THE UNDERWRITERS ) MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE 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. No dealer, broker, salesman or other person has been authorized to give any information or to make any representation other than those contained in this Official Statement in connection with the offering described herein, and, if given or made, such other information or representation must not be relied upon as having been authorized. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the Bonds offered hereby, nor shall there be any offer or solicitation of such offer or sale of the Bonds in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. Neither the delivery of this Official Statement nor the sale of any of the Bonds implies that the information herein is correct as of any date subsequent to the date thereof. The electronic distribution of this Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Bonds described herein to the residents of any particular state and is not specifically directed to the residents of any particular state. The Bonds will not be offered or sold in any state unless and until they are either registered pursuant to the laws of such state, or qualified pursuant to an appropriate exemption from registration in such state. NEITHER THE BONDS NOR THE RESOLUTION (AS SUCH TERMS ARE DEFINED HEREIN) HAVE BEEN REGISTERED OR QUALIFIED WITH THE SECURITIES AND EXCHANGE COMMISSION BY REASON OF THE PROVISIONS OF SECTION 3(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 304(a)(4) OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED. THE REGISTRATION OR QUALIFICATION OF THE BONDS OR THE RESOLUTION IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAW OF THE STATES IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED, IF ANY, AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES, SHALL NOT BE REGARDED AS A RECOMMENDATION THEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. All quotations from and summaries and explanations of laws and documents herein do not purport to be complete, and reference is made to such laws and documents for full and complete statements of their provisions. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or opinions and not as representations of fact. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE OF THE BONDS SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COUNTY SINCE THE DATE HEREOF. The information set forth herein has been obtained from sources which are believed to be reliable and is in a form deemed final by the County for the purpose of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (except for certain information permitted to be omitted under Rule 15c2-12(b)(1)). The information contained herein is subject to change after the date of this Official Statement, and this Official Statement speaks only as of its date. References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, Rule 15c2-12 (as defined herein). The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy of completeness of such information. Questions regarding information in this Official Statement should be directed to Randolph B. Vineyard, Director of Accounts & Budgets, Blount County, 341 Court Street, Courthouse, Maryville, Tennessee (865/ ) or PFM Financial Advisors LLC, Financial Advisor to the County, 530 Oak Court Drive, Suite 160, Memphis, Tennessee, (901/ ). Although the County does not contract to do so and does not represent that it will do so, it may maintain, from time to time, a mailing list of parties wishing to receive annual and other information regarding the County. Parties wishing to receive such information should contact the Office of the Mayor, Blount County, 341 Court Street, Courthouse, Maryville, Tennessee (865/ ) for procedures to obtain such information.

5 TABLE OF CONTENTS Part I COUNTY OFFICIALS... 1 INTRODUCTION... 2 THE BONDS... 2 DESCRIPTION... 2 PURPOSES OF THE ISSUE... 3 BOOK-ENTRY SYSTEM... 3 AUTHORITY FOR ISSUANCE OF THE BONDS... 3 SECURITY AND REMEDIES... 3 OPTIONAL REDEMPTION... 4 NOTICE OF REDEMPTION... 4 SELECTION OF BONDS TO BE REDEEMED... 5 CONTINUING DISCLOSURE... 5 PLAN OF REFUNDING... 6 ESTIMATED SOURCES AND USES OF FUNDS... 8 LONG TERM DEBT SERVICE REQUIREMENTS... 9 STATEMENT OF BONDED DEBT STATEMENT OF INDEBTEDNESS AND DEBT RATIOS HOSPITAL BONDED DEBT SERVICE REQUIREMENTS FUTURE FINANCING PLANS OPINION OF COUNSEL LITIGATION TAX MATTERS TENNESSEE STATE TAX EXEMPTION FEDERALLY TAXABLE SERIES 2016A BONDS FEDERALLY TAX-EXEMPT SERIES 2016B BONDS 15 RATINGS FINANCIAL ADVISOR UNDERWRITING AUDITED FINANCIAL STATEMENTS MISCELLANEOUS CERTIFICATE AS TO OFFICIAL STATEMENT Economic and Demographic Information... Part II Basic Financial Statements... Appendix A Form of Bond Counsel Opinion...Appendix B Book-Entry System...Appendix C Form of Continuing Disclosure Certificate... Appendix D

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7 COUNTY OFFICIALS COUNTY MAYOR The Honorable Ed Mitchell BOARD OF COUNTY COMMISSIONERS District 1: Archie Archer... Shawn Carter District 2: Mike Akard... Mike Lewis District 3: Steve Samples... Mike Caylor District 4: Gary Farmer... Jerome Moon... Karen Miller District 5: Dave Bennett... Richard Carver District 6: Thomas Cole... Dodd Crowe District 7: Tom Stinnett... Tona Monroe District 8: Brad Bowers... Grady Caskey District 9: Ron French... Andy Allen District 10: Jamie Daly... Kenneth Melton DIRECTOR OF ACCOUNTS & BUDGETS Randolph B. Vineyard COUNTY CLERK COUNTY TRUSTEE COUNTY ATTORNEY Gaye Hasty Scott Graves Craig Garrett, Esq. BOND COUNSEL Bass, Berry & Sims, PLC Knoxville, Tennessee FINANCIAL ADVISOR Public Financial Management, Inc. Memphis, Tennessee REGISTRATION AGENT U.S. Bank National Association Nashville, Tennessee I-1

8 INTRODUCTION This Official Statement, including the cover page and Appendices hereto, of Blount County, Tennessee (the County ), is provided for the purpose of setting forth certain information concerning the sale by the County of its $8,920,000 Taxable General Obligation Refunding Bonds, Series 2016A and $117,010,000 General Obligation Refunding Bonds, Series 2016B. All financial and other information presented herein and in the Appendices has been provided by the County from its records, except for information expressly attributed to other sources. The presentation of information is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the County. No representation is made that past experience, as might be shown by such financial and other information, will necessarily continue or be repeated in the future. THE BONDS DESCRIPTION The $8,920,000 Taxable General Obligation Refunding Bonds, Series 2016A (the Series 2016A Bonds ) and the $117,010,000 General Obligation Refunding Bonds, Series 2016B (the Series 2016B Bonds and, collectively with the Series 2016A Bonds, the Bonds ) are dated the date of issuance and delivery and will bear interest from that date to their respective maturities in the amounts and at the rates set forth on the cover. The Bonds are issuable only as fully registered Bonds in the denomination of $5,000 or any integral multiple thereof. Interest on the Bonds is payable on June 1 and December 1 of each year, commencing June 1, 2017, based on a 360-day year of twelve 30-day months. U.S. Bank National Association (the Registration Agent ) will make all interest payments with respect to the Bonds on each interest payment date directly to the registered owners 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 owners at their addresses shown on said 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 County in respect of such Bonds to the extent of the payments so made. 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. In the event the Bonds are no longer registered in the name of The Depository Trust Company ( DTC ) or its successor or assigns, if requested by the owner of at least $1,000,000 in aggregate principal amount of the Bonds, payment of interest on such Bonds shall be paid by wire transfer to a bank within the continental United States or deposited to a designated account if such account is maintained with the Registration Agent and written notice of any such election and designated account is given to the Registration Agent prior to the record date. Any interest on any Bond which is payable but is not punctually paid or duly provided for on any interest payment date (hereinafter Defaulted Interest ) shall forthwith cease to be payable to the registered owner on the relevant Regular Record Date; and, in lieu thereof, such Defaulted Interest shall be paid by the County to the persons in whose names the Bonds are registered at the close of business on a date (the Special Record Date ) for the payment of such Defaulted Interest, which shall be fixed in the following manner: The County shall notify the Registration Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment, and at the same time the County shall deposit with the Registration Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Registration Agent for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest. Thereupon, not less than ten (10) days after the receipt by the Registration Agent of the notice of the proposed payment, the Registration Agent shall fix a Special Record Date for the payment of such Defaulted Interest which date shall not be more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment to the registered owners. The Registration Agent shall promptly notify the County of such Special Record Date and, in the name and at the expense of the County, not less than ten (10) days prior to such Special Record Date, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefore to be mailed, first class postage prepaid, to each registered owner at the address thereof as it appears in the Bond registration records maintained by the Registration Agent as of the date of such notice. Nothing contained in the Resolution (as hereinafter defined) or in the Bonds shall impair any statutory or other rights in law or in equity of any registered owner arising as a result of the failure of the County to punctually pay or duly provide for the payment of principal of and interest on the Bonds when due. I-2

9 PURPOSES OF THE ISSUE The Bonds are being issued to (i) refund (A) on a current basis, the $2,115,000 outstanding principal amount of the County s General Obligation Refunding Bonds, Series 2004A maturing March 1, 2017 through March 1, 2019 (the Refunded 2004A Bonds ), (B) on a current basis, the $1,645,000 outstanding principal amount of the County s General Obligation Refunding Bonds, Series 2004B maturing April 1, 2017 through April 1, 2019 (the Refunded 2004B Bonds ), (C) on a current basis, the $4,695,000 outstanding principal amount of the County s General Obligation Refunding Bonds, Series 2005 maturing April 1, 2017 through April 1, 2019 (the Refunded 2005 Bonds ), (D) on an advance basis, the $27,270,000 outstanding principal amount of the County s General Obligation Refunding Bonds, Series 2011 maturing June 1, 2022 through June 1, 2030 (the Refunded 2011 Bonds ) and (E) on a current basis, the $79,435,000 outstanding principal amount of the County s General Obligation Refunding Bonds, Series 2013B maturing June 1, 2037 (the Refunded 2013B Bonds and, together with the Refunded 2004A Bonds, Refunded 2004B Bonds, Refunded 2005 Bonds, and Refunded 2011 Bonds, the Refunded Bonds ), (ii) prepay (A) the $900,000 outstanding principal amount of the Loan Agreement (Taxable Series B-10-A) dated June 29, 2006, by and among the County, The Public Building Authority of Blount County, Tennessee (the Authority ), the City of Alcoa, Tennessee ( Alcoa ), and the City of Maryville, Tennessee ( Maryville ) (the Series B-10-A Loan ) due June 1, 2017 and June 1, 2021, (B) $18,755,000 of the outstanding principal amount of the Loan Agreement (Series B-16-A) dated May 15, 2008, between the County and the Authority (the Series B-16-A Loan ) due June 1, 2024 through June 1, 2027, and June 1, 2037, and (C) $2,070,000 of the outstanding principal amount of the Loan Agreement (Series B-17-A) dated June 1, 2008, by and among the County, the Authority, Alcoa and Maryville (the Series B-17-A Loan and, together with the Series B-10-A Loan and B-16-A Loan, the Prior Loans ) due June 1, 2023 and June 1, 2030, (iii) finance the cost of the termination of interest rate swap agreements previously entered into by the County to provide interest rate hedges with respect to the 2013B Bonds (the Swap Agreements ), and (iv) pay costs of issuance and sale of the Bonds. See PLAN OF REFUNDING herein. BOOK-ENTRY SYSTEM Upon initial issuance, the Bonds will be available only in book-entry form. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Bond certificate will be issued in the aggregate principal amount of each maturity of the Bonds and will be deposited with DTC. Beneficial owners of the Bonds will not receive physical delivery of bond certificates except under limited circumstances. A description of DTC and its operations are contained in Appendix C. AUTHORITY FOR ISSUANCE OF THE BONDS The Bonds are being issued by the County pursuant to the provisions of Title 9, Chapter 21, Tennessee Code Annotated, as amended, other applicable provisions of law, and pursuant to a resolution adopted by the Board of County Commissioners on September 19, 2016 (the Resolution ). SECURITY AND REMEDIES The Bonds, including the principal thereof, the premium, if any, and interest thereon, will be direct general obligations of the County, and the County has pledged its full faith, credit and unlimited taxing power to the punctual payment of the principal of and interest on the Bonds. An ad valorem tax sufficient to pay when due such principal and interest shall be levied annually and assessed, collected and paid, in like manner with the other taxes of the County and shall be in addition to all the other taxes authorized or limited by law. It shall be the duty of the Board of County Commissioners to include in the annual levy a tax sufficient to pay the interest on and principal of the Bonds as the same become due. Pursuant to Tennessee law, any holder of the Bonds may by mandamus or other suit, action or proceeding, enforce such holder s rights against the County, the Board of County Commissioners or any officer, agent or employee of the County. I-3

10 OPTIONAL REDEMPTION Series 2016A Bonds The Series 2016A Bonds will be subject to redemption prior to their respective maturities, at the option of the County, in whole or in part, in any authorized denomination on any date at a redemption price equal to the Make-Whole Redemption Price. The Make-Whole Redemption Price of any Series 2016A Bonds to be redeemed is an amount equal to the greater of (i) 100% of the principal amount of such Series 2016A Bonds; or (ii) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of such Series 2016A Bonds, not including any portion of those payments of interest accrued and unpaid as of the date on which such Series 2016A Bonds are to be redeemed, discounted to the date on which such Series 2016A Bonds are to be redeemed on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate (as defined below) plus 15 basis points, plus, in each case, accrued and unpaid interest on such Series 2016A Bonds on such redemption date. The Treasury Rate is, as of any redemption date of any Series 2016A Bonds, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (excluding inflation indexed securities) or, if such Statistical Release is no longer published, any publicly available source of similar market data, most nearly equal to the period from such redemption date to the maturity date of such Series 2016A Bonds; provided, however, that if the period from such redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. The Make-Whole Redemption Price will be determined by an independent accounting firm, investment banking firm or financial advisor retained by the County to calculate such redemption price (the Calculation Agent ). The determination by the Calculation Agent of the redemption price will be conclusive and binding on the County and the holders of the Series 2016A Bonds. The County will not exercise its option to call the Series 2016A Bonds for optional redemption if the Make-Whole Redemption Price exceeds 102% of the principal amount the Series 2016A Bonds being redeemed plus accrued and unpaid interest on such Series 2016A Bonds on the redemption date. Series 2016B Bonds The Series 2016B Bonds maturing on or before June 1, 2026 shall not be subject to optional redemption prior to maturity. The Series 2016B Bonds maturing on or after June 1, 2027 shall be subject to redemption at the option of the County, in whole or in part at any time (in multiples of $5,000) in any order of maturity as determined by the County, on or after June 1, 2026, at the price of par, plus accrued interest to the redemption date. NOTICE OF REDEMPTION Notice of call for redemption of the Bonds, or portions thereof to be redeemed, is to be given by the Registration Agent in accordance with the Resolution by mailing a copy of the redemption notice not more than 60 calendar days and not less than 20 calendar days prior to the date fixed for redemption to the registered owner (Cede & Co., so long as it is the registered owner in the book-entry-only system) of the Bonds. The notice may state that it is conditioned upon the deposit of moneys in an amount equal to the amount necessary to effect the redemption with the Registration Agent no later than the redemption date ( Conditional Redemption ). Each beneficial owner may desire to make arrangements with its related DTC participant or indirect participant to have all notices of redemption or other communications to DTC, which may affect such persons, to be forwarded in writing by such DTC participant or indirect participant to the beneficial owner. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the beneficial owner of the Bonds or such other intended recipient receives such notice. In the case of a Conditional Redemption, the failure of the County to make funds available in part or in whole on or before the redemption date shall not constitute an event of default, I-4

11 and the Registration Agent shall give immediate notice to DTC that the redemption did not occur and that the Bonds called for redemption and not so paid remain outstanding. SELECTION OF BONDS TO BE REDEEMED If less than all the Bonds shall be called for redemption, the maturities to be redeemed shall be designated by the Board of County Commissioners. If less than all of the Bonds within a single 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 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. CONTINUING DISCLOSURE The County will, at the time the Bonds are delivered, execute a Continuing Disclosure Certificate under which it will covenant for the benefit of the holders and beneficial owners of the Bonds to provide certain financial information and operating data relating to the County, notice of the occurrence of certain enumerated events and notice of failure of the County to provide any required financial information. The information, data and notices described above will be filed or caused to be filed by the County with the Municipal Securities Rulemaking Board ( MSRB ) at and with any state information depository which may hereafter be established in Tennessee. The specific nature of the information contained in the Annual Report and notices can be found in the form of Continuing Disclosure Certificate attached hereto as Appendix D. These covenants have been made in order to assist the Underwriters in complying with Securities and Exchange Commission Rule 15c2-12(b) (the Rule ), as it may be amended from time to time. The County has previously undertaken to provide continuing disclosure pursuant to the Rule. During the previous five years, the County has not failed to comply, in all material respects, with its previous undertakings relating to continuing disclosure of information pursuant to the Rule, except as described in the following paragraphs. For the fiscal years ended June 30, 2011, 2012, 2013 and 2015, while the County timely filed its audited financial statements with respect to certain issues, such audited financial statements were filed late with respect to certain CUSIP numbers and were not properly linked to all CUSIP numbers on EMMA, and the County did not file a notice of failure to timely file such audited financial statements. For the fiscal year ended June 30, 2014, while the County timely filed its audited financial statements under certain CUSIP numbers, such audited financial statements were not properly linked to all CUSIP numbers on EMMA. The County has since linked its audited financial statements for each of the past five fiscal years to all relevant CUSIP numbers on EMMA and filed notice of failure to file as required by the Rule. The County does not believe that the failure to file its audited financial statements under every possible CUSIP number was material as such information was readily accessible and available. For the fiscal years ended June 30, 2011 and 2012, while the County timely filed the operating data required to be filed under its continuing disclosure undertakings with respect to certain issues, such operating data was filed late under certain CUSIP numbers and was not properly linked to all CUSIP numbers on EMMA, and the County did not file notice of failure to timely file such required operating data. For the fiscal year ended June 30, 2013, the County did not timely file the operating data required to be filed under its continuing disclosure undertakings and did not file a notice of failure to timely file such required operating data. For the fiscal year ended June 30, 2014, while the County timely filed the operating data required to be filed under its continuing disclosure undertakings with respect to certain issues, such operating data was not properly linked to all CUSIP numbers on EMMA. For the fiscal year ended June 30, 2015, the County did not timely file the operating data required to be filed under its continuing disclosure undertakings, and did not file a notice of failure to timely file such required operating data. Additionally, with respect to the County s General Obligation Refunding Bonds, Series 2004A, the County did not file certain required operating data relating to overlapping debt in each of the past five fiscal years and did not file a notice of failure to timely file such required operating data. The County has filed since filed all required I-5

12 operating data and notice of failure to file as required by the Rule and has linked all such required operating data to all relevant CUSIP numbers on EMMA, as applicable. The County does not believe that the failure to file required operating data under every possible CUSIP number was material as such information was readily accessible and available. Additionally, the County did not file separate material event notices as to certain changes in the ratings of bonds issued by the County or as to which the County was an obligated person. These rating changes were not initiated at the request of the County, and the County was not informed of certain rating changes. These rating changes generally occurred due to the recalibration by certain rating agencies of certain long-term municipal ratings to make municipal ratings more comparable to the ratings of corporate obligations, changes in rating criteria by a rating agency that were not unique to the County, or changes in ratings of insurers that had insured bonds issued by the County or as to which the County was an obligated person. These rating changes were widely reported in the national news and did not reflect a change in the assessment of the County s creditworthiness by any rating agency that was unique to the County. Any changes in ratings have been subsequently provided by the County to the financial markets when the County issued bonds subsequent to such changes in the offering documents relating to those bonds or have been filed with the MSRB. The County does not believe that the failure to make filings as to such changes was material. The County has retained Digital Assurance Certification, L.L.C. ("DAC") as its dissemination agent. The County is working with DAC to implement procedures to ensure compliance with the Rule and fully anticipates satisfying all future disclosure obligations required pursuant to the Rule. PLAN OF REFUNDING The Series 2016A Bonds are being issued to (i) finance a portion of the cost of the termination of the Swap Agreements, (ii) prepay a portion of the Prior Loans, and (iii) pay costs of issuance and sale of the Series 2016A Bonds. The Series 2016B Bonds are being issued to (i) refund the Refunded Bonds, (ii) prepay a portion of the Prior Loans, and (iii) pay costs of issuance and sale of the Series 2016B Bonds. A portion of the proceeds of the Bonds used to refund the Refunded Bonds and prepay the Prior Loans will be deposited into an escrow fund (the Escrow Fund ), to be established pursuant to a Refunding Escrow Agreement dated as of the date of the Bonds (the Escrow Agreement ), between the County and U.S. Bank National Association, as escrow agent (the Escrow Agent ). There will be two accounts within the Escrow Fund, a Series 2016A Account and a Series 2016B Account. A portion of the amounts deposited in the accounts within the Escrow Fund will be invested in defeasance obligations (the Escrow Securities ), the maturing principal and interest of which will provide funds, together with other amounts on deposit in the Escrow Fund, to pay when and as due, respectively, (1) interest on the Refunded 2004A Bonds, Refunded 2004B Bonds and Refunded 2005 Bonds until January 3, 2017, (2) the redemption price of 100% of the Refunded 2004A Bonds, Refunded 2004B Bonds and Refunded 2005 Bonds on January 3, 2017, (3) interest on the Refunded 2011 Bonds until June 1, 2021 (the earliest date of redemption of the 2011 Bonds), (4) the redemption price of 100% of the Refunded 2011 Bonds on June 1, 2021, (5) interest on the Series B-10-A Loan until January 3, 2017, (6) the prepayment price of 100% of the Series B-10-A Loan on January 3, 2017, (7) interest on the Series B-16-A Loan and Series B-17-A Loan until June 1, 2018 (the earliest date of prepayment of the Series B-16-A Loan and Series B-17-A Loan), and (8) the prepayment price of 100% of the Series B-16-A Loan and Series B-17-A Loan on June 1, The Escrow Agent will be given irrevocable instructions to (i) redeem the Refunded 2004A Bonds, Refunded 2004B Bonds and Refunded 2005 Bonds, and prepay the Series B-10-A Loan on January 3, 2017, (ii) prepay the Series B-16-A Loan and Series B-17-A Loan on June 1, 2018, and (iii) redeem the Refunded 2011 Bonds on June 1, THE BENEFICIAL OWNERS OF THE BONDS WILL HAVE NO RIGHTS, SECURITY OR INTEREST IN AND TO THE ESCROW FUND WHATSOEVER. Robert Thomas CPA, LLC (the Verification Agent ) will verify, from the information provided to it by Merrill Lynch, Pierce, Fenner & Smith Incorporated, the mathematical accuracy, as of the date of issuance of the Bonds, of (i) the mathematical computations contained in the schedules provided by the Underwriters to determine that the forecasted receipts of principal of and interest on the Escrow Securities deposited in the Escrow Fund, together with other funds available therefor listed in such schedules to be held by the Escrow Agent, will be sufficient to pay interest payments on the Refunded Bonds and Prior Loans when due, the redemption price of the Refunded Bonds on their respective redemption dates, and the prepayment price of the Prior Loans on their respective prepayment dates, and (ii) the mathematical computations supporting the conclusion that the Series 2016B Bonds are not arbitrage bonds under Section 148 of the Code. The Verification Agent I-6

13 will express no opinion on the exemption from taxation of the interest on the Series 2016B Bonds. Bond Counsel will rely on such verification in rendering its opinion as to the exclusion of interest on the Series 2016B Bonds from gross income of the owners thereof for purposes of federal income taxation. The tables below set forth certain details with respect to the Refunded Bonds and the Prior Loans. Refunded 2004A Bonds Date of Maturity Par Amount Interest Rate Redemption Date Call Price 3/1/2017 $ 675, % 1/3/ % 3/1/ , % 1/3/ /1/ , % 1/3/ Refunded 2004B Bonds Date of Maturity Par Amount Interest Rate Redemption Date Call Price 4/1/2017 $ 530, % 1/3/ % 4/1/ , % 1/3/ /1/ , % 1/3/ Refunded 2005 Bonds Date of Maturity Par Amount Interest Rate Redemption Date Call Price 4/1/2017 $ 1,500, % 1/3/ % 4/1/2018 1,570, % 1/3/ /1/2019 1,625, % 1/3/ Refunded 2011 Bonds Date of Maturity Par Amount Interest Rate Redemption Date Call Price 6/1/2022 $ 7,075, % 6/1/ % 6/1/2023 7,425, % 6/1/ /1/ , % 6/1/ /1/ , % 6/1/ /1/ , % 6/1/ /1/ , % 6/1/ /1/2028 1,535, % 6/1/ /1/2029 7,595, % 6/1/ /1/2030 3,180, % 6/1/ Refunded 2013B Bonds Date of Maturity Par Amount Interest Rate Redemption Date Call Price 6/1/2037 $ 79,435,000 Variable 12/1/ % Taxable Series B-10-A Loan Date of Maturity Par Amount Interest Rate Prepayment Date Call Price 6/1/2017 $ 160, % 1/3/ % 6/1/ , % 1/3/ Series B-16-A Loan Date of Maturity Par Amount Interest Rate Prepayment Date Call Price 6/1/2024 $ 3,290, % 6/1/ % 6/1/2025 3,600, % 6/1/ /1/2026 3,920, % 6/1/ /1/2027 4,745, % 6/1/ /1/2037 3,200, % 6/1/ I-7

14 Series B-17-A Loan Date of Maturity Par Amount Interest Rate Prepayment Date Call Price 6/1/2023 $ 720, % 6/1/ % 6/1/2030 1,350, % 6/1/ ESTIMATED SOURCES AND USES OF FUNDS Series 2016A Series 2016B Total Sources Par Amount $8,920,000 $117,010,000 $125,930,000 Plus Original Issue Premium - 24,898,990 24,898,990 Equity Contribution 5,000,000-5,000,000 Total Sources $13,920,000 $141,908,990 $155,828,990 Uses Deposit to Escrow Fund $904,910 $141,326,077 $142,230,988 Swap Termination Payments 12,914,000-12,914,000 Costs of Issuance (1) 101, , ,002 Total Uses $13,920,000 $141,908,990 $155,828,990 Note: Totals may not foot due to rounding. (1) Includes underwriting discount, financial advisory and legal fees and expenses, and miscellaneous costs of issuance. I-8

15 LONG TERM DEBT SERVICE REQUIREMENTS As of December 1, 2016 (Unaudited) FY Ended Existing General Obligation Debt (1) & (2) Less: Refunded Debt Service (2) Plus: Series 2016A Bonds and Series 2016B Bonds Total (4) 6/30 Principal Interest TOTAL Principal Interest TOTAL Principal Interest TOTAL Principal Interest (3) TOTAL (4) % Principal ,160,000 7,127,542 14,287,542 2,985,000 2,795,551 5,780,551 3,025,000 2,968,781 5,993,781 7,200,000 7,300,772 14,500, ,315,000 6,877,450 14,192,450 3,135,000 5,692,534 8,827,534 3,170,000 5,880,873 9,050,873 7,350,000 7,065,790 14,415, ,790,000 6,636,343 14,426,343 3,240,000 5,583,870 8,823,870 3,410,000 5,741,773 9,151,773 7,960,000 6,794,246 14,754, ,085,000 6,373,067 14,458, ,000 5,448,883 5,773, ,000 5,589,473 6,209,473 8,380,000 6,513,657 14,893, ,385,000 6,075,549 14,460, ,000 5,431,365 5,776, ,000 5,575,997 6,210,997 8,675,000 6,220,181 14,895, % ,810,000 5,699,777 14,509,777 7,225,000 5,412,803 12,637,803 7,335,000 5,560,924 12,895,924 8,920,000 5,847,898 14,767, ,200,000 5,307,952 14,507,952 7,585,000 5,052,678 12,637,678 7,690,000 5,203,909 12,893,909 9,305,000 5,459,183 14,764, ,215,000 4,897,602 15,112,602 8,565,000 4,674,628 13,239,628 7,480,000 4,828,827 12,308,827 9,130,000 5,051,801 14,181, ,605,000 4,492,141 15,097,141 8,890,000 4,318,865 13,208,865 7,815,000 4,463,762 12,278,762 9,530,000 4,637,038 14,167, ,035,000 4,047,368 15,082,368 9,250,000 3,926,390 13,176,390 8,145,000 4,081,568 12,226,568 9,930,000 4,202,546 14,132, % ,365,000 3,599,633 14,964,633 9,525,000 3,515,903 13,040,903 8,465,000 3,682,786 12,147,786 10,305,000 3,766,516 14,071, ,330,000 3,153,114 16,483,114 11,435,000 3,109,913 14,544,913 10,280,000 3,267,748 13,547,748 12,175,000 3,310,950 15,485, ,505,000 2,661,582 16,166,582 11,555,000 2,644,256 14,199,256 10,650,000 2,761,602 13,411,602 12,600,000 2,778,928 15,378, ,335,000 2,123,577 8,458,577 4,325,000 2,152,525 6,477,525 3,580,000 2,236,765 5,816,765 5,590,000 2,207,817 7,797, ,070,000 1,876,252 3,946,252-1,962,500 1,962, ,000 2,065,420 2,485,420 2,490,000 1,979,171 4,469, % ,100,000 1,814,152 8,914,152 7,100,000 1,962,500 9,062,500 6,200,000 2,051,938 8,251,938 6,200,000 1,903,589 8,103, ,550,000 1,547,920 9,097,920 7,550,000 1,674,750 9,224,750 6,665,000 1,749,033 8,414,033 6,665,000 1,622,203 8,287, ,900,000 1,265,156 9,165,156 7,900,000 1,369,000 9,269,000 7,030,000 1,422,903 8,452,903 7,030,000 1,319,059 8,349, ,250, ,533 9,219,533 8,250,000 1,049,250 9,299,250 7,345,000 1,144,233 8,489,233 7,345,000 1,064,516 8,409, ,650, ,051 9,311,051 8,650, ,500 9,365,500 7,770, ,183 8,554,183 7,770, ,734 8,499, % ,050, ,874 9,387,874 9,050, ,750 9,415,750 8,200, ,860 8,602,860 8,200, ,984 8,574, % $ 183,705,000 $ 77,544,636 $ 261,249,636 $ 136,885,000 $ 68,859,411 $ 205,744,411 $ 125,930,000 $ 71,465,352 $ 197,395,352 $ 172,750,000 $ 80,150,577 $ 252,900,577 (1) As of 6/30/2016. The above figures do not include short-term notes outstanding, if any, or hospital revenue supported general obligation debt. For more information, see the notes to the Financial Statements in the GENERAL PURPOSE FINANCIAL STATEMENTS included herein. (2) Series 2013B (included in the Existing and Refunded General Obligation Debt) is variable rate. The assumed rate herein through FY 2017 is 3.674% and 4.000% thereafter. (3) The County budgets to account for interest rate and/or basis risk. (4) Totals may not foot due to rounding. [Remainder of page left intentionally blank] I-9

16 STATEMENT OF BONDED DEBT As of December 1, 2016 (Unaudited) AMOUNT ISSUED PURPOSE DUE DATE INTEREST RATE(S) AMOUNT OUTSTANDING $2,000,000 Loan Agreement, Series B-10-A 2 June 2021 Fixed $0 33,550,000 Loan Agreement, Series B-16-A 2 June 2037 Fixed 1,100,000 3,000,000 Loan Agreement, Series B-17-A 2 June 2030 Fixed 245,000 4,380,000 Loan Agreement, Series B-18-A June 2030 Fixed 2,400, ,865 School Agreement November 2020 N/A 63,327 3,007,000 Lease Agreement September 2020 Fixed 1,484,872 2,738,602 School Agreement November 2019 Fixed 1,160,608 7,405,000 General Obligation Refunding Bonds, Series 2004A 2 March 2019 Fixed 0 5,060,000 General Obligation Refunding Bonds, Series 2004B 2 April 2019 Fixed 0 14,860,000 General Obligation Refunding Bonds, Series April 2019 Fixed 0 46,390,000 General Obligation Refunding Bonds, Series June 2030 Fixed 17,455,000 79,800,000 General Obligation Refunding Bonds, Series 2013B 2 June 2037 Variable 0 14,855,000 Qualified School Construction Bonds, Series 2010 September 2027 Fixed 10,072,846 7,120,000 General Obligation Refunding Bonds, Series 2015A June 2021 Fixed 5,985,000 19,785,000 General Obligation Refunding Bonds, Series 2015B June 2031 Fixed 19,635,000 8,920,000 General Obligation Refunding Bonds, Series 2016A June 2037 Fixed 8,920, ,010,000 General Obligation Refunding Bonds, Series 2016B June 2037 Fixed 117,010,000 $370,608,467 TOTAL EXISTING DEBT $185,531,653 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 STATEMETNS included herein. (2) Bonds and Loans Being Refunded. (3) The County budgets to account for interest rate and/or basis risk. (4) Revenue only debt. *Does not include hospital revenue supported general obligation debt. [Remainder of page left intentionally blank] I-10

17 STATEMENT OF INDEBTEDNESS AND DEBT RATIOS For Fiscal Years ended June 30 INDEBTEDNESS TAX SUPPORTED General Obligation Bonds & Notes $220,571,256 $214,690,055 $208,599,822 $202,206,166 $205,637,187 TOTAL TAX SUPPORTED $220,571,256 $214,690,055 $208,599,822 $202,206,166 $205,637,187 REVENUE SUPPORTED Hospital Revenue Bonds $104,365,000 $100,590,000 $96,625,000 $90,213,400 $79,025,000 TOTAL REVENUE SUPPORTED $104,365,000 $100,590,000 $96,625,000 $90,213,400 $79,025,000 TOTAL DEBT $324,936,256 $315,280,055 $305,224,822 $292,419,566 $284,662,187 Less: Revenue Supported Debt ($104,365,000) ($100,590,000) ($96,625,000) ($90,213,400) ($79,025,000) Less: Debt Service Fund $12,254,678 $11,414,045 $9,829,822 $9,958,709 $17,832,512 NET DIRECT DEBT $232,825,934 $226,104,100 $218,429,644 $212,164,875 $223,469,699 PROPERTY TAX BASE Estimated Actual Value $11,317,275,603 $11,289,572,717 $11,387,873,077 $11,658,722,377 $11,984,589,247 Appraised Value 11,252,124,053 11,345,868,487 11,466,454,150 11,761,862,009 11,698,925,451 Assessed Value 3,152,224,840 3,138,416,105 3,166,426,156 3,266,737,465 3,429,882,235 DEBT RATIOS For Fiscal Years Ended June TOTAL DEBT to Estimated Actual Value 2.87% 2.79% 2.68% 2.51% 2.38% TOTAL DEBT to Appraised Value 2.89% 2.78% 2.66% 2.49% 2.43% TOTAL DEBT to Assessed Value 10.31% 10.05% 9.64% 8.95% 8.30% NET DIRECT DEBT to Estimated Actual Value 2.06% 2.00% 1.92% 1.82% 1.86% NET DIRECT DEBT to Appraised Value 2.07% 1.99% 1.90% 1.80% 1.91% NET DIRECT DEBT to Assessed Value 7.39% 7.20% 6.90% 6.49% 6.52% PER CAPITA RATIOS POPULATION (1) 123, , , , ,253 PER CAPITA PERSONAL INCOME (2) $33,309 $34,944 $35,310 $35,310 $35,310 Estimated Actual Value to POPULATION 91,541 91,014 91,031 91,618 94,179 Assessed Value to POPULATION 25,497 25,301 25,311 25,671 26,953 Total Debt to POPULATION 2,628 2,542 2,440 2,298 2,237 Net Direct Debt to POPULATION 1,883 1,823 1,746 1,667 1,756 Total Debt Per Capita as a percent 7.89% 7.27% 6.91% 6.51% 6.34% of PER CAPITA PERSONAL INCOME Net Direct Debt Per Capita as a percent 5.65% 5.22% 4.94% 4.72% 4.97% of PER CAPITA PERSONAL INCOME (1) Per Capita computations are based upon POPULATION data according to the Census Bureau Estimates (2) PER CAPITA PERSONAL INCOME is based upon data from the Bureau of Economic Analysis I-11