$6,500,000* dade county, georgia general obligation sales...
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PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 7, 2008 NEW ISSUE RATING: Moody’s “A3”
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BOOK ENTRY ONLY Standard & Poor’s “AA-” BANK QUALIFIED See “MISCELLANEOUS, -Ratings” herein. In the opinion of Bond Counsel, under existing law, and assuming compliance with the tax covenant described herein, interest on the Bonds is exempt from present State of Georgia income taxation and is excluded from gross income for federal income tax purposes. See, however, “LEGAL MATTERS, -Tax Exemption” herein for a brief description of certain other possible federal tax consequences to certain recipients of interest on the Bonds.
$6,500,000* DADE COUNTY, GEORGIA
General Obligation Sales Tax Bonds, Series 2008 Dated: [Date of Issuance] Principal Due: November 1, in the years shown below The DADE COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008 (the “Bonds”) will be issued in registered form in the name of Cede and Co., as the nominee for The Depository Trust Company (“DTC”), New York, New York. Individual purchases of the Bonds must be made in book-entry form only in authorized denominations of $5,000 or any integral multiple thereof. Individual purchasers (“Beneficial Owners”) of the Bonds will not receive physical delivery of the Bonds. Transfers of the Bonds will be effected through a book-entry system as described herein. Interest on the Bonds will be payable on May 1 and November 1 of each year (each an “Interest Payment Date”), beginning May 1, 2009. So long as DTC or its nominee is the registered owner of the Bonds, disbursements of payments of principal of and interest on the Bonds to DTC is the responsibility of Regions Bank, Atlanta, Georgia, as Paying Agent; disbursements of such payments to DTC Participants is the responsibility of DTC; and disbursements of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants as more fully described herein. See “THE BONDS, -Book Entry Only System of Delivery of the Bonds” herein. The Bonds are not subject to redemption prior to maturity. The Bonds are being issued to provide funds to finance the costs of acquiring, constructing, and equipping certain capital outlay projects of Dade County (the “County”), the Dade County Industrial Development Authority and the City of Trenton, a municipality located within the County, and the costs of issuance of the Bonds. See “THE BONDS, -Estimated Sources and Uses of Funds; and -The Projects” herein. MATURITY SCHEDULE
Maturity Principal Amount Interest Rate Price or Yield CUSIP
2010
$1,005,000
2011 1,030,000 2012 1,060,000 2013 1,100,000 2014 1,135,000 2015 1,170,000
The Bonds are general obligations of the County. Principal of and interest on the Bonds are payable first from receipts of a special county one percent (1%) sales and use tax (the “Special Sales Tax”) which will be collected in the County beginning July 1, 2009. The County reasonably expects that such receipts will be sufficient to pay all debt service on the Bonds. Nevertheless, if such receipts are insufficient, debt service on the Bonds shall be paid, to the extent necessary, from the general fund of the County or from an ad valorem tax to be levied, without limitation as to rate or amount, upon all property in the County subject to taxation for bond purposes. Prior to the issuance of the Bonds, the governing body of the County will provide for the assessment and collection of an ad valorem tax on all property in the County subject to taxation for general obligation bond purposes, which, together with such Special Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as they become due and payable. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE BONDS OR THE SECURITY THEREFOR. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Bonds are offered when, as and if issued by the County and accepted by the Underwriter, subject to the approval of legality of the Bonds by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. Certain legal matters relating to the Bonds will be passed on for the County by its counsel, Robin Rogers, Esq., Trenton, Georgia, and for the Underwriter by its counsel, Gray & Pannell LLP, Savannah, Georgia. Delivery of the Bonds in definitive form is expected to be made through DTC in New York, New York, on or about _________, 2008.
MORGAN KEEGAN & COMPANY, INC. Official Statement dated: ____________, 2008. *Preliminary, subject to change
DADE COUNTY, GEORGIA Elected Governing Body Ben Brandon, County Executive/Chairman
Lamar Lowery, Commissioner District 1 Sarah Moore, Commissioner District 2 David Young, Commissioner District 3
Scottie Pittman, Commissioner District 4 Appointed Officials Don Townsend, County Clerk
71 Case Avenue
P.O. Box 613 Trenton, Georgia 30752
(706) 657-4625 County Attorney Robin Rogers Trenton, Georgia UNDERWRITER Morgan Keegan & Company, Inc. Two Buckhead Plaza, Suite 702 3050 Peachtree Road, N.W. Atlanta, Georgia 30305 (404) 240-6840 BOND COUNSEL and UNDERWRITER=S COUNSEL Gray & Pannell LLP Savannah, Georgia
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TABLE OF CONTENTS Page INTRODUCTION ........................................................................................................................................ 1
The County ...................................................................................................................................... 1 Security and Sources of Payment for the Bonds.............................................................................. 1 Purpose of the Bonds ....................................................................................................................... 1 Description of the Bonds ................................................................................................................. 1 Tax Status ........................................................................................................................................ 2 Bond Registrar and Paying Agent.................................................................................................... 2 Professionals Involved in the Offering ............................................................................................ 2 Terms of the Offering ...................................................................................................................... 2 Continuing Disclosure ..................................................................................................................... 3 Additional Information .................................................................................................................... 3
THE BONDS ................................................................................................................................................ 4
General Provisions ........................................................................................................................... 4 Book-Entry Only System of Delivery of Bonds .............................................................................. 4 Authority for Issuance of the Bonds ................................................................................................ 6 Validation of the Bonds ................................................................................................................... 6 Estimated Sources and Uses of Funds ............................................................................................. 6 The Projects ..................................................................................................................................... 6 Investment of Moneys...................................................................................................................... 7 Construction Fund Disbursements ................................................................................................... 8 Security and Sources of Payment for the Bonds.............................................................................. 9
DADE COUNTY, GEORGIA.................................................................................................................... 11
Introduction.................................................................................................................................... 11 Government Format and Principal Officials .................................................................................. 11 Government Services and Facilities............................................................................................... 11 Employees/Employee Relations .................................................................................................... 12 Employee Benefits ......................................................................................................................... 12 Governmental Immunity and Insurance Coverage ........................................................................ 12 Population ...................................................................................................................................... 13 Per Capita Personal Income ........................................................................................................... 13 Median Home Values .................................................................................................................... 13 Bank Deposits ................................................................................................................................ 13 Industry and Employment.............................................................................................................. 14 Building Permits ............................................................................................................................ 15 Commuting Patterns....................................................................................................................... 16
DEBT STRUCTURE OF DADE COUNTY .............................................................................................. 17
Summary of County Indebtedness by Category ............................................................................ 17 Debt Limitation.............................................................................................................................. 17 Long and Short Term Indebtedness ............................................................................................... 18 Debt Ratios .................................................................................................................................... 18 Indebtedness of Overlapping Governmental Entities .................................................................... 18 Estimated Debt Service Schedule .................................................................................................. 19
DADE COUNTY AD VALOREM TAXATION....................................................................................... 20 Introduction.................................................................................................................................... 20 Property Subject to Taxation ......................................................................................................... 20 Assessed Value .............................................................................................................................. 20 Annual Tax Levy ........................................................................................................................... 21 Property Tax Collections ............................................................................................................... 21 Ten Largest Taxpayers................................................................................................................... 22 Tax Digest...................................................................................................................................... 22 Millage Rates ................................................................................................................................. 23 M&O Tax Levies and Collections ................................................................................................. 23
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Page FINANCIAL INFORMATION CONCERNING DADE COUNTY ......................................................... 24
Five Year General Fund Operating History................................................................................... 24 Accounting Policies ....................................................................................................................... 25 Independent Auditors’ Reports, 2003-2007................................................................................... 25 Budgetary Process.......................................................................................................................... 25
LEGAL MATTERS.................................................................................................................................... 27
Litigation........................................................................................................................................ 27 Legal Proceedings.......................................................................................................................... 27 Tax Exemption............................................................................................................................... 27 Original Issue Discount.................................................................................................................. 28 Premium Bonds.............................................................................................................................. 28
MISCELLANEOUS ................................................................................................................................... 29
Ratings ........................................................................................................................................... 29 Underwriting.................................................................................................................................. 29 Continuing Disclosure ................................................................................................................... 29 Independent Auditor; Financial Statements................................................................................... 29 Miscellaneous ................................................................................................................................ 30 Approval of Official Statement...................................................................................................... 30
Appendix A: AUDITED FINANCIAL STATEMENTS OF DADE COUNTY, GEORGIA
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007 Appendix B: PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL Appendix C: THE CONTINUING DISCLOSURE CERTIFICATE
No dealer, broker, salesman or other person has been authorized by the County or Morgan Keegan & Company, Inc., Atlanta, Georgia (the “Underwriter”), or any other person to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representation must not be relied upon as having been authorized by the County, the Underwriter, or any other person. Except where otherwise indicated, all information contained in this Official Statement has been provided by the County. Sources other than the County are believed to be reliable, but are not guaranteed as to accuracy or completeness by the County or the Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in any of the information set forth herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale.
The Bonds have not been registered under the Securities Act of 1933, and the Resolution has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts.
This Preliminary Official Statement has been deemed final by the County for purposes of Securities Exchange Act Rule 15c2-12, except for the permitted omissions described in paragraph (b)(1) of Rule 15c2-12.
OFFICIAL STATEMENT $6,500,000*
DADE COUNTY, GEORGIA GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008
INTRODUCTION
This Official Statement of Dade County, Georgia (the “County”), which includes the cover page and the Appendices hereto, sets forth information concerning the County and the proposed DADE COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008 (the “Bonds”).
The information contained in this section entitled “INTRODUCTION” is a brief description of the terms of and security for the Bonds and does not purport to be comprehensive or definitive. A full review of the entire Official Statement, as well as the documents summarized or described herein, should be made. This Official Statement speaks only as of its date, and the information contained herein is subject to change. All references herein to, or summaries of, the Resolution (hereinafter defined) or other documents or official acts are qualified in their entirety by the exact terms of such documents or official acts, copies of which are available from the County. All references herein to, or summaries of, the Bonds are qualified in their entirety by the definitive form thereof and the provisions with respect thereto included in the Resolution. All undefined, capitalized terms used herein shall have the meaning ascribed to such terms in the Resolution unless the context requires otherwise. The County
The County is a political subdivision of the State, created and existing under the laws of the State of Georgia (the “State”). The County is located in the extreme northwest corner of Georgia, approximately 135 miles northwest of Atlanta, Georgia and 20 miles south of Chattanooga, Tennessee. The County had a population of 15,154 according to the 2000 census compiled by the U.S. Department of Commerce, Bureau of the Census. For more detailed information, see “DADE COUNTY, GEORGIA.” Security and Sources of Payment for the Bonds
General Obligation Debt. The Bonds are general obligations of the County and will constitute a pledge of the full faith, credit, and taxing power of the County. Principal of and interest on the Bonds are payable first from a portion of the receipts of a special county one percent (1%) sales and use tax (the “Special Sales Tax”) collected within the territorial limits of the County and then, if and to the extent necessary, from ad valorem taxes which may be levied, without limitation as to rate or amount, upon all taxable property subject to taxation for general obligation bond purposes within the territorial limits of the County. Prior to the issuance of the Bonds, the governing body of the County will provide for the assessment and collection of an ad valorem tax within the County in an amount which, together with the Special Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as they become due and payable. For more detailed information, see “THE BONDS, -Security and Sources of Payment for the Bonds” and “DADE COUNTY AD VALOREM TAXATION.” Purpose of the Bonds
The Bonds are being issued to provide funds to finance (i) the costs of acquiring, constructing, and equipping certain capital outlay projects for the County, the Dade County Industrial Development Authority and the City of Trenton, a municipality within the County, and (ii) the costs of issuance of the Bonds. See “THE BONDS, -Estimated Sources and Uses of Funds; and -The Projects” herein. Description of the Bonds
Redemption. The Bonds are not subject to redemption by the County prior to their respective maturities.
Denominations. Individual purchases of the Bonds may be made in book entry form only in denominations of $5,000 or any integral multiple thereof. _________________ * The use of the asterisk (*) throughout this Preliminary Official Statement indicates information which is subject to change.
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Registration and Transfer. The Bonds will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will serve as securities depository for the Bonds.
Manner of Making Payments. Interest on the Bonds will be payable on May 1 and November 1 of each year (each an “Interest Payment Date”), commencing May 1, 2009. The Bonds bear interest at the rates per annum, and mature in the years and amounts, as set forth on the front cover page hereof. So long as DTC or its nominee is the registered owner of the Bonds, the payments of principal of and interest on Bonds are payable by wire transfer by the Paying Agent to Cede & Co., as nominee for DTC which, in turn, will remit such amounts to DTC Participants (as defined herein) for subsequent disbursement to the Beneficial Owners (as defined herein).
For more detailed information on the Bonds, see “THE BONDS.” Tax Status
In the opinion of Bond Counsel, subject to the limitations and conditions described under “LEGAL MATTERS, -Tax Exemption,” interest on the Bonds is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and will not be an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; however, such interest will be taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. The County has designated the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Internal Revenue Code. See Appendix B for the proposed form of opinion of Bond Counsel to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion and certain other tax consequences of owning the Bonds, including certain exceptions to the exclusion of the interest on the Bonds from federal gross income, see “LEGAL MATTERS, -Tax Exemption” herein. Bond Registrar and Paying Agent Regions Bank, in the City of Atlanta, Georgia, will serve as Bond Registrar and Paying Agent for the Bonds. Professionals Involved in the Offering
Certain legal matters pertaining to the County and the authorization and issuance of the Bonds are subject to the approving legal opinion of Gray & Pannell LLP, Savannah, Georgia, as Bond Counsel; see Appendix B for the proposed form of Bond Counsel=s opinion to be delivered in connection with the issuance of the Bonds. Certain other legal matters will be passed upon for the County by its counsel, Robin Rogers, Esq., Trenton, Georgia, and for the Underwriter by its counsel, Gray & Pannell LLP, Savannah, Georgia. The general purpose financial statements of the County as of December 31, 2007, and for the fiscal year then ended, attached hereto as Appendix A, have been audited by Henderson, Hutcherson & McCullough, PLLC, independent certified public accountants, to the extent and for the period indicated in their report thereon which appears in Appendix A hereto. Terms of the Offering
Authority for Issuance. The Bonds shall be issued under authority of the Constitution of the State of Georgia and the general laws of the State of Georgia, particularly Part 1, Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated (“O.C.G.A.”), which authorizes the imposition of the Special Sales Tax. The Bonds shall be issued pursuant to the provisions of a resolution adopted by the governing body of the County on ________, 2008 (the “Resolution”). The issuance of the Bonds was approved by a majority of the votes cast in the County in a special county one percent sales and use tax election held in the County on July 15, 2008 (the “Election”).
Offering. The Bonds are offered when, as, and if issued by the County and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice, and to approval of legality by Gray & Pannell LLP, Bond Counsel.
Delivery. The Bonds in definitive form are expected to be delivered through DTC in New York, New York on or about ___________, 2008.
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Continuing Disclosure
On the date of the issuance and delivery of the Bonds, the County will sign a Continuing Disclosure Certificate which will allow the Underwriter to comply with Securities and Exchange Commission Rule 15c2-12(b)(5). See “MISCELLANEOUS, -Continuing Disclosure” and “Appendix C: THE CONTINUING DISCLOSURE CERTIFICATE.” Additional Information
This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Bonds, the County, the Resolution, and the security and sources of payment for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions, statutes, the Resolution, and other documents are intended as summaries only and are qualified in their entirety by reference to such documents, and references herein to the Bonds are qualified in their entirety to the form thereof included in the Resolution. Copies of the Resolution and other documents and information are available upon request, prior to the delivery of the Bonds, from Morgan Keegan & Company, Inc., Two Buckhead Plaza, Suite 702, 3050 Peachtree Road, N.W., Atlanta, Georgia 30305, telephone (404) 240-6840, and after delivery of the Bonds, upon payment to the County of a charge for copying, mailing and handling, from Dade County, 71 Case Avenue, Trenton, Georgia 30752, telephone (706) 657-5116, Attention: County Coordinator. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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THE BONDS General Provisions
The Bonds, dated as of the date of issuance and delivery thereof, will be executed and delivered in the aggregate principal amount specified on the front cover page of this Official Statement. Interest with respect to the Bonds will be payable on each Interest Payment Date, commencing May 1, 2009. Interest on the Bonds will be at the rates per annum, and the principal of the Bonds will mature in the amounts and in the years, set forth on the front cover page of this Official Statement. Book-Entry Only System of Delivery of Bonds 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), or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Bonds in the principal amount of such maturity, and will be deposited with DTC. DTC, the world’s largest 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 1934. DTC holds and provides asset servicing for over 2.2 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 Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. 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 Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com, and www.dtc.org. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (a “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 confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co, or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds 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 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bond 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.
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Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the documents pertaining to the Bonds. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds 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 Bond Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within 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 such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Paying Agent 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 the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments with respect to the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the County or the Paying Agent, on the 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 nor its nominee, the Paying 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 with respect to the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Paying Agent or the County, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursements of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond 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, bond certificates will be printed and delivered to DTC. The foregoing information concerning DTC and its book-entry system has been obtained from DTC. The County and the Underwriter do not make any representation or warranty or take any responsibility for the accuracy or completeness of such information. SO LONG AS CEDE & CO. OR SUCH OTHER DTC NOMINEE, AS NOMINEE FOR DTC, IS THE SOLE BONDHOLDER, THE COUNTY AND THE BOND REGISTRAR WILL TREAT CEDE & CO. OR SUCH OTHER NOMINEE AS THE ONLY OWNER OF THE BONDS FOR ALL PURPOSES UNDER THE RESOLUTION, INCLUDING RECEIPT OF ALL PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS, RECEIPT OF NOTICES, VOTING, AND REQUESTING OR DIRECTING THE COUNTY OR THE PAYING AGENT TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THE RESOLUTION. THE COUNTY HAS NO RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT; (B) THE PAYMENT OR ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO BONDHOLDERS; OR (D) OTHER ACTION TAKEN BY DTC OR CEDE & CO. OR SUCH OTHER DTC NOMINEE, AS OWNER. Beneficial Owners of the Bonds may experience some delay in their receipt of distributions of principal and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC, and DTC will credit such distributions to the accounts of Direct Participants which will thereafter credit them to the accounts of Beneficial Owners either directly or indirectly through Indirect Participants.
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Authority for Issuance of the Bonds
The Bonds are being issued pursuant to the authority granted by (i) the Constitution of Georgia, (ii) the general laws of the state of Georgia, particularly the Special County One Percent (1%) Sales and Use Tax, codified in Part 1, Article 3 of Chapter 8 of Title 48 of Official Code of Georgia Annotated, and (iii) the Resolution. The Board of Commissioners of Dade County, as the governing body of the County, adopted a resolution on May 1, 2008, imposing the Special Sales Tax within the County, conditioned upon approval by a majority of the qualified voters residing within the County voting in the Election, and authorizing the issuance of general obligation debt of the County, conditioned upon approval of a majority of the votes cast in the Election. The resolution calling the Election and the notice of the Election stipulated an interest rate for the Bonds not exceeding six percent (6.00%) per annum. The Election was held in accordance with Article 14 of Chapter 2 of Title 21 of the Official Code of Georgia Annotated. The canvass of the Election showed 1,778 “Yes” votes and 1,128 “No” votes, a 61.2% approval by those who voted in the Election. Subsequent to such approval, the Board of Commissioners adopted the Resolution authorizing and regulating the issuance of the Bonds. Validation of the Bonds
The Bonds and the security therefor were confirmed and validated on ___________, 2008 by the Superior Court of Dade County in accordance with the procedures of Article 2 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated. Estimated Sources and Uses of Funds
Sources of Funds:
Proceeds from Sale of Bonds1................................................................................ $
Total Sources of Funds: .............................................................................. $ Uses of Funds:
Costs of Projects .................................................................................................... $ Estimated Costs of Issuance2 ...................................................................................
Total Uses of Funds: ................................................................................... $
_________________ 1 [Includes net original issue discount/premium of $___________]. 2 Includes underwriter=s discount, initial Bond Registrar and Paying Agent=s fee, legal and accounting fees, rating
agency=s fees, cost of printing, and other estimated miscellaneous fees and expenses associated with the issuance of the Bonds.
The Projects
Description of Projects. The proceeds from the sale of the Bonds and the investment earnings thereon, together with Special Sales Tax proceeds, if any, will be used to acquire, construct, and equip, in whole or in part, the following capital outlay projects (collectively, the “Projects”) of the County, the Dade County Industrial Development Authority and the City of Trenton, located within the County, as approved by the voters voting in the Election:
• For the County, road, street, and bridge purposes, which purposes may include sidewalks, bicycle paths and capital equipment therefor; acquiring, constructing, and equipping a new court facility, including any necessary capital costs for the relocation of governmental offices or services; public safety facilities and equipment including fire department, mountain rescue, emergency 911, and other county emergency services; installation of new water lines and fire hydrants by the Dade County Water and Sewer Authority; vehicles and equipment for the road department, sheriff’s department, recreation department, and the extension agency; adding to, remodeling and renovating county facilities and acquiring any property, both real and personal, and equipment necessary therefor, including the transfer station, county jail, recreation facilities, animal control, the old courthouse, a community building at Davis, a walking track at New Home; and purchasing new books, computers and other technology for the Dade County Library;
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• For the Dade County Industrial Development Authority, acquisition of land and construction of related infrastructure for future industrial development; and
• For the City of Trenton, public safety facilities, vehicles and equipment for police and fire departments; equipment and renovation of facilities for waste water treatment and utilities; road, street, and bridge purposes, which purposes may include sidewalks, bicycle paths and capital equipment therefor; new construction, renovations and equipment for parks and recreation; city animal control facilities and renovations and equipment for city hall and city administration.
The Dade County Industrial Development Authority and the City of Trenton, a municipality located within the County, will receive proceeds from the sale of the Bonds in the amount of its percentage set forth in the Contract (hereinafter defined) and will be required to deposit the moneys so received into a bond construction fund. Prior to the receipt of any proceeds of the Bonds, the Dade County Industrial Development Authority and the City of Trenton will execute a tax certificate to assure that such proceeds are spent in accordance with the requirements of the Code and Georgia law, and to the extent permitted by law, the Dade County Industrial Development Authority and the City of Trenton will agree to indemnify and hold harmless the County for any expenditures of Bond proceeds by such party which results in an adverse effect on the tax-exempt status of the Bonds and to pay any costs or expenses the County may incur as a result of the failure of such party to spend Bond proceeds in accordance with applicable arbitrage regulations. See “THE BONDS, -Security and Sources of Payment for the Bonds, Security from Special Sales Tax.”
The County will require contractors engaged in the construction of its Projects to obtain performance and payment bonds, a certificate of insurance for general liability, a certificate of insurance for workers= compensation, a certificate of insurance/auto liability and excess liability, and evidence of property insurance for builders’ risk. Investment of Moneys
Construction Fund Moneys. The moneys in the Construction Fund will be held by and under the control of the County and will be disbursed by the County to pay the costs of the County=s Projects. Moneys in the Construction Fund which are not needed at the time to pay current obligations during the construction and equipping of the County=s Projects may be invested, upon direction to the Construction Fund Custodian from the County, in any of the following investments:
1. The local government investment pool created in O.C.G.A. ' 36-83-8;
2. Bonds or other obligations of the County, or bonds or obligations of the State or other counties, municipal corporations, and political subdivisions of the State;
3. Bonds or other obligations of the United States or of subsidiary corporations of the United
States government, which are fully guaranteed by such government;
4. Obligations of agencies of the United States government issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, and the Central Bank for Cooperatives;
5. Bonds or other obligations issued by any public housing agency or municipal corporation in
the United States, which such bonds or obligations are fully secured as to payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States government, or project notes issued by any public housing agency, urban renewal agency or municipal corporation in the United States which are fully secured as to payment of both principal and interest by a requisition, loan, or payment agreement with the United States government;
6. Certificates of deposit of national or state banks located within the State which have deposits
insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, including the certificates of deposit of any bank, savings and loan association, or building and loan association acting as depository, custodian or trustee for any proceeds of the Bonds; provided, however, that the portion of such certificates of deposit in excess of the amount insured by the Federal Deposit
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Insurance Corporation, the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation, or the Georgia Credit Union Deposit Insurance Corporation, if any, shall be secured by deposit with the Federal Reserve Bank of Atlanta, Georgia, or with any national or state bank or federal savings and loan association or state building and loan or savings and loan association located within the State, of one or more of the following securities in an aggregate principal amount equal at least to the amount of such excess: direct and general obligations of the State or any county or municipal corporation in the State, obligations of the United States or subsidiary corporations included in paragraph (3) above, obligations of the agencies of the United States government included in paragraph (4) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities included in paragraph (5) above;
7. Repurchase agreements with respect to obligations included in 2, 3, 4, 5, or 6 above and any
other investments to the extent at the time permitted by then applicable law for the investment of public funds; and
8. Securities of or other interests in any no-load, open-end management type investment
company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, or any common trust fund maintained by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as:
(a) the portfolio of such investment company or investment trust or common trust fund is
limited to the obligations referenced in paragraph (2) above and repurchase agreements fully collateralized by any such obligations;
(b) such investment company or investment trust or common trust fund takes delivery of
such collateral either directly or through an authorized custodian;
(c) such investment company or investment trust or common trust fund is managed so as to maintain its shares at a constant net asset value; and
(d) securities of or other interests in such investment company or investment trust or
common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State.
Other Moneys. All net proceeds (i.e., net of deductions allowed to dealers and net of commission
allowed to the Revenue Commissioner) of the Special Sales Tax will be placed in the Dade County 2008 Special County One Percent Sales and Use Tax Proceeds Account (the “Sales Tax Proceeds Account 2008”) to be used exclusively for the purposes specified herein and in the resolution calling for imposition of the Special Sales Tax. The beneficial interest in the moneys in the Sales Tax Proceeds Account 2008 shall be considered to be in the owners of the Bonds. Such moneys shall be held and kept separate and apart from all other revenues collected by the County. Moneys in the Sales Tax Proceeds Account 2008, pending their disbursement, may be invested or reinvested by the Sales Tax Proceeds Account 2008 Custodian, at the direction of the County, in any investment authorized by the laws of the State. See “THE BONDS, -Security and Sources of Payment for the Bonds, Security from Special Sales Tax.” Construction Fund Disbursements
Disbursements from the County=s Construction Fund will be made only upon the execution and filing with the Construction Fund Custodian of a requisition and certificate signed by the project superintendent (the person or persons B typically the Chairman of the Board of Commissioners or the County Coordinator B so designated by the Chairman of the Board of Commissioners) certifying (i) the amount to be paid and the name of the person, firm or corporation to whom payment is due, (ii) that an obligation has been incurred by the County, that the same is a proper charge and has not been paid, and that the project superintendent has a copy of the invoice for the obligation, (iii) that the project superintendent has no notice of any liens or rights to liens which should be satisfied before such payment is made, (iv) that such requisition contains no item representing retained percentages which the County is entitled to retain, and (v) that the materials, supplies or equipment invoiced were actually installed in or about the construction site or delivered at the site for that purpose.
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Security and Sources of Payment for the Bonds Security from Ad Valorem Taxation. The Bonds will constitute general obligation debt of the County
within the meaning of Article IX, Section V, Paragraph I of the Constitution of Georgia and shall count against the limitation on debt contained therein. See “DEBT STRUCTURE OF THE COUNTY, -Debt Limitations, State Law.” Said limitation requires that the debt of the County shall never exceed 10% of the assessed value of taxable property within the territorial limits of the County. Any liability on such debt which is not satisfied from the proceeds of the Special Sales Tax shall be satisfied from the general fund of the County, in which event the principal of and interest on the Bonds will be payable from ad valorem taxes levied, without limitation as to rate or amount, upon all taxable property within the County which is subject to taxation for bond purposes, in an amount sufficient to pay the principal of and interest on the Bonds.
Prior to the issuance of the Bonds, the Board of Commissioners, as required by Article IX, Section VI, Paragraph VI of the Constitution of the State of Georgia, will provide for the assessment and collection of an ad valorem tax on all taxable property within the territorial limits of the County subject to taxation for general obligation bond purposes in an amount, which, together with the Special Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as the same become due and payable. The proceeds of the ad valorem tax assessed to pay the principal of and interest on the Bonds, together with any other moneys collected for such purpose, will be placed, pursuant to Article IX, Section V, Paragraph VI of the Constitution of the State of Georgia, in the Sales Tax Proceeds Account 2008, as a sinking fund, to be used exclusively for paying the principal of and interest on the Bonds. Such moneys will be held and kept separate and apart from all other revenues collected by the County.
Security from Special Sales Tax. Payment of the principal of and interest on the Bonds will be secured by, and will be first payable from, the Special Sales Tax. The Special Sales Tax will be levied in the County beginning July 1, 2009 and will be collected for a period of time not to exceed six years to raise an estimated $18,000,000. The County, the Dade County Industrial Development Authority and the City of Trenton have entered into an intergovernmental contract, dated May 1, 2008 (the “Contract”), relating to the distribution of the Special Sales Tax and proceeds of the Bonds. According to the Contract, the Dade County Industrial Development Authority will receive approximately $990,000 of the proceeds of the Bonds, the City of Trenton will receive approximately $2,060,000 of the proceeds of the Bonds, and the County will receive approximately $3,210,000 of the proceeds of the Bonds after payment of capitalized interest and costs of issuance. The County will receive all proceeds of the Special Sales to pay debt service on the Bonds and other capital outlay projects of the County as approved in the Election. If proceeds of the Special Sales Tax exceed the estimated amount of $18,000,000, such excess collections shall be distributed 16.29% to the City of Trenton and 83.71% to the County.
Notwithstanding the distribution provisions set forth in the Contract, all funds provided by the Special Sales Tax (and any amount obtained from any ad valorem tax levied and collected for payment of the Bonds) are pledged irrevocably to and appropriated for the payment of the principal of and interest on the Bonds so that all of the Bonds will be fully paid as the same mature and become due. All proceeds of the Special Sales Tax will be deposited into the Special Sales Tax Proceeds Account 2008 until such time as there is on deposit in said account sufficient funds to pay the principal of and interest on the Bonds coming due in a bond year. All Special Sales Tax proceeds, if any, subsequently received in a bond year will be used to pay the costs of the Projects.
The County has covenanted to pay to the Paying Agent on or before each Interest Payment Date, amounts sufficient to pay the principal of and interest on the Bonds on such dates. The County estimates that receipts of the Special Sales Tax will be sufficient to meet debt service requirements on the Bonds.
Pursuant to Part 1 of Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated (the “Sales Tax Act”) and the results of the Election, the imposition of the Special Sales Tax has been authorized upon the retail purchase, retail sale, rental, storage, use, and consumption of tangible personal property, and upon the services described and set forth in the Georgia Retailers= and Consumers= Sales and Use Tax Act (O.C.G.A. ' 48-8-1, et seq.) (the “State Sales Tax Act”) within the County, subject to numerous exemptions. The Special Sales Tax is to correspond as nearly as practicable, except as to rate, with the 4% State of Georgia sales and use tax (the “State Sales Tax”) levied pursuant to the State Sales Tax Act, except that the Special Sales Tax applies to sales of motor fuels, food and beverages, and except that sales of tangible personal property ordered by and delivered to a purchaser outside the County shall not be subject to the Special Sales Tax regardless of the point at which title passes, and building and construction materials are not subject to the Special Sales Tax when the contract pursuant to which the materials are purchased or used was advertised for bid prior to the voters= approval of the imposition of the tax and the contract was entered into as a result of a bid actually submitted in response to the advertisement prior to approval of the imposition of the
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tax. A reciprocal credit is also allowed against the Special Sales Tax for any amounts paid pursuant to any local sales and use tax on tangible personal property purchased outside the County.
The Special Sales Tax shall be administered and collected by the State of Georgia Department of
Revenue, Sales and Use Tax Division (the “Collection Agent”) in the same manner as the State Sales Tax. On or before the 20th day of each month, Special Sales Tax proceeds collected by retailers are required to be paid for the preceding month, except for retailers or providers of services with a very small tax liability who remit taxes to the Collection Agent quarterly. Retailers or providers of services are allowed, as a collection fee, a percentage of the amount of Special Sales Tax receipts due to the Department of Revenue in the form of a deduction in paying the amount due, if said receipts are not delinquent at the time of payment to the Department of Revenue. The rate of the deduction shall be the same as the rate from time to time authorized for deductions under the State Sales Tax. The following deductions are allowed: (1) 3% of the first $3,000 of Special Sales Tax reported due on each monthly return (other than Special Sales Tax on motor fuel), (2) 0.50% of Special Sales Tax in excess of $3,000 reported due on each monthly return (other than Special Sales Tax on motor fuel), and (3) 3% of Special Sales Tax on motor fuel reported due on each monthly return.
The Collection Agent is required to disburse the proceeds of the Special Sales Tax as soon as practicable after collection. One percent of the amount collected is retained by the Collection Agent and paid into the general fund of the state treasury to defray the costs of administration.
Any net proceeds of the Special Sales Tax received by the County in excess of the amounts required for payment of the Bonds and the costs of acquiring, constructing, and equipping all projects and purposes approved by the voters shall be used for the purpose of reducing indebtedness of the County other than indebtedness incurred pursuant to the Act. If there is no such other indebtedness or, if the excess proceeds exceed the amount of any such other indebtedness, then the excess proceeds shall next be paid into the general fund of the County to be used for the purpose of reducing ad valorem taxes.
Current Special Sales Tax Data. A special county one percent sales and use tax (the “Current Special Sales Tax”) is presently being collected in the County, which tax was approved by a majority of the voters of the County voting in an election held for such purpose on June 17, 2003. The Current Special Sales Tax was imposed beginning July 1, 2004, and is expected to cease being collected on March 31, 2009.
The total amount of Current Special Sales Tax collected in the County as of December 31st in the years 2003 through 2007, and as of September 30, 2008, and the County=s approximate share thereof, has been as follows:
_________________
Year Amount1 County’s Share2 Percentage Change
2003 $1,863,604.69 $1,560,023.47 -- 2004 2,026,072.22 1,696,025.06 8.72% 2005 2,234,097.16 1,870,162.73 10.27 2006 2,566,915.22 2,148,764.73 14.90 2007 2,623,678.75 2,196,281.48 2.21
20083 1,811,207.00 1,331,535.94 (8.36)4
1 Amounts shown are net of deductions allowed to dealers and net of commission allowed to the Collection Agent. 2 The County’s pro rata share under the Current Special Sales Tax is seventy-five percent (83.71%) of total collections. 3 Represents nine (9) months of collections through September 30, 2008. 4 Percentage Change represents collections compared to the first seven months of calendar year 2007.
Source: State of Georgia Department of Revenue. The historical sales tax data presented above should not be considered to represent future results that may be obtained by the County from collections of the Special Sales Tax. Although the County believes that future financial results will be comparable to, or exceed, those set forth above, certain of the assumptions upon which it presently is relying may not materialize, and unanticipated events and circumstances, such as a recession, may occur that may adversely affect such results.
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DADE COUNTY, GEORGIA Introduction
Dade County is located in the extreme northwest corner of Georgia, approximately 135 miles northwest of Atlanta, Georgia. The northern county line is contiguous to Chattanooga, Tennessee. The County is bordered on the north by Tennessee, on the east by Walker County, on the south by Walker County, and on the west by Alabama. The City of Trenton is the county seat and serves as the economic and retail center for the surrounding area.
The population of the County grew approximately 23.0% during the 20 year period from 1980 to 2000, from 12,318 residents in 1980 to 15,154 residents in 2000. This compares with Georgia=s total population growth of 49.9% during the same 20 year period. The estimated population of the County in 2007 was 16,098.
At 174.1 square miles, the County is the 149th largest of Georgia=s 159 counties. Set forth below are the percentages of land use for various categories within the territorial limits of the County, computed based upon the acres of land for the various categories set forth in the tax digest for each respective year.
Residential Agricultural Preferential Conservation Use Commercial Industrial Utility Timber
2003
23.1% 56.9
5.3 13.1
1.1 0.2 0.0
0.3
100.0%
2004
23.2% 59.9
2.0 13.1
1.1 0.2 0.0
0.5
100.0%
2005
23.4% 59.1
1.8 13.5
1.0 0.2 0.0
1.0
100.0%
2006
22.7% 47.1
2.0 23.4
1.4 0.2 0.1
3.1
100.0%
2007
23.5% 43.0
1.6 30.0
1.4 0.2 0.1
0.2
100.0% Government Format and Principal Officials
County Executive/ Chairman of the Board of Commissioners. The County is a political subdivision of the State of Georgia. Effective January 1, 2006, the commission structure changed to an at-large, elected county executive, who serves as the chairman of the commission, and four part-time commissioners elected by district. Information concerning current members of the Board of Commissioners is as follows:
Name Current Term Expires Principal Occupation Years on BoardBen Brandon December 31, 2008 Executive/Chairman Dade County 4 Lamar Lowery December 31, 2010 Electrician 6 Sarah Moore December 31, 2008 Retired Superior Court Clerk 4 David Young December 31, 2008 Certified Land Surveyor 4 Scottie Pittman December 31, 2010 Electrician 6
County Clerk. Don Townsend is the current County Clerk. He was appointed by the Board of
Commissioners on October 5, 2006, and officially took office on November 20, 2006. His term has no set expiration date. Government Services and Facilities The County Sheriff’s department has one office, 44 sworn law enforcement officers, 4 civilian employees, and 28 vehicles. The Sheriff’s Department maintains a 24-hour uniformed patrol. The County has seven volunteer fire departments. Each community has a separate ISO rating through The National Board of Fire Underwriters’as follows: Trenton has an ISO rating of 6; New Salem has an ISO rating of 7; West Brow has an ISO rating of 6; North Dade has an ISO rating of 7; South Dade has an ISO rating of 7; New Home has an ISO rating of 9; and Davis has an ISO rating of 9. The County maintains approximately 274 miles of roads. The public services department has 18 employees, who perform road maintenance and other public works. There is 1 public library in the county with approximately 35,000 volumes.
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Employees/Employee Relations
As of September 1, 2008, the County had approximately 141 employees. No employees belong to labor unions or other collective bargaining groups and the County has no knowledge of any union organizing efforts. The County believes that employee relations are good. Employee Benefits
General. The County provides a full range of employee benefits for County employees, including a defined benefit pension plan, group hospitalization, medical, dental and vision and group life insurance. All employees are covered by Social Security, workers’ compensation, and unemployment insurance. All County employees receive vacation leave of 12 days, 9 paid holidays, 2 personal days, 6 sick days and 3 funeral leave days each year. Annual leave may not be accrued in excess of two hundred forty (240) hours. Annual sick leave may not be accrued in excess of one hundred sixty (160) hours.
Pension Plan. The County contributes to a single employer, noncontributory, defined benefit pension
plan which is self-administered. The plan provides retirement, disability, and death benefits to plan participants, and beneficiaries. The County contributes at an actuarially determined rate. County contributions to the plan begin vesting after three years of service and are 100% vested after seven years of service.
For more detailed discussion of the County=s Pension Plan and additional historical information, see
Note E of Appendix A: AUDITED FINANCIAL STATEMENTS OF DADE COUNTY, GEORGIA FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007. Governmental Immunity and Insurance Coverage
Governmental Immunity. Article I, Section II, Paragraph IX of the Constitution of the State of Georgia extends sovereign immunity to the County, as a political subdivision of the State of Georgia, except as to actions for the breach of written contracts. Except as specifically provided by the General Assembly of the State of Georgia in a State Tort Claims Act, all officers and employees of the County may be subject to suit and may be liable for injuries and damages caused by the negligent performance of, or negligent failure to perform, their ministerial functions and may be liable for injuries and damages if they act with actual malice or with actual intent to cause injury in the performance of their official functions. Except as provided in the previous sentence, officers and employees of the County shall not be subject to suit or liability, and no judgment shall be entered against them, for the performance or nonperformance of their official functions. The County, however, may be unable to rely upon the defense of sovereign immunity and may be subject to liability in the event of suits alleging causes of action founded upon various federal laws, such as suits filed pursuant to 42 U.S.C. ' 1983, alleging the deprivation of federal constitutional or statutory rights of an individual and suits alleging anti-competitive practices and violations of the federal antitrust laws by the County in the exercise of its delegated powers.
Insurance Coverage. The County carries liability insurance for the types of claims and in amounts that are customary for similar entities for those categories of claims that are not subject to the defense of sovereign immunity. The County obtains workers= compensation insurance through the Association County Commissioners of Georgia Group Self-Insured Workers= Compensation Fund. The County also carries property and casualty damage insurance on its buildings and other physical assets.
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Population
The following table sets forth the population, including percentage of annual increase, in the County, the State, and the United States. The estimated population of the County in 2007 was 16,098.
Year 1960 1970 1980 1990 2000
Dade County
8,666 9,910 12,318 13,183 15,154
Percentage Change
--
14.4% 24.3
7.0 15.0
Georgia
3,943,1164,589,5755,463,1056,478,2168,186,453
PercentageChange
--
16.4% 19.0 18.6 26.4
United States 179,323,175 203,211,926 226,545,805 248,709,873 281,421,906
PercentageChange
--
13.3% 11.5 9.8 13.2
Source: U.S. Department of Commerce, Bureau of the Census.
Per Capita Personal Income The following table sets forth the per capita personal income in Dade County, the State of Georgia, and the United States for the years 2002 through 2006. Data for 2007 is not yet available.
Year
2002 2003 2004 2005 2006
Dade County
$21,307 21,762 22,411 23,841 24,942
Georgia
$28,513 28,696 29,688 31,193 32,095
United States
$30,821 31,504 33,123 34,757 36,714
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Accounts Data.
Median Home Values The following table sets forth the median home values for the County, the State, and the United States for the census years 1980, 1990, and 2000 and an estimate for 2006.
Year
1980 1990 2000 2006
Dade County
* $45,100
79,200 *
Georgia
$36,900 71,300
111,200 156,800
United States
$47,200 79,100
119,600 185,200
* Information not available
Source: U.S. Department of Commerce, Bureau of the Census Bank Deposits
As of June 30, 2007, two financial institutions with a total of 2 branch offices provided banking services within the County. The following are the total deposits in the County’s financial institutions as of June 30 in each of the years 2003 through 2007. Year Amount
Source: State of Georgia, Department of Banking and Finance.
Percentage Change
2003 $117,075,000 -- 2004 116,964,000 (0.1)% 2005 114,596,000 (2.0) 2006 115,901,000 1.1 2007 122,834,000 6.0
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Industry and Employment Private Employers. Set forth below are the eight largest private employers located in Dade County as of September 1, 2008, their type of business, and their approximate number of employees. There can be no assurance that any employer listed below will continue to be located in the County or will continue employment at the level stated. No independent investigation has been made of, and no representation can be made as to, the stability or financial condition of the companies listed.
Employer Type of Business Employees Shaw Industries Group Inc. Yarn Spinning Mills 440 Gill Manufacturing Automotive Parts 135 Accellent Cardiology Polyimide Tubing 140 Phelps-Dodge HPC Specialty Wire/Tubing 95 Bi-Lo Supermarket & Grocery 72 Bull Moose Tube Co. Welded Steel Metal 68 Polymer Specialties, Inc. Fiberglass Porch Columns 65 Citizens Bank & Trust Financial 45 National Boiler Services, Inc. Boiler Makers 38 Tri-State Rental Service Service Industry 38
Source: Northwest Georgia Joint Development Authority. Public Employers. Set forth below are the largest public employers located in Dade County as of September 1, 2008, their type of service, and their approximate number of employees.
Employer Type of Business Employees Dade County Board of Education Public Education 350 Dade County Government County Government 121
Economic Sector Distribution. The following table shows the annual average percentage of persons who worked in each major sector of the local economy in Dade County in 2003 through 2007. Figures are based on employees covered under the state unemployment insurance program.
Industry Agriculture, Forestry, & Fishing Construction Manufacturing Transportation and Warehousing Wholesale Trade Retail Trade Finance, Insurance, and Real Estate Service and Other Industries Federal, State, and Local Government Total:
2003
0.0% 10.1 25.8
0.0 1.0
15.4 3.9
24.1 19.7
100.0%
2004
0.0% 8.0
26.7 0.0 1.1
16.6 3.6
25.1 18.9
100.0%
2005
0.0% 8.2
26.7 0.0 0.6
16.6 3.4
27.1 17.4
100.0%
2006
0.0% 4.9
27.9 0.4 0.5
17.0 3.4
28.0 17.9
100.0%
2007
0.0% 4.9
27.1 0.6 0.7
16.7 3.4
28.3 18.3
100.0%
Source: State of Georgia, Department of Labor, Labor Information Systems.
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Civilian Employment Statistics of Dade County. Employment includes nonagricultural wage and salary employment, self-employed, unpaid family and private household workers, and agricultural workers. Persons in labor disputes are counted as employed. The use of rounded data does not imply that the numbers are exact.
Employment Unemployment Total Labor Force County Unemployment Rate State Unemployment Rate U.S. Unemployment Rate
2003
7,895 346
8,241
4.2% 4.7% 6.0%
2004
8,017 339
8,356
4.1% 4.6% 5.6%
2005
8,094 390
8,484
4.6% 5.3% 5.1%
2006
8,341 346
8,687
4.0% 4.7% 4.6%
2007
8,439 352
8,791
4.0% 4.4% 4.6%
Source: State of Georgia, Department of Labor, Labor Information Systems.
Building Permits The following table shows a summary of residential building permits in the County for the last five
years.
Source: The University of Georgia, Terry College of Business, Selig Center for Economic Growth.
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Year
Permits Value
2003 18 $1,640,000 2004 13 1,235,000 2005 21 6,400,000 2006 19 2,212,000 2007 8 880,000
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Commuting Patterns The following two tables show a summary of commuting patterns in the County as of Census year 2000.
Employed Residents of Dade County
County of Employment Number Percent of Total Hamilton, TN 3,091 44.3% Dade, GA 2,363 33.8 Walker, GA 747 10.7 Catoosa, GA 137 2.0 DeKalb, AL 94 1.3 Jackson, AL 91 1.3 Marion, TN 82 1.2 Tift, GA 74 1.1 Other 304 4.3 Total Residents: 6,983 100.0%
Persons working in Dade County
County of Residence Number Percent of Total Dade, GA 2,363 65.3% Jackson, AL 464 12.9 DeKalb, AL 364 10.1 Hamilton, TN 183 5.1 Walker, GA 79 2.2 Marion, TN 59 1.6 Chattooga, GA 27 0.7 Fulton, GA 27 0.7 Other 51 1.4 Total Residents: 3,617 100.0%
Source: U.S. Census Bureau
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DEBT STRUCTURE OF DADE COUNTY Summary of County Indebtedness by Category
Set forth below is information concerning debt of the County as of September 1, 2008, and as of the anticipated date of issuance of the Bonds. The information set forth below should be read in conjunction with the County=s financial statements included as Appendix A hereto.
_________________ 1 These are general obligations of the County to which its full faith and credit and taxing power are pledged. The debt service on the Series
2008 Bonds are payable first from the existing Special Sales Tax, and debt service on the Bonds will be payable first from the Special Sales Tax, which will begin being collected on July 1, 2009. 2 The Series 2003 Bonds are payable on or before October 1, 2009. The next scheduled payment of $1,229,524.50 is scheduled to occur on October 1, 2008, leaving a balance due of $1,230,000 for next year. 3 The financial obligations of the County under these capital leases do not constitute a general obligation of the County to which its full faith, credit, and taxing power are pledged, but are subject to and dependent upon lawful appropriations of general revenues being made by the Board of Commissioners to pay the payments due in each fiscal year under the leases. The County’s obligations under the leases do not constitute debt for purposes of the constitutional debt limit described in “DEBT STRUCTURE OF DADE COUNTY, -Debt Limitation” herein and, thus, do not count against the County’s debt limitation. 4 Tax Anticipation Note is scheduled to be paid in full by October 20, 2008.
Reference is made to Note 5 of the financial statements of the County for the fiscal year ended December 31, 2007, included in Appendix A, for further discussion of these and other commitments and contingent liabilities of the County. Debt Limitation The Constitution of the State provides two limitations on the ability of the County to incur long term debt. The County may not issue long term debt (other than refunding obligations) secured by a pledge to levy general ad valorem taxes without the approval of a majority of the qualified voters of the County voting in a referendum on the debt. In addition, the amount of such long term debt may not exceed 10% of the assessed value of all taxable property within the County. Short-term obligations (those payable within the same calendar year in which they are incurred), lease and installment purchase obligations subject to annual appropriation, and intergovernmental obligations are not subject to the legal limitations described above. As computed in the following table, based upon assessed values for as of January 1, 2008, the County could incur, upon necessary voter approval, immediately after the issuance of the Bonds, approximately $36,240,527* of long-term obligations payable out of general property taxes.
Computation of Legal Debt Margin
Gross Tax Digest for the County as of January 1, 2008 ................................................$514,658,807 Less M&O Exemptions1 ...................................................................................................(74,953,536) Net M&O Tax Digest................................................................................................$439,705,271 Debt Limit (10% of Net M&O Tax Digest).....................................................................$43,970,527 Less Amount of Debt Outstanding, after Issuance of the Bonds, Applicable to Debt Limit (7,730,000*) Legal Debt Margin $36,240,527* ___________________ 1 Based on M&O exemptions. Actual bond exemptions are not available because in past years it has not been necessary for the County to
levy a tax for general obligation debt; debt service on outstanding debt has been paid by the Special Sales Tax. It is not expected that the amount of bond exemptions would be materially higher than the amount of M&O exemptions.
Source: State of Georgia Department of Revenue.
Category of Obligation
Amount Authorized or Issued
Amount Outstanding as of September 1, 2008
Amount to be Outstanding Upon Issuance of the Bonds
General Obligation Bonds1 The Bonds $6,500,000 -0- $6,500,000*
Series 2003 Bonds2 5,900,000 $2,430,000 1,230,000 Capital Leases3
General Fund Leases 148,272 96,150 96,150* General Obligation Debt Tax Anticipation Note4 600,000 200,000 200,000* TOTAL $13,148,272 $2,785,563 $8,026,150*
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Long and Short Term Indebtedness The County entered into a capital lease agreement with Ford Motor Credit Company to purchase vehicles on March 20, 2006. The economic substance of the lease is that the County is financing the vehicles through the lease in the amount of $16,610 at an interest rate of 5.75%. The County entered into a second capital lease agreement with Ford Motor Credit Company to purchase vehicles on September 18, 2006. The economic substance of lease is that the County is financing the vehicles through the lease in the amount of $131,662 at an interest rate of 6.60%. The County is obligated under the agreements to repay the leases in installments consisting of principal repayments and interest payable annually for a 2-year term and a 4-year term, respectively, in certain amounts and on certain dates as specified in the agreements. The vehicles may be purchased at the end of the lease for one dollar. The County anticipates paying the note with proceeds from the Special Sales Tax. During the past five fiscal years, the County has not incurred tax anticipation debt or any other short term debt, except for the current year Tax Anticipation Note shown on the previous page, which is scheduled to be paid in full by October 20, 2008. The County has no plans to issue any other short term obligations and no plans to issue any long term indebtedness other than the Bonds. Debt Ratios The following table sets forth certain debt ratios of the County following the issuance of the Bonds.
Per Capita Debt1
Percentage of Gross Tax Digest2
Percentage of Fair Market Value3
Per Capita Debt as a Percentage of Per Capita Income4
General Obligation Debt
$403.78 1.26% 0.51%
1.62%
Overlapping Debt
$446.80 1.40 %
0.56%
1.79%
Total Tax Supported Debt
$850.58 2.66% 1.07%
3.41%
______________ 1 Based upon estimated 2007 population of 16,098. 2 Based upon 2008 Gross Tax Digest of $514,658,807. 3 Based upon 2008 Estimated Actual Value of $1, 86,627,410. 24 Based upon 2006 Per Capita Income of $24,942.
Indebtedness of Overlapping Governmental Entities
Property owners in the County are responsible for both the County=s debt obligations and any debt obligations of other taxing entities in the proportion to which the jurisdiction of the County overlaps such entities. Set forth below are the estimated overlapping general obligation debt and overlapping property tax supported contractual obligations, if any, as of September 1, 2008. Although the County has attempted to obtain accurate information as to the overlapping debt, it does not guarantee its completeness or accuracy, as there is no central reporting entity which has this information available, and the amounts are based on information supplied by others.
Name of
Overlapping Entity
Amount of Outstanding
Debt as of September 1, 2008
Percent of Outstanding Debt Chargeable to Persons or Property in the County
Amount of Outstanding Debt Chargeable to Persons or Property in the County
Dade County School District
General Obligation Bonds $7,160,000.00 100% $7,160,000.00 Capital Leases 32,648.09 100% 32,648.09 TOTALS: $7,192,648.09 100% $7,192,648.09
___________________ 1 The percentage of each overlapping entity=s outstanding debt chargeable to property in the County is calculated by dividing the gross assessed
valuation of taxable real and personal property in the County by the gross assessed valuation of taxable real and personal property of the overlapping entity.
19
Estimated Debt Service Schedule*
Set forth below are the estimated principal and interest payment requirements of the County with respect to the Bonds.
Year Principal Interest Total
2009 $261,461.77 $ 261,461.77 2010 $1,005,000 260,737.50 1,265,737.50 2011 1,030,000 225,562.50 1,255,562.50 2012 1,060,000 184,362.50 1,244,362.50 2013 1,100,000 141,962.50 1,241,962.50 2014 1,135,000 97,962.50 1,232,962.50 2015 1,170,000 49,725.00 1,219,725.00
TOTAL $6,500,000 $1,221,774.27 $7,721,774.27
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DADE COUNTY AD VALOREM TAXATION Introduction
Ad valorem property taxes are levied annually in mills (one tenth of one percent) upon each dollar of assessed property value. Ad valorem property taxes accounted for an annual average of approximately 23% of the General Fund revenues of the County for the fiscal years ending December 31, 2003 through December 31, 2007, and are budgeted to account for 30% of General Fund revenues for the year ending December 31, 2008. Property Subject to Taxation
Ad valorem property taxes are levied, based upon value, on real and personal property within the County. There are, however, certain classes of property which are exempt from taxation, including public property, religious property, charitable property, property of nonprofit hospitals, nonprofit homes for the aged, and nonprofit homes for the mentally handicapped, college and certain educational property, public library property, certain farm products, certain air and water pollution control property, and personal effects. The County has a value freeze exemption which allows taxpayers to freeze their assessment based upon the previous year value on homestead property. This applies for homestead taxes up to three acres for county and school purposes. In addition, the County allows exemptions from ad valorem taxation purposes for: (1) The home of each resident of Georgia that is actually occupied and used as the primary residence by the owner in the amount of $2,000, (2) Individuals 65 years of age and older with a joint net income of less than $10,000 may claim a $4,000 Exemption, (3) Individuals 65 years of age and older are exempt from school tax for their homestead property and up to 5 acres of land, (4) Individuals 62 years of age and older with a joint net income of less than $10,000 may deduct an exemption for school tax, including taxes levied to retire bonded indebtedness, in an amount up to $10,000 from the 40% assessed value of the homestead property, social security income and certain retirement income are excluded from the calculation of the income threshold, (5) Disabled veteran, minor children, or an unremarried surviving spouse of U.S. Service Member killed in action may be granted an exemption of $50,000, (6) a local exemption for county taxes only is available for individuals 70 years of age and older, with a federal adjusted gross income of less than $15,000, for 100% of the home and up to 5 acres of land, (7) a floating or varying homestead exemption is available for individuals 62 years of age or older with a joint income of $30,000 or less and this exemption applies to state and county taxes but does not apply to school tax. A “Freeport” exemption is available to companies that manufacture or warehouse goods in the County. The County exempts 100% for (1) raw materials and goods in process of manufacture, (2) finished goods produced in Georgia within the last 12 months, and (3) finished goods stored in Georgia within the last 12 months and destined for shipment out of state. Assessed Value
Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated as a percentage of fair market value. Georgia law requires all counties to assess taxable tangible property, with certain exceptions, at 40% of its fair market value and to tax such property on a levy made by each tax jurisdiction according to 40% of the property’s fair market value. Georgia law requires certain agricultural real property to be assessed for ad valorem property tax purposes at 75% of the value of which other real property is assessed and requires certain historical property to be valued at a lower fair market value for ad valorem property tax purposes.
The chief appraiser of the County is required to submit a certified list of assessments for all taxable property, except motor vehicles, mobile homes, and property owned by public utilities, within the County to the Dade County Board of Tax Assessors. The Tax Commissioner of the County is required to present the tax returns to the Dade County Board of Tax Assessors by April 1st of each year. The Board of Tax Assessors is required to complete its revision and assessment of returns by July 1st of each year. The Tax Commissioner then certifies the digest and forwards a copy of the completed digest to the State of Georgia Revenue Commissioner for examination and approval. The Revenue Commissioner has the authority to examine the digest for the purpose of determining if the valuations of property are reasonably uniform and equalized between and within counties. Assessments may also be subject to review at various stages by the Dade County Board of Equalization and by state courts.
The State of Georgia Motor Vehicle Tax Unit assesses the value of all motor vehicles by make, model, and year and provides this information to each county’s tax office. The State of Georgia Property Tax
21
Unit assesses the value of the property of public utilities and divides the assessment into two parts, assessed value of property and assessed value of franchise, and provides these amounts to the county which bills these taxes to the utilities. Annual Tax Levy
The County determines a rate of levy for each fiscal year by computing a rate which, when levied upon the assessed value of taxable property within the territorial limits of the County, will produce the necessary amount of property tax revenues. The County then levies its ad valorem property taxes. Under Georgia law, there is no limitation on the annual rate of levy for the payment of principal of and interest on bonded indebtedness of the County. Ad valorem property taxes received for the payment of debt service on general obligation bonds of the County are required by law to be held and accounted for separately from other funds of the County. See “THE BONDS, -Security and Sources of Payment for the Bonds.” Property Tax Collections
Dade County bills and collects its own property taxes. Real and personal property taxes are levied on January 1 of each year on the assessed value listed as of January 1. Taxes levied by the County on January 1 are normally billed by October 20 and are normally payable on or before December 20. Interest of 12% per annum is applied to taxes paid after December 20. In addition, a 10% penalty will apply to all taxes that are not paid within 90 days of the December 20 deadline. However, there is no penalty if tax is on a homestead and less than $500.
All taxes levied on real and personal property, together with interest thereon and penalties for late payment, constitute a perpetual lien on and against the property tax arising after January 1 in the year in which taxed. The lien becomes enforceable 30 days after notification. Georgia law provides that taxes must be paid before any other debt, lien, or claim of any kind, except for certain claims against the estate of a decedent and except that the title and operation of a security deed is superior to the taxes assessed against the owner of property when the tax represents an assessment upon property of the owner other than the property specifically subject to the title and operation of the security deed.
Collection of delinquent real property taxes is enforceable by tax sale of such realty. Delinquent personal property taxes are similarly enforceable by seizure and sale of the taxpayer’s personal property. There can be no assurance, however, that the value of the property sold, in the event of a tax sale, will be sufficient to produce the amount required to pay in full the delinquent taxes, including any interest or penalties thereon.
When the last day for the payment of taxes has arrived, the tax collector notifies the taxpayer in writing of the fact that the taxes have not been paid and that, unless paid, an execution will be issued. At any time after 30 days from giving the notice described in the preceding sentence, the Sheriff may issue an execution for nonpayment of taxes. The Sheriff then publishes a notice of the sale in a local newspaper weekly for four weeks and gives the taxpayer ten days written notice by registered or certified mail. A public sale of the property is then made by the Sheriff at the Dade County Courthouse on the first Tuesday of the month after the required notices are given.
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Ten Largest Taxpayers
Set forth below is information concerning the ten largest taxpayers in the County in calendar year 2007. Information for 2008 is not yet available.
Taxpayer
Type of Business
2007 Assessed Value for the
County
Assessed Value as a Percent of
2007 Gross Assessed Values
2007 Taxes
Levied for the County
Georgia Power Company Public Utility $6,254,426 1.29% $40,529 Norfolk Southern Corporation Railroad 4,165,911 0.86 26,995 Dade County Industrial Government/Incentive 3,458,760 0.71 22,413 Canyon Ridge Club LLC Real Estate Company 3,322,820 0.68 21,532 Pilot Travel Centers Gas/Convenience Store 2,795,000 0.57 18,112 Southern Group LLC Real Estate Company 2,484,000 0.51 16,096 TAS Properties LLC Real Estate Company 2,281,880 0.47 14,787 Trenton Telephone Company Public Utility 2,109,007 0.43 13,666 Pilot Travel Centers Gas/Convenience Stores 1,023,775 0.21 6,634 Lookout Atlantis LTD Real Estate Company 952,080 0.20 6,170 TOTALS $28,847,659 5.93% $186,934
Source: Dade County Assessors Office Tax Digest
Set forth below is information concerning the assessed and estimated actual value of taxable property within the County for the past five calendar years.
As of January 1 ASSESSED VALUES: Real and Personal Property1
Public Utilities2
Motor Vehicles3
Mobile Homes4
Timber 100% Gross Tax Digest Less Bond Exemptions Net Tax Digest for Bonds5
Gross Tax Digest Less Maintenance & Operations (“M&O”) Exemptions Net M&O Tax Digest6 ESTIMATED ACTUAL VALUE:
2004
$289,754,331 13,425,207 30,940,920 4,120,138
207,320
$338,447,916
0
$338,447,916
$338,447,916
(40,908,549)
$297,539,367
$845,808,810
2005
$272,185,629 13,423,680 30,389,710 3,787,390
100,099
$319,886,508
0
$319,886,508
$319,886,508
(31,648,139)
$288,238,369
$799,566,122
2006
$416,370,701 15,422,470 32,026,030 3,725,147
229,029
$467,773,377
0
$467,773,377
$467,773,377
(66,105,180)
$401,668,197
$1,169,089,899
2007
$425,735,514 17,466,991 34,511,740 8,563,985
114,560
$486,392,790
0
$486,392,790
$486,392,790
(71,837,802)
$414,554,988
$1,215,810,135
2008
$450,633,358 19,190,036 37,011,800 7,810,541
13,072
$514,658,807
0
$514,658,807
$514,658,807
(74,953,536)
$439,705,271
$1,286,627,410
_________________ 1 The State of Georgia requires all counties to assess real estate and personal property at the rate of at least 40% of estimated actual value,
with the exception of timber, which is assessed at 100%. 2 The State of Georgia Property Tax Unit assesses the value of the property of public utilities at the percentage of fair market value used by
the County. The Property Tax Unit then divides the assessment into two parts, assessed value of property and assessed value of franchise, and provides these figures to the County which bills these taxes to the utilities with the amount of tax for each.
3 The State of Georgia Motor Vehicle Tax Unit assesses the value of motor vehicles by make, model, and year by county and provides this information to each county tax office. The State of Georgia assesses the value of motor vehicles at the percentage of fair market value used by the County.
4 The State of Georgia assesses the value of mobile homes at the percentage of fair market value used by the County. 5 Total assessed value, after deducting exemptions, for purposes of levying tax for the County=s general obligation bonds. 6 Total assessed value, after deducting exemptions, for purposes of levying tax for the M&O of the County. Source: State of Georgia Department of Revenue, Property Tax Division
23
Millage Rates
Set forth below is information concerning the rate of levy of property taxes per $1,000 of assessed value, or millage rates, of the County and all overlapping governments for calendar years 2003 through 2007.
Dade County County-Wide
Year
2003 2004 2005 2006 2007
Unincorporated M&O
6.60 5.65 5.54 4.48 6.48
IncorporatedM&O
8.82 7.77 7.91 6.28 8.28
TrentonM&O
3.5 3.5 3.5 3.5 3.5
School District
13.99 13.00 13.00 12.50 12.50
State of Georgia
0.25 0.25 0.25 0.25 0.25
Unincorporated Total
20.84 18.90 18.79 17.23 19.23
IncorporatedTotal
26.56 24.52 24.66 22.53 24.53
. Source: State of Georgia Department of Revenue, Property Tax Division. M&O Tax Levies and Collections
Set forth below is information concerning total real and personal property tax collections of the County reported as of the County’s fiscal years ended December 31, 2004 through December 31, 2007. Taxes levied by the County on January 1 are normally billed by October 20 and are normally payable on or before December 20, therefore collection data for 2008 is not yet available. The Current Year’s M&O Tax Levy for 2008 is $2,960,476. Fiscal Years Ended December 31 Current Year=s M&O Tax Levy1
Tax Collections2
Collection of Current Year=s Taxes Collection of Prior Years= Taxes
Total Tax Collections Current Year’s Tax Collections as a Percent of Current Year=s Levy Total Tax Collections as a Percent Of Current Year’s Levy Uncollected Current Year=s Taxes
2004 $1,808,499 $1,781,530 131,960 $1,913,490
99%
106%
$33,231
2005 $1,734,791 $1,760,428 70,092 $1,830,520
101%
106%
$19,864
2006 $1,939,587 $1,945,598 26,050 $1,971,648
100%
102%
$47,401
2007 $2,823,467 $2,676,642 62,478 $2,739,120
95%
97%
unavailable
_____________ 1 Current Year’s M & O Tax Levy is derived from the County’s five year history of the tax digest and current year’s digest values published
pursuant to O.C.G.A. Section 48-5-32 and is prior to adjustments, errors, omissions and property not on the digest. The Current Year’s M&O Tax Levy relates to the preceding calendar year digest and millage rates.
2 Collections reflect receipts during the 12 months following the billing date of the tax bills and include Current Year’s Taxes, Prior Years’ Taxes and all penalties and interest accrued up to payment.
Source: Dade County Tax Commissioner.
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FINANCIAL INFORMATION CONCERNING DADE COUNTY Five Year General Fund Operating History
The following table sets forth an historical, comparative summary of revenues, expenditures, and changes in fund balance of the County’s General Fund for the past five fiscal years. Information in the table has been extracted from audited financial statements of the County for the fiscal years ended December 31, 2003 through December 31, 2007. Although taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown, taken by itself, presents fairly the financial condition of the County for the fiscal years shown. For more complete information, reference is made to the audited financial statements of the County for fiscal year 2007, which are included in this Official Statement as Appendix A, and to the audited financial statements of the County for the fiscal years 2003 through 2006, copies of which are available from the County upon request.
Fiscal Years Ended December 31
Revenues Taxes Financial Institution Tax Insurance Premium Tax Intangibles Tax Alcohol Tax Motor Vehicle Tax Property Tax Real Estate Transfer Tax State Railroad Tax State Sales Tax State of Georgia, TVA in lieu of tax Other Taxes Licenses and Permits Intergovernmental Revenue Charges for Services Fines and Forfeitures Investment Earnings Contributions and Donations Notes Proceeds Miscellaneous
Total Revenues
Expenditures General Government Public Safety Highways and Streets Health and Welfare Culture and Recreation Sanitation
Debt Service – Principal retirement Debt Service – Interest
Total Expenditures Excess (Deficiency) of Rev. Over Expenditures Other Financing Sources (Uses)
Operating Transfers - In Operating Transfers - Out 1999 SPLOST Rollback Sale of Capital Assets
Total Other Financing Sources (Uses)
Excess of Revenues and Other Sources Over (Under) Expenditures Fund Balance, Beginning of Year
Reclassification of Funds Fund Balance, End of Year
20031
$ -0-
-0- -0--0--0--0--0--0--0--0-
4,573,035-0-
214,532 352,052 942,966
-0--0--0-
173,841 $6,256,426
$1,445,7783,472,932
700,649183,724195,269423,300
-0- -0-
$6,421,652
(165,226)
-0-(1,405)
-0- -0-
(1,405)
(166,631)2,565,700 -0-
$2,399,069
2004
$ 17,714
544,960 109,521 216,077 286,504
1,606,045 13,626
-0-1,664,037
134,187 -0--0-
455,563 502,013 783,018
-0--0--0-
317,185 $6,650,450
$1,567,031 3,439,633
622,030 213,076 184,871 429,801
-0- -0-
$6,456,442
194,008
-0--0--0-
-0- -0-
194,008 2,399,069 -0-
$2,593,077
2005
$ 17,599
581,967 114,557 183,332 252,801
1,783,577 22,085
5,950 1,837,762
134,049 -0- -0-
634,709 576,321 671,106
-0- -0- -0-
374,600 $7,190,415
$2,386,086 3,812,321
788,349 311,253 318,850 380,806
-0- -0-
$7,997,665
(807,250)
-0- (122,493)
504,535 -0- 382,042
(425,208) 2,593,077 -0-
$2,167,869
2006
$ 18,331
609,883 127,661 162,095 266,219
1,915,344 35,500
5,208 2,059,977
145,354 23,252
-0- 287,408 399,261 685,480
-0- -0-
25,638 483,240
$7,249,851
$1,957,102 3,975,649
549,563 369,722 345,633 381,793
-0- -0-
$7,579,462
(329,611)
69,671 -0- -0-
-0- 69,671
(259,940) 2,167,869 -0-
$1,907,929
2007
$ 8,874
641,300 126,687 165,710 244,009
2,611,372 27,517
-0-2,121,316
163,351 1,360
-0-118,362 465,689 667,574
-0--0--0-
717,106 $8,080,227
$2,021,551 4,456,685
331,766 405,084 183,732 320,808
-0- -0-
$7,719,626
360,601
(130,428)-0--0-
-0-(130,428)
230,173 1,907,929 -0-
$2,138,102________________________________ 1 The Financial Audit for Fiscal Year 2003 did not break out taxes into subcategories like the subsequent years; therefore, “other taxes” represents all taxes collected for the 2003 fiscal year.
25
Accounting Policies
The accounting policies of the County conform to generally accepted accounting principles (“GAAP”) as applicable to government units, except as described below. The County uses individual funds which are considered separate accounting entities, to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. The operations of each fund are accounted for with a self-balancing set of accounts. The County uses the following fund categories:
Governmental Funds. This category accounts for all or most of the County=s general activities and consists of the following fund types:
The General Fund is the principal operating fund of the County and is used to account for all financial resources of the general government, except for those required to be accounted for in another fund.
The Capital Projects Funds are used to account for the accumulation of resources provided by
the Special Purpose Local Option Sales Tax (SPLOST), approved by the voters of Dade County, for use in the purchase or construction of capital assets such as buildings, playgrounds, roads, bridges or sewers.
Fiduciary Funds. This category is used to account for assets held by the County in a trustee capacity
or as an agent for individuals, private organizations, other governments, and/or other funds, and consist of Trust Funds and Agency Funds.
All Governmental Funds and Agency Funds use the modified accrual basis of accounting. Under this basis of accounting, revenues are recorded when they become both measurable and available. Expenditures are recorded when they have used, or are expected to use, current expendable financial resources, except that unmatured interest on general long-term debt is recorded when due.
Note 1 of the County=s financial statement, included as Appendix A to this Official Statement, contains a detailed discussion of the County=s significant accounting policies. Independent Auditors’ Reports, 2003 B 2007
G.R. Rush & Company, P.C., independent certified public accountants, acted as the County=s auditors for the fiscal years ended December 31, 2003 through December 31, 2004. Henderson Hutcherson & McCullough, PLLC, acted as the County’s auditors for the fiscal years ended December 31, 2005 through December 31, 2007.
The auditors state that the general purpose financial statements of the County for the fiscal years ended December 31, 2003 through December 31, 2007 present fairly, in all material respects, the financial position of the County as of each respective fiscal year, and the results of its operations and cash flows of its proprietary fund types for each respective fiscal year in conformity with GAAP. Budgetary Process
General Description. The County=s budget process begins when a proposed operating budget is prepared for all Governmental Funds for the next fiscal year. A public hearing is conducted to obtain taxpayer comments. The budgets are then legally enacted through approval by the Board of Commissioners. Budgets are adopted on a modified accrual basis of accounting which is consistent with GAAP. The County prepares a budget for the Special Sales Tax using projected total Special Sales Tax revenues and projected capital outlays.
Pursuant to O.C.G.A. ' 36-81-3(b), the annual budgets approved by the Board of Commissioners for the General Fund and each Special Revenue Fund must be balanced. A budget is balanced when the sum of estimated net revenues and appropriated fund balances is equal to appropriations. The Board of Commissioners has the authority under O.C.G.A. ' 36-81-3(d), however, to amend the budget as follows:
(1) Any increase in appropriation at the legal level of control of the County, whether accomplished through a change in anticipated revenues in any fund or through a transfer of
26
appropriations among departments, requires the approval of the Board of Commissioners. Such amendment shall be adopted by ordinance or resolution;
(2) Transfers of appropriations within any fund below the County’s legal level of control requires
only the approval of the budget officer; and
(3) The Board of Commissioners may amend the legal level of control to establish a more detailed level of budgetary control at any time during the budget period. Said amendment shall be adopted by ordinance or resolution.
General Fund Budgets. Set forth below is a summary of the County=s General Fund budget for the
fiscal year ending December 31, 2008. The budget for fiscal year 2008 is based upon certain assumptions and estimates of the County=s management regarding future events, transactions, and circumstances. Realizations of the results projected in the budget for fiscal year 2008 will depend upon implementation by management of policies and procedures consistent with the assumptions. Accordingly, the actual results achieved could materially vary from those projected in the budget for fiscal year 2008 shown below.
Revenues
Property Taxes .................................... Intangible Tax ..................................... Railroad Equipment Tax ..................... Real Estate Transfer Tax..................... Franchise Fee Cable TV...................... Local Option Sales Tax....................... Alcohol Tax ........................................ Insurance Premium Tax ...................... Financial Institution Tax ..................... Motor Vehicle Tag Collection ............ Other Taxes ......................................... TVA in Lieu of Tax Payments ............
Licenses and Permits........................... Charges for Services ........................... Intergovernmental Revenue ................ Fines and Forfeitures........................... Miscellaneous .....................................
Total Revenues............................... Expenditures General Government ........................... Public Safety ....................................... Highway and Streets ........................... Culture and Recreation........................ Health and Welfare ............................. Sanitation ............................................ Miscellaneous .....................................
Total Expenditures .........................
$2,824,000 130,000
10,000 28,000 15,000
2,310,000 160,000 670,000
9,000 240,000
1,400 170,000 -0- 562,000 216,665 649,000
921,200
$8,916,265
$2,346,100 4,669,465
471,300 280,000 528,000 522,400
99,000
$8,916,265
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LEGAL MATTERS Litigation
The County, like other similar bodies, is subject to a variety of suits and proceedings arising in the ordinary conduct of its affairs. The County, after reviewing the current status of all pending and threatened litigation with its counsel, Robin Rogers, Esq., Trenton, Georgia, believes that, while the outcome of litigation cannot be predicted, the final settlement of all lawsuits which have been filed and of any actions or claims pending or threatened against the County or its officials in such capacity are adequately covered by insurance or sovereign immunity or will not have a material adverse effect upon the financial position or results of operations of the County.
It is a condition of closing that the County certify that there is no action, suit, proceeding, controversy or litigation of any nature pending or, to the knowledge of the County, threatened against or affecting the County before or by any court, public board or body: (i) in any way affecting or questioning the validity of the Bonds or the provisions of the security therefor, or restraining or enjoining or seeking to restrain or enjoin the execution, delivery, or sale of the Bonds, (ii) questioning or contesting the existence of the County, the title of any of the officers thereof to their respective offices or the exclusion from gross income for federal income tax purposes of the interest on the Bonds, or (iii) wherein an unfavorable decision, ruling or finding would have a material adverse effect on the financial condition of the County. Legal Proceedings
Validation of Bonds. In accordance with the law of the State, the Bonds and the security therefor were confirmed and validated on __________, 2008 by judgment of the Superior Court of Dade County, Georgia. Under Georgia law, the judgment of validation will be forever conclusive against the County.
Opinions of Counsel. All legal matters incidental to authorization and issuance of the Bonds are subject to the approval of Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. It is anticipated that the approving opinion will be in substantially the form attached hereto as Appendix B. Certain legal matters will be passed upon for the County by its counsel, Robin Rogers, Esq., Trenton, Georgia, and for the Underwriter by its counsel, Gray & Pannell LLP, Savannah, Georgia. The payment of legal fees is contingent upon issuance of the Bonds.
The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys or law firms rendering the opinion as to the legal issues explicitly addressed therein. By rendering a legal opinion, the attorney or law firm does not become an insurer or guarantor of the transaction opined upon, or of the future performance of parties to such transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Tax Exemption The Internal Revenue Code of 1986 (the “Code”) establishes certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for purposes of federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issue of the Bonds. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Bonds are to be invested and require that certain investment earnings on the foregoing be rebated on a periodic basis to the Treasury Department of the United States. The County has covenanted in the Resolution to comply with the requirements of the Code in order to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes.
In the opinion of Bond Counsel, under existing law, and assuming compliance with the aforementioned covenant, interest on the Bonds (a) is excluded from gross income for purposes of federal income taxation and (b) will not be included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; however, such interest will be taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations.
Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, foreign corporations which conduct a trade or business in the United States, Subchapter S Corporations, certain recipients of social
28
security or railroad retirement benefits, property and casualty insurance corporations and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Bond Counsel has expressed no opinion regarding any such other tax consequences. Prospective purchasers of the Bonds should consult with their own tax advisors as to the consequences of acquiring, carrying or disposing of the Bonds.
In the further opinion of Bond Counsel, under existing law, interest on the Bonds is exempt from present state income taxation within the State of Georgia. Interest on the Bonds may or may not be subject to state or local income taxation in jurisdictions other than the State of Georgia. Each purchaser of the Bonds should consult his or her own tax advisor regarding the tax-exempt status of interest on the Bonds in a particular state or local jurisdiction other than the State of Georgia.
In addition, in the opinion of Bond Counsel, based upon a representation of the County, the
Bonds are “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code. Original Issue Discount*
With respect to the Bonds maturing November 1, ____ (the “Original Issue Discount Bonds”), the difference between the initial public offering prices of such Original Issue Discount Bonds and their respective stated principal amounts constitutes original issue discount treated as interest which is excluded from gross income for federal income tax purposes subject to the caveats and provisions described in the foregoing section.
In the case of an owner of an Original Issue Discount Bond, the amount of original issue discount which is treated as having accrued with respect to such Original Issue Discount Bond is added to the cost basis of the owner in determining, for federal income tax purposes, gain or loss upon disposition of an Original Issue Discount Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of an Original Issue Discount Bond which are attributable to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal income tax purposes.
Original issue discount is treated as compounding semiannually, at the yield to maturity of each individual Original Issue Discount Bond, on days which are determined by reference to the maturity date of such Original Issue Discount Bond. The amount treated as original issue discount on an Original Issue Discount Bond for a particular semiannual accrual period is equal to (i) the product of (a) the yield to maturity for such Original Issue Discount Bond (determined by compounding at the close of each accrual period) and (b) the amount which would have been the tax basis for such Original Issue Discount Bond at the beginning of the particular accrual period if held by the original purchaser, (ii) less the amount of any interest payable for such Original Issue Discount Bond during the accrual period. The tax basis is determined by adding to the initial public offering price on such Original Issue Discount Bond the sum of the amounts which have been treated as original issue discount for such purposes during all prior periods. If an Original Issue Discount Bond is sold between semiannual compounding dates, original issue discount which would have accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Premium Bonds*
The difference between the principal amount of the Bonds maturing on ____________, ____ through ________, ____ (collectively, the “Premium Bonds”) and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such Premium Bond in the initial offering to the public at the initial offering price is required to decrease such purchaser=s adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning the Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds.
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MISCELLANEOUS Ratings Moody’s Investors Service has assigned a rating of “A3” to the Bonds and Standard & Poor’s Ratings Services, A Division of The McGraw-Hill Companies, Inc., has assigned a rating of “AA-” to the Bonds. The rating reflects only the views of the rating agency. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. An explanation of the significance of the rating may be obtained from the rating agency furnishing such rating. There is no assurance that either or both the ratings will remain unchanged for any given period of time or that either or both the ratings will not be revised downward or withdrawn entirely by the rating agency, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of either or both the ratings may have an adverse effect on the liquidity and market price of the Bonds. The rating agencies may be contacted as follows: (i) Moody’s Investors Service, Inc., 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, telephone (212) 553-1362 and (ii) Standard & Poor’s Rating Service, A Division of The McGraw-Hill Companies, Municipal Finance Department, 55 Water Street, 38th Floor, New York, New York 10041, telephone (212) 438-2074. Underwriting
Pursuant to a bond purchase agreement executed by and between the County and the Underwriter on __________, 2008, the Underwriter has agreed to purchase the Bonds at a price of $___________, which represents the par amount of the Bonds, $_________, less Underwriter=s Discount of $__________ [and net Original Issue Discount][, plus net Original Issue Premium]. [In addition, the Underwriter will pay accrued interest from the date of the Bonds to the date of payment for and delivery of the Bonds.] The obligations of the Underwriter to accept delivery of the Bonds are subject to numerous conditions set forth in the bond purchase agreement.
The Underwriter may offer and sell the Bonds to other dealers and other purchasers at prices lower than the public offering prices stated on the cover hereof. The initial public offering prices may be changed from time to time by the Underwriter. Continuing Disclosure
Securities and Exchange Commission Rule 15c2-12 (the “Rule”) under the Securities Exchange Act of 1934 imposes continuing disclosure obligations on the issuers and obligors of certain state and municipal securities to permit participating underwriters to offer and sell the issuer=s securities. On the date of issuance of the Bonds, the County will sign a Continuing Disclosure Certificate under the provisions of which the County shall covenant for the benefit of the beneficial owners of the Bonds to provide (i) certain financial information and operating data relating to the County (the “Annual Report”) and (ii) notices of the occurrence of certain enumerated events, if material. The Annual Report and the notices of material events will be filed with each Nationally Recognized Municipal Securities Information Repository and with the State information depository at such time as one is formed. The specific nature of the information to be contained in the Annual Report or in the notices of material events is in “Appendix C: THE CONTINUING DISCLOSURE CERTIFICATE.” These covenants shall be made by the County in order to assist the Underwriter in complying with the Rule. The County has never failed to comply in all material respects with its previous undertakings with regard to the Rule to provide annual reports or notices of material events. Independent Auditor; Financial Statements
Henderson, Hutcherson & McCullough, PLLC, Certified Public Accountants, Chattanooga, Tennessee, have been employed by the County as its independent auditor. The financial statements of the County as of December 31, 2007, and for the year then ended, attached hereto as Appendix A, have been audited by Henderson, Hutcherson & McCullough, PLLC, Certified Public Accountants, Chattanooga, Tennessee, to the extent and for the period indicated in their report thereon which appears in such appendix. Such financial statements have been included herein in reliance upon the report of Henderson, Hutcherson & McCullough, PLLC, given upon the authority of such firm as experts in accounting and auditing.
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Miscellaneous
Insofar as any statement in this Official Statement involves matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of the statements will be realized. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the holders of the Bonds.
Use of the words “shall,” “must,” or “will” in summaries of documents or laws in this Official Statement to describe future events or continuing obligations is not intended as a representation that such event will occur or obligation will be fulfilled but only that the document or law contemplates or requires such event to occur or obligation to be fulfilled. Approval of Official Statement
The execution and delivery of this Official Statement, and its distribution and use by the Underwriter, have been duly authorized and approved by the County.
DADE COUNTY
By: ______________________________ County Executive/Chairman
Appendix A AUDITED FINANCIAL STATEMENTS OF DADE COUNTY, GEORGIA FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
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Appendix B PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL
The form of Legal Opinion included in this Appendix B has been prepared by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel, and is substantially the form to be given in connection with the delivery of the Bonds.
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Appendix B-1
[Date of Closing] DRAFT
Board of Commissioners of Dade County Trenton, Georgia Re: $6,500,000 DADE COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008 To the Addressee: We have acted as bond counsel in connection with the issuance by Dade County (the “County”) of its GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008, in the principal amount of $6,500,000, dated as of the date of issuance and delivery thereof (the “Bonds”). In this capacity we have examined (i) the Constitution and general laws of the State of Georgia; (ii) certified copies of proceedings of the Board of Commissioners of Dade County (the “Board of Commissioners”), the governing body of the County, including a resolution adopted on May 1, 2008 calling a special county one percent sales and use tax election in the County on July 15, 2008 (the “Election”); (iii) a certified copy of a bond resolution adopted by the Board of Commissioners on _________, 2008 (the “Bond Resolution”); (iv) a certified copy of the proceedings in and the judgment of the Superior Court of Dade County, Georgia by which the Bonds were validated; and (v) other proofs authorizing and relating to the issuance of the Bonds, including a copy of the consolidated returns of the Election. As to questions of fact material to our opinion, we have relied upon representations of the County contained in the Bond Resolution and in the certified proceedings and other certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation. Principal of and interest on the Bonds are payable on May 1 and November 1 of each year, beginning May 1, 2009, with a final payment due on November 1, 2015. Principal of each Bond matures in the amounts, and interest on each Bond is payable in the manner and at the rate of interest, stated in each Bond and in the Bond Resolution. The Bonds are not subject to redemption prior to maturity. The Bonds are subject to transfer and exchange in the manner and on the terms specified in each Bond and the Bond Resolution. The Bonds are being issued pursuant to a book-entry system in fully registered form. The legal opinions expressed herein are based upon existing law, are subject to judicial discretion regarding usual equity principles and do not relate to compliance by the County, the initial purchasers of the Bonds, or any other party with any statute, regulation or ruling of the State of Georgia or the United States of America regarding the sale (other than the initial sale by the County) or distribution of the Bonds. The Internal Revenue Code of 1986 (the “Code”) sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for purposes of federal income taxation. Noncompliance with such requirements may cause interest on the Bonds to be included in gross income retroactively to the date of issue thereof. The
[Date of Closing] Page 2
Appendix B-2
County has covenanted in the Resolution to comply with the requirements of the Code in order to maintain the exclusion from federal gross income of interest on the Bonds. In reliance upon and subject to the foregoing, we are of the opinion that: 1. The Bonds have been duly authorized and issued by the County, with the assent of a majority of the qualified voters of the County voting in the Election held for that purpose and in accordance with the Constitution and laws of the State of Georgia. 2. The payment of the Bonds is validly secured by a special county one percent sales and use tax which will be collected within Dade County beginning upon the termination of the special sales tax now in effect, and shall be collected for a period of time not to exceed six years. The principal of and interest on the Bonds are payable from a separate account in which are to be placed the proceeds received by the County from such sales and use tax. The obligation to pay such principal and interest, however, is a general obligation debt of the County, and constitutes a pledge of the full faith, credit, and taxing power of the County. Any liability on such debt which is not satisfied from the proceeds of the sales and use tax shall be satisfied from the general fund of the County or from a direct annual ad valorem tax to be levied for such purpose. 3. The Bonds were duly confirmed and validated by judgment of the Superior Court of Dade County entered on _________, 2008 and no valid appeal may be taken from said judgment of validation. 4. Assuming compliance with the aforementioned covenant by the County to maintain the exclusion from federal gross income of interest on the Bonds, interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and the interest thereon is exempt from taxation by the State of Georgia and any of its political subdivisions. The interest on the Bonds will not be included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; however, such interest will be taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations.
The County has designated the Bonds as, and we are of the opinion, based upon the representations of the County, that the Bonds are, “qualified tax-exempt obligations” pursuant to Section 265(b)(3) of the Code. The County has certified that the reasonably anticipated amount of qualified tax-exempt obligations which the County, together with any entity subordinate to the County and all entities which issue obligations on behalf of the County, will issue during the calendar year in which the Bonds are issued and delivered will not exceed $10,000,000 in aggregate principal amount.
Although we have rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, a bondholder’s federal tax liability may otherwise be affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the bondholder’s other items of income or deduction. We express no opinion regarding any such other tax consequences.
[Date of Closing] Page 3
Appendix B-3
This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Yours very truly, GRAY & PANNELL LLP By:___________________ A Partner
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Appendix C THE CONTINUING DISCLOSURE CERTIFICATE
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CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by Dade County, Georgia (the “County), a political subdivision of the State of Georgia, in connection with the issuance of the DADE COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008, in the aggregate principal amount of $6,500,000 (the “Bonds”). The Bonds are being issued pursuant to a bond resolution adopted by the Board of Commissioners of the County on ____________, 2008 (the “Resolution”). The County covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the County for the benefit of the Holders and Beneficial Owners of the Bonds (together, the “Bondholders”) and in order to assist the Participating Underwriter (defined below) in complying with U.S. Securities and Exchange Commission Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution or parenthetically defined herein, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings: “Annual Report” means any Annual Report provided by the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Beneficial Owner” means any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. “Board of Commissioners” means the Board of Commissioners of Dade County, Georgia, the governing body of the County, and any successor or successors in office to the present Board of Commissioners. “Central Post Office” means http://www.DisclosureUSA.org and any successor thereto, which operates as an Internet-based electronic filing system, the purpose of which is to facilitate issuer compliance with the continuing disclosure requirements of the Rule, which system was established and is presently operated by the Texas Municipal Advisory Council. “Dissemination Agent” means the County or any successor Dissemination Agent designated in writing by the County and which has filed with the County a written acceptance of such designation. “Fiscal Year” means any period of 12 consecutive months adopted by the County as the County’s fiscal year for financial reporting purposes and initially shall mean the period beginning on January 1 of a calendar year and ending on December 31 of the following calendar year. “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MAC” means the Texas Municipal Advisory Council.
Appendix C - 1
“MSRB” means the Municipal Securities Rulemaking Board. “NRMSIR” means any nationally recognized municipal securities information repository for purposes of the Rule. The names and contact information for the NRMSIRs are available at the Internet website (www.sec.gov/info/municipal/nrmsir.htm) of the Securities and Exchange Commission. “Obligated Person” has the meaning set forth in the Rule. “Participating Underwriter” means Morgan Keegan & Company, Inc., Atlanta, Georgia, the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. “Repository” means each NRMSIR and each SID, if any. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “County” means the Dade County, a political subdivision of the State of Georgia. “SID” means any public or private repository or entity designated by the State of Georgia as a state information repository for the purpose of the Rule. As of the date of this Disclosure Certificate, there is no SID. SECTION 3. Provision of Annual Reports. (a) The County will provide, or cause the Dissemination Agent (if other than the County) to provide, electronically to the Central Post Office (which then will submit such filings electronically to each Repository), not later than one year after the end of each Fiscal Year, commencing with the report for the Fiscal Year ending December 31, 2009, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate; provided, however, that if the use of a Central Post Office has been discontinued, the Annual Report shall be provided directly to each Repository. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the County may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. In such event, the audited financial statements will be submitted promptly upon their availability. If the County’s fiscal year changes, notice of such change shall be given in the same manner as for a Listed Event under Section 5(c). (b) Not later than fifteen (15) business days prior to the date specified in paragraph (a) of this Section 3 for providing the Annual Report to the Central Post Office, the County shall provide the Annual Report to the Dissemination Agent (if other than the County). If the County is unable to provide an Annual Report by the date required in paragraph (a), the Dissemination Agent shall send a notice to the Central Post Office in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall:
Appendix C - 2
(i) determine each year, prior to the date for providing the Annual Report, the manner of filing with the Central Post Office or if the Central Post Office has been discontinued, the name and address of each Repository; and
(ii) (if the Dissemination Agent is other than the County), file a report with
the County certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and the name of the entity to which it was provided.
(d) Any filing under this certificate may be made solely by transmitting such filing to the MAC as provided at http://www.DisclosureUSA.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. SECTION 4. Content of Annual Reports. The County’s Annual Report shall contain or incorporate by reference: (a) The audited financial statements of the County for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as applicable to governmental entities from time to time by the Governmental Accounting Standards Board, and which shall be accompanied by an audit report, if available at the time of submission of the Annual Report to the Central Post Office pursuant to Section 3(a) hereof, resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing standards. If such audited financial statements are not available by the time the Annual Report is required to be filed pursuant to this Disclosure Certificate, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement for the Bonds, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) If generally accepted accounting principles have changed since the last Annual Report was submitted pursuant to this Disclosure Certificate and if such changes are material to the County, a narrative explanation describing the impact of such changes on the County. (c) Information for the prior fiscal year regarding the following categories of financial information and operating data of the County: (i) Special Sales Tax collections, (ii) legal debt margin, (iii) property tax digest, (iv) millage rates, (v) property tax levies and collections, (vi) ten largest taxpayers, (vii) a statement of direct and overlapping general obligation supported debt of the County, and (viii) the future debt service obligations of the County. Any or all of the items listed above may be incorporated by specific reference to other documents, including official statements of debt issues with respect to which the County is an “obligated person” (as defined by the Rule), which have been filed with each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The County must clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of Significant Events. (a) The County shall provide or cause to be provided through the Dissemination Agent, in a timely manner, to the Central Post Office (or, if the use of a Central Post Office has
Appendix C - 3
been discontinued, to each Repository) notice of the occurrence of any of the following events with respect to the Bonds, if such event is material: 1. Principal and interest payment delinquencies. 2. Non-payment related defaults.
3. Unscheduled draws on debt service reserves reflecting financial difficulties.
4. Unscheduled draws on credit enhancements reflecting financial difficulties.
5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions or events affecting the tax-exempt status of the
Bonds. 7. Modifications to rights of Bondholders. 8. Bond calls which are optional, contingent, or unscheduled. 9. Defeasances.
10. Release, substitution, or sale of property securing repayment of the Bonds.
11. Rating changes. (b) Notwithstanding the foregoing, notice of Listed Events described in paragraph (a)(8) and (9) above need not be given under this Section 5 any earlier than the notice (if any) of the underlying event is given to Bondholders of affected Bonds pursuant to the Resolution. (c) The content of any notice of the occurrence of a Listed Event shall be determined by the County and shall be in substantially the form attached as Exhibit B. SECTION 6. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the County chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the County shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 7. Termination of Reporting Obligation. The County reserves the right to terminate its obligations under this Disclosure Certificate if and when the County no longer remains an Obligated Person with respect to the Bonds within the meaning of the Rule; in particular upon the occurrence of the legal defeasance, prior redemption, or payment in full of all of the Bonds. The County will provide notice of such termination to the Central Post Office (or, if the use of a Central Post Office has been discontinued, to each Repository). SECTION 8. Dissemination Agent. The County, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. A Dissemination Agent other than the County shall not be responsible in any manner for the content of any notice or report prepared by the County pursuant to this Disclosure Certificate.
Appendix C - 4
SECTION 9. Amendment. Notwithstanding any other provision of this Disclosure Certificate, the County may amend this Disclosure Certificate if: (a) such amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Obligated Person on the Bonds, or type of business conducted; (b) such amendment is supported by an opinion of counsel expert in federal securities laws, to the effect that the undertakings contained herein, as amended, would have complied with the requirements of the Rule on the date hereof, after taking into account any amendments or official interpretations of the Rule, as well as any change in circumstances; and (c) such amendment does not materially impair the interests of the Bondholders, as determined either by an unqualified opinion of nationally recognized bond counsel filed with the County, or by the approving vote of the Bondholders pursuant to the terms of the Resolution at the time of such amendment. If any provision of this Disclosure Certificate is amended, the first release of the Annual Report containing any amended financial information or operating data shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being provided. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5 and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. Default. If the County fails to comply with any provision of this Disclosure Certificate, any Bondholder’s right to enforce the provisions of this undertaking shall be limited to a right to obtain mandamus or specific performance by court order of the County’s obligations pursuant to this Disclosure Certificate. Any failure by the County to comply with the provisions of this Disclosure Certificate shall not be an event of default with respect to the Bonds. SECTION 11. Duties, Immunities, and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and, to the extent allowed by applicable law, the County agrees to indemnify and save the Dissemination Agent (if other than itself), its officers, directors, employees, and agents, harmless against any loss, expense, and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the County under this Section 11 shall survive resignation or removal of the Dissemination Agent (if other than itself) and payment of the Bonds. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the County, the Dissemination Agent (if other than the County), the Participating Underwriter, and Bondholders, and shall create no rights in any other person or entity.
Appendix C - 5
SECTION 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 14. Governing Law. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State of Georgia. SECTION 15. Severability. In case any one or more of the provisions of this Disclosure Certificate shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Certificate, but this Disclosure Certificate shall be construed and enforced as if such illegal or invalid provision had not been contained herein. Date: ___________________, 2008. DADE COUNTY (SEAL) By:_____________________________ County Executive/Chairman Board of Commissioners Attest:___________________________ County Clerk
[SIGNATURE PAGE TO CONTINUING DISCLOSURE CERTIFICATE]
Appendix C - 6
Exhibit A
NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Dade County (Georgia) Name of Bond Issue: $6,500,000 DADE COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008 Date of Issuance: _____________, 2008 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate executed by Dade County on ___________, 2008. The Issuer anticipates that the Annual Report will be filed by _____________. Dated: _______________ [Name of Dissemination Agent] By:____________________________
____________
Appendix C - 7
Exhibit B
NOTICE OF THE OCCURRENCE OF [Insert the Listed Event]
relating to
$6,500,000 DADE COUNTY (GEORGIA) GENERAL OBLIGATION SALES TAX BONDS, SERIES 2008 (the “Bonds”)
CUSIP NUMBERS1:
Notice is hereby given that [insert the Listed Event] has occurred. [Describe circumstances leading up to the event, action being taken and anticipated impact.] This notice is based on the best information available at the time of dissemination and is not guaranteed as to accuracy or completeness. Any questions regarding this notice should be directed to [insert instructions for presenting securities, if applicable]. [Notice of a Listed Event constituting defeasance shall include the following: The County hereby expressly reserves the right to redeem such refunded or defeased bonds prior to their stated maturity date in accordance with the optional/extraordinary redemption provisions of said defeased Bonds. OR The County hereby covenants not to exercise any optional or extraordinary redemption provisions under the Bond Resolution; however, the sinking fund provision will survive the defeasance. AND The Bonds have been defeased to [maturity/the first call date, which is __________]. This notice does not constitute a notice of redemption and no Bonds should be delivered to the County or the Paying Agent as a result of this mailing. A Notice of Redemption instructing you where to submit your Bonds for payment will be mailed _______ to _______ days prior to the redemption date.] Dated:_____________________ DADE COUNTY By:______________________________
1 No representation is made as to the correctness of the CUSIP number either as printed on the Bonds or as contained herein, and reliance may only be placed on other bond identification contained herein.
Appendix C - 8
DISSEMINATION AGENT’S CERTIFICATE The undersigned hereby certifies that he/she is an officer of __________________, in the City of ________, ________ (the “Bank”), a _______________ [national/state] banking corporation duly created and existing under the laws of the _______________ [USA/State of Georgia], holding the office indicated below his/her signature, that he/she has personal knowledge of the facts herein set forth, and further certifies as follows: 1. The Bank is authorized and qualified to accept the duties of Dissemination Agent pursuant to appointment by a Disclosure Certificate signed on _____________, 20__ by the Board of Commissioners of Dade County, as the governing body for Dade County. 2. By acceptance of its appointment as Dissemination Agent, the Bank covenants and agrees that it will perform all services and assume its duties as such imposed by the Disclosure Certificate for the fees and on the conditions agreed upon with Dade County. Signed and sealed as of the ____ day of ____________, 20__. [Name of Dissemination Agent] (CORPORATE SEAL) By:______________________________ [name] [Title] Attest:____________________________ [name] [Title]
Appendix C - 9