$33,050,000 CITY OF BUFORD (GEORGIA) General Obligation Bonds, Series 2015

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1 NEW ISSUE RATING: Enhanced: Moody s Aa2 BOOK-ENTRY ONLY Underlying: Moody s Aa3 See MISCELLANEOUS -Rating herein. In the opinion of Alston & Bird, LLP, Atlanta, Georgia, Bond Counsel, under existing law and subject to the limitations and conditions described herein and assuming continuous compliance with certain covenants described herein, (i) interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations, and (ii) interest on the Bonds is exempt from state income taxation within the State of Georgia. See Tax Exemption herein. $33,050,000 CITY OF BUFORD (GEORGIA) General Obligation Bonds, Series 2015 Dated: Date of Issuance Due: January 1, as shown below The CITY OF BUFORD GENERAL OBLIGATION BONDS, SERIES 2015 (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 July 1 and January 1 of each year (each an Interest Payment Date ), beginning January 1, So long as Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the registered owner of the Bonds, disbursements of payments of principal of and interest on the Bonds to Cede & Co. is the responsibility of U.S. Bank National Association, 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 being issued by the City of Buford (the City ) to provide funds, together with other available funds of the City of Buford School System (the School System ) to finance the costs of acquiring, constructing, and equipping certain capital outlay projects of the School System and the costs of issuance of the Bonds including capitalized interest. See THE BONDS -Estimated Sources and Uses of Funds; -The Projects herein. MATURITY SCHEDULE Maturity Principal Amount Interest Rate Yield CUSIP 2019 $11,960, % 1.570% CS , CT ,875, CU ,700, CV4 The Bonds maturing after January 1, 2026 are subject to optional redemption prior to maturity. See THE BONDS Redemption herein. The obligation to pay the principal of and interest on the Bonds is a general obligation debt of the City and constitutes a pledge of the full faith and credit and taxing power of the City. Debt service on the Bonds shall be paid from the general fund of the City and from ad valorem taxes to be levied, without limitation as to rate or amount, upon all property in the City which is subject to taxation for bond purposes, sufficient to pay the principal of and interest on the Bonds. As additional security for the Bonds, the School System will participate in the State of Georgia Intercept Program. 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 City and received by Stephens Inc., Atlanta, Georgia (the Underwriter ), subject to the approval of legality by Alston & Bird, LLP, Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed upon for the City by its counsel, Gregory D. Jay, Esq., Buford, Georgia, and for the Underwriter by its counsel, Gray Pannell & Woodard 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 June 17, STEPHENS INC. Official Statement dated: May 20, 2015.

2 CITY OF BUFORD Board of Commissioners Phillip Beard, Chairman L. Chris Burge, Vice Chairman Michael Y. Smith Appointed Officials Bryan B. Kerlin, City Manager Mike Brown, Finance Director/Deputy Clerk Kim Wolfe, City Clerk/Planning Director SPECIAL SERVICES Independent Auditors Wilcox & Bivings, P.C. Suwanee, Georgia City Attorney Gregory D. Jay, Esq. Buford, Georgia Bond Counsel Alston & Bird, LLP Atlanta, Georgia Underwriter s Counsel Gray Pannell & Woodward LLP Savannah, Georgia Underwriter Stephens Inc. Atlanta, Georgia

3 TABLE OF CONTENTS Page INTRODUCTION... 1 The City... 1 The School System... 1 Security and Sources of Payment for the Bonds... 1 Purpose of the Bonds... 1 Description of the Bonds... 2 Tax Status... 2 Bond Registrar and Paying Agent... 2 Professionals Involved in the Offering... 2 Terms of the Offering... 3 Continuing Disclosure... 3 Additional Information... 3 THE BONDS... 4 Description... 4 Redemption... 4 Notice of Redemption... 4 Book-Entry Only System of Delivery of Bonds... 5 Authority for Issuance of the Bonds... 7 Validation of the Bonds... 7 Estimated Sources and Uses of Funds... 7 The Projects... 8 Investment of Money... 8 Construction Fund Disbursements Requisition Procedure Change of Use of Bond Proceeds Security and Sources of Payment for the Bonds Security from Ad Valorem Taxation Additional Security from Educational Sales Tax Enforcement of Remedies THE BUFORD SCHOOL SYSTEM Introduction Board of Education Administration Operations Schools, School Term Enrollment Employees, Employee Relations, and Labor Organizations Six Year General Fund History Budgetary Process for General Fund CITY OF BUFORD Introduction Government Format Government Services and Facilities Employees and Employee Relations Population Information Per Capita Personal Income Industry and Employment Building Permits i

4 Page DEBT STRUCTURE OF THE CITY OF BUFORD Summary of City Debt by Category Indebtedness of Overlapping Governmental Entities Debt Limitation Long and Short Term Indebtedness Debt Service Schedule CITY OF BUFORD AD VALOREM TAXATION Introduction Property Subject to Taxation Tax Relief Initiatives Assessed Value Annual Tax Levy Property Tax Collections M&O Tax Digest Ten Largest Taxpayers M&O Tax Levies and Collections for the City and School System Millage Rates CITY OF BUFORD FINANCIAL INFORMATION Five Year General Fund History Five Year Total-Primary Government History Five Year Proprietary Funds History Management Comments Concerning Material Trends in Revenues and Expenditures Accounting Policies Independent Auditor s Reports Budgetary Process for General Fund Employee Pension Plan Other Post-Employment Benefit Plans Deferred Compensation Plan Other Employee Benefits Governmental Immunity and Insurance Coverage LEGAL MATTERS Litigation Legal Proceedings Tax Matters Original Issue Discount and Premium MISCELLANEOUS Ratings Underwriting Continuing Disclosure Financial Statements Miscellaneous Certification Appendix A: Appendix B: Appendix C: FINANCIAL STATEMENTS OF THE CITY OF BUFORD FOR THE FISCAL YEAR ENDED JUNE 30, 2014 PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL FORM OF CONTINUING DISCLOSURE CERTIFICATE ii

5 No dealer, broker, salesman, or other person has been authorized by the City or 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 City, the Underwriter, or any other person. Except where otherwise indicated, all information contained in this Official Statement has been provided by the City. Sources other than the City are believed to be reliable, but are not guaranteed as to accuracy or completeness by the City 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 Ordinance has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts. iii

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7 OFFICIAL STATEMENT Relating to $33,050,000 CITY OF BUFORD (GEORGIA) GENERAL OBLIGATION BONDS, SERIES 2015 INTRODUCTION The purpose of this Official Statement, which includes the cover page and the appendices hereto, is to furnish information with respect to the proposed issuance and sale by the City of Buford (the City ) of its CITY OF BUFORD GENERAL OBLIGATION BONDS, SERIES 2015 (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. All undefined, capitalized terms used herein shall have the meaning ascribed to such terms in the Ordinance (as defined herein) unless the context requires otherwise. The City The City is a municipal corporation of the State of Georgia (the State ), located in north central Georgia, and was created and is existing under the laws of the State of Georgia. The City received its original charter in 1872 and its current charter became effective in For more detailed information, see THE CITY OF BUFORD. The School System The Charter of the City authorizes the Board of Education of the City of Buford (the Board of Education ) to regulate the operations of the system of public schools located within the corporate limits of the City, known as the Buford City School System (the School System ). The Board of Education is fiscally dependent upon the City because the governing body of the City must approve the School System s annual budget, levy the necessary taxes for the School System and issue general obligation debt for the School System. For more detailed information, see THE BUFORD CITY SCHOOL SYSTEM. Security and Sources of Payment for the Bonds The Bonds are general obligations of the City and will constitute a pledge of the full faith and credit of the City. Principal and interest are payable from ad valorem taxes which may be levied, without limitation as to rate or amount, upon all taxable property subject to taxation for bond purposes within the territorial limits of the City. As additional security for the Bonds, the School System will participate in the State of Georgia Intercept Program. For more detailed information, see THE BONDS -Security and Sources of Payment for the Bonds and CITY OF BUFORD AD VALOREM TAXATION. Purpose of the Bonds The Bonds are being issued to provide funds to finance the cost, in whole or in part, of acquiring, constructing, and equipping certain capital outlay projects of the School System and the costs of issuance of the Bonds, including capitalized interest (the Projects ). For more detailed information, see THE BONDS -Estimated Sources and Uses of Funds and THE BONDS -The Projects.

8 Description of the Bonds Redemption. The Bonds are subject to optional redemption as described herein under the heading THE BONDS -Redemption. Denominations. The Bonds will be issued in the denomination of $5,000 or any integral multiple thereof. 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 act as securities depository for the Bonds. Manner of Making Payments. Interest on the Bonds is payable on July 1 and January 1 of each year (each an Interest Payment Date ), beginning January 1, The Bonds bear interest at the rates per annum and mature in the amounts and at the times as set forth on the front cover page hereof. So long as DTC or its nominee is the registered owner of the Bonds, principal of and interest on the 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). Tax Status For more detailed information on the Bonds, see THE BONDS. In the opinion of Bond Counsel, under existing law and subject to the limitations and conditions described herein and assuming continuous compliance with certain covenants described herein, (1) interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations, and (2) interest on the Bonds is exempt from state income taxation within the State of Georgia. See Appendix B for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Bonds. For more complete discussion of such opinion and certain other tax consequences of owning the Bonds, including certain exceptions to the exclusion of the interest of the Bonds from gross income, see LEGAL MATTERS -Tax Matters herein. Bond Registrar and Paying Agent U.S. Bank National Association, Atlanta, Georgia, will act as Bond Registrar and Paying Agent for the Bonds. Professionals Involved in the Offering Certain legal matters pertaining to the City and its authorization and issuance of the Bonds are subject to the approving opinion of Alston & Bird, LLP, Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed on for the City by its counsel, Gregory D. Jay, Esq., Buford, Georgia, and by Gray Pannell & Woodward LLP, Savannah, Georgia, Underwriter s Counsel. The general purpose financial statements of the City for the fiscal year ended June 30, 2014, attached hereto as Appendix A, have been audited by Wilcox & Bivings, P.C., Certified Public Accountants, Suwanee, Georgia, to the extent and for the period indicated in its report thereon which appears in Appendix A hereto. 2

9 Terms of the Offering Authority for Issuance. The Bonds are to be issued under authority of the Constitution of the State of Georgia, the general laws of the State of Georgia, and a bond ordinance adopted by the City on February 2, 2015 (the Ordinance ). The issuance of general obligation debt of the City in the maximum aggregate principal amount of $37,915,000 was approved by a majority of the votes cast in the City in a general obligation bond election held on March 17, 2015 (the Election ). Offering. The Bonds are offered when, as, and if issued by the City and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice, to approval of legality by Alston & Bird, LLP, Atlanta, Georgia, and to validation by the Superior Court of Gwinnett, County. Delivery. The Bonds in definitive form are expected to be delivered through DTC in New York, New York on or about June 17, Continuing Disclosure The City will sign a Continuing Disclosure Certificate on the date of the sale of the Bonds, which will allow the Underwriter of the Bonds to comply with Securities and Exchange Commission Rule 15c2-12(b)(5) (the Rule ). The City has had some late and missed filings in the past but the Bonds will be the City s only current outstanding obligation subject to the Rule. For more information, see MISCELLANEOUS -Continuing Disclosure and Appendix C: FORM OF THE CONTINUING DISCLOSURE CERTIFICATE. Additional Information This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the City, the School System, the Bonds, the Ordinance, and the security and sources of payment for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to, or summaries of, the Ordinance or any other document or any constitutional provision or statute are qualified in their entirety by the exact terms of such documents or constitutional provision or statute. 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 Ordinance. Copies of all documents described herein are available upon request, prior to the delivery of the Bonds, from Stephens Inc., 3344 Peachtree Road, Suite 1650, Atlanta, Georgia 30326, (404) , and after delivery of the Bonds upon payment to the City of a charge for copying, mailing and handling, from the City of Buford, 2300 Buford Highway, Buford, Georgia 30518, telephone (770) [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 3

10 THE BONDS Description The Bonds, dated as of the date of issuance and delivery thereof, will bear interest at the rates per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months, and mature on January 1 in the years and amounts, set forth on the cover page hereof. Interest shall be payable on July 1 and January 1 of each year, beginning January 1, Redemption Optional Redemption. The Bonds maturing on or after January 1, 2026 may be redeemed prior to their respective maturities, either in whole or in part, at the option of the City, on any date in any year, not earlier than January 1, 2025, from any funds which may be made available for such purpose at a redemption price equal to 100% of the principal amount of the Bonds being redeemed, plus accrued interest thereon to date of redemption. Notice of Redemption Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first-class mail at least 30 days but not more than 60 days prior to the date fixed for redemption to the registered owner of the Bond or Bonds being redeemed (in whole or in part) at the address shown on the bond register or at such other address as is furnished in writing by such registered owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (i) the redemption date, (ii) the redemption price, (iii) if less than all outstanding Bonds are to be redeemed, the identification and CUSIP number (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (iv) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, (v) whether such redemption is conditional and any such conditions and (vi) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Paying Agent. The failure of the Bond Registrar to give any such notice to a particular owner of a Bond (or any defect in such notice) or the failure of the owner of any Bond to receive any such notice as so given shall not affect the validity of the proceedings for the redemption of any other Bond as to which proper notice is given. Prior to giving any such notice of redemption, the City shall give the Bond Registrar 45 days notice of its intent to redeem, unless waived by the Bond Registrar, and shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest, and the owner of said Bonds shall not be entitled to any rights under the Ordinance except the right to receive payment, and said Bond or portion thereof shall not be considered to be outstanding. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be redeemed by the Paying Agent at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the registered owner a new fully registered Bond or Bonds of the same series, interest rate and maturity in the denominations of $5,000 or any integral multiple thereof in the aggregate principal amount equal to the unpaid or unredeemed portion of such Bond. All Bonds which have been redeemed shall be canceled and destroyed by the Bond Registrar and shall not be reissued. 4

11 Book-Entry Only System of Delivery of the Bonds The Depository Trust Company ( DTC ), New York, NY, 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 securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC s records. The ownership interest of each actual purchaser of each 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 confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, 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 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 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. 5

12 Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the 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 any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to an issuer 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the City or Paying Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, Paying Agent, or City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to Paying Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant s interest in the Bonds, on DTC s records, to Paying Agent. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC s records and followed by a book-entry credit of tendered Securities to Paying Agent s DTC account. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, security certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, security certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. 6

13 Authority for Issuance of the Bonds On February 2, 2015, the City adopted an ordinance and resolution authorizing the issuance of general obligation school bonds of the City in the maximum principal amount of $37,915,000, conditioned upon approval by a majority of the qualified voters residing within the City voting in the Election. The Election was held in accordance with Article 14 of Chapter 2 of Title 21 of the Official Code of Georgia Annotated ( O.C.G.A. ), and resulted in approval of the issuance of general obligation debt of the City in an aggregate principal amount not to exceed $37,915,000. The resolution and ordinance dated February 2, 2015, calling the Election and the notice of Election stipulated an interest rate for the Bonds not exceeding 4% per annum. The canvass of the election showed 204 Yes votes and 12 No votes, a 94.4% approval rate. Subsequent to such approval, the City adopted the Ordinance authorizing and regulating the issuance of the Bonds. The Bonds are being issued pursuant to the authority granted by (i) the Constitution of the State of Georgia, (ii) the general laws of the State of Georgia, particularly O.C.G.A et seq., (iii) the results of the Election, and (iv) the provisions of the Ordinance. Validation of the Bonds In accordance with the law of the State of Georgia and in particular Article 2 of Chapter 82 of Title 36 of O.C.G.A., the Bonds and the security therefore will be confirmed and validated by a judgment of the Superior Court of Gwinnett County prior to their issuance and delivery. Under State law, the judgment of validation is forever conclusive against the City with respect to such validation of the Bonds and the security therefor. Estimated Sources and Uses of Funds Sources of Funds: Proceeds from Sale of Bonds 1... $37,770, Total:... $37,770, Uses of Funds: Costs of Projects 2... $35,000, Capitalized Interest... 2,389, Costs of Issuance , Total:... $37,770, Includes original issue premium of $4,720, See THE BONDS -The Projects. 3 Includes Underwriter s Discount and expenses, estimated legal and accounting fees, printing costs, validation court costs, rating agency fees, and other fees and expenses associated with the issuance of the Bonds. Concurrently with the issuance and delivery of the Bonds, the Underwriter s Discount shall be paid, all costs and expenses in connection with the issuance and sale of the Bonds, including without limitation the fees and expenses of accountants, attorneys, and the cost of printing, validation fees, and other miscellaneous fees and expenses shall be paid to those persons entitled to receive the same, and the balance of the proceeds from the sale of the Bonds shall be deposited in the City of Buford Construction Fund, Series 2015 (the Construction Fund ) created by the City pursuant to the terms of the Ordinance. 7

14 The Projects Description of the Projects. The proceeds from the sale of the Bonds will fund, in part, the projects, which consist of the following: (i) a new Buford High School that is planned to accommodate up to 2200 students with associated support facilities, (ii) acquiring, constructing, and equipping additional School System facilities, (iii) the addition of classrooms to existing schools, and (iv) renovation of existing facilities, and technology and preventive maintenance thereto in furtherance of K 12 education for the School System and paying expenses incident thereto (collectively, the Projects ). Plan of Financing. The City and the Board of Education have developed a plan to finance the Projects with proceeds from the sale of the Bonds, investment earnings thereon, and funds earned through the State capital outlay program administered by the Georgia Department of Education, the aggregate amount of which is expected to be sufficient to provide funding for the Projects. The Georgia Department of Education disburses capital outlay earnings to the Board of Education as the Board of Education incurs capital expenditures if certain requirements are met. The Board of Education expects to receive approximately $11,900,000 from the Georgia Department of Education for the construction of the Projects. The Board of Education anticipates that all Projects to be financed with proceeds from the sale of the Bonds will be completed no later than June Although the Board of Education believes it can achieve this construction schedule, unforeseen circumstances can occur in the course of construction or when remodeling or repairing older buildings, which may delay completion of the Projects. Plans and specifications for the projects that have begun to be designed or that have been completed were prepared by the architecture firm Breaux & Associates, Alpharetta, Georgia. After the architects complete and the Board of Education approves a set of plans and specifications for the Projects, the Board of Education will submit the plans and specifications to the Facilities Services Unit of the State of Georgia Department of Education for approval. After the plans and specifications are approved, the Board of Education will solicit bids for general contractors. After this selection and approval, the general contractors will select the construction sub-contractors. Contractors engaged in the construction of the Projects will be required 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 builder s risk. Investment of Money Construction Fund Money. The money in the Construction Fund will be held by Brand Bank, Buford, Georgia, as the Construction Fund Custodian (the Construction Fund Custodian ) and will be disbursed by the Construction Fund Custodian to pay the costs of the Projects. Money in the Construction Fund which are not needed at the time to pay current obligations during the construction and equipping of the Projects may be invested, upon direction to the Construction Fund Custodian from the Board of Education, in any of the following investments allowed by O.C.G.A , and no others: (a) (b) The local government investment pool created in O.C.G.A ; or The following securities and no others: (i) Bonds or other obligations of the School District, or bonds or obligations of the State or other states or of other counties, municipal corporations and political subdivisions of the State; 8

15 (ii) Bonds or other obligations of the United States or of subsidiary corporations of the United States government, which are fully guaranteed by such government; (iii) Obligations of and obligations guaranteed by agencies or instrumentalities of the United States government, including those issued by the Federal Land Bank, Federal Home Loan Bank, Federal Intermediate Credit Bank, Bank for Cooperatives, and any other such agency or instrumentality now or hereafter in existence; provided, however, that all such obligations shall have a current credit rating from nationally recognized rating service of at least one of the three highest rating categories available and have a nationally recognized market; (iv) 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 the 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; (v) 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 depositary, custodian or trustee for any such bond proceeds. The portion of such certificates of deposit in excess of the amount insured by the Federal Deposit 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 or with a trust office 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 other states or any county or municipal corporation in the State, obligations of the United States or subsidiary corporations included in paragraph (ii) above, obligations of the agencies and instrumentalities of the United States government included in paragraph 3 above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities included in paragraph (iv) above; (vi) 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 paragraphs 2 and 3 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 9

16 (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; and (vii) Interest-bearing time deposits, repurchase agreements, reverse repurchase agreements, rate guarantee agreements, or other similar banking arrangements with a bank or trust company having capital and surplus aggregating at least $50 million or with any government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York having capital aggregating at least $50 million or with any corporation which is subject to registration with the Board of Governors of the Federal Reserve System pursuant to the requirements of the Bank Holding Company Act of 1956, provided that each such interestbearing time deposit, repurchase agreement, reverse repurchase agreement, rate guarantee agreement, or other similar banking arrangement shall permit the money so placed to be available for use at the time provided with respect to the investment or reinvestment of such money. Other Money. (a) Pursuant to the Ordinance it is authorized to be established, prior to or concurrently with the issuance and delivery of the Bonds, a special account designated the CITY OF BUFORD SINKING FUND, SERIES 2015 (the Sinking Fund ). Money in the Sinking Fund shall be held and kept separate and apart from all other funds of the City and shall not in any manner be commingled with other funds of the City. The Sinking Fund will be maintained and held in trust by the City with the custodian of the account and the owners of the Bonds shall have a beneficial interest therein. Payment of the principal of and interest on the Bonds shall be made from the Sinking Fund. Money in the Sinking Fund shall be invested pursuant to O.C.G.A and O.C.G.A O.C.G.A provides that the governing body of the City, or the financial officer of the City to whom investment authority is delegated pursuant to O.C.G.A , in addition to other legal investments, may invest and reinvest money subject to its control and jurisdiction in: (a) obligations of the United States and of its agencies and instrumentalities, or obligations fully insured or guaranteed by the United States government or by one of its agencies; (b) bonds or certificates of indebtedness of the State of Georgia and of its agencies and instrumentalities; and (c) certificates of deposit of banks which have deposits insured by the Federal Deposit Insurance Corporation ( FDIC ); provided, however, that portion of such certificates of deposit in excess of the amount insured by the FDIC must be secured by direct obligations of the State of Georgia or the United States which are of a par value equal to that portion of such certificates of deposit which would be uninsured. O.C.G.A provides that the governing body of the City, or the financial officer of the City to whom investment authority is delegated, may invest and reinvest money subject to its control and jurisdiction in: (a) (b) (c) agencies; obligations of the State of Georgia or of other states; obligations issued by the United States government; obligations fully insured or guaranteed by the United States government or by one of its 10

17 (d) (e) obligations of any corporation of the United States government; prime bankers acceptances; (f) the local government investment pool established by O.C.G.A ; (g) (h) repurchase agreements; and obligations of other political subdivisions of the State of Georgia. Construction Fund Disbursements Withdrawals from the Construction Fund may be made for the purpose of paying the cost of acquiring, constructing, and equipping the Projects, including reimbursing the City and the Board of Education for advances from their other funds to accomplish the purposes hereinafter described and including the purchase of such property and equipment as may be useful in connection therewith, and, without intending thereby to limit or to restrict or to extend any proper definition of such cost as contained in the laws of the State relating to expenditure of proceeds of general obligation school bonds, shall include: (i) the cost of indemnity and fidelity bonds either to secure deposits in the Construction Fund or to insure the faithful completion of any contract pertaining to the Projects; (ii) any taxes or other charges lawfully levied or assessed against the Projects; (iii) fees and expenses of architects and engineers for engineering studies, surveys and estimates, and the preparation of plans and supervising the acquisition, construction and equipping of the Projects; (iv) all other items or expenses not elsewhere in this Section specified incident to the Projects; (v) payments made for labor, contractors, builders and materialmen in connection with the Projects and payment for machinery and equipment and for the restoration of property damaged or destroyed in connection therewith and the repayment of advances made to it for the purpose of paying any of the aforementioned costs; (vi) the cost of acquiring by purchase, and the amount of any award or final judgment in any proceeding to acquire by condemnation, lands and rights-of-way necessary for the Projects and appurtenances in connection therewith, and options and payments thereon, and any easements or rights-of-way or any damages incident to or resulting from the acquisition, construction and equipping of the Projects; and (vii) costs of issuance of the Bonds. Requisition Procedure All payments from the Construction Fund shall be made upon checks signed by an officer of the Board of Education properly authorized to sign in its behalf, but before such officer shall sign any such checks (other than checks issued in payment for the costs of issuance of the Bonds which shall not require the hereinafter described requisition and certificate but shall require an invoice for such payment) there shall be filed with the Construction Fund Custodian a requisition and certificate signed by the Project Superintendent certifying: (i) each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due; (ii) that an obligation in the stated amount has been incurred by the Board of Education, that the same is a proper charge against the Construction Fund and has not been paid, and stating that the bill, invoice or statement of account for such obligation, or a copy thereof, is on file in the office of the Project Superintendent; (iii) that the Project Superintendent has no notice of any vendor s, mechanic s or other liens or rights to liens, chattel mortgages or conditional sales contracts which should be satisfied or discharged before such payment is made; (iv) that such requisition contains no item representing payment on account or any retained percentages (other than any percentages required by the State to be retained) which the Board of Education, at the date of such certificate, is entitled to retain; and (v) that insofar as such obligation was incurred for work, material, supplies or equipment in connection with the Projects, such work was actually performed, or such material, supplies or equipment was actually installed in or about the construction or delivered at the site of the work for that purpose. 11

18 Change of Use of Bond Proceeds O.C.G.A allows the City, subsequent to the issuance of the Bonds, to expend the proceeds of the Bonds, including interest earnings thereon, for purposes of a nature substantially similar to the purpose stated in the election notice or to reduce the bonded indebtedness of the City, provided certain conditions are met. First, the City must adopt a Ordinance by a two-thirds majority vote declaring that (1) a portion of the proceeds of the Bonds remains after the purpose stated in the election notice has been accomplished, (2) the purpose stated in the election notice is no longer necessary, or (3) circumstances have changed such that expenditure of all or part of the proceeds of the Bonds is no longer practicable or feasible and setting forth the reason the proceeds of the Bonds were not expended for the purpose stated in the election notice and stating the purpose for which the proceeds of the Bonds will be expended. Second, the City, not earlier than ten days prior to expending such Bond proceeds, must publish the Ordinance described above once in the official legal organ of Gwinnett County. In addition, a copy of the Ordinance described above must be sent by registered or certified mail to the Paying Agent for the Bonds. Security and Sources of Payment for the Bonds Security from Ad Valorem Taxation. The Bonds will constitute general obligation debt of the City 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 CITY OF BUFORD -Debt Limitation. Said limitation requires that the debt of the City shall never exceed 10% of the assessed value of taxable property within the territorial limits of the City. 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 City which is subject to taxation for general obligation bond purposes, in an amount sufficient to pay the principal of and interest on the Bonds. Prior to the issuance of the Bonds, the Commission, as required by Article IX, Section V, Paragraph VI of the Constitution of Georgia, will provide for the assessment and collection of an ad valorem tax on all taxable property within the territorial limits of the City subject to taxation for general obligation bond purposes in an amount, which 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, shall be placed, pursuant to Article IX, Section V, Paragraph VI of the Constitution of the State of Georgia, in the Sinking Fund, to be used exclusively for paying the principal of and interest on the Bonds. Such money shall be held and kept separate and apart from all other revenues collected by the City or the School System. Additional Security Provided by State of Georgia Intercept Program. Prior to the issuance of the Bonds, the Board of Education, pursuant to O.C.G.A , will notify the State of Georgia Board of Education (the State Board ) of the proposed issuance of the Bonds and authorize and direct the State Board to withhold and transfer School System funds as hereinafter set forth. Under the terms of a resolution to be adopted by the Board of Education, the Sinking Fund Custodian is required to transfer to the Paying Agent for the Bonds such amounts of moneys as are necessary to provide for the payment of the interest, or principal and interest, on the Bonds coming due each Interest Payment Date. Under the terms of such resolution, if on the 15th day of the calendar month preceding each Interest Payment Date (or, if such 15th day is not a business day, the next succeeding business day) there shall not be on deposit in the Sinking Fund an amount sufficient to pay in full the interest, or principal and interest, coming due on the Bonds on such Interest Payment Date, as the case may be, and the City or the Board of Education does not immediately remedy the deficiency, the Sinking Fund Custodian shall notify the State Board of the amount of any such deficiency. Upon such notification, the State Board will withhold such amount from any State appropriation to which the School System may be entitled and thereafter transfer the 12

19 amount so withheld to the Sinking Fund Custodian not less than two business days prior to such payment date, for immediate deposit into the Sinking Fund. Enforcement of Remedies The realization of value from the pledge of the taxing power of the City to the payment of the Bonds upon any default will depend upon the exercise of various remedies specified by Georgia law. These remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. The enforceability of rights or remedies with respect to the Bonds may be limited by state and federal laws, rulings, and decisions affecting remedies and by bankruptcy, insolvency, or other laws affecting creditors rights or remedies heretofore or hereafter enacted. O.C.G.A provides that no city created under the Constitution or laws of the State of Georgia shall be authorized to file a petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. O.C.G.A also provides that no chief executive or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any city created under the Constitution or laws of the State of Georgia of any petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 13

20 THE BUFORD SCHOOL SYSTEM Introduction The City of Buford School System is an independent school system created under the Charter of the City, the boundaries of which are coextensive with the territorial limits of the City of Buford. See CITY OF BUFORD. The School System is the only public school system in the City and is vested, pursuant to the Charter of the City, with the power to conduct a system of public education within its boundaries. The School System operates public schools in the incorporated City of Buford, Georgia. Board of Education The Board of Education is authorized to make such regulations and rules as deemed necessary and proper for the effective and efficient administration of the School System. The Board of Education is composed of four regular members and one ex officio member. The registered voters of the City elect the four regular members, on staggered terms, who each serves a four-year term beginning on the January 1 following their election and serves until their successor is elected and qualified, and the chairperson of the city commission is the ex officio member, who serves as the chairperson of the Board of Education. The board shall elect from its number a vice chairperson pro tempore to act in the absence or disqualification of the chairperson. In the event of a vacancy on the Board of Education of one of the regular members for any reason other than the expiration of a term of office, such vacancy shall be filled for the unexpired term by a special election; provided, however, unless such vacancy occurs within six months of the expiration of the term of that office, such vacancy shall be filled by the ensuing regular general election. The qualifications for the regular members of the Board of Education are the same as those prescribed by the City Charter for the members of the City Commission of the City (the City Commission ) and are elected under the same rules and regulations as those governing the election of members of the City Commission. The Board of Education has the responsibility to maintain a reasonably uniform system of public schools providing quality education for all young people of the City of Buford. With the advice of the Superintendent, it must determine the policies and prescribe the rules and regulations for the management of the School System. Information as of March 1, 2015, regarding the members and officers of the Board of Education is set forth below: Name Expiration Date of Current Term Years in Office Principal Occupation Phillip Beard, Chairman December 31, Self employed Pat Pirkle, Vice-Chairman December 31, Retired Bruce Fricks December 31, Engineer Beth Lancaster December 31, Self employed Daren Perkins December 31, Gas Department Superintendent Dr. Geye Hamby, Secretary By Appointment 8 School Superintendent Administration School Superintendent. The Board of Education appoints the Superintendent of Schools (the School Superintendent ), who is the executive officer of the School System and the Secretary of the Board of Education. Dr. Geye Hamby has been the School Superintendent since July 1, Dr. Hamby 14