$3,350,000 L C (G GENERAL O S T B S 2011

NEW ISSUE - BOOK ENTRY ONLY RATING: S&P: “AA-“

(See “MISCELLANEOUS—Rating”) In the opinion of Bond Counsel, subject to the limitations and conditions described herein, and assuming compliance by the County

with certain covenants interest on the Bonds (including any original issue discount properly allocable to the holders thereof) is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, for the purpose of computing the alternative minimum tax imposed on certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The Bonds have been designated as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See “LEGAL MATTERS – Tax Exemption.”

$3,350,000* LEE COUNTY (GEORGIA)

GENERAL OBLIGATION SALES TAX BONDS, SERIES 2011

Dated: Date of Issuance Due: April 1, as shown below

Lee County, Georgia, a political subdivision of the State of Georgia (the “County”), is issuing its General Obligation Sales Tax Bonds, Series 2011 (the “Bonds”) in fully registered form and in denominations of $5,000, or any integral multiple thereof, to (i) finance certain capital outlay projects of the County, (ii) pay capitalized interest and (iii) pay expenses incident to the issuance of the Bonds. See “PLAN OF FINANCING.”

The Bonds are direct and general obligations of the County. The principal of and interest on the Bonds are payable first from the

proceeds of a one percent sales and use tax (the “Sales and Use Tax”) received by the County. To the extent that the proceeds of the Sales and Use Tax received by the County are insufficient to make such payments, the principal of and interest on the Bonds are payable from an ad valorem tax, unlimited as to rate or amount, to be levied upon all taxable property within the County subject to taxation for general obligation bond purposes. See “THE BONDS – Security and Sources of Payment for the Bonds, and “COUNTY AD VALOREM TAXATION.”

Interest on the Bonds is payable semiannually on April 1 and October 1 of each year (each such date, an “Interest Payment Date”),

commencing October 1, 2011, by The Bank of New York Mellon Trust Company, N.A., as Paying Agent, to the owners thereof as shown on the registration books maintained by The Bank of New York Mellon Trust Company, N.A., as Bond Registrar. The Bonds bear interest from the Interest Payment Date next preceding their date of authentication, except as provided herein. See “THE BONDS – Description.”

The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases will be made only in book-entry form through the Direct Participants and Indirect Participants (as herein defined), and no physical delivery of the Bonds will be made to Beneficial Owners (as herein defined). Payment of principal of and interest on the Bonds will be made to Beneficial Owners by DTC through its Direct Participants and Indirect Participants. As long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the holders of the Bonds or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”

The Bonds are not subject to redemption prior to maturity. See “THE BONDS – Redemption.”

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES OR YIELDS*

Maturity April 1

Principal Amount

Interest Rate

Yield

2014 $525,000 2015 535,000 2016 550,000 2017 565,000 2018 580,000 2019 595,000

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A

SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION.

The Bonds are offered when, as, and if issued by the County and accepted by the Underwriter, subject to prior sale, to the withdrawal or modification of the offer without notice, and to the approving opinion of Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel and Disclosure Counsel to the County. Certain legal matters will be passed on for the County by its counsel, Gatewood, Skipper & Rambo, P.C., Americus, Georgia. The Bonds are expected to be delivered through DTC in New York, New York on or about July 13, 2011.

Dated: __________, 2011 ∗Preliminary, subject to change.

PRELIMINARY OFFICIAL STATEMENT DATED JUNE 23, 2011 T

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LEE COUNTY, GEORGIA

Elected Officials

Ed Duffy, Chairman Rick Muggridge Dennis Roland Betty Johnson Bill Williams

Appointed Officials

Tony Massey, County Administrator

Heather Kittrell, Finance Director

County’s Counsel

Gatewood, Skipper & Rambo, P.C. Americus, Georgia

Underwriter

Merchant Capital, L.L.C. Atlanta, Georgia

County’s Bond Counsel and Disclosure Counsel

Murray Barnes Finister LLP

Atlanta, Georgia

County’s Accountants

Geer & Associates Albany, Georgia

No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement in connection with the offering contained herein, and if given or made, such other information or representations must not be relied upon. 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 information contained in this Official Statement has been obtained from representatives of the County, public documents, records and other sources considered to be reliable. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guaranty the accuracy or completeness of such information.

The delivery of this Official Statement at any time does not imply that any information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not representations of fact.

NO REGISTRATION STATEMENT RELATING TO THE BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) OR ANY STATE SECURITIES AGENCY. THE BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES AGENCY, NOR HAS THE SEC OR ANY STATE SECURITIES AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

In making an investment decision, investors must rely on their own examination of the County and the terms of the offering, including the merits and risks involved. The Bonds have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Official Statement. Any representation to the contrary is a criminal offense.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

(THIS PAGE LEFT BLANK INTENTIONALLY)

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TABLE OF CONTENTS

INTRODUCTION ......................................................................................................................................................... 1

General ............................................................................................................................................................ 1 The County ...................................................................................................................................................... 1 Purpose of the Bonds ....................................................................................................................................... 1 Security and Sources of Payment for the Bonds ............................................................................................. 1 Description of the Bonds ................................................................................................................................. 1 Tax Exemption ................................................................................................................................................ 2 Bond Registrar, Paying Agent and Construction Fund Custodian .................................................................. 2 Professionals Involved in the Offering ............................................................................................................ 2 Authority for Issuance ..................................................................................................................................... 3 Offering and Delivery of the Bonds ................................................................................................................ 3 Continuing Disclosure ..................................................................................................................................... 3 Other Information ............................................................................................................................................ 3

PLAN OF FINANCING ................................................................................................................................................ 4

Estimated Sources and Applications of Funds ................................................................................................ 4 The Projects ..................................................................................................................................................... 4

THE BONDS ................................................................................................................................................................. 6

Description ...................................................................................................................................................... 6 Security and Sources of Payment for the Bonds ............................................................................................. 6 Enforcement of Remedies ............................................................................................................................... 8 Redemption ..................................................................................................................................................... 8 Registration Provisions; Transfer and Exchange ............................................................................................. 8 Book-Entry System of Registration ................................................................................................................. 8

PRINCIPAL AND INTEREST REQUIREMENTS* .................................................................................................. 10

THE COUNTY ............................................................................................................................................................ 11

Introduction ................................................................................................................................................... 11 Form of Government and County Officials ................................................................................................... 11 Employees and Benefits ................................................................................................................................ 11 Demographic Information ............................................................................................................................. 12 Economic Information ................................................................................................................................... 13 Education ....................................................................................................................................................... 17 Recreation Facilities ...................................................................................................................................... 17 Utilities .......................................................................................................................................................... 17 Services ......................................................................................................................................................... 18 Healthcare ..................................................................................................................................................... 18

COUNTY DEBT STRUCTURE ................................................................................................................................. 19

Summary of County Direct and Overlapping Debt by Category ................................................................... 19 Tax Supported Debt Ratios ........................................................................................................................... 19 Limitations on County Debt .......................................................................................................................... 20 Proposed Debt ............................................................................................................................................... 20

COUNTY AD VALOREM TAXATION .................................................................................................................... 20

Introduction ................................................................................................................................................... 20 Property Subject to Taxation ......................................................................................................................... 20 Assessed Value .............................................................................................................................................. 21 Annual Tax Levy ........................................................................................................................................... 21 Property Tax Collections ............................................................................................................................... 21

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Property Tax Millage Rates ........................................................................................................................... 22 Ad Valorem Property Tax Digest .................................................................................................................. 22 Tax Collections ............................................................................................................................................. 23 Ten Largest Taxpayers .................................................................................................................................. 23

COUNTY FINANCIAL INFORMATION ................................................................................................................. 24

Accounting System and Policies ................................................................................................................... 24 Five Year General Fund History ................................................................................................................... 24 General Fund Interim Report ........................................................................................................................ 25 Budgetary Process ......................................................................................................................................... 25 Budget ........................................................................................................................................................... 26 Management’s Discussion ............................................................................................................................. 26 Insurance Coverage and Governmental Immunity ........................................................................................ 26 Investment of Funds ...................................................................................................................................... 27 Capital Improvement Plan ............................................................................................................................. 28

LEGAL MATTERS .................................................................................................................................................... 28

Pending Litigation ......................................................................................................................................... 28 Tax Exemption .............................................................................................................................................. 28 Validation Proceedings.................................................................................................................................. 29 Closing Certificates ....................................................................................................................................... 29

MISCELLANEOUS .................................................................................................................................................... 29

Rating ............................................................................................................................................................ 29 Underwriting ................................................................................................................................................. 30 Independent Auditors .................................................................................................................................... 30 Additional Information .................................................................................................................................. 30

CERTIFICATION ....................................................................................................................................................... 31

APPENDIX A: Financial Statements of the County for Fiscal Year Ended June 30, 2010 APPENDIX B: Form of Opinion of Bond Counsel APPENDIX C: Form of Continuing Disclosure Certificate

INTRODUCTION

$3,350,000 LEE COUNTY (GEORGIA)

GENERAL OBLIGATION SALES TAX BONDS, SERIES 2011 General

The purpose of this Official Statement, which includes the cover page and the Appendices hereto, is to furnish certain information in connection with the sale by Lee County, Georgia (the “County”) of $3,350,000 in aggregate principal amount of its General Obligation Sales Tax Bonds, Series 2011 (the “Bonds”).

This introduction is not a summary of this Official Statement and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to, more complete and detailed information contained in the entire Official Statement, including the cover page and the Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement and of the documents summarized or described herein, if necessary. The offering of the Bonds to potential investors is made only by means of the entire Official Statement, including the Appendices hereto. No person is authorized to detach this Introduction from the Official Statement or to otherwise use it without the entire Official Statement including the Appendices hereto. The County

The County is a political subdivision of the State of Georgia. It is located approximately 200 miles southwest of the City of Atlanta, Georgia. The County has an estimated population of 28,298. See “THE COUNTY.” Purpose of the Bonds

The proceeds of the Bonds will be used to (i) finance certain capital outlay projects for the County (the “Projects”), (ii) pay capitalized interest and (iii) pay expenses incident to the issuance of the Bonds. See “PLAN OF FINANCING.” Security and Sources of Payment for the Bonds

The Bonds are direct and general obligations of the County. The principal of and interest on the Bonds are payable first from a one percent sales and use tax (the “Sales and Use Tax”) received by the County. To the extent that the proceeds of the Sales and Use Tax received by the County is insufficient to make such payments, the principal of and interest on the Bonds are payable from an ad valorem tax, unlimited as to rate or amount, which may be levied upon all taxable property within the territorial limits of the County subject to taxation for general obligation bond purposes. See “THE BONDS – Security and Sources of Payment for the Bonds” and “COUNTY AD VALOREM TAXATION.” Description of the Bonds

Redemption. The Bonds are not subject to redemption prior to their respective maturities. See “THE BONDS – Redemption.”

Denominations. The Bonds are issuable in denominations of $5,000 or any integral multiple thereof.

Book-Entry Bonds. The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases will be made only in book-entry form through the Direct Participants and Indirect Participants (as herein

Throughout this Preliminary Official Statement, an asterisk indicates that the information is preliminary and subject to change.

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defined), and no physical delivery of the Bonds will be made to Beneficial Owners (as herein defined). Payment of principal of and interest on the Bonds will be made to Beneficial Owners by DTC through its Direct Participants and Indirect Participants. As long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the holders of the Bonds or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”

Registration, Transfers and Exchanges. The Bonds will be issued in fully registered form. When in book-entry form, ownership of Bonds held by DTC or its nominee, Cede & Co., may be transferred or exchanged in accordance with the rules and procedures of DTC. When not in book-entry form and subject to the conditions hereinafter described, ownership of any Bond may be transferred upon surrender of such Bond to The Bank of New York Mellon Trust Company, N.A., as Bond Registrar and Paying Agent, together with an assignment duly executed by the registered owner or his attorney. When not in book-entry form and subject to the conditions hereinafter described, the Bonds are exchangeable for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. See “THE BONDS – Registration Provisions; Transfer and Exchange.”

Payments. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity (each an “Interest Payment Date”), commencing October 1, 2011. Principal of the Bonds will be payable at the times and in the amounts shown on the front cover of this Official Statement. When in book-entry form, payment of the principal of and interest on the Bonds will be made by the Paying Agent directly to Cede & Co., as nominee of DTC, and will subsequently be disbursed to Direct Participants and Indirect Participants and thereafter to Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”

When not in book-entry form, interest on the Bonds is payable by check or draft mailed to the registered owners thereof at the addresses which appear on the bond registration books of the Bond Registrar as of the close of business on the fifteenth calendar day of the month preceding each Interest Payment Date (the “Record Date”). When not in book-entry form, the principal of the Bonds is payable upon surrender thereof at the corporate trust office of the Paying Agent in Atlanta, Georgia. See “THE BONDS – Description.”

For a more complete description of the Bonds, see “THE BONDS.” Tax Exemption

In the opinion of Bond Counsel, subject to the limitations and conditions described herein and assuming compliance by the County with certain covenants, interest on the Bonds (including any original issue discount properly allocable to the holders thereof) is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, that, for the purpose of computing the alternative minimum tax imposed on certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The Bonds have been designated as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). See “LEGAL MATTERS – Tax Exemption” herein and Appendix B hereto for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Bonds. Bond Registrar, Paying Agent and Construction Fund Custodian

The Bank of New York Mellon Trust Company, N.A., will act as Bond Registrar and as Paying Agent for the Bonds and as the Construction Fund Custodian. The corporate trust office of the Paying Agent and Bond Registrar is The Bank of New York Mellon Trust Company, N.A., 900 Ashwood Parkway, Suite 425, Atlanta, GA 30338, Attention: Corporate Trust Department. Professionals Involved in the Offering

Certain legal matters pertaining to the County and its authorization and issuance of the Bonds are subject to the approving opinion of Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel and Disclosure Counsel to the County. Copies of the opinion will be available at the time of delivery of the Bonds, and a copy of the proposed form of the opinion is attached hereto as Appendix B. Certain legal matters will be passed on for the County by its counsel, Gatewood, Skipper & Rambo, P.C., Americus, Georgia. The financial statements of the County as of June 30, 2010 and for the year then ended attached hereto as Appendix A have been audited by Geer & Associates,

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Albany, Georgia, to the extent and for the period indicated in its report thereon which appears in Appendix A hereto. See “MISCELLANEOUS – Independent Auditors.” Authority for Issuance

The Bonds are being issued in accordance with the Constitution of the State of Georgia and laws of the State of Georgia and a resolution of the Board of Commissioners (the “Board of Commissioners”) authorizing the issuance of the Bonds adopted on ____________, 2011 (the “Bond Resolution”). The imposition of the Sales and Use Tax and the issuance of the Bonds were approved by the qualified voters of the County by a vote of 880 in favor and 150 opposed, in an election held on March 15, 2011 (the “Election”). Offering and Delivery of the Bonds

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. The Bonds in definitive form are expected to be delivered through The Depository Trust Company in New York, New York, on or about July 13, 2011. Continuing Disclosure

The County has covenanted for the benefit of the owners of the Bonds in a Continuing Disclosure Certificate to provide (a) certain financial information and operating data relating to the County (the “Operating and Financial Data”) annually to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”) and (b) notices of the occurrence of certain events, if deemed by the County to be material (the “Material Events Notices”), to EMMA. The County’s undertaking to provide Operating and Financial Data and Material Events Notices is described in the Continuing Disclosure Certificate, a form of which is attached as Appendix C hereto. The covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12 (the “Rule”).

The County entered into a Continuing Disclosure Certificate in connection with the issuance of the Lee

County Utilities Authority Revenue Bonds, Series 2010 (the “Prior Disclosure Certificate”). Under the terms of the Prior Disclosure Certificate, the County was required to file an annual report containing certain financial information and operating data within 270 days after the fiscal year end. The County did not file the report on a timely basis. However, the County is filing the report in connection with the offering of the Bonds by incorporating this Official Statement by reference. The County has put procedures in place to ensure that future filings are made on time in accordance with the Rule.

Other Information

This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the County, the Bonds, 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 Bond Resolution, and other documents are intended as summaries only and are qualified in their entirety by reference to such laws and documents, and references herein to the Bonds are qualified in their entirety to the form thereof included in the Bond Resolution. Copies of the Bond Resolution and other documents and information are available, upon request and upon payment to the County of a charge for copying, mailing and handling, from the County Administrator, Lee County, 110 Starksville Avenue North, Leesburg, Georgia 31763, telephone (229) 759-6000. During the period of the offering of the Bonds copies of the documents are available, upon request and payment to the Underwriter of a charge for copying, mailing and handling from Merchant Capital, L.L.C., One Buckhead Plaza, Suite 1700, 3060 Peachtree Road, N.W., Atlanta, Georgia 30305, telephone (404) 504-2760.

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PLAN OF FINANCING

Estimated Sources and Applications of Funds

The sources and applications of funds in connection with the issuance of the Bonds are estimated below.

Estimated Sources of Funds: Par Amount of Bonds Plus: Net Original Issue Premium

Total Sources of Funds Estimated Application of Funds:

Costs of Projects Costs of Issuance(1) Capitalized Interest(2)

Total Application of Funds

(1) Includes Underwriter’s discount, premium for the Policy, legal and accounting fees, rating agency fees, printing

and engraving costs, validation court costs and other costs of issuance. (2) Interest will be capitalized through April 1, 2013. The Projects

Project Description. The Projects consist of the acquisition and installation of a library and certain other capital outlay projects.

Construction Fund. The Bond proceeds will be deposited in the Lee County General Obligation Sales Tax Bonds, Series 2011 Construction Fund (the “Construction Fund”), a trust fund held by the Construction Fund Custodian. Prior to the expenditure of the Bond proceeds deposited in the Construction Fund, such moneys will be invested in the investments described below. Pursuant to the Bond Resolution, the County will direct the investment of moneys on deposit in the Construction Fund.

Investment of Bond Proceeds. The moneys in the Construction Fund will be invested pending their

disbursement. Section 36-82-7 of the Official Code of Georgia Annotated provides that the proceeds of the Bonds may be invested and reinvested by the governing authority of the County in the following investments, and no others:

(1) the local government investment pool created in Chapter 83 of Title 36 of the Official Code of Georgia Annotated;

(2) bonds or obligations of the County or of the State of Georgia or other states and bonds or

obligations of other counties, municipal corporations, and political subdivisions of the State of Georgia;

(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 and obligations guaranteed by agencies or instrumentalities of the United

States government issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the 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 a nationally recognized rating service of at least one of the three highest rating categories available and have a nationally recognized market;

(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 the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the

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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 of Georgia 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 of Georgia 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 such bond proceeds, provided the portion of the 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, must 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 Georgia, 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 of Georgia or of any county or municipal corporation in the State of Georgia, obligations of the United States or subsidiary corporations described in (3) above, obligations of the agencies of the United States government described in (4) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities described in (5) above;

(7) 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 described in paragraph (3) and (4) 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 of Georgia; and

(8) 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 interest-bearing time deposit, repurchase agreement, reverse repurchase agreement, rate guarantee agreement, or other similar banking arrangement shall permit the moneys so placed to be available for use at the time provided with respect to the investment or reinvestment of such moneys.

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THE BONDS

Description

The Bonds will be dated the date of issuance and will bear interest at the rates specified on the cover page of this Official Statement (computed on the basis of a 360-day year of twelve 30-day months) from the Interest Payment Date next preceding their date of authentication to which interest has been paid (unless their date of authentication is an Interest Payment Date, in which case from such Interest Payment Date, unless their date of authentication is after a Record Date but before an Interest Payment Date, in which case from the next Interest Payment Date, or unless their date of authentication is before the first Interest Payment Date, in which case from their date of issuance). Interest will be payable semiannually on each Interest Payment Date, commencing December 1, 2011. The principal amount of the Bonds is payable at the times and in the amounts set forth on the cover page of this Official Statement. Both the principal of and interest on the Bonds shall be payable in lawful money of the United States of America.

When in book-entry form, payment of the principal of and interest on the Bonds will be made by the

Paying Agent directly to Cede & Co., as nominee of DTC, and will subsequently be disbursed to Direct Participants and Indirect Participants and thereafter to Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”

When not in book-entry form, the principal amount of the Bonds shall be payable at maturity upon presentation and surrender thereof at the principal corporate trust office of the Paying Agent. Payments of interest on the Bonds shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on each Record Date and such payments of interest shall be mailed to the registered owner at the address shown on the bond registration book. If the registered owner of Bonds in the aggregate principal amount of at least $1,000,000 shall supply wire instructions to the Paying Agent on or prior to the Record Date, then interest due on the Interest Payment Date succeeding the Record Date shall be payable by wire transfer in accordance with such instructions. Security and Sources of Payment for the Bonds

Generally. The Bonds will constitute general obligations of the County. The principal of and interest on the Bonds are payable first from a portion of the Sales and Use Tax proceeds received by the County pursuant to the Intergovernmental Contract. To the extent that the Net Proceeds are insufficient to make principal and interest payments, the principal of and interest on the Bonds are payable from an ad valorem tax unlimited as to rate or amount, upon all taxable property within the County subject to taxation for general obligation bond purposes, including real and personal property, privately owned utilities, motor vehicles, and mobile homes which are not exempt from ad valorem taxes.

Sales and Use Tax. Official Code of Georgia Annotated Section 48-8-110, et seq., as amended (the “Sales

and Use Tax Act”) authorizes counties to impose the Sales and Use Tax for a set period of time (up to six years) to fund certain capital outlay projects and to retire existing general obligation debt. The Sales and Use Tax Act further authorizes the counties to issue general obligation bonds in order to pay for all or a portion of such capital outlay projects and to use the Sales and Use Tax to pay debt service on the general obligation bonds. The voters in the county must approve the imposition of the Sales and Use Tax and the issuance of any general obligation bonds.

The Sales and Use Tax is imposed on the retail sales, rental, storage, use or consumption of tangible

personal property and on services within the County, subject to numerous exemptions provided from time to time under applicable Georgia law, including sales to certain governmental entities and to certain non-profit organizations, professional, insurance, and personal service transactions, sales of certain agricultural products, sales to and by certain agricultural enterprises, sales of certain types of manufacturing equipment, the sale or use of certain types of industrial materials, and sales of prescription drugs, certain medical devices and equipment, and lottery tickets.

The Election to approve the imposition of the Sales and Use Tax and the issuance of the Bonds was held on

March 15, 2011 in the County. A majority of the qualified voters of the County who voted in the Election, by a vote of 880 in favor and 150 opposed, approved (i) the imposition and collection of the Sales and Use Tax for a period of

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time not to exceed six years and (ii) the issuance of the Bonds. The Sales and Use Tax will be collected from September 30, 2013 (the expiration of the Sales and Use Tax currently in effect).

The County entered into an Intergovernmental Contract, dated December 15, 2010 (the “Intergovernmental

Contract”) with Leesburg and Smithville. Under the terms of the Intergovernmental Contract, Leesburg is entitled to receive 10.63% of the Sales and Use Tax proceeds; Smithville is entitled to receive 3.13% of the Sales and Use Tax proceeds; and the County is entitled to receive the balance of the Sales and Tax proceeds.

Pursuant to an Escrow Agreement, dated as of July 1, 2011 (the “Custodial Agreement”), between the

County and The Bank of New York Trust Company, N.A., as custodian (the “Custodian”), the Sales and Use Tax proceeds are to be deposited into a special trust fund held separate and apart from all other funds of the County (the “Sales Tax Fund”). The Sales Tax Fund includes four separate accounts, the “Debt Service Account,” the “County Account,” the “Smithville Account” and the “Leesburg Account.” The proceeds of the Sales and Use Tax will be remitted by the Department of Revenue to the Custodian once a month. Each month the Custodian will deposit Leesburg’s share of the proceeds into the Leesburg Account and Smithville’s share of the proceeds into the Smithville Account. The County is entitled to receive the balance of the proceeds each month (the “County Proceeds”).

The County Proceeds received by the Custodian each month will be deposited into the Debt Service Account until such time as there is on deposit therein the amount needed to pay the principal of and interest on the Bonds coming due in the current Bond Year (i.e., April 2 of each year through the following April 1). After the Debt Service Account is fully funded each Bond Year, the remaining County Proceeds will be deposited into the County Account and may be used by the County to pay costs of the County projects not funded with Bond proceeds.

If at any time there are not sufficient amounts in the Debt Service Account to pay principal and interest on the Bonds as the same become due and payable, the Custodian shall promptly notify the County by telephone confirmed in writing of the amount of the shortfall. Should the moneys in the Debt Service Account prove insufficient on any Interest Payment Date, the Custodian shall transfer the moneys necessary to make up for any such deficiency from the County Account to the Debt Service Account. Should the moneys in the Debt Service Account and the County Account prove insufficient on any Interest Payment Date, the County shall be solely responsible to make available moneys to make the required payments of principal and interest on the Bonds from such other sources as are lawfully available to the County.

The table below sets forth the collections of Sales and Use Tax for the twelve-month periods beginning

July 1 and ending June 30 for the following years. These historical collections are indicative of anticipated collections of the Sales and Use Tax, however, there can be no assurance that future collections of the Sales and Use Tax will equal or exceed past collections of the Sales and Use Tax.

Sales and Use Tax Collections(1)

Year Ending June 30 Amount 2011(2) $3,219,300 2010 3,454,690 2009 3,611,349 2008 3,764,897 2007 3,508,301 Total $17,558,537

(1) Represents total collections. (2) Represents collections from July 2010 through May 2011. Source: Georgia Department of Revenue.

General Obligations. Prior to the issuance of the Bonds, the County, as required by law, will levy an ad valorem tax on all taxable property within the County subject to taxation for general obligation bond purposes in an amount sufficient to pay the principal of and interest on the Bonds as the same becomes due and payable to the extent that the proceeds of the Sales and Use Tax are insufficient to make such payments. See “COUNTY DEBT

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STRUCTURE” and “COUNTY AD VALOREM TAXATION” herein for a discussion of the County’s outstanding debt and legal ability to incur future indebtedness and for a discussion of County ad valorem taxation. Enforcement of Remedies

The realization of value from the pledge of the taxing power of the County 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 to the extent applicable to the Bonds or the County.

Redemption

The Bonds are not subject to redemption prior to their respective maturities. Registration Provisions; Transfer and Exchange

The Bonds will be issued in fully registered form. Ownership of the Bonds will be registered on the registration books of the County maintained by the Bond Registrar. When in book-entry form, ownership of the Bonds held by DTC or Cede & Co., as its nominee, on behalf of the Beneficial Owners thereof, may be transferred or exchanged in accordance with the rules of DTC. See “THE BONDS – Book-Entry System of Registration.”

When not in book-entry form, ownership of any Bond is transferable upon surrender thereof to the Bond Registrar, together with an assignment duly executed by the registered owner or his attorney or legal representative, in such form as shall be satisfactory to the Bond Registrar. Upon any such transfer of ownership, the Bond Registrar will cause to be authenticated and delivered a new Bond or Bonds registered in the name of the transferee in any authorized denomination in the same aggregate principal amount, maturity, and interest rate as the Bonds surrendered for such transfer. When not in book-entry form, the Bonds may be exchanged for a like principal amount of Bonds of the same maturity and interest rate but of other authorized denominations. The Bond Registrar is not required to transfer or exchange any Bond after notice of redemption of such Bond has been given. For every exchange or registration of transfer, the Bond Registrar may charge an amount sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge may be made to the owner for any exchange or registration of transfer of the Bonds. Book-Entry System of Registration

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds 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 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 Section 17A of the Securities Exchange Act of 1934. 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, 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

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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 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 Bonds (“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 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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all the 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 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. 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 Bond documents. 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 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 Bonds

unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds and principal and interest payments on 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 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, the County or the Paying Agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or the 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.

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DTC may discontinue providing its services as depository with respect to Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, certificates for the Bonds are required to be printed and delivered.

The County may decide to discontinue use of the system of book-entry transfers through DTC (or a

successor securities depository). In that event, certificates for the Bonds will be printed and delivered. The information in this section concerning DTC and DTC’s book-entry system has been obtained from

sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof.

NEITHER THE COUNTY NOR THE PAYING AGENT NOR THE UNDERWRITER (OTHER THAN IN THEIR CAPACITY, IF ANY, AS A DIRECT PARTICIPANT OR AN INDIRECT PARTICIPANT) WILL HAVE ANY OBLIGATION TO THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO DTC’S PROCEDURES OR ANY PROCEDURES OR ARRANGEMENTS BETWEEN DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS AND BENEFICIAL OWNERS.

NEITHER THE COUNTY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR

OBLIGATION TO PARTICIPANTS, BENEFICIAL OWNERS OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS FOR (1) SENDING TRANSACTION STATEMENTS; (2) MAINTAINING, SUPERVISING OR REVIEWING, THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS; (3) PAYMENT OR THE TIMELINESS OF PAYMENT BY DTC TO ANY PARTICIPANT, OR BY ANY PARTICIPANT OR OTHER NOMINEES OF BENEFICIAL OWNERS TO ANY BENEFICIAL OWNER, OF ANY AMOUNT DUE IN RESPECT OF THE PRINCIPAL OF OR REDEMPTION PREMIUM, IF ANY, OR INTEREST ON BONDS; (4) DELIVERY OR TIMELY DELIVERY BY DTC TO ANY PARTICIPANT, OR BY ANY PARTICIPANT OR OTHER NOMINEES OF BENEFICIAL OWNERS TO ANY BENEFICIAL OWNERS, OF ANY NOTICE (INCLUDING NOTICE OF REDEMPTION) OR OTHER COMMUNICATION WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO HOLDERS OR OWNERS OF BONDS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF BONDS; OR (6) ANY ACTION TAKEN BY DTC OR ITS NOMINEE AS THE REGISTERED OWNER OF BONDS.

PRINCIPAL AND INTEREST REQUIREMENTS*

The following are the principal and interest payment requirements with respect to the Bonds for the years shown below.

Calendar Year Principal Interest Annual

Debt Service

2014 $525,000 2015 535,000 2016 550,000 2017 565,000 2018 580,000 2019 595,000

$3,350,000

See “COUNTY DEBT STRUCTURE” for a description of other tax supported debt of the County.

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THE COUNTY

Introduction

Lee County, Georgia (the “County”) is a political subdivision created and existing under the laws of the State of Georgia. The County is located 200 miles southwest of the City of Atlanta, Georgia. Access is provided by Interstate 75, and Highway 19. There are two cities in the County: Smithville and Leesburg. Leesburg serves as the County Seat. The County has a land area of approximately 362 square miles (74th in size of 159 counties). The County’s population in 2010 was 28,298.

Form of Government and County Officials

The County is governed by, and generally acts through, a five member Board of Commissioners. The Commissioners are elected by districts to serve staggered four-year terms. The Chairman and Vice-Chairman are selected among the Board members every January. Information concerning the current Board of Commissioners is set forth below:

Lee County Board of Commissioners Term Expires

Name Occupation December 31 in the Year Ed Duffy, Chair Retired, Beverage Store Owner 2014 Rick Muggridge, Vice-Chair Self-Employed Insurance Agency 2012 Betty Johnson Retired County Tax Commissioner 2012 Bill Williams Self-Employed CPA Firm 2012 Dennis Roland Retired, Marine Corps Logistics Base 2014

The Board appoints a full-time county administrator to run the day-to-day operations of the County. The

current county administrator is Tony Massey, who has been with the County since February 7, 2011. Mr. Massey holds a Masters degree in Public Administration from the University of Tennessee. Mr. Massey has been in local government for 27 years serving as City Planner and Director of Economic Development, Assistant City Manager, Loss Control Consultant and City Manager..

The County also has six other elected officials elected by the voters through at-large elections for four year terms. Those officers are the Sheriff, Tax Commissioner, Clerk of Superior Court, Judge of the Probate Court, Judge of the Magistrate Court and the Coroner. Employees and Benefits

The County employed 270 full-time persons and 70 part-time persons in all departments of government as of April 30, 2011. No employees of the County are represented by labor organizations or are covered by collective bargaining agreements, and the County is not aware of any union organizing efforts at the present time. The County believes that employee relations are good.

The County has a defined benefit retirement plan and a defined contribution benefit plan. Reference is

made to Note IV(C) of the financial statements of the County for the fiscal year ended June 30, 2010 included as Appendix A for a detailed description of the retirement plans. All current and future eligible employees are enrolled in a defined contribution plan. The County does not offer any other post-retirement benefits.

The County’s employee benefit plan is a self-funded welfare plan consisting of an insured part and a self-

funded part. Under the plan, the self-funded part provides medical and dental coverage for employees and their dependents up to a maximum of $60,000 per participant per plan year. The insured part provides insurance coverage for claims in excess of the coverage provided by the self-funded part.

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Demographic Information

Population and Median Age. Set forth below is the population and median age of the County for the census years 1980 through 2010.

Year Population Median Age 2010 28,298 36.0 2000 24,757 32.6 1990 16,250 29.7 1980 11,684 26.7

Source: United States Census Bureau.

Population By Age. The following table presents population by age for the County for the census year 2010.

Under 20 20 to 44 45 to 64 65 Years Years Years Years and Over

30.8% 33.6% 27.3% 8.3%


Population by Race. The following table presents estimated population by race for the County for the census year 2010.

Black or African

American Indian and

Alaska

Two or More

Hispanic or White American Native Asian Other(1) Races Latino(2)

76.9% 18.6% 0.3% 2.2% 0.6% 1.4% 2.0%

(1) 98.6% of the population is one race. (2) Hispanics may be of any race, so also are included in applicable race categories.


Level of Education. The following table presents the level of education of the population 25 years and over for the County for the census year 2000 and the estimated level of education shown in the ACS survey for 2007-2009 (the most recent information available).

Census Year 2000

2007-2009 ACS Survey

Less than 9th grade 4.1% 5.0% 9th to 12 grade, no diploma 14.6 13.3 High school graduate (including equivalency) 35.9 34.9 Some college, no degree 22.3 24.6 Associate degree 6.1 7.0 Bachelor’s degree 11.3 8.6 Graduate or Professional degree 5.7 6.4 100.0% 100.0% Percent high school graduate or higher 81.3% 81.6% Percent bachelor’s degree or higher 17.0 15.1%


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Commuting Patterns. The following table sets forth the commuting pattern in the County as of census year 2000 (the most recent information available).

Employed Residents of the County Persons Working in the County County of Percent County of Percent

Employment Number of Total Residence Number of Total

Dougherty 8,713 73.2% Lee 2,144 60.5% Lee 2,144 18.0 Dougherty 784 22.1 Sumter 384 3.2 Terrell 178 5.0 Terrell 165 1.4 Sumter 176 5.0 Worth 136 1.1 Mitchell 94 2.7 Tift 48 0.4 Worth 65 1.8 Mitchell 42 0.4 Baker 19 0.5 Crisp 40 0.3 Colquitt 17 0.5 Other 230 1.9 Other 69 1.9

Total Residents 11,902 100.0% Total Residents 3,546 100.0%

Source: Georgia Department of Labor. Economic Information

The following information is provided to give prospective investors an overview of the general economic condition in the County. These statistics have not been adjusted to reflect economic trends and are not to be relied upon as a representation or guarantee of the County or the Underwriter.

Per Capita Personal Income. Set forth below is per capita income data for the County, the State of Georgia

and the United States for calendar years 2005 through 2009 (the most recent information available).

Year County State United States

2009 $30,668 (1) $34,129 $39,635 2008 30,159 35,362 40,674 2007 27,512 34,687 39,461 2006 26,572 33,425 37,698 2005 25,602 32,157 35,424

(1) Ranked 36th out of 159 counties in the State. Source: United States Department of Commerce, Bureau of Economic Analysis.

Personal Income. The following table reflects the estimated personal income figures (in thousands) for the County, the State of Georgia and the United States for calendar years 2005 through 2009 (the most recent information available).

Year County State United States

2009 $1,055,269 (1) $335,465,861 $12,168,161,000 2008 1,019,511 342,934,981 12,380,225,000 2007 908,666 330,701,621 11,900,562,000 2006 855,071 311,855,316 11,256,516,000 2005 790,623 292,543,612 10,476,669,000

(1) Ranked 52nd out of 159 counties in the State. Source: United States Department of Commerce, Bureau of Economic Analysis.

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Poverty Levels and Income Distribution. According to the 2007-2009 American Community Survey 3-Year Estimates, approximately 10.6% of all people in the County had incomes below the poverty level; approximately 15.3% of all people in Georgia had incomes below the poverty level; and approximately 13.6% of all people in the United States had incomes below the poverty level.

The following table shows the income distributions of the County for the census year 2000 and as shown in

the ACS survey for 2007-2009 (the most recent information available).

Income

Percent of

Population, 2000

Percent of Population, ACS

2007-2009 Survey

Less than $10,000 4.5% 7.1% $10,000 to $14,999 3.0 3.7 $15,000 to $24,999 9.5 9.6 $25,000 to $34,999 9.1 10.8 $35,000 to $49,999 19.6 15.6 $50,000 to $74,999 24.7 21.1 $75,000 to $99,999 15.2 15.5 $100,000 to $149,999 10.1 12.3 $150,000 to $199,999 2.8 3.1 $200,000 or more 1.5 1.3 100.0% 100.0%


Median Home Values. The following table shows the median home value of owner occupied housing for the County, the State and the United States for census years 1980 through 2000 and an estimate for 2007-2009 based on the ACS survey.

Year Lee County State of Georgia United States

2009 $144,600 $165,100 $191,900 2000 102,900 111,200 119,600 1990 65,300 71,300 79,100 1980 42,800 36,900 47,200


Building Permits Summary. The following table reflects the number and aggregate dollar value of commercial and residential building permits issued in the County for the last five fiscal years. Permits are categorized between commercial and residential, with each category including new construction, additions, alterations and conversions. For presentation purposes, permits issued for mobile homes, single family homes and multifamily homes are included in the residential totals. All other permits are included in the commercial totals.

Commercial Residential Total Year # Permits Value # Permits Value # Permits Value

2010 20 $2,256,155 101 $10,710,032 121 $12,966,187 2009 49 3,952,508 107 10,327,010 156 14,279,518 2008 42 8,752,150 147 17,142,290 189 25,894,440 2007 186 10,572,117 573 42,673,495 759 53,245,612 2006 171 6,524,654 854 58,584,990 1,025 65,109,644

Source: Lee County Department of License and Permits.

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Banking Deposits. Set forth below are the banking deposits in the County for the last five fiscal years ending June 30.

Year Institutions Deposits

2010 8 $293,000,000 2009 8 298,000,000 2008 9 195,000,000 2007 9 181,000,000 2006 9 159,000,000 2005 9 152,000,000

Source: Federal Depository Insurance Corporation.

Largest Employers. Set forth below are the ten largest employers located in the County. The type of business and the approximate number of employees are shown in the table. There can be no assurance that any employer listed below will continue to operate 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 below.

Largest Employers in Lee County

Employer Industry Number of Employees

1. Lee County Board of Education Government 800 2. Wal-Mart Supercenter (1) Retail 520 3. Oxford Construction Company Road Construction 300 4. Lee County Government Government 250 5. Woodgrain Mill Works Manufacturing 130 6. McCleskey Mills Farm Product Processing 107 7. Publix Grocery Store 106 8. Safe Air & Heating HVAC Installation and Service 72 9. ACC Distribution 60 Food Distribution 60

10. Applied Fiber Manufacturing 41 (1) Wal-Mart has opened a store in East Albany. The new store may draw customers from the store in the County. Source: Lee County Chamber of Commerce.

Labor Statistics. Set forth below are labor statistics for the County, the State and the United States for the past five calendar years and as of March 31, 2011.

2006 2007 2008 2009 2010 2011 Lee County Labor Force 17,314 17,617 17,923 18,110 17,805 18,217 Lee County Unemployment Rate 3.6% 3.7% 4.5% 7.1% 8.3% 7.3% State Unemployment Rate 4.6% 4.6% 6.2 9.7 10.2 9.8 United States Unemployment Rate 4.6% 4.6% 5.8 9.3 9.6 9.2 Source: Georgia Department of Labor.

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Industry Mix. The following table sets forth the industry mix for the County for calendar year 2009 (the most recent information available). The table is intended to provide information regarding the types of industries employing residents in the County and the compensation paid to those employees. The tables do not provide information with respect to all industries and firms.

Number of Employment Average Industry Firms Number Percent Weekly Wages

Goods Producing: Agriculture, Forestry, Fishing & Hunting 16 160 3.1% $459 Mining 1 (1) (1) (1)

Construction 92 757 14.5 666 Manufacturing 13 135 2.6 654

Service Providing: Utilities 1 (1) (1) (1)

Wholesale Trade 24 325 6.2 1,296 Retail Trade 62 629 12.1 487 Transportation and Warehousing 10 34 0.7 610 Information 3 (1) (1) (1)

Finance and Insurance 24 107 2.1 674 Real Estate and Rental and Leasing 23 50 1.0 438 Professional and Technical Services 37 156 3.0 673 Administrative and Waste Services 18 447 8.6 334 Educational Services 2 (1) (1) (1) Health Care and Social Assistance 35 480 9.2 471 Arts, Entertainment and Recreation 5 31 0.6 158 Accommodation and Food Services 20 236 4.5 201

Other Services, Ex. Public Admin 35 153 2.9 453 Unclassified 9 5 0.1 447 Total Private Sector 430 3,729 71.5 570 Total – Government 28 1,489 28.5 579

State Government 8 (1) (1) (1)

Local Government 15 1,234 23.6 575 Federal Government 5 44 0.8 813

ALL INDUSTRIES 458 5,218 100.0 $573 (1) Denotes confidential data relating to individual employers and cannot be released. These data use the North

American Industrial Classification System (NAICS) categories (as opposed to Standing Industrial Classification (SIC) categories.) Average weekly wage is derived by dividing gross payroll dollars paid to all employees – both hourly and salaried – by the average number of employees who had earnings; average earnings are then divided by the number of weeks in a reporting period to obtain weekly figures. Figures in other columns may not sum accurately due to rounding since all figures represent Annual Averages.

Source: Georgia Department of Labor.

[Remainder of Page Intentionally Left Blank]

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Category of Land Use. Set forth below are the categories of land use within the County and approximate percentages of land use, computed using the assessed values of the land for ad valorem tax purposes for 2010 (the most recent information available).

Land Type Percentage(1)

Residential(2) 64.01% Agricultural 8.40 Conservation and Preferential 10.33 Commercial 14.04 Industrial 0.87 Utility 2.26 Timber 0.09 100.00%

(1) Percentages are based on the assessed value of the land. (2) Includes mobile homes. Source: Georgia Department of Revenue 2010 Tax Digest Consolidated Summary. Education

Local Schools. The Lee County School System (the “School System”) serves approximately 6,284 students in one pre-K and two primary schools which include kindergarten through second grade, two elementary schools which include grades 3 – 5, one middle school, one high school, and a transitional learning center. See www.Lee.k12.ga.us for more information on the School System. Neither the County nor the Underwriter has undertaken any responsibility to verify the accuracy of the information provided on the School System’s website. There are no private schools in the County.

Higher Education. There is one technical college nearby, Albany Technical College, with 2,500 to 3,000

students registered each quarter, and there is one two-year college nearby, Darton College, with about 2,600 students. There are two four-year universities near the County, Albany State University and Georgia Southwestern State University (approximately 25 miles north of Leesburg), with approximately 3,150 and 2,400 students, respectively. Recreation Facilities

The Park Street Recreation Complex, the Kinchafoonee Recreation Complex and numerous neighborhood parks provide spaces for various youth recreational programs including: Youth Wrestling, Youth Basketball, Adult and Youth Softball, Youth Football, Youth Baseball, Fall Baseball, Fall Softball, Cheerleading and Summer Fun Program. These facilities are maintained by the County Parks and Recreation Department.

Additional recreation opportunities located in the County include The Parks at Chehaw, an 800-acre

recreation facility with many amenities such as BMX track, a unique wooden playscape, RV, tent and primitive camping, picnic pavilions and a miniature riding train. The park also includes a 100-acre wild animal park that is accredited by the American Zoo Association and contains many native and exotic animals in a natural setting. The Flint RiverQuarium in Albany, Georgia offers visitors 15,000 sq. ft. of discovery and adventure through high-tech, interactive exhibits; crawl-through caverns and fresh and saltwater exhibits highlighting natural habitats of the 350-mile Flint River and rivers around the world. Lake Chehaw is a 1,400-acre man-made lake located in the southern part of the County. Other nearby recreational attractions include Callaway Gardens, located about 1-1/2 hours north of Leesburg, Georgia Veterans Memorial State Park and Lake Blackshear each of which is located about 30 minutes north of Leesburg. Utilities

Electricity is provided to the County by Georgia Power Company or Sumter Electric Membership Cooperative. Businesses that require a 900 kw or higher connected load may choose between these two electric service providers. Water and wastewater treatment is provided by the Lee County Utility Authority, the City of Leesburg and the City of Smithville. Natural gas is provided by the City of Albany’s Water, Gas & Light

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Commission. Solid waste collection is provided by the County through the use of various sizes of dumpsters and roll-off containers, and there is weekly curbside garbage collection. Cable television is provided by Mediacom Communications Corporation, which offers advanced broadband services including cable television, advanced digital video programming and high-speed Internet access. Various companies provide telephone service. Services

The County provides Lee County citizens with EMS and E-911. All county EMS personnel are certified paramedics or emergency medical technicians, who must meet qualification standards established by the Georgia Department of Human Resources and the State Board of Medical Examiners. The department currently operates three ambulances from three locations which are manned 24 hours per day, seven days per week. The Lee County Fire Department has budgeted for 32 full-time personnel and 15 part-time personnel. Since 911, the volunteer firefighter program has been reorganized into the Citizen’s Emergency Response Team or “CERT” program. The CERT program is partially funded through FEMA and includes multiple levels of training for citizens who wish to participate in various types of assistance to the professional firefighters. There are currently approximately 50 participants on the various CERT teams. The Fire Department maintains four manned and three unmanned county fire stations, seven county fire trucks and onboard equipment, one rescue truck, one service truck, one tanker, two brush trailers, one regional hazmat trailer, a command vehicle, three county boats and one fire prevention unit which is used for educational purposes. The Sheriff’s Department has 78 full-time personnel. The County also provides library services, animal control, planning, zoning, code enforcement and building permit services, a senior citizens center and a health department. Healthcare

There are two major hospitals located in close proximity to the County – Phoebe Putney Memorial Hospital and Palmyra Medical Center. Phoebe Putney Memorial Hospital is located in Albany, Georgia. It is a 450-bed, not-for-profit regional medical center that offers full-service care to all of southwest Georgia. Palmyra Medical Center is also located in Albany, Georgia. It is a 248-bed full service facility with over 200 physicians.

The Lee County Health Department offers a full range of physical and mental health services as needed by

families and individuals in the community.


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COUNTY DEBT STRUCTURE

Summary of County Direct and Overlapping Debt by Category

The following table sets forth the outstanding tax-supported debt of the County and certain overlapping governmental entities as of June 1, 2011 and assumes the issuance of the Series 2011 Bonds. Although the County has attempted to obtain accurate information as to the outstanding overlapping debt, it does not warrant its completeness or accuracy, as there is no central reporting entity that has this information available, and the amounts are based on information supplied by others. The information set forth below should be read in conjunction with the County’s financial statements included as Appendix A and the notes thereto.

Category of Debt Amount of

Outstanding Debt Direct:

General Obligation Bonds(1) $ 9,165,000 Contract-backed Indebtedness(2) 26,246,981 Capital Leases(3) 849,075

Total Direct 36,261,056 Overlapping:

Lee County School District General Obligation Bonds 25,065,000(4)

Total Overlapping 25,065,000 Total Direct and Overlapping $61,326,056

(1) Represents general obligations of the governmental entity to which its full faith and credit are pledged.

Constitutes debt for purposes of the constitutional debt limit described in “Limits on County Debt” herein. (2) Represents general obligations of the governmental entity to which its full faith and credit and taxing power are

pledged. Does not constitute debt for purposes of the constitutional debt limit. Includes the Series 2011 Bonds, but excludes GEFA loans for all governmental entities.

(3) Represents contractual obligations of the governmental entity that are subject to annual appropriation. Does not constitute debt for purposes of the constitutional debt limit.

(4) Includes $15,000,000 authorized, but unissued bonds. Tax Supported Debt Ratios

The following table sets forth certain tax-supported debt ratios assuming the issuance of the Bonds.

Overlapping Total Tax Direct Debt(5) Debt(6) Supported Debt Per Capita Debt(1) $1,053.79 $728.42 $1,782.21 Percentage of Gross Tax Digest(2) 3.78% 2.62% 6.40% Percentage of Estimated Fair Market Value(3) 1.51% 1.04% 2.55% Per Capita Debt as Percentage of Per Capita Income(4) 3.44% 2.37% 5.81%

(1) Based upon 2009 estimated population figure of 34,410. (2) Based upon 2010 Gross Tax Digest of $958,430,761. (3) Based on 2010 estimated fair market value of $2,396,076,903. (4) Based upon 2009 per capita income figure of $30,668. (5) The County anticipates paying the General Obligation Bonds with the proceeds of the Sales and Use Tax. The

County anticipates that $22,702,080 of the Intergovernmental Contracts will be paid with the Net Revenues of the Water and Sewer System.

(6) The School District anticipates paying its General Obligation Bonds with the proceeds of a one percent sales and use tax levied by the School District.

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Limitations on County Debt

The Constitution of the State of Georgia provides that the County and the other governmental entities within the County may not incur long-term obligations payable out of general property taxes without the approval of a majority of the qualified voters of such governmental entity voting at an election called to approve the obligations. In addition, under the Constitution of the State of Georgia, the County and the other governmental entities within the County may not incur long-term obligations payable out of general property taxes in excess of ten percent of the assessed value of all taxable property within such governmental entity.

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 (such as the Capital Leases and Intergovernmental Contracts described in “COUNTY DEBT STRUCTURE—Summary of County Direct and Overlapping Debt by Category” herein) are not subject to the legal limitations described above. In addition, refunded obligations cease to count against the debt limitation upon being refunded. Georgia law has limits on the amount of lease or installment purchase contracts subject to annual appropriation. The limits depend upon lessee/purchaser and the type of assets being leased/purchased.

As computed in the table below, based upon its 2010 assessed value and after issuance of the Series 2010 Bonds, the County could incur (upon necessary voter approval) approximately $86,678,076 of long-term obligations payable out of general property taxes (or general obligation bonds).

Computation of Legal Debt Margin

2010 Gross Tax Digest $958,430,761 Debt Limit (10% of Assessed Value) 95,843,076 Amount of Debt Applicable to Debt Limit 9,165,000 Legal Debt Margin $86,678,076

(1) The legal debt margin should be based upon the net general obligation bond digest. This digest was not

prepared because the outstanding General Obligation Sales Tax Bonds have been paid with proceeds of the Sales and Use Tax. If prepared, the net general obligation bond digest would have been smaller than the gross digest, resulting in a lower legal debt margin.

Proposed Debt

The County does not anticipate issuing any long-term tax-supported debt within the next three years except for routine capital leases for equipment.

COUNTY AD VALOREM TAXATION

Introduction

An important source of revenue to fund the operations of the County is ad valorem property taxes. Ad valorem property taxes are levied annually in mills (one tenth of one percent) upon each dollar of assessed property value. Property Subject to Taxation

Ad valorem property taxes are levied, based upon value, against 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. In addition, there are exemptions from ad valorem taxation for maintenance and operation purposes and for general obligation bond purposes, for

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homesteads under certain conditions. Manufacturing and distribution businesses within the County are allowed a “freeport” exemption as authorized by the Constitution of the State of Georgia.

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 taxable tangible property to be assessed, with certain exceptions, at 40 percent of its fair market value and to be taxed on a levy made by each tax jurisdiction according to 40 percent 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 percent of the value of which other real property is assessed, requires certain historical property to be valued at a lower fair market value for ad valorem property tax purposes, and requires certain agricultural, timber, and environmentally sensitive real property and certain single-family real property located in transitional developing areas to be valued at their “current use value” (as opposed to fair market value). Standing timber is assessed at 100% of its fair market value.

The chief appraiser of the County is required to submit a certified list of assessments for all taxable property, except motor vehicles and property owned by public utilities, within the County to the Lee County Board of Tax Assessors. The Lee County Board of Tax Assessors is required to receive the tax returns of the County by April 1 of each year. The Lee County Board of Tax Assessors is required to complete its revision and assessment of returns by June 1 of each year and to forward a copy of the completed digest to the State of Georgia Revenue Commissioner for examination and approval. The State of Georgia 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 Lee County Board of Equalization and by state courts.

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 Property Tax 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 its territorial limits, will produce the necessary amount of property tax revenues. The County then levies its ad valorem property taxes.

Under State law there is no limitation on the annual rate of levy for payment of either general government

operations or principal and interest on bonded indebtedness of the County. Ad valorem taxes received for the payment of debt service on the general obligation bonds of the County are required to be held and accounted for separately from other funds of the County.

Property Tax Collections

The County bills and collects its own property taxes. Real and personal property taxes, except motor vehicle taxes, are levied on approximately September 15 of each year on the assessed value listed as of January 1. Taxes levied by the County on September 15 are normally due on or before December 20. An interest penalty of 1% per month applies to taxes paid after deadline.

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 taxed. The lien normally 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

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assurance, however, that the value of 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 may notify 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 thirty days from giving the notice described in the preceding sentence, an execution for nonpayment of taxes may be issued. A notice of the sale is then published 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 may then be made by the Tax Commissioner at the County Courthouse on the first Tuesday of the month after the required notices are given.

Property Tax Millage Rates

The following table sets forth the millage rate (i.e., the tax rates per $1,000 of assessed value) of the various taxing entities for the last five calendar years.

Millage Rates by Category 2006 2007 2008 2009 2010

State of Georgia 0.250 0.250 0.250 0.250 0.250 Lee County 12.766 12.766 12.766 12.766 12.766 Lee County School District 14.750 14.750 15.400 15.400 15.400 City of Leesburg 6.000 6.000 6.00 6.00 6.00 City of Smithville 4.000 4.000 4.00 4.00 4.00 Total Combined Millage Rates

Lee County (unincorporated) 27.766 27.766 28.416 28.416 28.416 City of Leesburg 33.766 33.766 34.416 34.416 34.416 City of Smithville 31.766 31.766 32.416 32.416 32.416

Source: Georgia Department of Revenue.

Ad Valorem Property Tax Digest

The property tax digests, or the assessed valuations,(1) of the County for the last five calendar years are shown below.

Property Type 2006 2007 2008 2009 2010 Residential $465,458,369 $494,488,322 $525,135,193 $548,559,450 $553,462,170 Agricultural 85,137,780 75,710,168 76,512,732 72,459,760 73,344,722 Preferential 3,634,800 5,616,000 7,071,080 1,401,240 1,401,240 Conservation Use 71,503,379 77,281,447 80,322,535 89,444,479 88,765,141 Commercial 101,809,476 105,393,595 110,375,456 121,718,467 122,567,201 Industrial 7,827,870 7,924,335 8,168,354 7,810,207 7,606,171 Utility 17,002,132 19,284,636 19,111,140 19,687,228 19,687,228 Motor Vehicle 75,487,310 83,094,790 85,264,750 94,271,470 85,604,940 Mobile Home 6,714,570 6,567,945 6,026,388 5,811,232 5,133,968 Timber 100% 1,830,893 1,847,805 767,281 2,074,114 764,177 Heavy Equipment 676,894 1,118,036 1,238,013 77,540 93,803 Gross Digest 837,083,473 878,327,079 919,992,922 963,315,187 958,430,761 M&O Exemptions 74,926,484 80,814,752 83,735,694 92,742,091 93,504,251 Net M&O Digest $762,156,989 $797,512,327 $836,257,228 $870,573,096 $864,926,510 (1) Property other than timber is assessed at 40% of its fair market value. Timber is assessed at 100% of its fair

market value. Source: Georgia Department of Revenue.

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Tax Collections

The following table reflects the real and personal tax levy and collection record of the County for the last four fiscal years and the current fiscal year through May 31, 2011.

Delinquent Taxes Fiscal Year Total Total Tax % of Total Tax Outstanding % of Delinquent

of Levy Tax Levy(1) Collections Collections to Levy as of Year End Taxes to Tax Levy

2011 $9,872,325 $9,508,806 96.3% $363,519 3.7% 2010 9,808,612 9,492,226 96.7 316,387 3.2 2009 9,484,638 9,205,539 97.0 279,098 2.9 2008 8,998,546 8,873,381 98.6 125,165 1.4 2007 8,648,293 8,450,234 97.7 198,059 2.3

(1) Relates to preceding calendar year tax digest and millage rates. For example, the 2010 digest and millage rates

are used for the fiscal year 2011 levy. The real and personal property levy excludes taxes levied on mobile homes, motor vehicles, timber and heavy equipment.

Source: Lee County Tax Commissioner. Ten Largest Taxpayers

Set forth below are the ten largest taxpayers of the County for the current fiscal year. A determination of the largest taxpayers within the County can be made only by manually reviewing individual tax records. Therefore, it is possible that owners of several small parcels may have an aggregate assessment in excess of those set forth in the table below. Furthermore, the taxpayers shown in the table below may own additional parcels within the County. No independent investigation has been made of, and consequently no representation can be made as to, the financial condition of any of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the County.

Percentage of County Percentage of 2010 Assessed Total Assessed Taxes Total Taxes Taxpayer Valuation Valuation(1) Paid(2) Levied(3)

1. Chem Nut, Inc $14,675,728 1.8977% $127,285 1.2893% 2. Haley Herbert P. Family 8,008,640 1.0356 81,675 0.8273 3. Farmland Reserve Inc 6,378,978 0.8249 81,434 0.8249 4. Sumter EMC 6,111,973 0.7903 78,025 0.7903 5. Georgia Power Company 5,293,354 0.6845 67,575 0.6845 6. Oxford Construction Co 5,153,502 0.6664 64,513 0.6535 7. Glass David D as Trustee 4,583,360 0.5927 58,511 0.5927 8. Oakland Plantation Partners 4,444,360 0.5747 56,735 0.5747 9. Mana Inc 4,275,964 0.5529 33,800 0.3424

10. Creekwood Apartments LLC 3,679,840 0.4758 46,977 0.4758 Total $62,605,699 8.0955% $696,530 7.0554%

(1) Based on the 2010 net maintenance and operations tax digest of $864,926,510. (2) Taxpayers have entered into property tax abatement agreements with the County. The total property taxes paid

by these taxpayers are less than the assessed valuation of property taxes owed. (3) Based upon a total real and personal property tax levy of $9,872,325. Source: Lee County Tax Commissioner’s Office

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COUNTY FINANCIAL INFORMATION

Accounting System and Policies

See footnote I of the financial statements of the County for a detailed discussion of the County’s significant accounting policies.

Five Year General Fund History

Set forth below is a historical, comparative summary of the revenues, expenditures, and changes in fund balance of the County’s General Fund. Information in the following tables for the fiscal years ended June 30, 2006 through 2010 has been extracted from audited financial statements of the County. 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 years shown. For more complete information, reference is made to the audited financial statements, copies of which are available from the County upon request.

General Fund History

2006 2007 2008 2009 2010

Revenues: Taxes $13,623,235 $14,228,690 $14,750,331 $15,351,945 $15,553,427 Licenses and Permits 556,517 113,623 62,097 22,940 210,185 Intergovernmental 156,870 25,284 51,967 272,968 28,767 Charges for Services, Fines 2,762,427 2,640,892 2,986,858 3,147,276 3,358,041 Fines and Forfeitures 831,744 910,447 820,735 878,496 862,319 Investment Income 84,594 64,111 122,049 76,739 55,284 Contributions and Donations 7,000 25 26,823 — — Miscellaneous Income 92,276 116,797 105,702 99,070 234,136

Total Revenues: 18,114,663 18,099,869 18,926,562 19,849,434 20,302,159

Expenditures: General Government 5,010,824 2,196,626 2,326,538 3,099,643 4,871,789 Judicial 1,231,062 1,232,659 1,453,813 1,429,520 1,449,542 Public safety 6,618,749 6,303,479 7,390,507 7,918,642 8,188,982 Public works 3,714,083 3,387,145 3,733,337 3,910,951 2,356,566 Health and welfare 300,637 305,813 334,637 339,124 414,752 Culture and recreation 799,867 805,376 898,424 864,752 771,900 Housing and development 696,454 476,282 428,802 416,645 670,601 Capital outlay — — — — 350,392 Debt Service 590,760 683,085 562,132 416,706 510,799

Total Expenditures: 18,962,436 15,390,465 17,128,190 18,395,983 19,585,323

Revenues Over (Under) Expenditures (847,773) 2,709,404 1,798,372 1,453,451 716,836

Other Financing Sources (Uses) Capital Lease 1,116,575 — 110,000 — 623,577 Proceeds, Capital Asset Dispositions — 205,839 243,631 193,368 — Operating transfer from other funds 42,000 — 1,294,296 317,506 901,208 Operating transfer to other funds (1,389,912) (2,925,727) (851,089) (1,344,333) (1,155,357)

Net Other Financing Sources (Uses) (231,337) (2,719,888) 796,838 (833,459) 369,428

Net Change in Fund Balances (1,079,110) (10,484) 2,595,210 619,992 1,086,264

Fund balance, beginning of year 4,291,480 3,212,370 3,201,886 5,797,096 6,417,088 Fund balance, end of year $3,212,370 $3,201,886 $5,797,096 $6,417,088 $7,503,352

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General Fund Interim Report

The following is a comparison of the actual revenues and expenditures for the ten month periods ending April 30, 2010 and 2011. The information in the table has not been audited and was prepared by the County’s Finance Department. The financial results for the ten-month period ending April 30, 2011 are not necessarily indicative of the actual financial results for the fiscal year ending June 30, 2011.

Ten Months Ten Months Ended 4/30/10(1) Ended 4/30/11(1) Revenues:

Taxes $13,634,949 $14,089,928 Penalties & Interest 178,030 123,385 Licenses and Permits 172,596 142,364 Intergovernmental 25,575 29,970 Charges for Services, Fines 2,954,712 3,164,817 Fines and Forfeitures 666,048 653,357 Investment Income 44,830 25,043 Contributions and donations (21,508) 9,907 Miscellaneous Revenue 97,610 92,940 Other Financing Sources 466,846 337,048

Total Revenues: 18,219,688 18,668,761 Expenditures:

General Government 4,193,799 4,219,363 Judicial 1,215,281 1,290,909 Public safety 7,011,459 7,723,443 Public works 1,565,802 1,470,247 Health and welfare 348,194 348,629 Culture and recreation 661,657 652,826 Housing and development 851,713 873,996 State Grants 213 — Other Financing Uses 255,300 90,345 Debt Service Payments 392,201 269,284

Total Expenditures: 16,495,619 16,939,042

Revenue over/under Expenditures $1,724,069 $1,729,719 (1) Unaudited. Budgetary Process

See footnote II(A) of the financial statements for a description of the budgetary process and a comparison of the fiscal year 2010 to actual expenditures.


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Budget

Set forth below is a summary of the County’s budget for its General Fund for the year ending June 30, 2011. There can be no assurance that the projected results will be achieved. Accordingly, the actual results achieved could materially vary from those projected in the budget set forth below.

General Fund Budget for Year Ending June 30, 2011

(GAAP Budgetary Basis of Accounting)

Revenues Taxes $15,332,794 Licenses and Permits 164,600 Charges for Services, Fines 4,582,245 Investment Earnings 27,478 Other 1,032,335

Total Revenues $21,139,452 Expenditures

General Government $5,117,286 Court System/Judicial 1,558,988 Public Safety 9,461,092 Public Works 1,776,166 Health and Welfare 420,092 Culture and Recreation 774,532 Housing and Development 1,162,885 Other Financing Uses 584,141 Debt Service 284,270

Total Expenditures $21,139,452 Excess of Revenues Over (Under) Expenditures 0

Management’s Discussion

Over the course of the last three years, the fund balance has continued to increase due to continued efforts to decrease spending and better manage unnecessary purchases. Due to the efforts of both the Administrator and Finance Director, the fund balance has increased over four million dollars over the three year period. The management team is strongly committed to continuing to build the fund balance through reasonably budgeted revenues and expenses and other measures to avoid deficit spending. In addition, financial policies are being developed that would require the maintenance of a fund balance reserve in the amount of approximately three months of general fund operating expenditures. Insurance Coverage and Governmental Immunity

Under Georgia law, the defense of sovereign immunity is available to the County, except for actions for the breach of written contracts and actions for the recovery of damage for any claim for which liability insurance protection has been provided, but only to the extent of the liability insurance provided. 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.

The County is a participating member of the Association of County Commissioners of Georgia - Interlocal

Risk Management Agency (“IRMA”). The agency is an instrumentality of counties and their related authorities, formed pursuant to intergovernmental contracts, to pool liability risks. IRMA serves as the agent of its members for claims adjustment and administration of the joint liability pool. IRMA offers its members risk management services in order to reduce the risk of liability before litigation arises. Annual contributions by members are weighted to reflect the size of the member, the level of proprietary services offered to the member, its prior litigation history, and

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a risk analysis. Although protected by reinsurance purchased directly by IRMA, the solvency of the pool is assured through the agreement of its members to be jointly and severally liable for the self-insurance pool’s obligations. See footnote IV(A) to the County’s Financial Statements for further discussion.

Present coverage for the County, including coverage pursuant to the IRMA coverage agreement, is summarized below:

Amount in Force Type Amount Deductible

General Liability $ 1,000,000 $1,000 Property Liability 27,648,448 1,000 Boiler/Machinery 100,000,000 1,000 Workers’ Compensation Statutory Statutory

Investment of Funds

O.C.G.A. Section 36-80-3 provides that the governing body of the County may invest and reinvest money subject to its control and jurisdiction in:

(1) obligations of the United States and of its agencies and instrumentalities,

(2) bonds or certificates of indebtedness of the State of Georgia and of its agencies and instrumentalities, and

(3) certificates of deposit of banks which have deposits insured by the Federal Deposit Insurance Corporation; provided, however, that the portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation 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. Section 36-83-4 provides that the governing body of the County may invest and reinvest money

subject to its control and jurisdiction in:

(1) obligations of the State of Georgia or other states,

(2) obligations issued by the United States government, (3) obligations fully insured or guaranteed by the United States government or United States

government agency,

(4) obligations of any corporation of the United States government;

(5) prime banker’s acceptances,

(6) the local government investment pool established by Section 36-83-8 of the Official Code of Georgia Annotated,

(7) repurchase agreements, and

(8) obligations of other political subdivisions of the State of Georgia.

Section 45-8-14 of the Official Code of Georgia Annotated provides that the Board of Commissioners of the County shall designate one or more solvent banks, insured federal savings and loan associations, or insured state chartered building and loan associations as depositaries of moneys belonging to the County. Section 45-8-12 of the Official Code of Georgia Annotated prohibits the County from having on deposit at any one time in any depository for a time longer than ten days a sum of money which has not been secured by a surety bond, by federal deposit insurance or by pledged securities worth a face value of not less than 110 percent of the public funds being secured

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after the deduction of the amount of deposit insurance. Section 45-8-11 of the Official Code of Georgia Annotated allows the Board of Commissioners, in its discretion, to waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Capital Improvement Plan

The five-year capital improvement plan is an integral part of the County’s Comprehensive Plan. The plan identifies projected capital needs, associated costs and the funding source. The funding sources include operating revenues, SPLOST funds, intergovernmental/grant funds and lease-purchase agreements.

LEGAL MATTERS

Pending 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, Gatewood, Skipper & Rambo, P.C., 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 material adverse effect upon the financial position or results of operations of the County.

There is no litigation now pending or, to the knowledge of the County, threatened against which restrains or enjoins the issuance or delivery of the Bonds, the levy of an ad valorem tax for the payment of the Bonds, or the use of the proceeds of the Bonds or which questions or contests the validity of the Bonds or the proceedings and authority under which they are to be issued and an ad valorem tax is to be levied to pay the Bonds. Neither the creation, organization, or existence of the County, nor the title of the present members or other officials of the County to their respective offices, is being contested or questioned. Tax Exemption

Legal matters incident to the authorization, validity, and issuance of the Bonds are subject to the approving opinion of Murray Barnes Finister LLP, Bond Counsel, which will be delivered contemporaneously with the delivery of the Bonds in substantially the form attached to this Official Statement as Appendix B. Copies of such opinion will be available at the time of the initial delivery of the Bonds.

In the opinion of Murray Barnes Finister LLP, Bond Counsel, under existing statutes, rulings and court decisions, and assuming compliance by the County with certain tax covenants, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in defining adjusted current earnings for purposes of computing the alternative minimum tax imposed on such corporations. Except as provided below with respect to original issue premium and bank qualification, no opinion will be expressed with respect to any other federal tax consequences of the receipt or accrual of interest on, or the ownership of, the Bonds.

Ownership of the Bonds may result in other collateral federal income tax consequences to certain

taxpayers, including, without limitation, banks, thrift institutions and other financial institutions, foreign corporations which conduct a trade or business in the United States, property and casualty insurance corporations, S corporations, individual recipients of social security or railroad retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Purchasers of the Bonds should consult their tax advisors as to the applicability of any such collateral consequences.

In concluding that the interest on the Bonds is not includable in gross income for federal income tax

purposes, Bond Counsel will (i) rely as to certain factual matters upon representations of the County with respect to the use of proceeds of the Bonds and the facilities financed thereby without undertaking to verify the same by independent investigation; and (ii) assume the continued compliance by the County with its covenants relating to the use of the proceeds of the Bonds and compliance with other requirements of the Code, including the arbitrage rebate requirements of the Code as applicable to the Bonds. The inaccuracy of any such representations or noncompliance

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with such covenants may cause interest on the related Bonds to become includable in gross income for federal income tax purposes retroactive to the date of issuance of such Bonds.

An amount equal to the excess of the purchase price of a Bond over its stated redemption price at maturity

constitutes premium on such Bond. A purchaser of a Bond must amortize any premium over such Bond’s term using constant yield principles, based on the purchaser’s yield to maturity. As premium is amortized, the purchaser’s basis in such Bond is reduced by a corresponding amount, resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Bond prior to its maturity. Even though the purchaser’s basis is reduced, no federal income tax deduction is allowed. Purchasers of any Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult their own tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to state and local tax consequences of owning such Bonds.

The foregoing is a general discussion of certain federal income tax consequences of original issue premium and does not purport to deal with all tax questions that may be relevant to particular investors or circumstances. Holders of the Bonds should consult their own tax advisors with respect to the apportionment for federal income tax purposes of accrued tax-exempt interest upon a sale or exchange (including redemption) and with respect to the state and local tax consequences of original issue premium.

The Bonds have been designated as “qualified tax-exempt obligations” within the meaning of Section

265(b)(3) of the Code. In the 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. Validation Proceedings

The County caused proceedings to be instituted in the Superior Court of Lee County, Georgia to validate the Bonds, and the Bonds have been validated. The Order is not being appealed or contested. Closing Certificates

The County will deliver to the Underwriter a certificate that no litigation is pending or threatened against it which would have a material effect on the issuance or validity of the Bonds or the levy and collection of an ad valorem tax to pay the Bonds or on the financial condition of the County. In addition, the County will represent to the Underwriter in the Bond Purchase Agreement that the information contained in this Official Statement does not contain any misrepresentation of a material fact and does not omit or state any material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading.

MISCELLANEOUS

Rating

Standard & Poor’s Rating Services, a division of The McGraw Hill Companies, Inc. has assigned a rating of “AA-.” The rating reflects only the views of the rating agency, and an explanation of the significance of such rating may be obtained from the rating agency furnishing such rating. There is no assurance that such rating will remain unchanged for any given period of time or that it will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the liquidity and market price of the Bonds. Neither the Underwriter nor the County has undertaken any responsibility to oppose any such revision, suspension or withdrawal.

30

Underwriting

Merchant Capital, L.L.C. (the “Underwriter”) has agreed to purchase the Bonds pursuant to a Bond Purchase Agreement entered into between the County and the Underwriter. The price and other terms regarding underwriting of the Bonds were established through negotiation. The Underwriter has agreed to purchase the Bonds at a purchase price of $______________ (par, plus original issue premium of $__________, less Underwriter’s discount of $___________). The Bond Purchase Agreement provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Bond Purchase Agreement. The Underwriter intends to offer the Bonds to the public initially at the offering prices shown on the cover page hereof, which prices may subsequently change without any requirement of prior notice. The Underwriter reserved the right to join with other dealers and underwriters in offering the Bonds to the public. The Underwriter may offer and sell the Bonds to certain dealers at prices lower than the public offering. Independent Auditors

The general purpose financial statements of the County as of June 30, 2010 and for the year then ended, attached hereto as part of Appendix A, have been audited by Geer & Associates, Albany, Georgia, to the extent and for the period indicated in its report thereon, which appears in Appendix A. Such financial statements have been included herein in reliance upon the report of Geer & Associates, Albany, Georgia, given upon the authority of such firm as independent auditors. Additional Information

Use of the words “shall” or “will” in this Official Statement in summaries of documents to describe future events or continuing obligations is not intended as a representation that such event or obligation will occur but only that the document contemplates or requires such event to occur or obligation to be fulfilled.

Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion 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 owners of the Bonds.


31

CERTIFICATION

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.

LEE COUNTY, GEORGIA By:

Chairman, Board of Commissioners

APPENDIX A

Financial Statements of the County for Fiscal Year Ended June 30, 2010

LEE COUNTY, GEORGIA

Report Of Independent Certified Public Accountants In Accordance

With The Single Audit Act And Government Auditing Standards

For the year ended June 30, 2010

Geer & Associates Certified Public Accountants

1120 Stuart Avenue Albany, Georgia

.

Geer & Associates Certified Public Accountants, P.C.

Independent Auditors’ Report

To the Board of County Commissioners Lee County, Georgia Commissioners: We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Lee County, Georgia, as of and for the year ended June 30, 2010, which collectively comprise the Lee County, Georgia’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Lee County Board of Health. Those financial statements are discrete component units of the County and were audited by other auditors whose report thereon has been furnished to us, and our opinions, insofar as it relates to the amounts included for the Lee County Board of Health are based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component unit, the business–type activities, each major fund and the aggregate remaining fund information of Lee County, Georgia as of June 30, 2010 thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Lee County, Georgia, has not presented management’s discussion and analysis, that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be a part of, the basic financial statements. In accordance with Governmental Auditing Standards, we have also issued our report dated December 5, 2010 on our consideration of Lee County, Georgia’s internal control over financial reporting and our test of its compliance with certain laws, regulations, contracts and grants agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting and compliance. That report is an integral part of an audit performed in accordance with Governmental Auditing Standards and should be considered in assessing the results of our audit. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Lee County, Georgia’s basic financial statements. The required supplementary information is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. The required supplementary information, combining and individual fund schedules, and supplemental schedules have been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic statements and, in our opinion, based on our audit and the report of other auditors, are fairly stated, in all material respects, in relation to the basic statements taken as a whole. Respectfully submitted,

Geer & Associates Geer & Associates December 5, 2010

1

BASIC FINANCIAL STATEMENTS

2

Lee County Board of Commissions

Statement of Net Assets

June 30, 2010

Component Unit

Lee County

Governmental Business-type Primary Health

Activities Activities Government Department

ASSETS

Cash & cash equivalents 12,332,770$ 375,917$ 12,708,687$ 349,641$

Receivables, net of allowance for uncollectibles 1,520,875 195,101 1,715,976 -

Internal balances 522,161 (522,161) - -

Due from other funds 201,583 - 201,583 15,801

Inventories - 15,693 15,693 -

Prepaid items 504,101 20,259 524,360 -

Deferred items 213,316 37,053 250,369 -

Restricted cash & cash equivalents 140,067 1,763,340 1,903,407 -

Capital assets not being depreciated 6,682,156 3,404,577 10,086,733 -

Capital assets net of accumulated depreciation 40,635,102 24,735,955 65,371,057 38,303

Total Assets 62,752,131 30,025,734 92,777,865 403,745

LIABILITIES

Accounts payable 1,721,645 78,267 1,799,912 20,987

Accrued wages, withholdings & benefits 385,109 78,305 463,414 -

Compensated absences, due within one year 40,910 2,514 43,424 4,425

Due to other funds - 161,197 161,197 3,697

Accrued interest payable 83,825 12,490 96,315 -

Deferred revenue 134,566 134,566 -

Other current costs - 248,291 248,291

Closure & Post Closure Care 30,282

Debt and leases payable, due within one year 2,758,228 448,618 3,206,846 -

Noncurrent liabilities

Compensated absences 479,741 38,565 518,306 39,826

Customer deposits - 386,380 386,380 -

Closure & Post Closure Care 1,014,954 1,014,954

Debt and leases payable, less current portion 10,339,436 23,471,508 33,810,944 -

15,808,894 26,105,937 41,884,549 68,935

NET ASSETS

Invested in capital assets, net of related debt 34,219,594 4,220,406 38,440,000 38,303

Restricted

Restricted for capital outlay 175 1,247,133 1,247,308 211,114

Restricted for debt service 353,208 - 353,208 -

Restricted for health & welfare - - - -

Unrestricted 12,370,260 (1,547,742) 10,822,518 85,393

Total Net Assets 46,943,237$ 3,919,797$ 50,863,034$ 334,810$

Primary Government

+

The accompanying notes are an integral part of these financial statements

3

4


Statement of Activities

For the Year Ended June 30, 2010

Component Unit

Operating Capital Grants Lee County

Charges for Grants and and Governmental Business-type Health

FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Department

Primary Government

Governmental Activities

General government 7,598,669$ 3,337,542$ -$ -$ (4,261,127)$ -$ (4,261,127)$

Judicial 1,501,032 988,241 - - (512,791) - (512,791)

Public safety 9,471,294 946,736 - - (8,524,558) - (8,524,558)

Public works 3,607,832 2,638,532 - - (969,300) - (969,300)

Health & welfare 431,638 53,540 - - (378,098) - (378,098)

Culture & recreation 1,146,953 - - - (1,146,953) - (1,146,953)

Housing & development 759,180 - - - (759,180) - (759,180)

Interest on long-term debt 711,517 - - - (711,517) - (711,517)

Total Governmental Activities 25,228,115 7,964,591 - - (17,263,524) - (17,263,524)

Business-type Activities

Water and sewer 5,452,302 3,430,878 - - - (2,021,424) (2,021,424)

Solid waste 220,384 100,749 - - - (119,635) (119,635)

Golf/recreation 911,404 885,609 - - - (25,795) (25,795)

Total Business-type Activities 6,584,090 4,417,236 - - - (2,166,854) (2,166,854)

Total Primary Government 31,812,205$ 12,381,827$ -$ -$ (17,263,524) (2,166,854) (19,430,378)

Component Unit

Lee County Health Department 715,609$ 288,032$ 453,959$ -$ 26,382$

Total Component Unit 715,609$ 288,032$ 453,959$ -$ 26,382

General Revenues

Taxes

Real property 9,716,499 - 9,716,499 -

Personal property 1,196,056 - 1,196,056 -

Real estate transfer (intangible) 312,270 - 312,270 -

Franchise 202,504 - 202,504 -

General sales & use 5,959,873 - 5,959,873 -

Selective sales & use 208,690 - 208,690 -

Business 1,206,724 - 1,206,724 -

Penalties & interest on delinquent taxes 240,794 - 240,794 -

Investment income 91,349 28,041 119,390 -

Miscellaneous 341,015 7,510 348,525 -

Gain on disposition of captial assets 59,945 - 59,945 -

Transfers (429,565) 429,565 - -

Total General Revenues and Transfers 19,106,154 465,116 19,571,270 -

Change in Net Assets 1,842,630 (1,701,738) 140,892 26,382

Net Assets- Beginning 45,100,607 5,621,535 50,722,142 308,428

Net Assets- Ending 46,943,237$ 3,919,797$ 50,863,034$ 334,810$

Program Revenues Net (Expense) Revenue and Changes in Net Assets

Primary Government

The accompanying notes are an integral part of these financial statements.

5


Balance Sheet

Governmental Funds

June 30, 2010

1% SPLOST 1% SPLOST Other Total

Development 1% SPLOST #5 BONY #5 Tax Governmental Governmental

General Authority #4 Advance Proceeds Funds Funds

ASSETS

Cash & cash equivalents 5,442,987$ 701,357$ 1,298,939$ -$ 4,007,571$ 763,297$ 12,214,151$

Receivables, net of allowance for uncollectibles 892,719 - - - - 3,293 896,012

Due from other funds 1,804,497 - 1,162,300 1,504,463 3,899,736 38,492 8,409,488

Prepaids 473,923 - - - - - 473,923

Restricted assets - - - - - - -

Cash & cash equivalents 12,614 - 47,762 31,442 - 48,248 140,066

Accounts receivable - - - -$ 562,557 62,773 625,330

Total Assets 8,626,740$ 701,357$ 2,509,001$ 1,535,905$ 8,469,864$ 916,103$ 22,758,970$

LIABILITIES & FUND EQUITY

Liabilities

Accounts payable 463,804$ -$ 256,477$ 906,118$ -$ 7,025$ 1,633,424$

Accrued wages, withholdings & benefits 369,981 - - - - 15,129 385,110

Compensated absences 40,910 - - - - - 40,910

Deferred revenue 248,693 - - - - - 248,693

Due to other funds - - 1,095,177 2,273,325 3,599,812 344,506 7,312,820

Total liabilities 1,123,388 - 1,351,654 3,179,443 3,599,812 366,660 9,620,957

Fund balances

Reserved for capital expenditure 12,614 - 47,762 31,442 4,007,571 48,248 4,147,637$

Reserved for debt service - - - - - - -

Unreserved, reported in

General fund 7,490,738 - - - - - 7,490,738

Special revenue funds - 701,357 - - - 501,195 1,202,552

Capital projects funds - - 1,109,585 (1,674,980) 862,481 - 297,086

Total fund balances 7,503,352 701,357 1,157,347 (1,643,538) 4,870,052 549,443 13,138,013

Total liabilities & fund balances 8,626,740$ 701,357$ 2,509,001$ 1,535,905$ 8,469,864$ 916,103$ 22,758,970$

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds 47,317,256$

Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds 248,693

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds

Capital leases (1,221,956)

Notes payable (2,466,555)

Installment sale agreement (1,625,000)

General obligation bonds (7,784,153)

Deferred charges for issuance cost (to be amortized over life of debt) 213,321

Accrued interest payable (83,825)

Compensated absences (479,741)

Total long-term liabilities (13,447,909)

An internal service fund is used by management to charge the costs of the County's medical benefit plan

to individual funds

Net assets of internal service fund (312,816)$

Internal payable representing cost in excess of charges to business-type activities- prior years -

(312,816)

Net Assets of governmental activities 46,943,237$


6


Statement of Revenues, Expenditures & Change in Fund Balance

Governmental Funds


1% SPLOST 1% SPLOST Other Total

Development 1% SPLOST #5 BONY #5 Tax Governmental Governmental

General Authority #4 Advance Proceeds Funds Funds

REVENUES

Taxes 15,553,427$ -$ -$ -$ 3,486,504$ 3,479 19,043,410$

Licenses & permits 210,185 - - - - - 210,185

Intergovernmental 28,767 - - - - - 28,767

Charges for services 3,358,041 - 13,892 - - 665,673 4,037,606

Fines & forfeitures 862,319 - - - - - 862,319

Investment income 55,284 12,063 7,826 1,199 11,209 20,405 107,986

Miscellaneous 234,136 - 1,750 77,880 - - 313,766

Total revenues 20,302,159 12,063 23,468 79,079 3,497,713 689,557 24,604,039

EXPENDITURES

Current

General government 4,871,789 - 35,910 - - - 4,907,699

Judical 1,449,542 - - - - - 1,449,542

Public safety 8,188,982 - - 2 - 599,943 8,788,927

Public works 2,356,566 - - 7,015 - - 2,363,581

Health & welfare 414,752 - - - - - 414,752

Culture & recreation 771,900 175,186 - - 644 - 947,730

Housing & development 670,601 - - - - 69,802 740,403

Capital outlay 350,392 - 1,075,137 1,386,264 828,822 426,408 4,067,023

Debt service 510,799 261,230 2,540,180 26,778 140,455 3,479,442

Intergovernmental - - 939,419 148,161 - - 1,087,580

Total expenditures 19,585,323 436,416 2,050,466 4,081,622 856,244 1,236,608 28,246,679

Excess (deficiency) of

revenues over

(under) expenditures 716,836 (424,353) (2,026,998) (4,002,543) 2,641,469 (547,051) (3,642,640)

OTHER FINANCING

SOURCES (USES)

Transfer in 901,208 439,485 - 2,540,180 - - 3,880,873

Transfer out (1,155,357) - (170,000) - (2,818,680) (166,401) (4,310,438)

Proceeds of capital asset dispositions - 361,738 - - - (33,051) 328,687

Loan proceeds - - - - - - -

Capital leases 623,577 - - - - - 623,577

Notes payable - - - - - - -

Total other financing sources (uses) 369,428 801,223 (170,000) 2,540,180 (2,818,680) (199,452) 522,699

net change in fund balances 1,086,264 376,870 (2,196,998) (1,462,363) (177,211) (746,503) (3,119,941)

Fund balances- beginning 6,417,088 324,487 3,354,345 (181,175) 5,047,263 1,295,946 16,257,954

Fund balances- ending 7,503,352$ 701,357$ 1,157,347$ (1,643,538)$ 4,870,052$ 549,443$ 13,138,013$


7


Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances

of Governmental Funds to the Statement of Activities


Amounts reported for governmental activities in the Statement of Activities are different because:

Net change in fund balances- total governmental funds reported in the Statement of

Revenues, Expenditures and Changes in Fund Balances- Governmental Funds (3,119,764)$

Governmental funds report capital outlays as expenditures. However, in the Statement

of Activities the cost of those assets is allocated over their estimated useful lives and

reported as depreciation expense.

Capital outlay 5,802,570$

Depreciation expense (2,713,933) 3,088,637

The net effect of various miscellaneous transactions involving capital assets (i.e.,

sales, trade-ins, and donations) is to decrease net assets.

Cost of capital assets sold/disposed (475,059)$

Loss on capital assets sold/disposed 33,051

Accumulated depreciation 142,490 (299,518)

The issuance of long-term debt (e.g. bonds, leses, notes) provides current financial

resources to governmental funds, while the repayment of the principal of long-term

debt consumes the current financial resources of governmental funds. Neither

transaction, however, has any effect on net assets. Also, governmental funds report

the effect of issuance costs, premiums, discounts, and similar items when debt is first

issued, whereas these amounts are deferred and amortized in the Statement of

Activities.

Debt Issued or Incurred

Capital Leases (623,000)$

Principal repayments

Capital leases 472,154

Notes payable 1,700,000

Installment sale agreement 405,000 1,954,154

Expenses reported in the Statement of Activities that do not require the use of current

financial resources are not reported as expenditures in governmental funds while

expenditures reported in the Statement of Revenues, Expenditures, and Changes in Fund

Balances are recognized as expenses of the previous period in the Statement of

Activities and included in beginning net assets.

Interest (22,087)$

Amortization of bond premiums (58,131)

Amortization of issuance costs 63,981

Prepaid expenses (192,627)

Compensated absences 64,316 (144,548)

An internal service fund is used by management to charge the cost of the County's

medical benefit plan to individual funds. A portion of the net revenue of the internal

service fund is reported with governmental activities.

Change in net assets of internal service fund 363,669

Some expenses reported in the statement of activities do not require the use of current

resources and, therefore, are not reported as expenditures in governmental funds. -

Change in net assets of governmental activities reported in the Statement of Activities 1,842,630$

8



Proprietary Funds

June 30, 2010

Governmental

Total Activities

Utility Solid Golf Enterprise Internal

Authority Waste Complex Funds Service Fund

ASSETS

Current Assets

Cash & cash equivalents 284,834$ 2,204$ 88,879$ 375,917$ 118,618$

Receivables, net of allowance for uncollectibles 143,633 1,110 50,358 195,101 -

Due from other funds - - - - 2,624,053

Inventories - - 15,693 15,693 -

Prepaid items 13,212 568 6,479 20,259 30,178

Restricted assets

Cash & cash equivalents 1,221,514 - - 1,221,514 -

Total current assets 1,663,193 3,882 161,409 1,828,484 2,772,849

Noncurrent Assets

Restricted assets

Cash & cash equivalents 541,826 - - - -

Total restricted assets 541,826 - - - -

Deferred charges 37,053 - - 37,053

Capital assets not being depreciated

Land 77,310 163,000 2,536,452 2,776,762 -

Construction in progress 627,815 - - 627,815 -

Capital assets net of accumulated depreciated

Buildings & systems 23,847,751 10,029 878,175 24,735,955 -

Total capital assets net of accumulated

depreciation 24,552,876 173,029 3,414,627 28,140,532 -

Total noncurrent assets 25,131,755 173,029 3,414,627 28,719,411 -

Total assets 26,794,948 176,911 3,576,036 30,547,895 2,772,849

Business-type Activities- Enterprise Funds


9



Proprietary Funds

June 30, 2010

Governmental

Total Activities



LIABILITIES

Current Liabilities

Accounts payable 41,314 8,965 27,988 78,267 88,689

Accrued and other liabilities 7,564 1,979 68,762 78,305 -

Compensated absences - - 2,514 2,514 -

Internal balances 501,917 25,363 (5,119) 522,161 -

Due to Other Funds 138,462 22,735 - 161,197 2,996,976

Accrued Interest Payable 12,490 - - 12,490 -

Deferred Revenue 117,337 - 17,229 134,566 -

Loans Payable Current 248,665 - 164,850 413,515 -

Capital Leases Payable Current 4,821 - - 4,821 -

Closeure& Post Closure Care - 30,282 - 30,282 -

Other Current Liabilities 248,291 - - 248,291 -

Total Current Liabilities 1,320,861 89,324 276,224 2,267,198 3,085,665

Non-Current Liabilities 117,338 30,303 23,501,811

Customer Deposits 386,380 - - 386,380 -

Compensated Absences 23,077 4,020 11,468 38,565 -

Loans Payable 2,730,182 - - 2,730,182 -

Revenue Bonds Payable 20,771,608 - - 20,771,608 -

Closure & Post Closure Care - 1,014,954 - 1,014,954 -

Total Non-Current Liabilities 23,911,247 1,018,974 11,468 24,941,689 -

TOTAL LIABILITIES 25,232,108 1,108,298 287,692 26,628,098 3,085,665

Net Assets

Invested in Capital Assets, Net

of Related Debt 797,579 173,029 3,249,798 4,220,406 -

Restricted

Restricted for Debt Service 1,247,133 - - 1,247,133 -

Unrestricted (481,872) (1,104,416) 38,546 (1,547,742) (312,816)

1,562,840$ (931,387)$ 3,288,344$ 3,919,797$ (312,816)$



10


Statement of Revenues, Expenses & Changes in Fund Net Assets

Proprietary Funds


Governmental

Total Activities



OPERATING REVENUES

Changes for sales & services 3,430,878$ 100,749$ 885,609$ 4,417,236$ 2,805,331$

Total operating revenues 3,430,878 100,749 885,609 4,417,236 2,805,331

OPERATING EXPENSES

Personal services & employee benefits 582,226 71,077 401,534 1,054,837 2,261,943

Purchased/contracted services 360,872 141,965 269,901 772,738 183,228

Supplies 530,927 6,495 157,187 694,609 -

Depreciation 990,003 847 72,825 1,063,675 -

Total operating expenses 2,464,028 220,384 901,447 3,585,859 2,445,171

Operating income (loss) 966,850 (119,635) (15,838) 831,377 360,160

NONOPERATING REVENUES (EXPENSES)

Investment income 26,560 241 1,240 28,041 3,507

Contributions & donations 7,510 - - 7,510 -

Interest on long-term debt (1,465,840) - (9,957) (1,475,797) -

Fiscal agent's fees (3,877) - - (3,877) -

Bond issuance costs (1,518,557) - - (1,518,557) -

Total nonoperating revenues (expenses) (2,954,204) 241 (8,717) (2,962,680) 3,507

Income (loss) before contributions & transfers (1,987,354) (119,394) (24,555) (2,131,303) 363,667

Capital contributions

Transfers in 364,765 64,800 - 429,565 -

Transfers out - - - - -

Changes in net assets (1,622,589) (54,594) (24,555) (1,701,738) 363,667

Net assets- beginning of year 3,185,429 (876,793) 3,312,899 5,621,535 (676,483)

Net assets- end of year 1,562,840$ (931,387)$ 3,288,344$ 3,919,797$ (312,816)$



11


Statement of Cash Flows

Proprietary Funds


Governmental

Total Activities



CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers and users 3,685,947$ 104,730$ 874,637$ 4,665,314$ -$

Receipts from interfund services provided - - - - 1,208,461

Payments to suppliers (755,940) (151,755) (408,816) (1,316,511) (1,204,965)

Payments to employees (501,310) (49,545) (368,256) (919,111) -

Payments for interfund services used (71,006) (21,300) (31,950) (124,256) -

Net cash provided (used) by operating activities 2,357,691 (117,870) 65,615 2,305,436 3,496

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers in 364,765 64,800 - 429,565 -

Net cash provided (used) by noncapital financing 364,765 64,800 - 429,565 -

CASH FLOWS FROM CAPITAL & RELATED FINANCING

Proceeds from capital debt 22,070,000 - - 22,070,000 -

Acquisition & construction of capital assets (721,878) - (139) (722,017) -

Principal paid on capital debt (22,052,513) - (2,329) (22,054,842) -

Interest paid on capital debt (1,124,610) - (9,957) (1,134,567) -

Payments of fiscal agent's fees (3,877) - - (3,877) -

Debt issuance costs (1,298,370) - - (1,298,370) -

Net cash provided (used) by capital related financing

activities (3,131,248) - (12,425) (3,143,673) -

CASH FLOWS FROM INVESTING ACTIVITIES

Investment income 26,559 223 1,240 28,022 1,007

Net cash provided (used) by investing activities 26,559 223 1,240 28,022 1,007

Net increase (decrease) in cash & cash equivalents (382,233) (52,847) 54,430 (380,650) 4,503

Cash & cash equivalents- beginning of year 2,430,408 55,051 34,449 2,519,908 114,115

Cash & cash equivalents- end of year 2,048,175$ 2,204$ 88,879$ 2,139,258$ 118,618$

RECONCILIATION OF OPERATING INCOME TO NET CASH

Operating income (loss) 966,850$ (119,635)$ (15,838)$ 831,377$ 360,160$

Adjustments to reconcile operating income to net cash

provided (used) by operating activities

Depreciation expense 990,003 847 72,825 1,063,675 -

(Increase) decrease in accounts receivable 221,315 - (10,000) 211,315 -

(Increase) decrease in inventories - - (2,827) (2,827) -

(increase) decrease in accounts payable (29,361) 6,824 18,803 (3,734) (356,664)

(Increase) decrease in accrued wages & withholdings 16,312 936 6,973 24,221 -

(Increase) decrease in due to other funds 166,491 (704) (5,635) 160,152 -

(Increase) decrease in other current liabilities 26,081 3,981 1,314 31,376 -

(Increase) decrease in closure & postclosure - (10,119) - (10,119) -

Net cash provided (used) by operating activities 2,357,691$ (117,870)$ 65,615$ 2,305,435$ 3,496$



12

Statement of Fiduciary Net Assets

Fiduciary Funds

June 30, 2010

Pension Agency

Trust Fund Funds

ASSETS

Cash & cash equivalents -$ 731,904$

Investments, at fair value - -

Total assets - 731,904

LIABILITIES

Due to others - 731,904

Total liabilities - 731,904

NET ASSETS

Held in trust for pension benefits & other purposes -$ -$

(See schedule of funding progress)


13

Statement of Changes in Fiduciary Net Assets

Fiduciary Funds

June 30, 2010

Pension

Trust Fund

ADDITIONS

Contributions -$

Employer -

Investment earnings

Interest & dividends -

Net increase in the fair value of investments -

Total investment earnings -

Less investments expense -

-

Total additions -

DEDUCTIONS

Benefits -

Administrative expenses -

Total deductions -

Changes in net assets -

Net assets- beginning -

Net assets- ending -$


14

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity Lee County, Georgia operates under a five member Commission form of government. Commissioners serve staggered terms of four years. The Board elects its own chairman. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations. Each discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that it is legally separate form the government. Blended Component Units The Lee County Utility Authority is a blended component unit. The data from this unit is combined with data of the primary government and reported as the Utility Authority enterprise fund. Separate financial statements for the Authority are not issued. The Lee County Parks and Recreation Authority is a blended component unit. The data from this unit is combined with data of the primary government and reported as the Golf Complex enterprise fund. Separate financial statements for the Authority are not issued. The Development Authority of Lee County is a blended component unit. The component unit is a legally separate organization for which the County is financially accountable. The data from this unit is combined with data of the primary government and reported as a special revenue fund. Separate financial statements for the Development Authority of Lee County may be obtained at the entity’s administrative office at 100 Starksville Rd Leesburg, GA 31763. Discretely Presented Component Unit. The Lee County Board of Health (Board) provides healthcare services for the citizens of the County. The County Commissioners appoint a voting majority to the Board. The Board is presented as a governmental fund type. The financial data of the Board reflects their most recent audited financial statements. The fiscal year end of the Board is June 30. Complete financial statements for the component unit may be obtained at the entity's administrative offices. B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function, or segment, are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

15

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the County. The County reports the following major governmental funds: The General Fund is the County’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Development Authority Fund accounts for the activities of the Lee County Development Authority, a blended component unit, which pursues and enhances economic development of the county. The 1% SPLOST #4 Fund accounts for the capital projects financed from the special purpose local option sales tax which was approved by the voters for a five year period effective October 1, 2002 through September 30, 2007. The 1% SPLOST #5 BONY Advance Fund accounts for the general obligation sales tax bonds, series 2007 used to finance a portion of the capital projects of the special purpose local option sales tax which was approved by the voters for a six year period effective October 1, 2007 through September 30, 2013. The 1% SPLOST #5 Tax Proceeds Fund accounts for the capital projects financed from the special purpose local option sales tax which was approved by the voters for a six year period effective October 1, 2007 through September 30, 2013. The County reports the following major proprietary funds: The Utility Authority Fund accounts for the activities of the Lee County Utility Authority, a blended component unit of the government. The Authority operates a water and sewer system for the County. The Solid Waste Fund accounts for the activities of the county's inert waste landfill. The Golf Complex Fund accounts for the activities of the Grande Island Golf Complex, a recreational facility owned by the county.

16

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation- Continued Additionally, the government reports the following fund types: The Internal Service Fund accounts for the costs of the County’s medical benefit plan provided to other departments and agencies of the County. The Pension Trust Fund accounts for the activities of the government’s defined benefit pension plan. Agency Funds account for taxes, fees, fines, and bonds collected on behalf of other governments, agencies, officials, and individuals. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The County has elected not to follow subsequent private-sector guidance. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for the enterprise funds includes the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, then, unrestricted resources as they are needed. D. Assets, Liabilities and Equity 1. Deposits and Investments The County's cash and cash equivalents are considered to be cash on hand, demand deposits, certificates of deposit and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the County to invest in obligations of the State of Georgia or other states, obligations issued by the U.S. Government, obligations fully insured or guaranteed by the U.S. Government or by a government agency of the United States, obligations of any corporation of the U.S. Government, prime bankers' acceptances, the local government investment pool, repurchase agreements, and obligations of other political subdivisions of Georgia. Investments for the County, as well as for its component units, are reported at fair value. 2. Receivables and Payables Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either "due to/from other funds” (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding material balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”

17

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 2. Receivables and Payables- continued

Advances between funds, if any, are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectibles. Property taxes were levied on July 17, 2010, payable December 20, 2010, and attached as an enforceable lien on property as of January 1. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method in the Golf Complex fund. The costs of inventories are recorded as expenditures when purchased in all other funds. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the proprietary funds and government-wide financial statements and as expenditures when paid in the governmental funds. 4. Capital Assets Capital assets include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) and are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the County as assets with an initial, individual cost which exceeds certain capitalization thresholds and has an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the County chose to include all such items regardless of their acquisition date or amount. As the County constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical costs. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. Donated capital assets are recorded at estimated fair market value at the date of donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives:

Assets

Capitalization

Thresholds

Estimated

Service

Life

Buildings 10,000$ 25-50

Machinery and Equipment 5,000 5-15

Improvements 5,000 10-20

Public Domain Infrastructure 25,000 15-50

Water & Sewer Systems 5,000 15-50

18

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 5. Compensated Absences It is the County’s policy to permit employees to accumulate earned but unused vacation benefits. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. 6. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. For current and advance refundings resulting in the defeasance of debt, the differences between the reacquisition price and the net carrying amount of the old debt are reported as a deduction from or addition to the new liability. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 7. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change.

19

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital projects funds, which adopt project-length budgets, and the Hotel/Motel Tax special revenue fund. All annual appropriations lapse at fiscal year end. All agencies of the government submit requests for appropriations to the County administrator so that a budget may be prepared. The County administrator prepares and submits a proposed budget to the Board of County Commissioners for review. The commission holds public hearings and a final budget must be prepared and adopted no later than June 30. The appropriated budget is prepared by fund, function and department. The County's department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the County commission. The legal level of budgetary control is the department level. The Official Code of Georgia Annotated section 36-81-3(b) requires an annual balanced budget for the general fund, each special revenue fund, and each debt service fund and requires a project-length budget for each capital projects fund. B. Excess of Expenditures Over Appropriations Excess of expenditures over appropriations at the department level (the legal level of control) is presented below:

Budget Actual Excess

General Fund

Animal Control 248,386$ 308,904$ (60,518)$

Health Department 305,955 307,775 (1,820)

Library 366,958 368,477 (1,519)

Transfers 985,937 1,155,357 (169,420)

Development Authority 178,256 436,416 (258,160)

Building Inspection - 923 (923)

District Attorney 13,610 31,084 (17,474)

Special Assessment 79,175 517,568 (438,393)

E-911 - 709,690 (709,690)

Deficit Fund Balances As of June 30, 2010, the County was not in compliance. The Building Inspection Fund and E-911 has deficit fund balances. C. Bond Covenants In accordance with the requirements of the General Obligation Sales Tax Bonds, Series 2007, and pursuant to an Escrow Agreement, dated as of September 1, 2007, between the County and The Bank of New York Trust Company, N.A., the County is required to deposit 3.10% of the sales and use tax proceeds into the Smithville account until such time as there has been deposited therein $900,000. The remaining proceeds are to be deposited into the Debt Service account until such time as there is on deposit therein the amount needed to pay the principal of and interest on the bonds coming due in the current bond year (December 2 of each year through the following December 1). After the Debt Service account is fully funded each bond year, the remaining County proceeds will be deposited into the County account. The funds required to be deposited into the Smithville and Debt Service accounts were held in the County account at June 30, 2010. The County has subsequently funded the Smithville account.

20

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 III. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The County does not have a formal investment policy for interest rate, credit, concentration of credit, or custodial credit risks. As of June 30, 2010, the County had the following investments.

Investments Maturities Fair Value

U.S. Treasury Money Market Funds 1,123,156

LPL Financial Services- Money Mkt Funds 88,510

Georgia Fund 1 7,644,878

8,856,544$

Credit risk. The County’s investments in Georgia Fund 1 are rated AAAm (Standard & Poor’s). Georgia Fund 1, created by OCGA 36-83-8, is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, the State of Georgia Office of Treasury operates Georgia Fund 1 in manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and it is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Other investments in debt securities which require disclosure of credit ratings were not rated. Concentration of credit risk. As of June 30, 2010, the County had no investments in the Federal National Mortgage Association. Custodial credit risk – investments. For an investment, this is the risk that, in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. As of June 30, 2010, the U.S. Treasuries have a custodial credit risk because they are uninsured, unregistered and held by the counterparty’s trust department, but not in the County’s name. Custodial credit risk – deposits. In the case of deposits, this is the risk that in the event of a bank failure, the County’s deposits may not be returned to it. As of June 30, 2010, the County’s bank balance was not exposed to custodial credit risk because it was insured and collateralized with securities held by the pledging financial institution’s trust department or agent in the County’s name.

21

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 B. Receivables Receivables as of year-end for the County’s individual major funds and nonmajor funds in the aggregate, including applicable allowances for uncollectible accounts, are as follows:

1% SPLOST Nonmajor

#5 Tax Governmental Utility Solid Golf

General Proceeds Funds Authority Waste Complex Total

Receivables:

Taxes 248,693$ -$ -$ -$ -$ -$ 248,693$

Accounts 942,846 562,557 65,598 - 1,110 50,358 1,622,469

Intergovernmental 399,272 - - - - - 399,272

1,590,811 562,557 65,598 - 1,110 50,358 2,270,434

Gross receivables

Less: allowance for

uncollectibles (698,092) - - - - - (698,092)

892,719$ 562,557$ 65,598$ -$ 1,110$ 50,358$ 1,572,342$

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:

Unavailable

Property taxes (General Fund) 248,693$

248,693$

C. Capital Assets Capital asset activity for the year ended June 30, 2010, was as follows:

Beginning Ending

Balance Increases Decreases Balance

Governmental activities:

Capital assets, not being depreciated

Land 3,792,704$ (36,596)$ 301,134$ 3,454,974$

Construction in progress 2,959,933 221,671 - 3,181,604

Total capital assets, not being depreciated 6,752,637 185,075 301,134 6,636,578

Capital assets, being depreciated

Buildings 14,053,527 3,141,699 - 17,195,226

Infrastructure 65,313,636 1,003,089 - 66,316,725

Improvements other than buildings 1,588,879 11,628 - 1,600,507

Machinery and equipment 7,087,094 1,461,079 173,925 8,374,248

Total capital assets, being depreciated 88,043,136 5,617,495 173,925 93,486,706

Less accumulated depreciation for:

Buildings (4,253,343) (313,548) - (4,566,891)

Infrastructure (40,501,362) (1,614,957) - (42,116,319)

Improvements other than buildings (403,602) (85,904) - (489,506)

Machinery and equipment (5,076,277) (699,524) (142,490) (5,633,311)

Total accumulated depreciation (50,234,584) (2,713,933) (142,490) (52,806,027)

Total capital assets, being depreciated, net 37,808,552 2,903,562 31,435 40,680,679

Governmental activities capital assets, net 44,561,189$ 3,088,637$ 332,569$ 47,317,257$

22

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 C. Capital Assets- Continued

Beginning Ending

Balance Increases Decreases Balance

Business-type activities:

Capital assets, not being depreciated

Land 2,776,762$ -$ -$ 2,776,762$

Construction in progress 4,750,815 587,883 4,710,883 627,815

Total capital assets, not being depreciated 7,527,577 587,883 4,710,883 3,404,577

Capital assets, being depreciated

Buildings and infrastructure 28,544,611 4,729,870 - 33,274,481

Improvements other than buildings 262,020 667 - 262,687

Machinery and equipment 847,962 - 139 847,823

Total capital assets, being depreciated 29,654,593 4,730,537 139 34,384,991

Less accumulated depreciation for:

Buildings and system (7,877,439) (951,837) - (8,829,276)

Improvements other than buildings (90,060) (72,964) - (163,024)

Machinery and equipment (617,862) (38,874) - (656,736)

Total accumulated depreciation (8,585,361) (1,063,675) - (9,649,036)

Total capital assets, being depreciated, net 21,069,232 3,666,862 139 24,735,955

Business-type activities capital assets, net 28,596,809$ 4,254,745$ 4,711,022$ 28,140,532$

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities

General government 156,859$

Judicial 11,434

Public safety 580,270

Public works 1,850,072

Health & welfare 16,266

Culture & recreation 85,171

Housing & development 13,861

Total depreciation expense- governmental activities 2,713,933$

Business-type activities

Water and sewer 990,003$

Solid waste 847

Golf complex 72,825

Total depreciation expense- business-type activities 1,063,675$

23

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 D. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of June 30, 2010 is as follows:

Receivable Fund Payable Fund Amount

General Fund Nonmajor Governmental Funds 222,740

General Fund Utility Authority Enterprise Fund 979,084

General Fund Employeee Medical Internal Service Fund 2,993,426

General Fund 1% SPLOST #5 BONY Advance Capital Projects Fund 280,225

General Fund 1% SPLOST #5 BONY Advance Capital Projects Fund 350,482

General Fund Solid Waste Enterprise Fund 25,363

General Fund 1% SPLOST #4 Capital Projects Fund 62,137

1% SPLOST #4 Capital Projects Fund 1% SPLOST #5 BONY Advance Capital Projects Fund 1,151,296

1% SPLOST #4 Capital Projects Fund General Fund 11,004

1% SPLOST #5 BONY Advance Capital Projects Fund 1% SPLOST #5 Capital Projects Fund 1,504,463

1% SPLOST #5 Capital Projects Fund 1% SPLOST #4 Capital Projects Fund 1,033,040

1% SPLOST #5 Capital Projects Fund 1% SPLOST #5 BONY Advance Capital Projects Fund 2,586,671

1% SPLOST #5 Capital Projects Fund General Fund 280,025

Nonmajor Governmental General Fund 4,596

Utility Governmental Fund General Fund 477,167

Utility Governmental Fund Employee Medical Internal Service Fund 3,550

Employee Medical Internal Service Fund Nonmajor Governmental Funds 87,948

Employee Medical Internal Service Fund Utility Authority Enterprise Fund 138,462

Employee Medical Internal Service Fund Solid Waste Enterprise Fund 22,735

Employee Medical Internal Service Fund General Fund 2,330,972

Employee Medical Internal Service Fund Golf Complex Enterprise Fund 43,936

Nonmajor Governmental Nonmajor Governmental Funds 33,896

14,623,218

The outstanding balances between funds result mainly from un-reimbursed expenditures of the receivable fund that are accounted for in the payable fund. All balances are expected to be repaid in the subsequent year. Transfers to/from other funds for the year ending June 30, 2010 are as follows:

Transfer In Transfer Out Amount

General Fund SPLOST IV 170,000

General Fund SPLOST V 278,500

General Fund Jail 37,270

General Fund Building Inspector 415,436

E-911 General Fund 286,306

Development Authority General Fund 439,486

Solid Waste Enterprise Fund General Fund 64,800

Utility Authority General Fund 364,765

SPLOST BONY V SPLOST V 2,540,179

4,596,742

The SPLOST #4 fund transferred $170,000 to the General Fund to finance capital project expenditures. The SPLOST #5 Fund transferred $2,540,179 to the SPLOST BONY V Fund to finance debt payment. The General fund made transfers to the E-911 Fund, Development Authority, Golf Complex Fund, Nonmajor Governmental Fund, Solid Waste Fund, and Utility Authority to finance their operations.

24

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010

E. Leases Operating Leases. The County leases equipment at the Golf Course under non-cancelable operating leases. Total costs for such leases were $69,234 for the year ended June 30, 2010. The future minimum lease payments for these leases are as follows:

Business-type

Year Ending June 30 Activities

2011 69,234

Total minimum lease payments 69,234$

Capital Leases. The County has entered into lease agreements as lessee for financing the acquisition of capital assets. The lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. Capital assets subject to lease obligations at June 30, 2009 are as follows:

Governmental Business-type

Activities Activities Total

Machinery and equipment 3,560,776$ 224,420$ 3,785,196$

Less: accumulated depreciation (2,356,731) (184,819) (2,541,550)

Total 1,204,045$ 39,601$ 1,243,646$

The future minimum lease payments in total for each of the next five years, including principal and interest are presented as follows:

Governmental Business-Type

Year Ending June 30 Activities Activities Total

2011 372,881 4,821 377,702

2012 272,791 - 272,791

2013 119,393 - 119,393

2014 87,177 - 87,177

2015 369,714 - 369,714

Total 1,221,955$ 4,821$ 1,226,777$

25

LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 F. Long-Term Debt Notes Payable The Development Authority of Lee County issued notes payable for land acquisitions due in semi-annual installments of $130,615 each, through December 2012, with a balloon payment of $2,180,861 due June 27, 2013 at a 5.25% interest rate. The balance outstanding as June 30, 2010 was $2,466,555.

The Lee County Parks & Recreation Authority refinanced a note payable at Colony Bank to fund renovations at the golf course. The current note is dated April 12, 2007 at 7.5% interest. The total balance outstanding as of June 30, 2010 was $164,829. . Notes payable debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total Principal Interest Total

2011 131,657$ 129,573$ 261,230$ 164,829$ 842$ 165,671$

2012 138,428 122,802 261,230 - - -

2013 2,196,470 115,005 2,311,475 - - -

- - - -

2,466,555$ 367,380$ 2,833,935$ 164,829$ 842$ 165,671$

Governmental Activities Business-type Activities

Loan Payable The Lee County Utilities Authority entered into a loan agreement with the Georgia Environmental Facilities Authority to finance wastewater treatment facility improvements. The loan is to be repaid quarterly over a twenty year period with interest at 3 percent. The balance outstanding as of June 30, 2010 was $2,464,100. On October 12, 2006, the Authority entered into a new loan agreement with the Georgia Environmental Facilities Authority for $5,977,069 to finance the U.S. Highway 82 water and sewer extension at 4.15% for twenty years to be repaid in monthly installments beginning March 2008. The total amount drawn as of June 30, 2010 was refunded by the issuing of Revenue Bonds, Series 2010. The Authority received a $740,000 loan from Sumter Electric Membership Corporation, the recipient of a USDA Rural Economic Development Loan, to be used for the sewer extension along U.S. Highway 82. The note will be repaid in monthly installments of $7,708 over an eight year period, with no interest, beginning two years after May 8, 2007, the date of the note. The total amount outstanding as of June 30, 2010 was $632,083. The County has recognized imputed interest at a rate of 4.15 percent on the loan. Loan payable debt service requirements to maturity are as follows:

Year ending June 30 Principal Interest Total

2011 248,665$ 71,793$ 320,458$

2012 253,308 67,150 320,458

2013 258,409 62,048 320,458

2014 263,352 57,105 320,458

2015 301,549 18,909 320,458

2016 - 2020 1,133,437 175,936 1,309,372

2021 - 2025 637,464 502,325 1,139,789

Total 3,096,184 955,266$ 4,051,450$

Unamortized discounts (117,337)

2,978,846$

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LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 F. Long-Term Debt- Continued Installment Sale Agreements On September 1, 2002 the County entered into an installment lease-purchase agreement with the Association of County Commissioners of Georgia in the amount of $6,965,000. The County used $4,040,499 to pay off the existing jail obligation and $1,497,459 to purchase land for the industrial park. The remainder is being used to construct an administration building and pay costs associated with the debt. Interest payments will be made semi-annually and principal payments annually in varying amounts from $469,000 to $1,051,000 per year through September 1, 2013 if the agreement is renewed annually. These payments will be made from the proceeds of the Special Local Option Sales Tax. The balance outstanding as of June 30, 2010 was $1,625,000. Installment sale agreement debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total

2011 415,000$ 55,133$ 470,133$

2012 430,000 41,645 471,645

2013 450,000 27,240 477,240

2014 330,000 11,715 341,715

Total 1,625,000$ 135,733$ 1,760,733$

General Obligation Bonds On August 28, 2007, the County issued $10,635,000 in series 2007 general obligation sales tax bonds to finance certain capital outlay projects. Interest is payable semiannually on June 1 and December 1 at varying rates ranging from 4 percent to 5.25 percent beginning June 1, 2008 through 2013. Principal is paid on December 1 of each year beginning 2008. General obligation bonds outstanding, net of unamortized premiums of $199,153, at June 30, 2010, was $7,585,000. General obligation bond debt service requirements to maturity are as follows:


2011 1,770,000$ 329,225$ 2,099,225$

2012 1,845,000 248,700 2,093,700

2013 1,940,000 155,075 2,095,075

2014 2,030,000 53,288 2,083,288

Total 7,585,000 786,288$ 8,371,288$

Unamortized premiums 199,153

7,784,153$

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LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 F. Long-Term Debt- Continued Revenue Bonds On June 24, 2010, the Lee County Utilities Authority issued $22,070,000 revenue bonds, (the “Series 2010 Bonds”) for the purpose of (a) refunding the Prior Bonds and the GEFA Loan, (b) acquiring, constructing, installing and equipping the Series 2010 Projects, (c) funding a debt service reserve fund for the Series 2010 Bonds and (d) paying the costs of issuing the Series Bonds. The Series 2010 Bonds shall bear interest (based on a 360 day year comprised of twelve thirty day months) from the Interest Payment Date next preceding their date of authentication to which interest has been paid (unless their date of authentication is an Interest Payment Date, in which case from such Interest Payment Date, unless their date of authentication is after a Record Date but before an Interest Payment Date, in which case from the next Interest Payment Date, or unless their date of authentication is before the first Interest Payment Date, in which case from their date of original issuance) at rates per annum not to exceed 6% per annum. The interest shall be payable February 1 and August 1 of each year, commencing February 1, 2011, and the principal shall mature on the 1

st day of August on or

before August 1, 2035. The maximum annual debt service on the Series 2010 Bonds in any Sinking Fund year shall not exceed $2,500,000.

Revenue bond debt service requirements to maturity are as follows:


2011 -$ 501,397$ 501,397$

2012 415,000 827,661 1,242,661

2013 440,000 819,111 1,259,111

2014 515,000 809,561 1,324,561

2015 575,000 798,661 1,373,661

2016 - 2020 3,604,978 3,696,364 7,301,342

2021 - 2025 4,855,000 2,896,845 7,751,845

2026 - 2030 6,850,000 1,749,004 8,599,004

2031 - 2035 4,815,000 316,497 5,131,497

Total 22,069,978 12,415,101$ 29,353,582$

Unamortized discounts,

losses on refunds, &

related issue costs (1,298,370)

20,771,608$

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LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 F. Long-Term Debt- Continued Changes In Long-Term Liabilities Long-term liability activity for the year ended June 30, 2010, was as follows:

Beginning Ending Due Within

Balance Additions Reductions Balance One YearGovernmental activities:

Compensated absences 456,335$ 64,316$ -$ 520,651$ 40,910$ Capital leases 1,070,554 623,557 472,155 1,221,956 441,571 Notes payable 2,591,474 - 124,919 2,466,555 131,657 Installment sale agreement 2,030,000 - 405,000 1,625,000 415,000 General obligation bonds 9,542,284 - 1,758,131 7,784,153 1,770,000

15,690,647$ 687,873$ 2,760,205$ 13,618,315$ 2,799,138$

Business-type activities:Compensated absences 25,101$ 15,978$ -$ 41,079$ 2,514$ Capital leases 20,712 - 15,891 4,821 4,821 Notes payable 167,179 - 2,329 164,850 164,850 Loans payable 8,300,292 647,419 5,968,865 2,978,846 248,665 Revenue bonds payable 11,140,180 22,070,000 12,438,572 20,771,608 - Revenue notes payable 4,827,567 - 4,827,567 - - Closure & post closure care costs 1,055,355 - 10,119 1,045,236 30,282

25,536,386$ 22,733,397$ 23,263,342$ 25,006,441$ 451,132$

For governmental activities, compensated absences are generally liquidated by the General fund. G. Landfill Post-Closure Care Costs State and federal laws and regulations require that the County place a final cover on its landfill when closed and perform certain maintenance and monitoring functions at the landfill site for five years after closure of landfills prior to April 1994 and thirty years for all other landfills. For the County's landfill, which was closed prior to April 1994, the estimated liability for post-closure care cost is $1,045,236, which is based on 100% of landfill capacity used to date. Actual costs may be higher due to inflation, deflation, revisions to laws or regulations, or changes in technology.

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LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 H. Restricted Assets The balances of the restricted asset accounts are as follows:

1% SPLOST1% #5 BONY- Nonmajor Utility

General SPLOST Advance Governmental AuthorityFund #4 Fund Fund Funds Fund

Wachovia master lease -$ -$ -$ 48,248$ -$ JAG Court Services 12,440 Animal control building 175 - - - - COPS acquisition fund - 178 - - - COPS reserve fund - 42,222 - - - COPS payment fund - 5,362 - - - Office of treasury- Georgia fund 1 - - 23 - - Colony bank escrow - - 31,419 - - GEFA 2006 - - - - 54,488 Emergency fund - - - - 88,510 Revenue bond 2003 debt service - - - - 3,123 Revenue bond 2010 debt service - - - - 1,075,394 Customer deposits - - - - 608,992

12,614$ 47,762$ 31,442$ 48,248$ 1,830,508$

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LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 IV. OTHER INFORMATION A. Risk Management The County is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. Settled claims from these risks have not exceeded insurance coverage for the past three years. To cover the risks, the County is a member of the Association County Commissioners of Georgia - Interlocal Risk Management Agency (ACCG-IRMA). The ACCG-IRMA operates under the authority of O.C.G.A. 36-85-1 et Seq. and administers group self-insurance funds, which receive contributions of its members in order to pool the risks of general liability, motor vehicle liability and property damage. Through participation in the agency, members jointly purchase insurance with other counties participating in and belonging to the agency and are coinsured under master policies with the total premium apportioned among the participants. The County is jointly and severally liable for all legal obligations of the funds which arise out of an event which occurs while the County is a member of the fund. The County's deductible for coverage is $1,000 with various limits of liability up to $1,000,000 for liability, $30,056,912 for property, and $100,000,000 for boiler/machinery coverage. For its workers compensation coverage, the County is a member of the Association County Commissioners of Georgia-Group Self-Insurance Workers' Compensation Fund (ACCG-GSIWCF). The ACCG-GSIWCF operates under the authority of O.C.G.A 34-9-150 et Seq. The County pays into the fund its share of the fund's projected obligation for workers' compensation liability, administrative expenses, and other costs incurred by the fund. The County's share is adjusted by the board of the fund according to the claims experience of each participating member in accordance with criteria set forth in the bylaws of the fund. The fund makes payments to the employees of the members for workers compensation benefits pursuant to and in accordance with the claims procedures set forth in title 34, chapter 9 of O.C.G.A. The County is jointly and severally liable for all legal obligations of the fund, including, but not limited to, any obligations of the fund to pay claims against the fund arising out of any occurrence, incident, or accident covered under title 34, chapter 9 of O.C.G.A. The County has an employee benefit plan designed to protect employees covered against catastrophic health expenses. The plan is a self-funded welfare plan consisting of an insured part and a self-funded part. Under the plan, the self-funded part provides medical coverage for employees and their dependents up to a maximum of $70,000 per participant per plan year. The insured part provides insurance coverage for claims in excess of the coverage provided by the self-funded part, providing the County with protection from risk of loss. The total amount of the County's liability for a contract year, which begins February 1 and ends January 31, is the premium for each employee per month plus the maximum claim liability of $70,000 per employee per year not to exceed an estimated annual maximum cost of $3,077,136. The total claims incurred for the year ending June 30, 2009 by the County totaled $2,309,897. The total claims incurred for the year ending June 30, 2010 by the County totaled $2,445,171. The County contracts with the plan administrator to examine, review, determine benefits, calculate payments, approve or disapprove all claims for the plan. B. Commitments and Contingencies The County is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the County's counsel that resolution of most of these matters will not have a material adverse effect on the financial condition of the County. On October 17, 2005, the County entered into a contract with Camvera Networks, Inc. to provide various wireless communications services. The County in turn contracted with Consolidated Financial Resources, Inc. (CFRI) pursuant to a lease for equipment which CFRI purchased from Camvera. CFRI is responsible for the payment of the total consideration to Camvera for their purchase. The County is responsible for the lease payments to CFRI. Camvera guarantees it shall reimburse the County for its lease payments made to CFRI. Camvera does not have any property rights in the equipment being leased by the County. However, upon full payment of all guaranty payment obligations, title shall automatically vest in Camvera. The service agreement with Camvera in providing services to end-users expired December 31, 2007. Camvera fully owns the subscriber revenue generated, subject to its rights to apply such revenue toward its system operating, general operating or administrative costs, or towards funding a reserve, sinking or other account for the guaranty payments or for other purposes at its discretion. Under an assignment agreement entered into by the County, CFRI has assigned all its rights, title and interest, in the lease agreement, and in the equipment under the lease agreement, to Vision Bank. Under the agreement, the County makes its lease payments to Vision Bank.

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LEE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 B. Commitments and Contingencies- Continued On July 22, 2008, the County adopted a resolution authorizing the County Administrator or the Finance Director to seek a loan in the form of a Tax Anticipation Note in an amount of up to $4,000,000. C. Pensions The County adopted a defined benefit pension plan on April 2, 1986, which became effective July 1, 1986. This single-employer plan has been funded solely by the County and employee contributions were not permitted. Effective June 1, 1997, the County converted from a defined benefit plan to a defined contribution retirement plan, known as the Lee County Board of Commissioners Money Purchase Plan, which is administered by the County Administrator. Under the conversion, the defined benefit plan was essentially terminated and all current and future eligible employees are enrolled in the defined contribution plan. Employees were given credit for the present value of their accrued benefits in the defined benefit plan at conversion, which became their opening account balance in the defined contribution plan. The defined benefit plan was retained for eleven retirees already receiving or eligible to receive benefits and who did not elect to convert to the defined contribution plan. Defined Benefit Plan The County's defined benefit pension plan provides retirement and death benefits to plan members and beneficiaries. All persons eligible to receive benefits under the defined benefit plan are no longer active employees of the County. The benefit provisions of the plan are established by County ordinance. The financial statements of the plan are prepared using the accrual basis of accounting. Plan contributions are recognized when due. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. Securities traded on a national exchange are reported at the last reported sales price on the County’s balance sheet date. Securities without an estimated established market are reported at estimated fair value. A financial report that includes financial statements and required supplementary information for the plan may be obtained by writing to Qualified Pension Consultants of Florida, Inc., 117 Horseshoe Trail, Ormond Beach, Florida 32174. Funding Policy. Retired or terminated county employees are not required to contribute to the Plan. The County is required to contribute at an actuarially determined rate. All contribution requirements of plan members and the County are established by County ordinance. Annual Pension Cost. For the year ended June 30, 2009, the County's annual pension cost of $374,576 was equal to the County's required contributions. The required contribution was determined as part of the July 1, 2009, actuarial valuation using the terminal funding method. Under this method, the entire actuarial present value of benefits for each individual is contributed to the plan's fund at the time of withdrawal, retirement or benefit commencement. The actuarial assumptions included (a) 6% investment rate of return and (b) the 1983 individual annuity mortality tables (c) no inflation rate assumption due to the fact all participants are no longer employees of the County. The actuarial value of Plan assets was determined using techniques that smooth the effect of short-term volatility in the market value of investments. The unfunded actuarial accrued liability is being amortized as a level dollar amount on a closed basis over four years as of July 1, 1999.

Fiscal Year Annual Annual Percentage Net

Ending Pension County of APC Pension

June 30 Cost (APC) Contribution Contributed Obligation

2008 -$ -$ 0% -$

2009 302,200 340,169 116% -

2010 374,576 374,576 100% (81,804)

Three Year Trend Information

APPENDIX B

Form of Opinion of Bond Counsel

MURRAY BARNES FINISTER LLP

ONE CAPITAL CITY PLAZA • SUITE 1140 • 3350 PEACHTREE ROAD • ATLANTA, GEORGIA 30326

TELEPHONE: (678) 999-0350 • FACSIMILE: (678) 999-0357 • INTERNET: www.murraybarneslaw.com

_____________, 2011 Lee County Board of Commissioners Leesburg, Georgia

The Bank of New York Mellon Trust Company, National Association

Atlanta, Georgia

Merchant Capital, L.L.C. Atlanta, Georgia

Re: $3,350,000 Lee County, Georgia General Obligation Sales Tax Bonds,

Series 2011 To the Addressees:

We have acted as bond counsel and disclosure counsel to Lee County, Georgia (the “County”) in connection with the issuance by the County of $3,350,000 in aggregate principal amount of its General Obligation Sales Tax Bonds, Series 2011 (the “Bonds”). In connection with the foregoing, we have examined (a) a certified copy of the validation proceeding concluded in the Superior Court of Lee County, Georgia with respect to the Bonds, (b) the Bond Resolution of the County adopted on _______, 2011 (the “Bond Resolution”) and (c) the Constitution and laws of the State of Georgia, including, but not limited to, O.C.G.A. Section 48-8-110, et seq., as amended, relating to the imposition of a one percent sales and use tax (the “Sales and Use Tax”).

We have also examined and relied upon original, certified or photographic copies

of such documents, records, agreements and certificates as we have considered necessary or appropriate to enable us to render the opinions expressed herein. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate.

The Bonds are being issued to (a) finance capital projects, (b) pay capitalized interest and (c) pay the costs of issuing the Bonds. The Bonds are not subject to redemption prior to maturity.

As to questions of fact material to our opinion, we have relied upon

(a) representations of duly authorized officers of the County and (b) certified proceedings and

______________, 2011 Page 2 other certifications of duly authorized officers of the County, without undertaking to verify the same by independent investigation.

We express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Official Statement or (b) as to compliance by the County or the initial purchasers of the Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Bonds.

Based on our examinations, we are of the opinion, as of the date hereof and under

existing law, as follows:

1. The Bonds are valid and binding general obligations of the County payable, first, from the proceeds of the Sales and Use Tax and, second, from an ad valorem tax, without limitation as to rate or amount, levied on all property in the County subject to taxation for general obligation bond purposes.

2. The Board of Commissioners has levied an ad valorem tax, without

limitation as to rate or amount, on all property in the County subject to taxation for general obligation bond purposes in order to pay the principal of and interest on the Bonds as same become due.

3. Interest on the Bonds is exempt from present State of Georgia income

taxes.

4. The interest on the Bonds (a) is excluded from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. Except as provided in paragraph 5 below, we express no opinion regarding other federal tax consequences arising with respect to ownership of the Bonds. In rendering this opinion, we have assumed the continued compliance by the County with its covenants relating to the use of the proceeds of the Bonds and the facilities financed thereby and compliance with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order for the interest on the Bonds to be and continue to be excluded from gross income for federal income tax purposes. The inaccuracy of any certificate or representation or the noncompliance with such covenants could cause interest on the Bonds to be included in federal gross income retroactive to the date of issuance of the Bonds.

5. The Bonds have been designated as “qualified tax-exempt obligations”

within the meaning of Section 265(b)(3) of the Code.

______________, 2011 Page 3

The rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon for any other purpose or by any other person for any purpose without out prior written consent. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein.

Very truly yours,

MURRAY BARNES FINISTER LLP

By: A Partner

APPENDIX C

Form of Continuing Disclosure Certificate

CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by Lee County, Georgia (the “County”) in connection with the issuance of the Lee County General Obligation Sales Tax Bonds, Series 2011 (the “Bonds”). The Bonds are being issued pursuant to a resolution adopted by the Lee County Board of Commissioners on June 28, 2011 (the “Bond Resolution”). The County hereby 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 Beneficial Owners (as herein defined) of the Bonds and in order to assist the Participating Underwriter (as herein defined) in complying with the Rule (as herein defined).

Section 2. Definitions. In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized terms used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Annual Report” shall mean any Annual Report provided by the County pursuant

to the Rule and this Disclosure Certificate.

“Beneficial Owner” shall mean 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.

“Dissemination Agent” shall mean any person(s) appointed from time to time by the County to assist in carrying out its obligations under this Disclosure Certificate.

“EMMA” shall mean MSRB’s Electronic Municipal Market Access System.

“Fiscal Year” shall mean any period of twelve consecutive months adopted by the

County as its fiscal year for financial reporting purposes and shall initially mean the period beginning on July 1 of each calendar year and ending June 30 of the next calendar year.

“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.

“Official Statement” shall mean the Official Statement of the County relating to the Bonds.

“Participating Underwriter” shall mean Merchant Capital, L.L.C., Atlanta, Georgia.

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“Rule” shall mean 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.

“State” shall mean the State of Georgia.

Section 3. Provision of Annual Reports.

(a) The County shall, or shall cause the Dissemination Agent (if any) to, not later than 270 days after the end of the Fiscal Year, commencing with Fiscal Year 2011, provide to EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 business days prior to such date the County shall provide the Annual Report to the Dissemination Agent (if any). 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 however, that if audited financial statements are unavailable, unaudited financial statements may be submitted so long as such audited financial statements are furnished when available.

(b) The County or the Dissemination Agent (if any) shall: (i) determine each year prior to the date for providing the Annual

Report EMMA; and (ii) If the County is unable to provide to EMMA an Annual Report (or

the audited financial statements which were to be separately submitted) by the date required in subsection (a), send a notice to EMMA, in substantially the form attached as Exhibit A.

Section 4. Content of Annual Reports. The County’s Annual Report shall

contain or incorporate by reference the following:

(a) If audited financial statements are not yet available, the unaudited financial statements of the County, and when audited financial statements are available, the audited financial statements of the County, both such types of financial statements to be prepared in conformity with generally accepted accounting principles, as in effect from time to time. Such financial statements shall be accompanied by an audit report resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing.

(b) If the accounting principles changed from the previous Fiscal Year and if

such changes are material to the County, a description (as required by Section 8 of this Disclosure Certificate) of the impact of the change.

(c) A statement indicating that the Fiscal Year has not changed, or, if the

Fiscal Year has changed, a statement indicating the new Fiscal Year.

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(d) For the preceding Fiscal Year, financial information and operating data of

the County of the type described in the Official Statement under the headings “Sales and Use Tax Collections,” “Property Tax Millage Rates,” “Ad Valorem Property Tax Digest,” “Tax Collections” and “Ten Largest Taxpayers.”

Any or all of the items listed above may be incorporated by reference from 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 in accordance with the Rule and the other rules of the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from EMMA. The County shall clearly identify each such other document so incorporated by reference.

Section 5. Reporting of Significant Events.

(a) In a timely manner not in excess of ten (10) business days of the occurrence of any of the following Listed Events, the County shall file a notice of such occurrence in an electronic format with EMMA:

(i) Principal and interest payment delinquencies.

(ii) Non-payment related defaults, if material.

(iii) Unscheduled draws on debt service reserves reflecting financial difficulties.

(iv) Unscheduled draws on credit enhancements reflecting financial

difficulties.

(v) Substitution of credit or liquidity providers, or their failure to perform.

(vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, or a Notice of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other events affecting the tax status of the Bonds.

(vii) Modification to rights of the holders of the Bonds, if material.

(viii) Bond calls, if material, and tender offers.

(ix) Defeasances.

(x) Release, substitution or sale of property securing repayment of the Bonds,

if material.

(xi) Rating changes.

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(xii) Bankruptcy, insolvency, receivership, or a similar proceeding by an

obligated person. (xiii) Consummation of a merger, consolidation, acquisition involving an

obligated person, or sale of all or substantially all of the assets of an obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.

(xiv) Appointment of a successor or additional trustee or the change in name of

a trustee, if material.

(b) 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. Termination of Reporting Obligation. The County’s obligations under this Disclosure Certificate shall terminate upon the defeasance (within the meaning of the Rule), prior redemption or payment in full of all of the Bonds. If the County’s obligations are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Certificate in the same manner as if it were the County, and the original County shall have no further responsibility hereunder. The County shall notify EMMA in an electronic format that the County’s obligations under this Disclosure Certificate have terminated.

Section 7. Dissemination Agent. The County may, from time to time, appoint

a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and the County may, from time to time, discharge the Dissemination Agent, with or without appointing a successor Dissemination Agent.

Section 8. Amendment. This Disclosure Certificate may not be amended unless independent counsel experienced in securities law matters has rendered an opinion to the County to the effect that the amendment does not violate the provisions of the Rule.

In the event that this Disclosure Certificate is amended or any provision of the Disclosure Certificate is waived, the notice of a Listed Event pursuant to Section 5(a)(vii) hereof shall explain, in narrative form, the reasons for the amendment or wavier and the impact of the change in the type of operating data or financial information being provided in the Annual Report. If an amendment or waiver is made in this Disclosure Certificate which allows for a change in the accounting principles to be used in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and impact of the change in the accounting principles on the presentation of the financial information. A notice of the change in the accounting principles shall be deemed to be material and shall be sent to each Repository or to the MSRB.

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Section 9. 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 10. Default. In the event of a failure of the County to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any Beneficial Owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the County to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed a “default” or an “event of default” under the Bond Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of any party to comply with this Disclosure Certificate shall be an action to compel performance.

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 the County agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their 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 Dissemination Agent may consult with counsel (who may, but need not, be counsel for any party hereto or the County), and the opinion of such Counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such Counsel. The obligations of the County under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the County, the Participating Underwriter, and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

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.

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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.

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Date: June 28, 2011

LEE COUNTY, GEORGIA

By: Chairman

EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Obligated Person: Lee County, Georgia Name of Bond Issue: Lee County General Obligation Sales Tax Bonds, Series 2011 CUSIP Number1 _________________ Date of Issuance: July 13, 2011

NOTICE IS HEREBY GIVEN that the County has not provided an Annual Report due with respect to the above-named Bonds as required by its Continuing Disclosure Certificate, dated June 28, 2011. The County anticipates that the Annual Report will be filed by ________________________.

This notice is based on the best information available at the time of dissemination. Any questions regarding this notice should be directed to __________________. Dated:

LEE COUNTY, GEORGIA By:

Chairman

1No 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.

EXHIBIT B

NOTICE TO EMMA OF THE OCCURRENCE OF [INSERT THE LISTED EVENT]

Relating to

LEE COUNTY

GENERAL OBLIGATION SALES TAX BONDS SERIES 2011

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 the Listed Events described in Section 5(a)(ix) 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.]

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.

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Dated:_____________________

LEE COUNTY, GEORGIA

By: Chairman

$3,350,000 L C (G GENERAL O S T B S 2011

Documents

Transcript of $3,350,000 L C (G GENERAL O S T B S 2011