$8,455,000 decatur county, georgia general obligation sales … · general obligation sales tax...

NEW ISSUE RATING: Standard & Poor’s “AAA” (“A+” Underlying) BOOK ENTRY ONLY See “MISCELLANEOUS, -Ratings” herein. BANK QUALIFIED In the opinion of Bond Counsel, under existing law, and assuming compliance with the tax covenant described herein, interest on the Bonds is exempt from present State of Georgia income taxation and is excluded from gross income for federal income tax purposes. See, however, “LEGAL MATTERS, -Tax Exemption” herein for a brief description of certain other possible federal tax consequences to certain recipients of interest on the Bonds.

$8,455,000 DECATUR COUNTY, GEORGIA

General Obligation Sales Tax Bonds, Series 2009 Dated: Date of Issuance Principal Due: July 1, in the years shown below The DECATUR COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009 (the “Bonds”) will be issued in registered form in the name of Cede and Co., as the nominee for The Depository Trust Company (“DTC”), New York, New York. Individual purchases of the Bonds must be made in book-entry form only in authorized denominations of $5,000 or any integral multiple thereof. Individual purchasers (“Beneficial Owners”) of the Bonds will not receive physical delivery of the Bonds. Transfers of the Bonds will be effected through a book-entry system as described herein. Interest on the Bonds will be payable on January 1 and July 1 of each year (each an “Interest Payment Date”), beginning July 1, 2009 So long as DTC or its nominee is the registered owner of the Bonds, disbursements of payments of principal of and interest on the Bonds to DTC is the responsibility of Regions Bank, as Paying Agent; disbursements of such payments to DTC Participants is the responsibility of DTC; and disbursements of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants as more fully described herein. See “THE BONDS, -Book Entry Only System of Delivery of the Bonds” herein. The Bonds are not subject to redemption prior to maturity. The Bonds are being issued to provide funds to finance the costs of acquiring, constructing, and equipping certain capital outlay projects of Decatur County (the “County”), to pay capitalized interest on the Bonds, if any, and the costs of issuance of the Bonds. See “THE BONDS, -Estimated Sources and Uses of Funds; and -The Projects” herein.

MATURITY SCHEDULE

Maturity Principal Amount Interest Rate Yield CUSIP

2010

$1,300,000 3.00% 1.42% 243031AA92011 1,350,000 3.00 1.92 243031AB72012 1,385,000 3.00 2.20 243031AC52013 1,425,000 3.00 2.61 243031AD32014 1,470,000 4.00 3.00 243031AE12015 1,525,000 4.00 3.20 243031AF8

Payment of the principal of and premium, if any, and interest on the Bonds when due will be guaranteed under a financial guaranty insurance policy to be issued by Assured Guaranty Corp. (“Assured Guaranty”) concurrently with the delivery of the Bonds. See “BOND INSURANCE” and Appendix D: SPECIMEN FINANCIAL GUARANTY INSURANCE POLICY” herein.

The Bonds are general obligations of the County. Principal of and interest on the Bonds are payable first from receipts of a special county one percent (1%) sales and use tax (the “Special Sales Tax”) which will be collected in the County beginning April 1, 2009. The County reasonably expects that such receipts will be sufficient to pay all debt service on the Bonds. Nevertheless, if such receipts are insufficient, debt service on the Bonds shall be paid, to the extent necessary, from the general fund of the County or from an ad valorem tax to be levied, without limitation as to rate or amount, upon all property in the County subject to taxation for bond purposes. Prior to the issuance of the Bonds, the governing body of the County will provide for the assessment and collection of an ad valorem tax on all property in the County subject to taxation for general obligation bond purposes, which, together with such Special Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as they become due and payable. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE BONDS OR THE SECURITY THEREFOR. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Bonds are offered when, as and if issued by the County and accepted by the Underwriter, subject to the approval of legality of the Bonds by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. Certain legal matters relating to the Bonds will be passed on for the County by its counsel, Hall Booth Smith & Slover, PC, Bainbridge, Georgia, and for the Underwriter by its counsel, Gray & Pannell LLP, Savannah, Georgia. Delivery of the Bonds in definitive form is expected to be made through DTC in New York, New York, on or about March 19, 2009.

Official Statement dated: March 12, 2009.

DECATUR COUNTY, GEORGIA

Board of Commissioners H. Palmer Rich, Chairman

Dr. Earl Perry, Vice ChairmanDr. David C. Mosely

Gary Phillips Russell Smith

Dr. Charles T. Stafford

Appointed Officials Carl Rowland, Finance Director

Tom Patton, County Administrator

County Attorney Hall Booth Smith & Slover, PC Bainbridge, Georgia

UNDERWRITERMerchant Capital, L.L.C.

Atlanta, Georgia 30305

BOND COUNSEL and UNDERWRITER=S COUNSEL Gray & Pannell LLP Savannah, Georgia

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TABLE OF CONTENTS Page

INTRODUCTION ........................................................................................................................................ 1 The County ...................................................................................................................................... 1 Security and Sources of Payment for the Bonds .............................................................................. 1 Purpose of the Bonds ....................................................................................................................... 1 Description of the Bonds ................................................................................................................. 1 Tax Status ........................................................................................................................................ 2 Bond Registrar and Paying Agent .................................................................................................... 2 Professionals Involved in the Offering ............................................................................................ 2 Terms of the Offering ...................................................................................................................... 2 Continuing Disclosure ..................................................................................................................... 3 Additional Information .................................................................................................................... 3

THE BONDS ................................................................................................................................................ 4 General Provisions ........................................................................................................................... 4 Book-Entry Only System of Delivery of Bonds .............................................................................. 4 Authority for Issuance of the Bonds ................................................................................................ 6 Validation of the Bonds ................................................................................................................... 6 Estimated Sources and Uses of Funds ............................................................................................. 6 The Projects ..................................................................................................................................... 6 Investment of Moneys...................................................................................................................... 7 Construction Fund Disbursements ................................................................................................... 8 Security and Sources of Payment for the Bonds .............................................................................. 8

BOND INSURANCE ................................................................................................................................. 11 The Insurance Policy ..................................................................................................................... 11 The Insurer ..................................................................................................................................... 11

DECATUR COUNTY, GEORGIA ............................................................................................................ 14 Introduction .................................................................................................................................... 14 Government Format and Principal Officials .................................................................................. 14Government Services and Facilities ............................................................................................... 15 Employees/Employee Relations .................................................................................................... 15 Employee Benefits ......................................................................................................................... 15 Governmental Immunity and Insurance Coverage ........................................................................ 15 Population ...................................................................................................................................... 16 Per Capita Personal Income ........................................................................................................... 16 Median Home Values .................................................................................................................... 16 Bank Deposits ................................................................................................................................ 16 Industry and Employment .............................................................................................................. 17 Building Permits ............................................................................................................................ 18 Commuting Patterns ....................................................................................................................... 19

DEBT STRUCTURE OF DECATUR COUNTY ...................................................................................... 20 Summary of County Indebtedness by Category ............................................................................ 20 Debt Limitation .............................................................................................................................. 20 Long and Short Term Indebtedness ............................................................................................... 21 Debt Ratios .................................................................................................................................... 21 Indebtedness of Overlapping Governmental Entities .................................................................... 22 Debt Service Schedule ................................................................................................................... 23

DECATUR COUNTY AD VALOREM TAXATION ............................................................................... 24 Introduction .................................................................................................................................... 24 Property Subject to Taxation ......................................................................................................... 24 Assessed Value .............................................................................................................................. 24 Annual Tax Levy ........................................................................................................................... 25 Property Tax Collections ............................................................................................................... 25 Ten Largest Taxpayers ................................................................................................................... 26 Tax Digest ...................................................................................................................................... 26 Millage Rates ................................................................................................................................. 27 M&O Tax Levies and Collections ................................................................................................. 27

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DECATUR COUNTY FINANCIAL INFORMATION ............................................................................. 28 Six Year General Fund Operating History ..................................................................................... 28Accounting Policies ....................................................................................................................... 29 Independent Auditors’ Reports, 2003-2007 ................................................................................... 29Budgetary Process .......................................................................................................................... 29

LEGAL MATTERS .................................................................................................................................... 31 Litigation ........................................................................................................................................ 31 Legal Proceedings .......................................................................................................................... 31 Tax Exemption ............................................................................................................................... 31 Premium Bonds .............................................................................................................................. 32

MISCELLANEOUS ................................................................................................................................... 33 Ratings ........................................................................................................................................... 33 Underwriting .................................................................................................................................. 33 Continuing Disclosure ................................................................................................................... 33 Independent Auditor; Financial Statements ................................................................................... 33Miscellaneous ................................................................................................................................ 34 Approval of Official Statement ...................................................................................................... 34

Appendix A: AUDITED FINANCIAL STATEMENTS OF DECATUR COUNTY, GEORGIA FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Appendix B: PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL

Appendix C: FORM OF THE CONTINUING DISCLOSURE CERTIFICATE

Appendix D: SPECIMEN FINANCIAL GUARANTY INSURANCE POLICY

No dealer, broker, salesman or other person has been authorized by the County or Merchant Capital, L.L.C., Atlanta, Georgia (the “Underwriter”), or any other person to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representation must not be relied upon as having been authorized by the County, the Underwriter, or any other person. Except where otherwise indicated, all information contained in this Official Statement has been provided by the County. Sources other than the County are believed to be reliable, but are not guaranteed as to accuracy or completeness by the County or the Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in any of the information set forth herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given.

This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale.

The Bonds have not been registered under the Securities Act of 1933, and the Resolution has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts.

Assured Guaranty makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, Assured Guaranty has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding Assured Guaranty supplied by Assured Guaranty and presented under the heading “BOND INSURANCE” and Appendix D: SPECIMEN FINANCIAL GUARANTY INSURANCE POLICY”.

OFFICIAL STATEMENT

$8,455,000 DECATUR COUNTY, GEORGIA

GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009

INTRODUCTION

This Official Statement of Decatur County, Georgia (the “County”), which includes the cover page and the Appendices hereto, sets forth information concerning the County and the proposed DECATURCOUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009 (the “Bonds”).

The information contained in this section entitled “INTRODUCTION” is a brief description of the terms of and security for the Bonds and does not purport to be comprehensive or definitive. A full review of the entire Official Statement, as well as the documents summarized or described herein, should be made. This Official Statement speaks only as of its date, and the information contained herein is subject to change. All references herein to, or summaries of, the Resolution (hereinafter defined) or other documents or official acts are qualified in their entirety by the exact terms of such documents or official acts, copies of which are available from the County. All references herein to, or summaries of, the Bonds are qualified in their entirety by the definitive form thereof and the provisions with respect thereto included in the Resolution. All undefined, capitalized terms used herein shall have the meaning ascribed to such terms in the Resolution unless the context requires otherwise.

The County

The County is a political subdivision of the State, created and existing under the laws of the State of Georgia (the “State”). The County is located in the southwest corner of Georgia, approximately 30 miles northwest of Tallahassee, Florida and 60 miles south of Albany, Georgia, and its southern boundary is the state line between Georgia and Florida. The County had a population of 28,240 according to the 2000 census compiled by the U.S. Department of Commerce, Bureau of the Census. For more detailed information, see “DECATUR COUNTY, GEORGIA.”

Security and Sources of Payment for the Bonds

General Obligation Debt. The Bonds are general obligations of the County and will constitute a pledge of the full faith, credit, and taxing power of the County. Principal of and interest on the Bonds are payable first from the receipts of a special county one percent (1%) sales and use tax (the “Special Sales Tax”) collected within the territorial limits of the County and then, if and to the extent necessary, from ad valorem taxes which may be levied, without limitation as to rate or amount, upon all taxable property subject to taxation for general obligation bond purposes within the territorial limits of the County. Prior to the issuance of the Bonds, the governing body of the County will provide for the assessment and collection of an ad valorem tax within the County in an amount which, together with the Special Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as they become due and payable. For more detailed information, see “THE BONDS, -Security and Sources of Payment for the Bonds” and “DECATUR COUNTY AD VALOREM TAXATION.”

Purpose of the Bonds

The Bonds are being issued to provide funds to finance (i) the costs of acquiring, constructing, and equipping certain capital outlay projects for the County (ii) capitalized interest on the Bonds, if any, and (iii) the costs of issuance of the Bonds. See “THE BONDS, -Estimated Sources and Uses of Funds; and -The Projects” herein.

Description of the Bonds

Redemption. The Bonds are not subject to redemption by the County prior to their respective maturities.

Denominations. Individual purchases of the Bonds may be made in book entry form only in denominations of $5,000 or any integral multiple thereof.

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Registration and Transfer. The Bonds will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will serve as securities depository for the Bonds.

Manner of Making Payments. Interest on the Bonds will be payable on January 1 and July 1 of each year (each an “Interest Payment Date”), commencing July 1, 2009. The Bonds bear interest at the rates per annum, and mature in the years and amounts, as set forth on the front cover page hereof. So long as DTC or its nominee is the registered owner of the Bonds, the payments of principal of and interest on Bonds are payable by wire transfer by the Paying Agent to Cede & Co., as nominee for DTC which, in turn, will remit such amounts to DTC Participants (as defined herein) for subsequent disbursement to the Beneficial Owners (as defined herein).

For more detailed information on the Bonds, see “THE BONDS.”

Tax Status

In the opinion of Bond Counsel, subject to the limitations and conditions described under “LEGAL MATTERS, -Tax Exemption,” interest on the Bonds is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and will not be an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations. TheCounty has designated the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Internal Revenue Code. See Appendix B for the proposed form of opinion of Bond Counsel to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion and certain other tax consequences of owning the Bonds, including certain exceptions to the exclusion of the interest on the Bonds from federal gross income, see “LEGAL MATTERS, -Tax Exemption” herein.

Bond Registrar and Paying Agent

Regions Bank, in the City of Atlanta, Georgia, will serve as Bond Registrar and Paying Agent for the Bonds.

Professionals Involved in the Offering

Certain legal matters pertaining to the County and the authorization and issuance of the Bonds are subject to the approving legal opinion of Gray & Pannell LLP, Savannah, Georgia, as Bond Counsel; see Appendix B for the proposed form of Bond Counsel=s opinion to be delivered in connection with the issuance of the Bonds. Certain other legal matters will be passed upon for the County by its counsel, Hall Booth Smith & Slover, PC, Bainbridge, Georgia, and for the Underwriter by its counsel, Gray & Pannell LLP, Savannah, Georgia. The general purpose financial statements of the County as of June 30, 2007, and for the fiscal year then ended, attached hereto as Appendix A, have been audited by Fowler, Holley, Rambo & Stalvey, P.C., independent certified public accountants, to the extent and for the period indicated in their report thereon which appears in Appendix A hereto.

Terms of the Offering

Authority for Issuance. The Bonds shall be issued under authority of the Constitution of the State of Georgia and the general laws of the State of Georgia, particularly Part 1, Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated (“O.C.G.A.”), which authorizes the imposition of the Special Sales Tax. The Bonds shall be issued pursuant to the provisions of a bond resolution adopted by the governing body of the County on March 12, 2009 (the “Resolution”). The issuance of the Bonds was approved by a majority of the votes cast in the County in a special county one percent sales and use tax election held in the County on September 16, 2008 (the “Election”).

Offering. The Bonds are offered when, as, and if issued by the County and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice, and to approval of legality by Gray & Pannell LLP, Bond Counsel.

Delivery. The Bonds in definitive form are expected to be delivered through DTC in New York, New York on or about March 19, 2009.

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Continuing Disclosure

On the date of the issuance and delivery of the Bonds, the County will sign a Continuing Disclosure Certificate which will allow the Underwriter to comply with Securities and Exchange Commission Rule 15c2-12(b)(5). See “MISCELLANEOUS, -Continuing Disclosure” and “Appendix C: THE CONTINUING DISCLOSURE CERTIFICATE.”

Additional Information

This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Bonds, the County, the Resolution, and the security and sources of payment for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions, statutes, the Resolution, and other documents are intended as summaries only and are qualified in their entirety by reference to such documents, and references herein to the Bonds are qualified in their entirety to the form thereof included in the Resolution. Copies of the Resolution and other documents and information are available upon request, prior to the delivery of the Bonds, from Merchant Capital, L.L.C., One Buckhead Plaza, Suite 1700, 3060 Peachtree Road, N.W., Atlanta, Georgia 30305, telephone (404) 504-2760, and after delivery of the Bonds, upon payment to the County of a charge for copying, mailing and handling, from Decatur County, P.O. Box 726, Bainbridge, Georgia 39817, telephone (229) 248-3030, Attention: County Administrator.

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THE BONDS

General Provisions

The Bonds, dated as of the date of issuance and delivery thereof, will be executed and delivered in the aggregate principal amount specified on the front cover page of this Official Statement. Interest with respect to the Bonds will be payable on each Interest Payment Date, commencing July 1, 2009. Interest on the Bonds will be at the rates per annum, and the principal of the Bonds will mature in the amounts and in the years, set forth on the front cover page of this Official Statement.

Book-Entry Only System of Delivery of Bonds

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee), or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Bonds in the principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com, and www.dtc.org.

Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (a “Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co, or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee, do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bond are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

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Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the documents pertaining to the Bonds. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Bond Registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Paying Agent as soon as possible after the Record Date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments with respect to the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the County or the Paying Agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments with respect to the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Paying Agent or the County, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursements of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC.

The foregoing information concerning DTC and its book-entry system has been obtained from DTC. The County and the Underwriter do not make any representation or warranty or take any responsibility for the accuracy or completeness of such information.

SO LONG AS CEDE & CO. OR SUCH OTHER DTC NOMINEE, AS NOMINEE FOR DTC, IS THE SOLE BONDHOLDER, THE COUNTY AND THE BOND REGISTRAR WILL TREAT CEDE & CO. OR SUCH OTHER NOMINEE AS THE ONLY OWNER OF THE BONDS FOR ALL PURPOSES UNDER THE RESOLUTION, INCLUDING RECEIPT OF ALL PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS, RECEIPT OF NOTICES, VOTING, AND REQUESTING OR DIRECTING THE COUNTY OR THE PAYING AGENT TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THE RESOLUTION. THE COUNTY HAS NO RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT; (B) THE PAYMENT OR ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO BONDHOLDERS; OR (D)OTHER ACTION TAKEN BY DTC OR CEDE & CO. OR SUCH OTHER DTC NOMINEE, AS OWNER.

Beneficial Owners of the Bonds may experience some delay in their receipt of distributions of principal and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC, and DTC will credit such distributions to the accounts of Direct Participants which will thereafter credit them to the accounts of Beneficial Owners either directly or indirectly through Indirect Participants.

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Authority for Issuance of the Bonds

The Bonds are being issued pursuant to the authority granted by (i) the Constitution of Georgia, (ii) the general laws of the state of Georgia, particularly the Special County One Percent (1%) Sales and Use Tax, codified in Part 1, Article 3 of Chapter 8 of Title 48 of Official Code of Georgia Annotated, and (iii) the Resolution. The Board of Commissioners of Decatur County, as the governing body of the County, adopted a resolution on July 8, 2008, imposing the Special Sales Tax within the County, conditioned upon approval by a majority of the qualified voters residing within the County voting in the Election, and authorizing the issuance of general obligation debt of the County, conditioned upon approval of a majority of the votes cast in the Election. The resolution calling the Election and the notice of the Election stipulated an interest rate for the Bonds not exceeding five and one-half percent (5.50%) per annum. The Election was held in accordance with Article 14 of Chapter 2 of Title 21 of the Official Code of Georgia Annotated. The canvass of the Election showed 751 “Yes” votes and 84 “No” votes, an 89.9% approval by those who voted in the Election. Subsequent to such approval, the Board of Commissioners adopted the Resolution authorizing and regulating the issuance of the Bonds.

Validation of the Bonds

The Bonds and the security therefor were confirmed and validated on November 26, 2008 by the Superior Court of Decatur County in accordance with the procedures of Article 2 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated.

Estimated Sources and Uses of Funds

Sources of Funds:

Proceeds from Sale of Bonds1 ........................................................... $8,710,754.65

Total Sources of Funds: ......................................................... $8,710,754.65

Uses of Funds:

Costs of Projects ............................................................................... $8,500,000.00 Estimated Costs of Issuance2 ................................................................. 210,754.65

Total Uses of Funds: .............................................................. $8,710,754.65_________________1 Includes premium of $255,754.65.2 Includes underwriter=s discount, initial Bond Registrar and Paying Agent=s fee, legal and accounting fees, rating

agency=s fees, cost of printing, bond insurance premium and other estimated miscellaneous fees and expenses associated with the issuance of the Bonds.

The Projects

Description of Projects. The proceeds from the sale of the Bonds and the investment earnings thereon, together with Special Sales Tax proceeds, if any, will be used to acquire, construct, and equip, in whole or in part, the following capital outlay projects (collectively, the “Projects”) of the County, as approved by the voters voting in the Election: road, street, and bridge purposes; landfill improvements; acquisition of Silver Lake property; public safety/public access telecommunication and technology systems; a fire, emergency management service and E911 center; administrative offices for the County extension service; industrial spec building; jail and detention facilities; fire department equipment and facilities; and public safety equipment and facilities.

The County will require contractors engaged in the construction of its Projects to obtain performance and payment bonds, a certificate of insurance for general liability, a certificate of insurance for workers=compensation, a certificate of insurance/auto liability and excess liability, and evidence of property insurance for builders’ risk.

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Investment of Moneys

Construction Fund Moneys. The moneys in the Construction Fund will be held by and under the control of the County and will be disbursed by the County to pay the costs of the County=s Projects. Moneys in the Construction Fund which are not needed at the time to pay current obligations during the construction and equipping of the County=s Projects may be invested, upon direction to the Construction Fund Custodian from the County, in any of the following investments:

1. The local government investment pool created in O.C.G.A. ' 36-83-8;

2. Bonds or other obligations of the County, or bonds or obligations of the State or other counties, municipal corporations, and political subdivisions of the State;

3. Bonds or other obligations of the United States or of subsidiary corporations of the United States government, which are fully guaranteed by such government;

4. Obligations of agencies of the United States government issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, and the Central Bank for Cooperatives;

5. Bonds or other obligations issued by any public housing agency or municipal corporation in the United States, which such bonds or obligations are fully secured as to payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States government, or project notes issued by any public housing agency, urban renewal agency or municipal corporation in the United States which are fully secured as to payment of both principal and interest by a requisition, loan, or payment agreement with the United States government;

6. Certificates of deposit of national or state banks located within the State which have deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, including the certificates of deposit of any bank, savings and loan association, or building and loan association acting as depository, custodian or trustee for any proceeds of the Bonds; provided, however, that the portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation, or the Georgia Credit Union Deposit Insurance Corporation, if any, shall be secured by deposit with the Federal Reserve Bank of Atlanta, Georgia, or with any national or state bank or federal savings and loan association or state building and loan or savings and loan association located within the State, of one or more of the following securities in an aggregate principal amount equal at least to the amount of such excess: direct and general obligations of the State or any county or municipal corporation in the State, obligations of the United States or subsidiary corporations included in paragraph (3) above, obligations of the agencies of the United States government included in paragraph (4) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities included in paragraph (5) above;

7. Repurchase agreements with respect to obligations included in 2, 3, 4, 5, or 6 above and any other investments to the extent at the time permitted by then applicable law for the investment of public funds; and

8. Securities of or other interests in any no-load, open-end management type investment company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, or any common trust fund maintained by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as:

(a) the portfolio of such investment company or investment trust or common trust fund is limited to the obligations referenced in paragraph (2) above and repurchase agreements fully collateralized by any such obligations;

(b) such investment company or investment trust or common trust fund takes delivery of such collateral either directly or through an authorized custodian;

(c) such investment company or investment trust or common trust fund is managed so as to maintain its shares at a constant net asset value; and

8

(d) securities of or other interests in such investment company or investment trust or common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State.

Other Moneys. All net proceeds (i.e., net of deductions allowed to dealers and net of commission allowed to the Revenue Commissioner) of the Special Sales Tax will be placed in the Decatur County 2009 Special County One Percent Sales and Use Tax Proceeds Account (the “Sales Tax Proceeds Account 2009”)to be used exclusively for the purposes specified herein and in the resolution calling for imposition of the Special Sales Tax. The beneficial interest in the moneys in the Sales Tax Proceeds Account 2009 shall be considered to be in the owners of the Bonds. Such moneys shall be held and kept separate and apart from all other revenues collected by the County. Moneys in the Sales Tax Proceeds Account 2009, pending their disbursement, may be invested or reinvested by the Sales Tax Proceeds Account 2009 Custodian, at the direction of the County, in any investment authorized by the laws of the State. See “THE BONDS, -Security and Sources of Payment for the Bonds, Security from Special Sales Tax.”

Construction Fund Disbursements

Disbursements from the County’s Construction Fund will be made only upon the execution and filing with the Construction Fund Custodian of a requisition and certificate signed by the project superintendent (the person or persons B typically the Chairman of the Board of Commissioners or the County Administrator B so designated by the Chairman of the Board of Commissioners) certifying (i) the amount to be paid and the name of the person, firm or corporation to whom payment is due, (ii) that an obligation has been incurred by the County, that the same is a proper charge and has not been paid, and that the project superintendent has a copy of the invoice for the obligation, (iii) that the project superintendent has no notice of any liens or rights to liens which should be satisfied before such payment is made, (iv) that such requisition contains no item representing retained percentages which the County is entitled to retain, and (v) that the materials, supplies or equipment invoiced were actually installed in or about the construction site or delivered at the site for that purpose.

Security and Sources of Payment for the Bonds

Security from Ad Valorem Taxation. The Bonds will constitute general obligation debt of the County within the meaning of Article IX, Section V, Paragraph I of the Constitution of Georgia and shall count against the limitation on debt contained therein. See “DEBT STRUCTURE OF THE COUNTY, -Debt Limitations, State Law.” Said limitation requires that the debt of the County shall never exceed 10% of the assessed value of taxable property within the territorial limits of the County. Any liability on such debt which is not satisfied from the proceeds of the Special Sales Tax shall be satisfied from the general fund of the County, in which event the principal of and interest on the Bonds will be payable from ad valorem taxes levied, without limitation as to rate or amount, upon all taxable property within the County which is subject to taxation for bond purposes, in an amount sufficient to pay the principal of and interest on the Bonds.

Prior to the issuance of the Bonds, the Board of Commissioners, as required by Article IX, Section VI, Paragraph VI of the Constitution of the State of Georgia, will provide for the assessment and collection of an ad valorem tax on all taxable property within the territorial limits of the County subject to taxation for general obligation bond purposes in an amount, which, together with the Special Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as the same become due and payable. The proceeds of the ad valorem tax assessed to pay the principal of and interest on the Bonds, together with any other moneys collected for such purpose, will be placed, pursuant to Article IX, Section V, Paragraph VI of the Constitution of the State of Georgia, in the Sales Tax Proceeds Account 2009, as a sinking fund, to be used exclusively for paying the principal of and interest on the Bonds. Such moneys will be held and kept separate and apart from all other revenues collected by the County.

Security from Special Sales Tax. Payment of the principal of and interest on the Bonds will be secured by, and will be first payable from, the Special Sales Tax. The Special Sales Tax will be levied in the County beginning April 1, 2009 and will be collected for a period of time not to exceed six years to raise an estimated $36,867,625. The County, the City of Bainbridge, the City of Brinson, the City of Climax, the City of Attapulgus (collectively the “Municipalities”), and the Hospital Authority of Bainbridge and Decatur County (the “Hospital Authority”) have entered into an intergovernmental contract, dated July 8, 2008 (the “Contract”), relating to the distribution of the Special Sales Tax. According to the Contract, the City of Bainbridge will receive approximately 36.53% of the proceeds of the Special Sales Tax, the City of Attapulgus will receive approximately 1.53% of the proceeds of the Special Sales Tax, the City of Climax will receive approximately 0.93% of the proceeds of the Special Sales Tax, the City of Brinson will receive approximately 0.70% of the proceeds of the Special Sales Tax, the Hospital Authority will receive

9

approximately 12.00% of the proceeds of the Special Sales Tax and the County will receive approximately 48.31% of the proceeds of the Special Sales Tax. The Contract further provides that bonds may be issued to pay for a portion of the projects of the County, but the Contract shall not be construed so as to interfere with or impair the ability of the County to issue the Bonds.

All of the Special Sales Tax proceeds shall be received and distributed by the County each year first for the payment of the principal of and interest on the Bonds and then for the capital outlay projects of the County, the Municipalities and the Hospital Authority, on a monthly basis as such proceeds become available and after compliance with the provisions of O.C.G.A. § 48-8-121(e) for satisfying the annual debt service requirements on the Bonds.

Notwithstanding the distribution provisions set forth in the Contract, all funds provided by the Special Sales Tax (and any amount obtained from any ad valorem tax levied and collected for payment of the Bonds) are pledged irrevocably to and appropriated for the payment of the principal of and interest on the Bonds so that all of the Bonds will be fully paid as the same mature and become due. All proceeds of the Special Sales Tax will be deposited into the Special Sales Tax Proceeds Account 2009 until such time as there is on deposit in said account sufficient funds to pay the principal of and interest on the Bonds coming due in a bond year. All Special Sales Tax proceeds, if any, subsequently received in a bond year will be used to pay the costs of the Projects.

The County has covenanted to pay to the Paying Agent on or before each Interest Payment Date, amounts sufficient to pay the principal of and interest on the Bonds on such dates. The County estimates that receipts of the Special Sales Tax will be sufficient to meet debt service requirements on the Bonds.

Pursuant to Part 1 of Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated (the “Sales Tax Act”) and the results of the Election, the imposition of the Special Sales Tax has been authorized upon the retail purchase, retail sale, rental, storage, use, and consumption of tangible personal property, and upon the services described and set forth in the Georgia Retailers= and Consumers= Sales and Use Tax Act (O.C.G.A. ' 48-8-1, et seq.) (the “State Sales Tax Act”) within the County, subject to numerous exemptions. The Special Sales Tax is to correspond as nearly as practicable, except as to rate, with the 4% State of Georgia sales and use tax (the “State Sales Tax”) levied pursuant to the State Sales Tax Act, except that the Special Sales Tax applies to sales of motor fuels, food and beverages, and except that sales of tangible personal property ordered by and delivered to a purchaser outside the County shall not be subject to the Special Sales Tax regardless of the point at which title passes, and building and construction materials are not subject to the Special Sales Tax when the contract pursuant to which the materials are purchased or used was advertised for bid prior to the voters= approval of the imposition of the tax and the contract was entered into as a result of a bid actually submitted in response to the advertisement prior to approval of the imposition of the tax. A reciprocal credit is also allowed against the Special Sales Tax for any amounts paid pursuant to any local sales and use tax on tangible personal property purchased outside the County.

The Special Sales Tax shall be administered and collected by the State of Georgia Department of Revenue, Sales and Use Tax Division (the “Collection Agent”) in the same manner as the State Sales Tax. On or before the 20th day of each month, Special Sales Tax proceeds collected by retailers are required to be paid for the preceding month, except for retailers or providers of services with a very small tax liability who remit taxes to the Collection Agent quarterly. Retailers or providers of services are allowed, as a collection fee, a percentage of the amount of Special Sales Tax receipts due to the Department of Revenue in the form of a deduction in paying the amount due, if said receipts are not delinquent at the time of payment to the Department of Revenue. The rate of the deduction shall be the same as the rate from time to time authorized for deductions under the State Sales Tax. The following deductions are allowed: (1) 3% of the first $3,000 of Special Sales Tax reported due on each monthly return (other than Special Sales Tax on motor fuel), (2) 0.50% of Special Sales Tax in excess of $3,000 reported due on each monthly return (other than Special Sales Tax on motor fuel), and (3) 3% of Special Sales Tax on motor fuel reported due on each monthly return.

The Collection Agent is required to disburse the proceeds of the Special Sales Tax as soon as practicable after collection. One percent of the amount collected is retained by the Collection Agent and paid into the general fund of the state treasury to defray the costs of administration.

Any net proceeds of the Special Sales Tax received by the County in excess of the amounts required for payment of the Bonds and the costs of acquiring, constructing, and equipping all projects and purposes approved by the voters shall be used for the purpose of reducing indebtedness of the County other than indebtedness incurred pursuant to the Act. If there is no such other indebtedness or, if the excess proceeds exceed the amount of any such other indebtedness, then the excess proceeds shall next be paid into the general fund of the County to be used for the purpose of reducing ad valorem taxes.

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Current Special Sales Tax Data. A special county one percent sales and use tax (the “CurrentSpecial Sales Tax”) is presently being collected in the County, which tax was approved by a majority of the voters of the County voting in an election held for such purpose on November 4, 2003. The Current Special Sales Tax was imposed on April 1, 2004, and is expected to cease being collected on March 31, 2009.

The total amount of Current Special Sales Tax collected in the County as of December 31 in the years 2003 through 2008, and the County’s approximate share thereof, has been as follows:

_________________ 1 Amounts shown are net of deductions allowed to retailers and net of commission allowed to the Collection Agent. 2 The County’s pro rata share under the Current Special Sales Tax is 48.31% of total collections.

Source: State of Georgia Department of Revenue.

The historical sales tax data presented above should not be considered to represent future results that may be obtained by the County from collections of the Special Sales Tax. Although the County believes that future financial results will be comparable to, or exceed, those set forth above, certain of the assumptions upon which it presently is relying may not materialize, and unanticipated events and circumstances, such as a recession, may occur that may adversely affect such results.


Year Amount1 County’s Share2 Percentage Change2003 $3,884,364.03 $1,876,536.26 -- 2004 4,028,094.39 1,945,972.40 3.7% 2005 4,561,904.28 2,203,855.96 13.3 2006 4,984,038.84 2,407,789.16 9.3 2007 5,210,408.29 2,517,148.25 4.5 2008 5,100,460.49 2,464,032.46 (2.1)

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BOND INSURANCE

The following information is not complete and reference is made to Appendix D for a specimen of the financial guaranty insurance policy (the “Policy”) of Assured Guaranty Corp. (“Assured Guaranty” or the “Insurer”).

The Insurance Policy

Assured Guaranty has made a commitment to issue the Policy relating to the Bonds, effective as of the date of issuance of such Bonds. Under the terms of the Policy, Assured Guaranty will unconditionally and irrevocably guarantee to pay that portion of principal of and interest on the Bonds that becomes Due for Payment but shall be unpaid by reason of Nonpayment (the “Insured Payments”). Insured Payments shall not include any additional amounts owing by the Issuer solely as a result of the failure by the Trustee or the Paying Agent to pay such amount when due and payable, including without limitation any such additional amounts as may be attributable to penalties or to interest accruing at a default rate, to amounts payable in respect of indemnification, or to any other additional amounts payable by the Trustee or the Paying Agent by reason of such failure. The Policy is non-cancelable for any reason, including without limitation the non-payment of premium.

“Due for Payment” means, when referring to the principal of the Bonds, the stated maturity date thereof, or the date on which such Bonds shall have been duly called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment is due by reason of a call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty in its sole discretion elects to make any principal payment, in whole or in part, on such earlier date) and, when referring to interest on such Bonds, means the stated dates for payment of interest.

“Nonpayment” means the failure of the Issuer to have provided sufficient funds to the Trustee or the Paying Agent for payment in full of all principal and interest Due for Payment on the Bonds. It is further understood that the term Nonpayment in respect of a Bond also includes any amount previously distributed to the Holder (as such term is defined in the Policy) of such Bond in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable preference with respect to such Holder. Nonpayment does not include nonpayment of principal or interest caused by the failure of the Trustee or the Paying Agent to pay such amount when due and payable.

Assured Guaranty will pay each portion of an Insured Payment that is Due for Payment and unpaid by reason of Nonpayment, on the later to occur of (i) the date such principal or interest becomes Due for Payment, or (ii) the business day next following the day on which Assured Guaranty shall have received a completed notice of Nonpayment therefor in accordance with the terms of the Policy.

Assured Guaranty shall be fully subrogated to the rights of the Holders of the Bonds to receive payments in respect of the Insured Payments to the extent of any payment by Assured Guaranty under the Policy.

The Policy is not covered by any insurance or guaranty fund established under New York, California, Connecticut or Florida insurance law.

The Insurer

Assured Guaranty Corp. (“Assured Guaranty”) is a Maryland-domiciled insurance company regulated by the Maryland Insurance Administration and licensed to conduct financial guaranty insurance business in all fifty states of the United States, the District of Columbia and Puerto Rico. Assured Guaranty commenced operations in 1988. Assured Guaranty is a wholly owned, indirect subsidiary of Assured Guaranty Ltd. (“AGL”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO.” AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, structured finance and mortgage markets. Neither AGL nor any of its shareholders is obligated to pay any debts of Assured Guaranty or any claims under any insurance policy issued by Assured Guaranty.

Assured Guaranty is subject to insurance laws and regulations in Maryland and in New York (and in other jurisdictions in which it is licensed) that, among other things, (i) limit Assured Guaranty’s business to financial guaranty insurance and related lines, (ii) prescribe minimum solvency requirements, including capital and surplus requirements, (iii) limit classes and concentrations of investments, (iv) regulate the amount

12

of both the aggregate and individual risks that may be insured, (v) limit the payment of dividends by Assured Guaranty, (vi) require the maintenance of contingency reserves, and (vii) govern changes in control and transactions among affiliates. Certain state laws to which Assured Guaranty is subject also require the approval of policy rates and forms.

Assured Guaranty’s financial strength is rated “AAA” (stable) by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”), “AAA” (stable) by Fitch, Inc. (“Fitch”) and “Aa2” (stable) by Moody’s Investors Service, Inc. (“Moody’s”). Each rating of Assured Guaranty should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of any security guaranteed by Assured Guaranty. Assured Guaranty does not guaranty the market price of the securities it guarantees, nor does it guaranty that the ratings on such securities will not be revised or withdrawn.

Recent Developments

On November 14, 2008, AGL announced that it had entered into a definitive agreement to purchase Financial Security Assurance Holdings Ltd. (“FSA”), the parent of financial guaranty insurance company Financial Security Assurance, Inc. For more information regarding the proposed acquisition by AGL of FSA, see the Annual Report on Form 10-K filed by AGL with the Securities and Exchange Commission (the “SEC”) on February 26, 2009.

Capitalization of Assured Guaranty Corp.

As of December 31, 2008, Assured Guaranty had total admitted assets of $1,803,146,295 (unaudited), total liabilities of $1,425,012,944 (unaudited), total surplus of $378,133,351 (unaudited) and total statutory capital (surplus plus contingency reserves) of $1,090,288,113 (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of December 31, 2007, Assured Guaranty had total admitted assets of $1,361,538,502 (audited), total liabilities of $961,967,238 (audited), total surplus of $399,571,264 (audited) and total statutory capital (surplus plus contingency reserves) of $982,045,695 (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. The Maryland Insurance Administration recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company, for determining its solvency under the Maryland Insurance Code, and for determining whether its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the Maryland Insurance Administration to financial statements prepared in accordance with accounting principles generally accepted in the United States in making such determinations. Incorporation of Certain Documents by Reference

The portions of the following documents relating to Assured Guaranty are hereby incorporated by reference into this Official Statement and shall be deemed to be a part hereof:

� The Annual Report on Form 10-K of AGL for the fiscal year ended December 31, 2008 (which was filed by AGL with the SEC on February 26, 2009); and

� The Current Reports on Form 8-K filed by AGL with the SEC, as they relate to Assured Guaranty.

All consolidated financial statements of Assured Guaranty and all other information relating to Assured Guaranty included in documents filed by AGL with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date of this Official Statement and prior to the termination of the offering of the Bonds shall be deemed to be incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such consolidated financial statements.

Any statement contained in a document incorporated herein by reference or contained herein under the heading “BOND INSURANCE – The Insurer” shall be modified or superseded for purposes of this Official Statement to the extent that a statement contained herein or in any subsequently filed document which is incorporated by reference herein also modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official Statement.

Copies of the consolidated financial statements of Assured Guaranty incorporated by reference herein and of the statutory financial statements filed by Assured Guaranty with the Maryland Insurance

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Administration are available upon request by contacting Assured Guaranty at 1325 Avenue of the Americas, New York, New York 10019 or by calling Assured Guaranty at (212) 974-0100. In addition, the information regarding Assured Guaranty that is incorporated by reference in this Official Statement that has been filed by AGL with the SEC is available to the public over the Internet at the SEC’s web site at http://www.sec.gov andat AGL’s web site at http://www.assuredguaranty.com, from the SEC’s Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the office of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.

Assured Guaranty makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, Assured Guaranty has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding Assured Guaranty supplied by Assured Guaranty and presented under the heading “BOND INSURANCE.”


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Introduction

Decatur County is located in the southwest corner of Georgia, approximately 30 miles northwest of Tallahassee, Florida and 60 miles south of Albany, Georgia. The County is bordered on the north by Miller County, Baker County and Mitchell County, on the east by Grady County, on the west by Seminole County, and its southern boundary is the state line between Georgia and Florida. The City of Bainbridge is the county seat.

The population of the County grew approximately 10.8% during the 20 year period from 1980 to 2000, from 25,495 residents in 1980 to 28,240 residents in 2000. This compares with Georgia=s total population growth of 45.0% during the same 20 year period. The estimated population of the County in 2007 was 28,544, making the County the 53rd largest of Georgia’s 159 counties when ranked by population.

At 623.2 square miles, the County is the 13th largest of Georgia=s 159 counties. Set forth below are the percentages of land use for various categories within the territorial limits of the County, computed based upon the acres of land for the various categories set forth in the tax digest for each respective year.

ResidentialAgriculturalPreferentialConservation Use Commercial IndustrialUtility Tax Exempt

2004

5.5% 41.0

9.141.2

0.40.20.0

2.6

100.0%

2005

6.4% 40.3

8.440.8

0.60.30.0

3.2

100.0%

2006

6.4% 40.2

7.441.9

0.60.30.0

3.2

100.0%

2007

6.5% 39.5

6.843.0

0.60.30.0

3.3

100.0%

2008

6.3% 35.0

5.149.4

0.60.30.0

3.3

100.0%

Government Format and Principal Officials

Board of Commissioners. Voters in each of the six districts of the County elect a commissioner. The Board sets direction and formulates policies for the County government, develops and approves the budget, authorizes expenditures, and approves or disapproves specific actions, such as rezoning of private property. The Board receives direct administrative assistance from the County Administrator. Information concerning current members of the Board of Commissioners is as follows:

Name Current Term Expires Principal Occupation Years on BoardH. Palmer Rich, Chairman December 31, 2010 Forestry Consultant 11Earl Perry, Vice ChairmanDavid C. Mosely

December 31, 2010December 31, 2012

Retired Math ProfessorRetired Superintendent

7 4

Gary Phillips December 31, 2010 Business Owner 3Russell Smith December 31, 2012 Retired Prison Warden 3 MonthsCharles T. Stafford December 31, 2012 Medical Doctor 3 Months

County Finance Director. Carl Rowland is the County Finance Director, hired in May 2006. He is responsible for overseeing/managing all financial management procedures, including accounting, the county budget, landfill and other county facility operations’ reports and accounts, bidding, investments, financial reports and special project coordination. Mr. Rowland has 30 years of experience in public finance. Notably, he worked as the chief financial officer for the City of Thomasville, Georgia, for 12 years, Business Manager of Thomasville Utilities for 6 years and was a financial consultant to public and private utilities for 6 years.

County Administrator. Tom Patton serves as the current County Administrator and has held this position since September 2006. He is a retired Marine Colonel with 35 years’ service in the Marine Corps, during which time he served in the infantry in Vietnam and later as a Marine Aviator. Mr. Patton held various command positions including Commanding Officer and Chief of Staff. Before accepting the administrator position in the County, Mr. Patton served as City Manager for the City of Corneila, Georgia, for three years.

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Government Services and Facilities

The County Sheriff’s department has 1 office, 36 sworn law enforcement officers, 34 detention officers, 8 civilian employees, and 50 vehicles. The Sheriff’s Department maintains a 24-hour uniformed patrol. The County has a part volunteer, part paid fire department. There are three paid crews and the National Board of Fire Underwriters’ fire insurance rating is an ISO rating of 4 at the Airport Industrial Park and a rating of 6 county-wide. The County maintains approximately 663 miles of roads. The public works department, or Road Department, has 20 vehicles, another 20 pieces of heavy equipment and 37 employees who perform road maintenance and other public works. The County operates a Correctional Institute with a bed capacity of 320. The State contracts with the County for the placement of 225 inmates in the County facility. The County utilizes approximately 150 inmates daily on work details through the City of Bainbridge and the County. The County opened a regional subtitle D landfill in August 2006. The landfill has a remaining life of 28 years and serves a multi-county area including southwest Georgia and the Florida panhandle. The County operates an airport with a 5500 foot primary runway at the Decatur County Industrial Airpark. The County also operates water, sewer and natural gas systems to serve industrial customers at the industrial airpark. There is one public library in the County with approximately 116,580 volumes.

Employees/Employee Relations

As of February 1, 2009, the County had approximately 302 employees. No employees belong to labor unions or other collective bargaining groups and the County has no knowledge of any union organizing efforts. The County believes that employee relations are good.

Employee Benefits

General. The County provides a full range of employee benefits for County employees, including a defined benefit pension plan, group hospitalization, medical, dental and group life insurance. All employees are covered by Social Security, Workers’ Compensation and unemployment insurance. All County employees receive paid time off leave of a minimum of 15 days to a maximum of 30 days per year, depending on the length of service with the county. In addition, there is available leave for extended illness of 12 days per year and available funeral leave of 3 days each year. With the exception of sick leave, there is no carryover of unused leave.

Pension Plan. The County sponsors the Association County Commissioners of Georgia Restated Pension Plan for Decatur County Employees, which is a defined benefit pension plan. The plan provides retirement, disability, and death benefits to plan participants and beneficiaries. All full time employees are eligible to participate in the Plan after completing 3 years of service. Benefits vest after 5 years of service. Participants become eligible to retire with unreduced benefits at age 65 with 5 years of service. Early retirement options are available at age 60, with 10 years of service and age 55 with 25 years of service. Upon eligibility to retire, participants are entitled to an annual benefit in the amount of 1.0% of average annual compensation plus $36 for each year of service payable as a life annuity. Compensation is averaged over a five-year period prior to retirement or termination.

For more detailed discussion of the County=s Pension Plan and additional historical information, see Note 7 of Appendix A: AUDITED FINANCIAL STATEMENTS OF DECATUR COUNTY, GEORGIA FOR THE FISCAL YEAR ENDED JUNE 30, 2007.

Governmental Immunity and Insurance Coverage

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 damages 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.

Insurance Coverage. The County carries liability insurance for the types of claims and in amounts that are customary for similar entities for those categories of claims that are not subject to the defense of sovereign immunity. The County obtains workers= compensation insurance through the Association County Commissioners of Georgia Group Self-Insured Workers= Compensation Fund. The County also carries property and casualty damage insurance on its buildings and other physical assets.

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Population

The following table sets forth the population, including percentage of annual increase, in the County, the State, and the United States. The estimated population of the County in 2007 was 28,544. Data for 2008 is not yet available.

Year

19601970198019902000

DecaturCounty

25,203 22,310 25,495 25,511 28,240

PercentageChange

--(11.5)% 14.3

0.110.7

Georgia

3,943,1164,589,5755,463,1056,478,2168,186,453

PercentageChange

-- 16.4% 19.018.626.4

United States

179,323,175203,211,926226,545,805248,709,873281,421,906

PercentageChange

-- 13.3% 11.5 9.8 13.2

Source: U.S. Department of Commerce, Bureau of the Census.

Per Capita Personal Income

The following table sets forth the per capita personal income in Decatur County, the State of Georgia, and the United States for the years 2002 through 2006. Data for 2007 and 2008 is not yet available.

Year

20022003200420052006

Decatur County

$20,62620,97221,14122,74522,940

Georgia

$28,51328,69629,68831,19332,095

United States

$30,82131,50433,12334,75736,714

Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Accounts Data.

Median Home Values

The following table sets forth the median home values for the County, the State, and the United States for the census years 1980, 1990, and 2000 and an estimate for 2006.

Year

1980199020002006

Decatur County

*42,80069,500

*

Georgia

$36,90071,300

111,200156,800

United States

$47,20079,100

119,600185,200

* Information not available Source: U.S. Department of Commerce, Bureau of the Census.

Bank Deposits

As of June 30, 2008, seven financial institutions with a total of ten branch offices provided banking services within the County. The following are the total deposits in the County’s financial institutions as of June 30 in each of the years 2003 through 2008.

Source: State of Georgia, Department of Banking and Finance.

Year AmountPercentage

Change2003 $265,535,000 --2004 280,702,000 5.7%2005 297,015,000 5.82006 322,867,000 12.12007 368,602,000 10.72008 372,713,000 1.1

17

Industry and Employment

Private Employers. Set forth below are the ten largest private employers located in Decatur County in calendar year 2008, their type of business, and their approximate number of employees. There can be no assurance that any employer listed below will continue to be located in the County or will continue employment at the level stated. No independent investigation has been made of, and no representation can be made as to, the stability or financial condition of the companies listed.

Employer Type of Business Employees

Shaw Industries Textile Manufacturer 350Wal-Mart Corporation Retail 350 Southwest Georgia Oil Fuel Production & Storage 280 Propex Fabrics Textile Manufacturer 250BASF Catalyst Corporation Fuller’s Earth Processing 223Elberta Crate & Box Box Manufacturer 220Sanfillippo & Son Peanut Processing & Packaging 180 TRACO Window & Door Manufacturer 169 Flint River Mills Feed Manufacturer 85 Stone’s Home Center Building Supply 60

Source: Decatur County Clerk’s Office.

Public Employers. Set forth below are the largest public employers located in Decatur County in calendar year 2008, their type of service, and their approximate number of employees.

Employer Type of Business Employees

Decatur Co. School System Education 889 Memorial Hospital & Manor Healthcare 597 Decatur County Government County Government 302Bainbridge College Education 277 City of Bainbridge Municipal Government 177Georgia Industry for the Blind Public Service 123 Bainbridge Substance Abuse Center State Department of Corrections 104

Economic Sector Distribution. The following table shows the annual average percentage of persons who worked in each major sector of the local economy in Decatur County in 2003 through 2007. Data for 2008 is not yet available. Figures are based on employees covered under the state unemployment insurance program.

Industry

Agriculture, Forestry, & Fishing MiningConstructionManufacturingTransportation and Warehousing Wholesale Trade Retail Trade Finance, Insurance, and Real Estate Service and Other Industries Federal, State, and Local Government

Total:

2003

7.5% 3.04.1

19.82.13.1

12.03.8

19.6 25.0

100.0%

2004

7.2% 3.24.3

15.32.12.9

12.64.0

20.9 27.5

100.0%

2005

6.3% 3.03.3

13.83.73.1

15.54.2

20.4 26.7

100.0%

2006

6.3% 3.13.1

13.44.03.1

15.33.7

19.8 28.2

100.0%

2007

6.9% 3.23.38.74.03.4

15.84.4

20.7 29.6

100.0%

Source: State of Georgia, Department of Labor, Labor Information Systems.

18

Civilian Employment Statistics of Decatur County. Employment includes nonagricultural wage and salary employment, self-employed, unpaid family and private household workers, and agricultural workers. Persons in labor disputes are counted as employed. The use of rounded data does not imply that the numbers are exact.

Employment Unemployment

Total Labor Force

County Unemployment Rate State Unemployment Rate U.S. Unemployment Rate

2004

10,910 767

11,677

6.6% 4.6% 5.6%

2005

11,484 724

12,208

5.9% 5.3% 5.1%

2006

11,399 671

12,070

5.6% 4.7% 4.6%

2007

10,998 694

11,692

5.9% 4.4% 4.6%

2008

11,099 917

12,016

7.6% 4.4% 4.6%

Source: State of Georgia, Department of Labor, Labor Information Systems.

Building Permits

The following table shows a summary of residential building permits in the County for the last five years. Annual data for 2008 is not yet available.

Year Permits Value

2003 100 $11,324,2312004 245 10,380,947 2005 307 14,933,0172006 129 16,789,3712007 137 17,462,899

Source: The University of Georgia, Terry College of Business, Selig Center for Economic Growth.


19

Commuting Patterns

The following two tables show a summary of commuting patterns in the County as of Census year 2000.

Employed Residents of Decatur County

County of Employment Number Percent of Total

Decatur, GA 8,634 77.9% Leon, FL 507 4.6 Gadsden, FL 411 3.7 Grady, GA 298 2.7 Thomas, GA 84 1.6 Mitchell, GA 163 1.5 Dougherty, GA 135 1.2 Miller, GA 131 1.2 Early, GA 102 0.9 Other 522 4.7

Total Residents: 11,087 100.0%

Persons working in Decatur County

County of Residence Number Percent of Total

Decatur, GA 8,634 74.3% Seminole, GA 909 7.8 Miller, GA 521 4.5 Grady, GA 354 3.0 Early, GA 169 1.5 Mitchell, GA 160 1.4 Gadsden, FL 154 1.3 Leon, FL 82 0.7 Baker, GA 79 0.7 Other 556 4.8

Total Residents: 11,618 100.0%

Source: U.S. Census Bureau


20

DEBT STRUCTURE OF DECATUR COUNTY

Summary of County Indebtedness by Category

Set forth below is information concerning debt of the County as of February 1, 2009, and as of the anticipated date of issuance of the Bonds. The information set forth below should be read in conjunction with the County=s financial statements included as Appendix A hereto.

_________________ 1 This is a general obligation of the County to which its full faith and credit and taxing power is pledged. The debt service on The Bonds is

payable first from the Special Sales Tax, which will begin being collected on April 1, 2009. 2 The County’s obligations under the instruments do not constitute debt for purposes of the constitutional debt limit described herein in “DEBT STRUCTURE OF DECATUR COUNTY, - Debt Limitation” and, thus, do not count against the County’s debt limitation.

Reference is made to Note 5 of the financial statements of the County for the fiscal year ended June 30, 2007, included in Appendix A, for further discussion of these and other commitments and contingent liabilities of the County.

Debt Limitation

The Constitution of the State provides two limitations on the ability of the County to incur long term debt. The County may not issue long term debt (other than refunding obligations) secured by a pledge to levy general ad valorem taxes without the approval of a majority of the qualified voters of the County voting in a referendum on the debt. In addition, the amount of such long term debt may not exceed 10% of the assessed value of all taxable property within the County.

Short-term obligations (those payable within the same calendar year in which they are incurred), lease and installment purchase obligations subject to annual appropriation, and intergovernmental obligations are not subject to the legal limitations described above.

As computed in the table below, based upon assessed values as of January 1, 2008, the County could incur, upon necessary voter approval, immediately after the issuance of the Bonds, approximately $81,334,048 of long-term obligations payable out of general property taxes.

Computation of Legal Debt Margin

Gross Tax Digest for the County as of January 1, 2008 ............................................. $1,135,413,130 Less M&O Exemptions1 ................................................................................................. (237,522,652) Net M&O Tax Digest ................................................................................................ $897,890,478Debt Limit (10% of Net M&O Tax Digest) ..................................................................... $89,789,048 Less Amount of Debt Outstanding, after Issuance of the Bonds, Applicable to Debt Limit (8,455,000)Legal Debt Margin $81,334,048 ___________________ 1 Based on M&O exemptions. Actual bond exemptions are not available because in past years it has not been necessary for the County to

levy a tax for general obligation debt; debt service on outstanding debt has been paid by the Special Sales Tax. It is not expected that the amount of bond exemptions would be materially higher than the amount of M&O exemptions.

Category of ObligationAmount Authorized

or IssuedAmount Outstanding as

of February 1, 2009Amount to be Outstanding

Upon Issuance of the Bonds

General Obligation Debt1

The Bonds $12,000,000 -0- $8,455,000

Notes Payable2

GEFA Loan 505,000 73,624 73,624 GEFA Loan 2,926,060 2,926,060 2,926,060 Capital Leases 630,712 428,755 428,755 Equipment Leases 2,787,174 1,358,072 1,358,072

Revenue Bonds2

1979 Water & Sewer 505,000 215,000 215,000

TOTAL $19,353,946 $5,001,511 $13,456,511

21

Long and Short Term Indebtedness

During the past five fiscal years, the County has not incurred tax anticipation debt or any other short term debt. The County has no plans to issue any other short term obligations and no plans to issue any long term indebtedness other than the Bonds.

Debt Ratios

The following table sets forth certain debt ratios of the County following the issuance of the Bonds.

Per Capita Debt1

Percentage of Gross Tax Digest2

Percentage of Fair Market Value3

Per Capita Debt as a Percentage of Per Capita Income4

General Obligation Debt

$296.210.74% 0.30%

1.29%

Overlapping Debt

$366.10 0.92% 0.37%

1.60%

Total TaxSupported Debt

$662.31 1.66% 0.67%

2.89% ______________

1 Based upon estimated 2007 population of 28,544. 2 Based upon 2008 Gross Tax Digest of $1,135,413,130. 3 Based upon 2008 Estimated Actual Value of $2,828,738,028. 4 Based upon 2006 Per Capita Income of $22,940.


22

Indebtedness of Overlapping Governmental Entities

Property owners in the County are responsible for both the County=s debt obligations and any debt obligations of other taxing entities in the proportion to which the jurisdiction of the County overlaps such entities. Set forth below are the estimated overlapping general obligation debt and overlapping property tax supported contractual obligations, if any, as of February 1, 2009. Although the County has attempted to obtain accurate information as to the overlapping debt, it does not guarantee its completeness or accuracy, as there is no central reporting entity which has this information available, and the amounts are based on information supplied by others.

Name of Overlapping Entity

Amount of Outstanding Debt as of February 1, 2009

Amount of Outstanding Debt Chargeable to Persons or Property in the County

Decatur County School District General Obligation Bonds1 $10,450,000 $10,450,000

Decatur Co. School Building AuthorityRevenue Bonds 23,000,000 23,000,000

Hospital Authority -0- -0-

City of BainbridgeNotes Payable2

GMA Note 916,638 916,638Intergovernmental Contract3

GEFA Loan 1,608,552 1,608,552

City of Brinson GEFA Loan3 165,463 165,463

City of Climax Capital Leases4 110,598 110,598

TOTALS: $36,251,251 $36,251,251 _________________ 1 These bonds are general obligations of the Decatur County School District to which its full faith, credit and taxing power is pledged. The

debt service on the bonds, however, is payable first from a one percent sales and use tax for educational purposes. 2 The City of Bainbridge’s obligations under this instrument does not constitute debt for purposes of the constitutional debt limit described in “DEBT STRUCTURE OF DECATUR COUNTY, - Debt Limitation” herein and thus, does not count against the County’s debt limitation.3 The financial obligations of the City of Bainbridge and the City of Brinson under their various intergovernmental contracts constitutegeneral obligations of the City of Bainbridge and the City of Brinson to make the payments they have contracted to make by the provisions of their contracts and constitute a pledge of their full faith, credit and taxing power; however, the City of Bainbridge’s and the City of Brinson’s obligations under the instruments do not constitute debt for purposes of the constitutional debt limit described in “DEBT STRUCTURE OF DECATUR COUNTY, - Debt Limitation” herein and thus, do not count against the County’s debt limitation. 4 The financial obligations of the City of Climax under these capital leases do not constitute a general obligation of the City to which its full faith, credit and taxing power are pledged, but are subject to and dependent upon lawful appropriations of revenues being made by the City to pay the payments due in each fiscal year under the leases. The City’s obligations under the leases do not constitute debt for purposes of the constitutional debt limit described in “DEBT STRUCTURE OF DECATUR COUNTY, - Debt Limitation” herein and thus, do not count against the County’s debt limitation.


23

Debt Service Schedule

Set forth below are the principal and interest payment requirements of the County with respect to the Bonds.

Bond Year Principal Interest Total

2009 $ 80,353 $ 80,3532010 $1,300,000 283,600 1,583,6002011 1,350,000 244,600 1,594,6002012 1,385,000 204,100 1,589,1002013 1,425,000 162,550 1,587,5502014 1,470,000 119,800 1,589,8002015 1,525,000 61,000 1,586,000

TOTAL $8,455,000 $1,156,003 $9,611,003


24

DECATUR COUNTY AD VALOREM TAXATION

Introduction

Ad valorem property taxes are levied annually in mills (one tenth of one percent) upon each dollar of assessed property value. Ad valorem property taxes accounted for an annual average of approximately 37% of the General Fund revenues of the County for the fiscal years ending June 30, 2003 through June 30, 2007, and are budgeted to account for 38% of General Fund revenues for the year ending June 30, 2008.

Property Subject to Taxation

Ad valorem property taxes are levied, based upon value, on real and personal property within the County. There are, however, certain classes of property which are exempt from taxation, including public property, religious property, charitable property, property of nonprofit hospitals, nonprofit homes for the aged, and nonprofit homes for the mentally handicapped, college and certain educational property, public library property, certain farm products, certain air and water pollution control property, and personal effects.

In addition, the County allows exemptions from ad valorem taxation purposes for: (1) The home of each resident of Georgia that is actually occupied and used as the primary residence by the owner in the amount of $2,000, (2) Individuals 65 years of age and older with a joint net income of less than $10,000 may claim a $4,000 Exemption, (3) Individuals 62 years of age and older with a joint net income of less than $10,000 may deduct an exemption for educational purposes and to retire bonded indebtedness, in an amount up to $10,000 of the homestead’s assessed value, social security income and certain retirement income are excluded from the calculation of the income threshold, (4) Any qualifying Disabled veteran or an unremarried surviving spouse of a U.S. Service Member killed in action may be granted an exemption of $50,000, (5) a floating or varying homestead exemption is available for individuals 62 years of age or older with a joint income of $30,000 or less and this exemption applies to state and county taxes, except for taxes to pay interest on and to retire bonded indebtedness, but this exemption does not affect any municipal or educational taxes and is meant to be used in the place of any other state and county homestead exemption. A “Freeport” exemption is available to companies that manufacture or warehouse goods in the County. The County exempts 100% for (1) raw materials and goods in process of manufacture, (2) finished goods produced in Georgia within the last 12 months, and (3) finished goods stored in Georgia within the last 12 months and destined for shipment out of state.

Assessed Value

Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated as a percentage of fair market value. Georgia law requires all counties to assess taxable tangible property, with certain exceptions, at 40% of its fair market value and to tax such property on a levy made by each tax jurisdiction according to 40% of the property’s fair market value. Georgia law requires certain agricultural real property to be assessed for ad valorem property tax purposes at 75% of the value of which other real property is assessed and requires certain historical property to be valued at a lower fair market value for ad valorem property tax purposes.

The chief appraiser of the County is required to submit a certified list of assessments for all taxable property, except motor vehicles, mobile homes, and property owned by public utilities, within the County to the Decatur County Board of Tax Assessors. The Board of Tax Assessors is required to complete its revision and assessment of returns by June 1 of each year. The Tax Commissioner then certifies the digest and forwards a copy of the completed digest to the State of Georgia Revenue Commissioner for examination and approval. The Revenue Commissioner has the authority to examine the digest for the purpose of determining if the valuations of property are reasonably uniform and equalized between and within counties. Assessments may also be subject to review at various stages by the Decatur County Board of Equalization and by state courts.

The State of Georgia Motor Vehicle Tax Unit assesses the value of all motor vehicles by make, model, and year and provides this information to each county’s tax office. The State of Georgia Property Tax 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.

25

Annual Tax Levy

The County determines a rate of levy for each fiscal year by computing a rate which, when levied upon the assessed value of taxable property within the territorial limits of the County, will produce the necessary amount of property tax revenues. The County then levies its ad valorem property taxes. Under Georgia law, there is no limitation on the annual rate of levy for the payment of principal of and interest on bonded indebtedness of the County. Ad valorem property taxes received for the payment of debt service on general obligation bonds of the County are required by law to be held and accounted for separately from other funds of the County. See “THE BONDS, -Security and Sources of Payment for the Bonds.”

Property Tax Collections

Decatur County bills and collects its own property taxes. Real and personal property taxes are levied on January 1 of each year on the assessed value listed as of January 1. Taxes levied by the County on January 1 are normally billed by October 20 and are normally payable on or before December 20. Interest of 12% per annum is applied to taxes paid after December 20. In addition, a 10% penalty will apply to all taxes that are not paid within 90 days of the December 20 deadline. However, there is no penalty if tax is on a homestead and less than $500.

All taxes levied on real and personal property, together with interest thereon and penalties for late payment, constitute a perpetual lien on and against the property tax arising after January 1 in the year in which taxed. The lien becomes enforceable 30 days after notification. Georgia law provides that taxes must be paid before any other debt, lien, or claim of any kind, except for certain claims against the estate of a decedent and except that the title and operation of a security deed is superior to the taxes assessed against the owner of property when the tax represents an assessment upon property of the owner other than the property specifically subject to the title and operation of the security deed.

Collection of delinquent real property taxes is enforceable by tax sale of such realty. Delinquent personal property taxes are similarly enforceable by seizure and sale of the taxpayer’s personal property. There can be no assurance, however, that the value of the property sold, in the event of a tax sale, will be sufficient to produce the amount required to pay in full the delinquent taxes, including any interest or penalties thereon.

When the last day for the payment of taxes has arrived, the tax collector notifies the taxpayer in writing of the fact that the taxes have not been paid and that, unless paid, an execution will be issued. At any time after 30 days from giving the notice described in the preceding sentence, the Tax Commissioner may issue an execution for nonpayment of taxes. The Tax Commissioner then publishes a notice of the sale in a local newspaper weekly for four weeks and gives the taxpayer ten days written notice by registered or certified mail. A public sale of the property is then made by the Tax Commissioner at the Decatur County Courthouse on the first Tuesday of the month after the required notices are given.


26

Ten Largest Taxpayers

Set forth below is information concerning the ten largest taxpayers in the County in calendar year 2008.

Taxpayer Type of Business

2008Assessed Value for the County

Assessed Value as Percent of 2008 Gross

Assessed Values1

2008Taxes Levied for the County

BASF Corporation Mining Fuller’s Earth $ 72,111,166 6.4% $ 591,888Morgan Stanley Investment Company 40,885,466 3.6 386,073Georgia Power Company Public Utilities 35,097,763 3.1 304,367Propex Fabrics Inc. Carpet Manufacturer 32,837,434 2.9 269,530Shaw Industries Carpet Manufacturer 27,953,502 2.5 229,442Engelhard Corp. Mining Fuller’s Earth 23,788,331 2.1 195,254International Paper Company Timber 21,268,941 1.9 174,575Coastal Lumber Company Timber 20,171,986 1.8 165,571Motiva Enterprises Texaco Fuel Sales 16,896,427 1.5 159,550Cyrene Turpentine Co, Inc. Timber 18,351,399 1.6 150,676

Total: $309,362,415 27.4% $2,626,926______________1 Based on Calendar year 2008 gross tax digest of $1,135,413,130.

Source: Decatur County Assessor’s Office

Tax Digest

Set forth below is information concerning the assessed and estimated actual value of taxable property within the County for the past five calendar years.

As of January 1

ASSESSED VALUES: Real and Personal Property1

Public Utilities2

Motor Vehicles3

Mobile Homes4

Timber 100% Heavy Equipment

Gross Tax Digest

Less Bond Exemptions

Net Tax Digest for Bonds5

Gross Tax Digest

Less Maintenance & Operations (“M&O”) Exemptions

Net M&O Tax Digest6

ESTIMATED ACTUAL VALUE:

2004

$614,951,04024,576,13862,491,38010,554,731

6,216,122 -0-

$718,789,411

-0-

$718,789,411

$718,789,411

(80,499,713)

$638,289,698

$1,787,649,345

2005

$651,707,65526,399,42160,630,93010,991,228

3,126,628 -0-

$752,855,862

-0-

$752,855,862

$752,855,862

(88,832,483)

$664,023,379

$1,877,449,713

2006

$670,493,41531,138,02359,855,11011,085,930

7,238,299 -0-

$779,810,777

-0-

$779,810,777

$779,810,777

(91,835,054)

$687,975,723

$1,938,669,494

2007

$741,400,19534,005,78766,370,76011,491,180

6,666,712 -0-

$859,934,634

-0-

$859,934,634

$859,934,634

(95,600,770)

$764,333,864

$2,139,836,517

2008

$1,016,685,3597

32,306,23667,417,06012,474,610

6,529,865 -0-

$1,135,413,130

-0-

$1,135,413,130

$1,135,413,130

(237,522,652)

$897,890,478

$2,828,738,028_________________1 The State of Georgia requires all counties to assess real estate and personal property at the rate of at least 40% of estimated actual value,

with the exception of timber, which is assessed at 100%. 2 The State of Georgia Property Tax Unit assesses the value of the property of public utilities at the percentage of fair market value used by

the County. The Property Tax Unit then divides the assessment into two parts, assessed value of property and assessed value of franchise, and provides these figures to the County which bills these taxes to the utilities with the amount of tax for each.

3 The State of Georgia Motor Vehicle Tax Unit assesses the value of motor vehicles by make, model, and year by county and provides this information to each county tax office. The State of Georgia assesses the value of motor vehicles at the percentage of fair market value used by the County.

4 The State of Georgia assesses the value of mobile homes at the percentage of fair market value used by the County.5 Total assessed value, after deducting exemptions, for purposes of levying tax for the County=s general obligation bonds.6 Total assessed value, after deducting exemptions, for purposes of levying tax for the M&O of the County. 7 The 2008 Assessed Value for Real and Personal Property increased due to a reappraisal of agricultural property. Source: State of Georgia Department of Revenue, Property Tax Division.

27

Millage Rates

Set forth below is information concerning the rate of levy of property taxes per $1,000 of assessed value, or millage rates, of the County and the County School District for calendar years 2004 through 2008.

Decatur County County-Wide1

YearUnincorporated

M&OIncorporated

M&OSchoolDistrict

State of Georgia

UnincorporatedTotal

IncorporatedTotal

2004 8.71% 8.71% 13.23% 0.25% 22.19% 22.19%2005 8.56 8.56 13.03 0.25 21.84 21.842006 8.56 8.56 12.84 0.25 21.65 21.652007 8.56 8.56 12.84 0.25 21.65 21.652008 8.56 8.56 11.71 0.25 20.52 20.52

_______________1 In addition to the County-Wide Incorporated Totals, the incorporated cities in the County, Attapulgus, Bainbridge, Brinson, and Climax,

have their own millage rates for property within their city limits.

Source: State of Georgia Department of Revenue, Property Tax Division.

M&O Tax Levies and Collections

Set forth below is information concerning total real and personal property tax collections of the County reported as of the County’s fiscal years ended June 30, 2005 through June 30, 2008. Taxes levied by the County on January 1 are normally billed by October 20 and are normally payable on or before December 20. The Current Year’s M&O Tax Levy for 2009 is not yet available from the Tax Commissioner.

Fiscal Years Ended June 30

Current Year=s M&O Tax Levy1

Tax CollectionsCollection of Current Year=s Taxes Collection of Prior Years= Taxes

Total Tax Collections

Current Year’s Tax Collections as a Percent of Current Year=s Levy

Total Tax Collections as a Percent Of Current Year’s Levy

Uncollected Current Year=s Taxes

2004

$4,869,128

$4,839,503$ 46,237

$4,885,740

99.40%

100.34% $ 29,625

2005

$5,044,190

$4,969,560 $ 37,059

$5,006,619

98.52%

99.26%

$ 74,630

2006

$5,219,661

$5,161,677 $ 33,746

$5,195,423

98.89%

99.54%

$ 57,984

2007

$5,756,605

$5,502,705$ 47,620

$5,550,325

95.59%

96.42% $ 253,900

2008

$6,893,811

$4,744,677$ 963,501

$5,708,178

68.83%

82.80% $ 2,149,1342

_____________1 Current Year’s M & O Tax Levy is derived from the County’s five year history of the tax digest and current year’s digest values published

pursuant to O.C.G.A. Section 48-5-32 and is prior to adjustments and property not on the digest. The Current Year’s M&O Tax Levy relates to the preceding calendar year digest and millage rates.

2 This includes (a) $700,000 in Utilities that were re-billed and are due February 27, 2009, and (b) $275,000 outstanding from Propex.

Source: Decatur County Tax Commissioner.

28

FINANCIAL INFORMATION CONCERNING DECATUR COUNTY

Six Year General Fund Operating History

The following table sets forth an historical, comparative summary of revenues, expenditures, and changes in fund balance of the County’s General Fund for the past six fiscal years. Information in the table has been extracted from audited financial statements of the County for the fiscal years ended June 30, 2003 through June 30, 2007, and from unaudited financial statements of the County for the fiscal year ended June 30, 2008. Although taken from audited and unaudited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown, taken by itself, presents fairly the financial condition of the County for the fiscal years shown. For more complete information, reference is made to the audited financial statements of the County for fiscal year 2007, which are included in this Official Statement as Appendix A, and to the audited financial statements of the County for the fiscal years 2003 through 2006, copies of which are available from the County upon request.

Fiscal Years Ended June 30

RevenuesTaxesLicenses and Permits Intergovernmental Revenue Charges for Services Fines and Forfeitures Interest Income ContributionsOther Revenues

Total Revenues

ExpendituresCurrent

General Government JudicialPublic Safety Public Works Health and Welfare RecreationHousing and Development

Capital Outlay General Government Judicial Public Safety Public Works Culture & Recreation Housing & Development Debt Service Principal Interest

Total Expenditures

Excess (Deficiency) of Rev. Over Expenditures

Other Financing Sources (Uses)Operating Transfers - In Operating Transfers – Out Proceeds from Sale of Assets Proceeds from Capital Leases

Total Other Financing Sources

Excess of Revenues and Other Sources Over (Under) Exp Fund Balance, Beginning of Year

Prior Period Adjustment Fund Balance, End of Year

2003

$ 8,722,706 103,764265,744

2,275,268961,869199,725

-0- 46,405

$12,575,481

$ 2,346,429 1,061,6165,570,5361,585,603

462,20141,833

221,802

53,6365,226

293,8062,7591,5623,925

-0- -0-

$11,651,934

923,547

189,192(410,472)

-0- -0- (221,280)

702,26716,747,498 (3,363)

$17,446,402

2004

$ 8,749,396 105,622344,049

2,002,517905,137163,649

6,102 220,807$12,497,279

$ 736,455 1,252,9816,908,4821,619,054

527,93051,533

423,931

60,6782,128

335,795316,358

-0-4,000

-0- -0-

$12,239,325

257,954

75,495(1,000,445)

-0- -0- (924,950)

(666,996)17,446,402

(855) $16,778,551

2005

$ 8,930,91798,548

330,6112,090,1651,031,708

282,3075,000

38,757$12,808,013

$ 1,054,6511,241,5217,887,2842,062,216

541,89954,231

497,903

39,1356,779

486,918207,951

2,94957,003

-0- -0-

$14,140,440

(1,332,427)

213,683(1,448,619)

-0- 138,650

(1,096,286)

(2,428,713)16,778,551 -0-

$14,349,838

2006

$ 9,491,398 106,583

1,277,7251,240,2421,023,755

363,5051,000

158,121$13,662,329

$ 1,280,521 1,388,9038,381,5172,604,239

506,907313,106394,573

433,6558,156

865,920452,014

-0-10,496

101,119 20,435

$16,761,561

(3,099,232)

-0-(1,946,959)

-0- 186,866

(1,760,093)

(4,859,325)14,349,838 -0-

$ 9,490,513

2007

$ 9,993,70290,722

204,3342,971,1871,337,634

338,0272,786

221,595$15,159,987

$ 1,269,1461,422,6109,840,3841,552,265

551,978278,025576,108

1,471-0-

306,468368,184

9,99957,772

-0- -0-

$16,234,410

(1,074,423)

700,998(1,498,798)

8,907 242,990 (545,903)

(1,620,326)9,490,513

-0- $ 7,870,187

(Unaudited)2008

$ 10,477,340126,881262,813

2,495,3991,174,033

211,810250

250,667$14,999,193

$ 1,285,8491,456,5759,918,7881,189,231

530,742155,564696,356

3,6044,252

501,350188,05910,2171,600

-0- -0-

$15,942,187

(942,994)

977,751(668,234)104,490

446,373860,380

(82,614)7,870,187

-0- $ 7,787,573

29

Accounting Policies

The accounting policies of the County conform to generally accepted accounting principles (“GAAP”) as applicable to government units, except as described below. The County uses individual funds which are considered separate accounting entities, to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. The operations of each fund are accounted for with a self-balancing set of accounts. The County uses the following fund categories:

Governmental Funds. This category accounts for all or most of the County=s general activities and consists of the following fund types:

The General Fund is the principal operating fund of the County and is used to account for all financial resources of the general government, except for those required to be accounted for in another fund.

The Special Revenue Funds account for moneys that are set aside for specific purposes. Namely grant funds and intergovernmental operations are accounted for in these funds.

The Capital Projects Funds account for the acquisition or construction of capital facilities.

The Debt Service Fund accounts for principal and interest payments of debt that has been incurred in the General Fund.

Proprietary Funds. This category accounts for monies received as a result of the County charging customers for services it provides.

Fiduciary Funds. This category is used to account for assets held by the County in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds, and consist of Trust Funds and Agency Funds.

All Governmental Funds, Proprietary Funds and Fiduciary Funds use the modified accrual basis of accounting. Under this basis of accounting, revenues are recorded when they become both measurable and available. Expenditures are recorded when they have used, or are expected to use, current expendable financial resources, except that unmatured interest on general long-term debt is recorded when due.

Note 1 of the County’s financial statement, included as Appendix A to this Official Statement, contains a detailed discussion of the County’s significant accounting policies.

Independent Auditors’ Reports, 2003 B 2007

Fowler, Holley, Rambo & Stalvey, P.C., independent certified public accountants, acted as the County=s auditors for the fiscal years ended June 30, 2004 through June 30, 2007. Ben Lee & Associates, Inc., independent certified public accountants, Valdosta, Georgia, acted as the County’s auditors for the fiscal year ended June 30, 2003.

The accountants state that the general purpose financial statements of the County for the fiscal years ended June 30, 2003 through June 30, 2007 present fairly, in all material respects, the financial position of the County as of each respective fiscal year, and the results of its operations and cash flows of its proprietary fund types for each respective fiscal year in conformity with GAAP.

Budgetary Process

General Description. The County maintains a finance committee consisting of two commissioners, the County administrator and the finance director. The finance committee reviews the County’s budget on an ongoing basis and recommends amendments and changes throughout the fiscal year. The County=s budgetary process begins at least four months prior to year end when the County Administrator, Finance Director and Department Heads begin work on the proposed operating budget for the next fiscal year. Approximately thirty days prior to year end, the proposed operating budget is submitted to the Board of Commissioners. A public hearing is conducted to obtain taxpayer comments. The budgets are then legally enacted through approval by the Board of Commissioners. Budgets are adopted on a modified accrual basis of accounting which is consistent with GAAP. The County prepares a budget for the Special Sales Tax using projected total Special Sales Tax revenues and projected capital outlays.

30

Pursuant to O.C.G.A. ' 36-81-3(b), the annual budgets approved by the Board of Commissioners for the General Fund and each Special Revenue Fund must be balanced. A budget is balanced when the sum of estimated net revenues and appropriated fund balances is equal to appropriations. The Board of Commissioners has the authority under O.C.G.A. ' 36-81-3(d), however, to amend the budget as follows:

(1) Any increase in appropriation at the legal level of control of the County, whether accomplished through a change in anticipated revenues in any fund or through a transfer of appropriations among departments, requires the approval of the Board of Commissioners. Such amendment shall be adopted by ordinance or resolution;

(2) Transfers of appropriations within any fund below the County’s legal level of control requires only the approval of the budget officer; and

(3) The Board of Commissioners may amend the legal level of control to establish a more detailed level of budgetary control at any time during the budget period. Said amendment shall be adopted by ordinance or resolution.

General Fund Budgets. Set forth below is a summary of the County=s General Fund budget for the fiscal year ending June 30, 2009. The budget for fiscal year 2009 is based upon certain assumptions and estimates of the County’s management regarding future events, transactions, and circumstances. Realizations of the results projected in the budget for fiscal year 2009 will depend upon implementation by management of policies and procedures consistent with the assumptions. Accordingly, the actual results achieved could materially vary from those projected in the budget for fiscal year 2009 shown below.

Revenues

Property Taxes ..................................... Sales Tax .............................................. Other Taxes .......................................... Licenses and Permits ........................... Charges for Services ............................ Intergovernmental Revenue ................. Fines and Forfeitures ........................... Rental Income ...................................... Interest Income .................................... Other Revenues ....................................

Total Revenues ...............................

Expenditures

Administration ..................................... Benefits ................................................ Courts ................................................... Sheriff .................................................. Other Public Safety .............................. Public Works ....................................... Property Assessment ............................ Culture and Recreation ........................ Indigent Care ....................................... Other Departments & Cmty. Service ...

Total Expenditures ..........................

2009

$8,137,7212,900,000

929,313137,500

2,733,5001,375,8971,248,200

105,000100,000603,500

$18,270,631

$1,185,1782,154,8121,280,1752,515,0556,094,2722,646,873

332,167182,685570,709

1,270,352

$18,232,278

31

LEGAL MATTERSLitigation

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, Hall Booth Smith & Slover, PC, Bainbridge, Georgia, believes that, while the outcome of litigation cannot be predicted, the final settlement of all lawsuits which have been filed and of any actions or claims pending or threatened against the County or its officials in such capacity are adequately covered by insurance or sovereign immunity or will not have a material adverse effect upon the financial position or results of operations of the County.

It is a condition of closing that the County certify that there is no action, suit, proceeding, controversy or litigation of any nature pending or, to the knowledge of the County, threatened against or affecting the County before or by any court, public board or body: (i) in any way affecting or questioning the validity of the Bonds or the provisions of the security therefor, or restraining or enjoining or seeking to restrain or enjoin the execution, delivery, or sale of the Bonds, (ii) questioning or contesting the existence of the County, the title of any of the officers thereof to their respective offices or the exclusion from gross income for federal income tax purposes of the interest on the Bonds, or (iii) wherein an unfavorable decision, ruling or finding would have a material adverse effect on the financial condition of the County.

Legal Proceedings

Validation of Bonds. In accordance with the law of the State, the Bonds and the security therefor were confirmed and validated on November 26, 2008, by judgment of the Superior Court of Decatur County, Georgia. Under Georgia law, the judgment of validation will be forever conclusive against the County.

Opinions of Counsel. All legal matters incidental to authorization and issuance of the Bonds are subject to the approval of Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. It is anticipated that the approving opinion will be in substantially the form attached hereto as Appendix B. Certain legal matters will be passed upon for the County by its counsel, Hall Booth Smith & Slover, PC, Bainbridge, Georgia, and for the Underwriter by its counsel, Gray & Pannell LLP, Savannah, Georgia. The payment of legal fees is contingent upon issuance of the Bonds.

The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys or law firms rendering the opinion as to the legal issues explicitly addressed therein. By rendering a legal opinion, the attorney or law firm does not become an insurer or guarantor of the transaction opined upon, or of the future performance of parties to such transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

Tax Exemption

The Internal Revenue Code of 1986 (the “Code”) establishes certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for purposes of federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issue of the Bonds. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Bonds are to be invested and require that certain investment earnings on the foregoing be rebated on a periodic basis to the Treasury Department of the United States. The County has covenanted in the Resolution to comply with the requirements of the Code in order to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes.

In the opinion of Bond Counsel, under existing law, and assuming compliance with the aforementioned covenant, interest on the Bonds (a) is excluded from gross income for purposes of federal income taxation and (b) will not be included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations.

Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, foreign corporations which conduct a trade or business in the United States, Subchapter S Corporations, certain recipients of social security or railroad retirement benefits, property and casualty insurance corporations and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Bond Counsel has

32

expressed no opinion regarding any such other tax consequences. Prospective purchasers of the Bonds should consult with their own tax advisors as to the consequences of acquiring, carrying or disposing of the Bonds.

In the further opinion of Bond Counsel, under existing law, interest on the Bonds is exempt from present state income taxation within the State of Georgia. Interest on the Bonds may or may not be subject to state or local income taxation in jurisdictions other than the State of Georgia. Each purchaser of the Bonds should consult his or her own tax advisor regarding the tax-exempt status of interest on the Bonds in a particular state or local jurisdiction other than the State of Georgia.

In addition, in the opinion of Bond Counsel, based upon a representation of the County, the Bonds are “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code.

Premium Bonds

The difference between the principal amount of the Bonds maturing on July 1, 2010 through July 1, 2015 (collectively, the “Premium Bonds”) and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such Premium Bond in the initial offering to the public at the initial offering price is required to decrease such purchaser=s adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning the Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds.


33

MISCELLANEOUS

Ratings

Standard & Poor’s Ratings Services, A Division of The McGraw-Hill Companies, Inc., has assigned a rating of “AAA” to the Bonds, with the understanding that upon delivery of the Bonds the Financial Guaranty Insurance Policy will be issued by Assured Guaranty. Standard & Poor’s Ratings Services, A Division of the McGraw-Hill Companies, Inc., has assigned an underlying rating of “A+” to the Bonds. The rating reflects only the views of the rating agency. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. An explanation of the significance of the rating may be obtained from the rating agency furnishing such rating. There is no assurance that the rating will remain unchanged for any given period of time or that the rating will not be revised downward or withdrawn entirely by the rating agency, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the liquidity and market price of the Bonds.

The rating agency may be contacted as follows: Standard & Poor’s Rating Service, A Division of The McGraw-Hill Companies, Municipal Finance Department, 55 Water Street, 38th Floor, New York, New York 10041, telephone (212) 438-2074.

Underwriting

Pursuant to a bond purchase agreement executed by and between the County and the Underwriter on March 12, 2009, the Underwriter has agreed to purchase the Bonds at a price of $8,613,507.74, which represents the par amount of the Bonds, $8,455,000, less Underwriter=s Discount of $54,957.50, plus Original Issue Premium of $255,754.65 and less an Insurance Premium of $42,288.41. The obligations of the Underwriter to accept delivery of the Bonds are subject to numerous conditions set forth in the bond purchase agreement.

The Underwriter may offer and sell the Bonds to other dealers and other purchasers at prices lower than the public offering prices stated on the cover hereof. The initial public offering prices may be changed from time to time by the Underwriter.

Continuing Disclosure

Securities and Exchange Commission Rule 15c2-12 (the “Rule”) under the Securities Exchange Act of 1934 imposes continuing disclosure obligations on the issuers and obligors of certain state and municipal securities to permit participating underwriters to offer and sell the issuer=s securities. On the date of issuance of the Bonds, the County will sign a Continuing Disclosure Certificate under the provisions of which the County shall covenant for the benefit of the beneficial owners of the Bonds to provide (i) certain financial information and operating data relating to the County (the “Annual Report”) and (ii) notices of the occurrence of certain enumerated events, if material. The Annual Report and the notices of material events will be filed with each Nationally Recognized Municipal Securities Information Repository and with the State information depository at such time as one is formed. The specific nature of the information to be contained in the Annual Report or in the notices of material events is in “Appendix C: THE CONTINUING DISCLOSURE CERTIFICATE.” These covenants shall be made by the County in order to assist the Underwriter in complying with the Rule. The County has never failed to comply in all material respects with its previous undertakings with regard to the Rule to provide annual reports or notices of material events.

Independent Auditor; Financial Statements

Fowler, Holley, Rambo & Stalvey, P.C., independent certified public accountants, have been employed by the County as its independent auditor. The financial statements of the County as of June 30, 2007, and for the year then ended, attached hereto as Appendix A, have been audited by Fowler, Holley, Rambo & Stalvey, P.C., to the extent and for the period indicated in their report thereon which appears in such appendix. Such financial statements have been included herein in reliance upon the report of Fowler, Holley, Rambo & Stalvey, P.C., given upon the authority of such firm as experts in accounting and auditing.

34

Miscellaneous

Insofar as any statement in this Official Statement involves matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of the statements will be realized. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the holders of the Bonds.

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

Approval of Official Statement

The execution and delivery of this Official Statement, and its distribution and use by the Underwriter, have been duly authorized and approved by the County.

DECATUR COUNTY

By: /s/ H. Palmer Rich Chairman

Appendix A

AUDITED FINANCIAL STATEMENTS OF DECATUR COUNTY, GEORGIA FOR THE FISCAL YEAR ENDED JUNE 30, 2007

(THIS PAGE LEFT BLANK INTENTIONALLY)


REPORT ON EXAMINATION

OF

FINANCIAL STATEMENTS

For the Fiscal Year Ended June 30, 2007

DECATUR COUNTY, GEORGIAFor The Fiscal Year Ended June 30, 2007Table of Contents

FINANCIAL SECTION Page

Independent Auditor's Report i-ii

Management's Discussion and Analysis I-XIII

Basic Financial Statements

Statement of Net Assets 1

Statement of Activities 2-3

Balance Sheet - Governmental Funds 4

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 5

Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 6

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Net Activities 7

Statement of Net Assets - Proprietary Funds 8

Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds 9

Statement of Cash Flows - Proprietary Funds 10-11

Statement of Fiduciary Assets and Liabilities 12

Statement of Net Assets - Component Units 13

Statement of Activities - Component Units 14

Notes to the Financial Statements 15-49

Required Supplementary Information:

Major Funds:General Fund - Budgetary Comparison Schedule 50-51

Note A - Explanation of Differences between Revenues, Expenditures, and Other Financing Sources (Uses) for Budgetary Funds on a Budgetary Basis and GAAP General Fund and Major Special Revenue Funds on a GAAP Basis 52

Note B - to Required Supplementary Information - Budget and Budgetary Accounting 53


GASB 27 Required Supplementary Information - Schedule of Funding Progress 54

Notes to Required Supplementary Information - Employee Retirement System 55

Supplemental Information

Combining and Individual Fund Statements and Schedules:Governmental Funds:

Nonmajor Governmental Funds:Nonmajor Governmental Funds - Combining Balance Sheet 56

Nonmajor Governmental Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balance 57

Nonmajor Special Revenue Funds - Combining Balance Sheet 58

Nonmajor Special Revenue Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balances 59

Law Library - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 60

Confiscated Assets - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 61

E-911 - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 62

CDBG-EIP - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 63

Victim's Assistance - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 64

Local Assistance Grant VFD - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 65

One GA Grant - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 66

Youth Golf Program - Special Revenue Fund - Budget Comparison Schedule (Non-GAAP) 67

Debt Service Fund - Budget Comparison Schedule (Non-GAAP) 68

Nonmajor Capital Projects Funds - Combining Balance Sheet 69

Nonmajor Capital Projects Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balances 70

Agency Funds: Combining Statement of Changes in Fiduciary Assets and Liabilities 71


STATE REPORTING REQUIREMENTS

Schedule of Special Purpose Local Option Sales Tax 72-73

Community Development Block Grant Source and Application of Funds Schedule Grant # 04p-y-043-1-2976 74

Community Development Block Grant-Project Cost Schedule Grant # 04p-y-043-1-2976 75

Community Development Block Grant EIP Schedule of Revolving Loan Funds Reconciliation to Local Semi-Annual Report Grant # 02g-y-043-1-2761 76

Annual Report of 9-1-1 Collections and Expenditures 77-81

GOVERNMENTAL AUDITING STANDARDS REQUIREMENTS

Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 82-85

I

DECATUR COUNTY GOVERNMENT

Management’s Discussion and Analysis


Our discussion and analysis of Decatur County’s financial performance provides an overview of the County’s financial activities for the fiscal year ended June 30, 2007. Please read it in conjunction with the County’s financial statements, which begin on page 1 and the Notes to the Financial Statements, which begin on page 15.

FINANCIAL HIGHLIGHTS

The County’s net assets totaled $ 45,148,011 for its governmental and business-type activities, an increase of $ 1,047,515 over the previous fiscal year. • Total combined revenues for governmental and business-type activities were

$ 24,135,992.• Overall expenses were $ 23,088,477, of which governmental activities were

$19,083,359 and business-type activities were $4,005,118. • As of June 30, 2007, governmental activities’ expenses exceeded program revenue,

resulting in the use of $ 11,698,627 in general revenues (primarily taxes). • In the County’s business-type activities, revenues were $ 3,487,932 and expenses

were $ 4,005,118, for an operating loss of $ 517,186 for 2007. Operating losses for the County’s business-type activities are offset by the use of general revenues.

• The General Fund resources available for appropriation were $ 410,194 less than budgeted, and, expenditures were $ 46,592 more than budgeted.

• The combined governmental funds’ balance as of June 30, 2007 was $ 6,878,765, of which the general fund comprised $ 7,870,187, the special local option sales tax (SPLOST) Capital Projects Funds comprised $(1,369,179) and other governmental funds comprised $ 377,757.

• The General Fund reported a decrease of $ 1,645,070 in unreserved fund balance to $ 6,769,074 from the prior fiscal year. This compares with an unreserved fund balance of $8,414,144 and a decrease of $ 4,930,927 in unreserved fund balance for the prior year.

II

USING THIS ANNUAL REPORT

This annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities (on pages 1- 3) provide information about the activities of the County as a whole and present a longer-term view of the County’s finances. The Statement of Net Assets presents information on all of the County’s assets and liabilities, with the difference between the two reported as net assets. The Statement of Activities presents information showing how the County’s net assets changed during the most recent fiscal year. The governmental fund financial statements start on page 4. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the County’s operations in more detail than the government-wide statements by providing information about the County’s most significant funds. The remaining statements provide financial information about activities for which the County acts solely as a trustee or agent for the benefit of those outside of the government.

Government-wide Reporting:

The Statement of Net Assets and the Statement of Activities

Our analysis of the County as a whole begins on page III. One of the most important questions asked about the County’s finances is, “Is the County as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Assets and the Statement of Activities report information about the County as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the type of accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the County’s net assets and changes in them. You can think of the County’s net assets—the difference between assets and liabilities—as one way to measure the County’s financial health, or financial position. Over time, increases or decreases in the County’s net assets are one indicator of whether its financial health is improving or deteriorating. You will need to consider other non-financial factors, however, such as changes in the County’s property tax base and the condition of the County’s roads, to assess the overall well-being of the County.

In the Statement of Net Assets and the Statement of Activities, we divide the County into three kinds of activities: • Governmental activities—Most of the County’s basic services are reported here,

including the public safety, public works, judiciary, health, welfare, culture, recreation, development, as well as general administration. Property taxes, fees, fines, and state and federal grants finance most of these activities.

• Business-type activities—The County charges a fee to customers to help it cover the cost of certain services it provides. The County’s Industrial Airpark, Landfill, Water and Sewer and Ambulance Services are reported here.

III

• Component units— The County includes three separate legal entities in its report –the Decatur County Health Department, Hospital Authority of Bainbridge, Decatur County, GA and the Law Library Special Revenue Fund. The Decatur County Health Department and the Hospital Authority of Bainbridge, Decatur County, GA arepresented as discretely-presented component units in a separate column in the basic financial statements. The Law Library Special Revenue Fund is reported as a blended component unit in the other governmental funds column of the basic financial statements. Although legally separate, these “component units” are important because the County is either financially accountable, or may maintain control by means of appointments to the governing boards of these organizations, or may be required by the state to report them as component units. Financial Statements for the County’s discretely presented component units are found beginning on page 13.

Reporting the County’s Most Significant Funds

Fund Financial Statements

Our analysis of the County’s major funds begins on page VI. The fund financial statements begin on page 4 and provide detailed information about the most significant funds—not the County as a whole. Some funds are required by State law and by bond covenants. However, the County establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money (like grants received from the Georgia Department of Community Affairs). The County’s two kinds of funds—governmental and proprietary—use different accounting approaches.

• Governmental funds—Most of the County’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the County’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the County’s programs. We describe the relationship (or differences) between government-wide information (reported in the Statement of Net Assets and the Statement of Activities) and governmental fund information in reconciliations on pages 5 and 7, respectively.

• Proprietary funds—When the County charges customers for the services it provides—whether to outside customers or to other units of the County—these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the County’s enterprise funds (a component of proprietary funds) are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. The proprietary fund statements begin on page 8.

IV

The County as Trustee

Reporting the County’s Fiduciary Responsibilities

• Fiduciary funds—these funds are used to account for assets held for others. All of the County’s fiduciary activities are reported in a separate Statement of Fiduciary Assets and Liabilities on page 12 and Statement of Changes in Assets and Liabilities beginning on page 71. These agency funds’ balances are due to other funds, agenciesand individuals as of the fiscal year end. We exclude these activities from the County’s other financial statements because the County cannot use these assets to finance its operations. The County is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

THE COUNTY AS A WHOLE

NET ASSETS: The County’s combined net assets increased $ 1,047,515 from a year ago—from

$ 44,100,496 to $ 45,148,011. Our analysis below focuses on the net assets (Table 1) and changes in net assets (Table 2) of the County’s governmental and business-type activities.

Table 1Net Assets

(000’s omitted)Governmental Business-type Total Primary Total

Activities Activities Government % ChangeAssets: 2006 2007 2006 2007 2006 2007 2006-2007

Current assets 11,005$ 8,412$ 924$ 1,600$ 11,929$ 10,012$ -16.1%Restricted assets- non current - - 83 86 83 86 3.6%Capital assets- net 22,144 28,193 17,167 15,502 39,311 43,695 11.2%

Total assets 33,149 36,605 18,174 17,188 51,323 53,793 4.8%

Liabilities:Long-term debt outstanding 663 631 5,486 5,916 6,149 6,547 6.5%Other liabilities 1,014 1,922 60 176 1,074 2,098 95.3%

Total liabilities 1,677 2,553 5,546 6,092 7,223 8,645 19.7%

Net assets: Invested in capital assets, net of debt 21,767 27,909 16,000 14,165 37,767 42,074 11.4%Restricted 1,647 1,465 83 86 1,730 1,551 -10.3%Unrestricted (deficit) 8,058 4,678 (3,455) (3,155) 4,603 1,523 -66.9%

Total net assets 31,472$ 34,052$ 12,628$ 11,096$ 44,100$ 45,148$ 2.4%

V

The County’s total net assets (governmental and business-type activities) were $ 45,148,011 as of June 30, 2007. Unrestricted net assets—the part of net assets that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements—were $ 4,679,680 at the end of this year.

The largest portion of the County’s net assets (approximately 93%) reflects its investment in capital assets such as land, buildings, equipment and infrastructure (roads, bridges, sidewalks) less any debt used to acquire those assets that remains outstanding. The County uses these capital assets to provide services to its citizens; therefore, these assets are not available for future spending. Although the County’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The total net assets of our business-type activities increased by 12.7 percent $ 11,095,697 compared to $9,683,387 in 2006.

The County reports positive balances in the Water and Sewer fund, Airport fund Natural Gas fund, Ambulance Service and Landfill funds.

This space intentionally left blank.

VI

CHANGES IN NET ASSETS:

The County’s total change in net assets was a negative $ (364,795) from the prior fiscal year as a result of its governmental activities and a positive $ 1,412,310 as a result of its business-type activities.

Table 2Changes in Net Assets

(000’s omitted)

Gove rnmental Business Type Total Pr imary TotalActivities Activities G overnment % Change

20 06 2007 2006 2007 2006 2007 2006-2007Reve nues

Program revenues:Charges for servic es $ 4,298 $ 4,880 $ 2,745 $ 3,249 $ 7,043 $ 8,129 15.4%Operat ing grants 202 681 - - 202 681 237.1%Capital grants 313 1,824 147 239 460 2,063 348.5%

General revenues:Property taxes 5,982 6,042 - - 5,982 6,042 1.0%Other taxes 5,822 6,352 - - 5,822 6,352 9.1%Investment ea rnings 544 419 1 1 545 420 -22.9%Miscellaneous 159 457 - - 159 457 187.4%

Total ge neral / pr ogramrevenues 17,320 20,655 2,893 3,489 20,213 24,144 19.4%Program Expense

General government 1,756 1,447 - - 1,756 1,447 -17.6%Judicial 1,416 1,488 - - 1,416 1,488 5.1%Public safe ty 10,381 11,635 1,125 1,160 11,506 12,795 11.2%Public works 3,491 2,646 3,232 2,845 6,723 5,491 -18.3%Health and welfare 525 570 - - 525 570 8.6%Culture and recreation 315 317 - - 315 317 0.6%Housing and development 431 976 - - 431 976 126.5%Interest and fiscal charges 21 5 - - 21 5 -76.2%

Total program expenses 18,336 19,084 4,357 4,005 22,693 23,089 1.7%

Changes in net assets (1,016) 1,571 (1,464) (516) (2,480) 1,055 -142.5%Specia l item - 9 - (17) - (8) 0.0%Transfers (2,833) (1,945) 2,833 1,945 - - -

Changes in net assets (3,849)$ (365)$ 1,369$ 1,412$ (2,480)$ 1,047$ -142.2%

Depreciation expenses of $ 2,094,408 were allocated to the above functions. $ 1,552,359 was allocated to the function of governmental activities. $ 542,049 was allocated to the function of business type activities.

VII

As can be seen from the chart following, approximately 25% of the County’s combined total revenue is provided by property taxes, 34% by fees, fines, charges forservices, an additional 27% by sales and other taxes, and the remaining 14% by a combination of grants, contributions, investment income and other revenues. The County charges fees for services as varied as providing copies of documents, issuing buildingpermits, water and sewer, industrial airpark, landfill, ambulances services, inmate housing and Emergency 911, in addition, the Courts (Superior, Probate, Magistrate & Juvenile) impose fines for violations of laws and ordinances.

Revenue Sources – FY 2007

VIII

The County’s major expenses, at 53% of the combined total, are clearly in the area of providing services to ensure the public safety. These services include the Sheriff’s office, jail operations, fire protection, emergency medical services, E-911, the coroner, animal control, and emergency management.

Program Expenses – FY 2007

THE COUNTY’S FUNDS

Decatur County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

The objective of the County’s governmental funds is to provide information on near-term activity and balances of spendable resources. Such information is useful in assessing the County’s financial requirements. In particular, the unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. It should be noted, however, that the County’s major revenue source— property taxes on real property—are only paid once a year, approximately fivemonths after the close of the fiscal year. The fund balance at the close of any fiscal year

IX

should be large enough to provide adequate financial resources until the next fiscal year’s taxes are received.

The County ended the 2007 fiscal year with a balance of $ 6,878,765 in its governmental funds. Of this, the unreserved portion was $ 5,754,750. The remaining $ 1,101,113 is reserved for inventories, retirement funding and other projects.

Major Funds:

General Fund

The General Fund is the operating fund of the County. At the end of the current year, the fund balance was $ 7,870,187, of which $ 6,746,172 was unreserved, which is available for spending in the coming year. As a measure of liquidity, it may be useful to compare the unreserved fund balance to total expenditures for the General Fund and transfers out to other funds. The unreserved General Fund balance represents 38% of that total. Therefore, the unreserved fund balance could fund 38% of one year’s normal budgeted appropriations.

The fund balance in the general fund decreased almost $ 1,620,326 during FY 2007, primarily due to an increase in transfers to other funds. Additional information about the General Fund can be found on pages 50-52.

Special Local Option Sales Tax (SPLOST) Capital Projects Fund

The SPLOST Funds were established to account for the proceeds of the special five-year, one-cent sales tax and projects approved by the voters on March 16, 1997 for up to $8.1 million and November 4, 2003 for up to $13.5 million.

On March 16, 1997, the voters approved another SPLOST referendum. Capital projects approved in the referendum are as follows:

Capital projects approved by the voters in the referendum are as follows:

1. Renovation of County Courthouse, Solid Waste Facilities and Fire Suppressions $4.6 million

2. Road & Bridges improvements $3.5 million Total $8.1 million

On November 4, 2003, the voters approved another SPLOST referendum to begin on April 1, 2004. Capital projects approved in the referendum are as follows:

1. Sanitary landfill, animal control, fire station and equipment, jail improvement, livestock facility improvement, and recreational projects. $7.2 million

2. Road and bridge improvements $6.3 million Total $13.5 million

X

SPLOST expenditures during FY 2007 consisted of the following:

Jail Improvements $. 35,431Solid Waste Activities $ 1,666,413Livestock Facility $ 395,588Recreation improvements $ 60,410Road and bridge improvements $ 2,617,896Debt service payments for capital leases associated with equipment for road & bridge improvements $ 58,917

Total $ 4,834,655

Additional information on the SPLOST Capital Projects fund can be found on pages 4-7.

Other Governmental Funds:

Combined assets were $ 746,499; liabilities $ 368,692; and unreserved fund balance was $ 377,732 for the year ended June 30, 2007. These totals are a combination of the following:

Special Revenue Funds

The County uses special revenue funds to account for the collection and disbursement of revenues that are legally restricted to expenditures for specific purposes. Included in this classification are:

• E-911 Fund • Confiscated Asset Fund• Law Library Fund• CDBG – EIP Fund• Victim’s Assistance Fund• Local Assistance Grant-VFD Fund• One Georgia Grant Fund• Youth Golf Program Fund

Combined total assets of the above funds were $ 746,424 as of June 30, 2007; liabilities $ 368,692 and unreserved fund balances were almost $ 377,732.

Debt Service Fund

The Debt Service Fund is used to account for the accumulation of resources and payment of capital lease principal and interest when the County is obligated for the payment. These capital leases are associated with equipment use for road and bridge projects approved in the SPLOST referendum. The Debt Service fund did not have any assets, liabilities or fund balances as of June 30, 2007.

XI

Capital Projects Funds

These funds are used to account for the acquisition and construction of major capital facilities, other than those financed by proprietary funds. Capital Projects Funds had on hand $ 25 in assets with no liabilities. The fund balances consist of $ 25 dollars used to open the bank account and is unreserved. The County has the following three non-major capital projects funds:

CDBG Slough Loop Grant FundOne GA Project FundCDBG Grant Fund

The CDBG Grant fund accounts for the activities of a grant from the U.S. Department of Housing and Urban Development.

The CDBG Slough Loop Grant fund accounts for the activities of a grant from the U.S. Department of Housing and Urban Development. The purpose of the grant is for road construction on Slough Loop.

The One Georgia Grant fund accounts for the activities of a grant from the One Georgia Authority. The purpose of the grant is for street improvements.

Proprietary Funds

The County reports five business-type activities as proprietary funds: Water andSewer, Natural Gas, Airport, Landfill and Ambulance Service. The Water and Sewer, Natural Gas, Airport, Landfill and Ambulance Service Fund had combined operating losses which totaled $ 1,129,765. This compares to last year’s operating losses of Water and Sewer, Industrial Airpark, Landfill and Ambulance Service Fund of $1,554,431. The operating losses in the four business-type activities were decreased by non-operating revenues and transfers from other funds. More detailed information about the County’s proprietary funds can be found beginning on pages 8-11.

Fiduciary Funds

These agency funds’ balances are due to other funds, agencies and individuals as of the fiscal year end. Additional information is available on page 71 of the Combining and Individual Fund Statements and Schedules Section. We exclude these activities from the County’s other financial statements because the County cannot use these assets to finance its operations. The County is responsible for ensuring that the assets reported in these funds are used for their intended purposes. The fiduciary funds assets and liabilities are $ 569,434.

XII

GENERAL FUND BUDGETARY HIGHLIGHTS

The legal level of control (the level at which expenditures may not legally exceed appropriations) is at the department level. The most significant budget is that of the General Fund. Significant variations between the original and final budget amounts were as a result of increased funding from Grantor Agencies.

The County’s original budget and the final budget projected no excess of revenues over expenditures on the budgetary basis. The actual revenues and expenditures on the budgetary basis resulted in a deficit of $ 1,533,145

Actual revenues were $ 410,194 less than budgeted and actual expenditures were $ 46,592 less than budgeted and other financing sources/uses reflects a negative $ 710,401 variance resulting in the use of additional prior year resources of $ 240,637 more than anticipated. Actual transfers were greater than budgeted because of various unexpected expenditures.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

The County’s investment in capital assets for its governmental and business-type activities as of June 30, 2007 amounts to $ 43,694,781, net of accumulated depreciation of $ 22,850,196. This investment in capital assets includes land, site improvements, construction-in-progress, buildings and building improvements, equipment, andinfrastructure.

Infrastructure assets (roads, bridges, curbs, gutters, storm drains, and so forth) are items that have been heretofore not considered assets at all by this County, having been viewed as immovable, without a market in which they could be sold, without readily determinable current values, possessed of both erratic and unpredictable useful lives, subject to continual acts of God (and man), and of indeterminable salvage value, at best.

Total capital assets, net of additions, retirements and depreciation, increased $ 2,379,877 for governmental activities and increased $ 2,004,410 for business-type activities. Depreciation expense for the period was $ 2,094,407, of which $ 592,034 was for infrastructure. Additional information on Capital Assets can be found in Note 4 of the Notes to the Financial Statements, beginning on page 26.

Long-term Debt

As of June 30, 2007, Decatur County had $ 6,831,943 in outstanding long-term debt principal, of which $ 525,309 is due within one year. Of the debt due within oneyear $ 15,000 represents principal payments on the Series 1979 Water and Sewer Bonds which are secured by the revenues of the Water and Sewer Systems, $ 55,201 represents principal payments on a Georgia Environmental Facilities Authority Loan for water system improvements. Water and Sewer revenues in the upcoming fiscal year should be sufficient to service these debt service requirements. $ 253,151 of the debt due within one year represents current payments on capital leases for equipment used in the Landfillfund. Resources in the above-mentioned funds should be sufficient to service the debt

XIII

payments due in future years. The landfill fund has an accrued liability of $ 4,307,227for closure and post closure costs for the old landfill, which was closed in July 2006. The landfill fund also has an accrued liability of $ 271,727 for closure and post closure costs for the new landfill, which was opened during the fiscal year and is currently in use. The County is of the opinion that future net resources of the landfill fund will be able to service this liability.

The Commissioners annually adopts a balanced budget, sets the millage rate to provide general revenues to cover the costs of all county programs that are not covered by specific program revenues, maintains an adequate unreserved general fund balance, and adopts such financial policies as enhance their ability to maintain a safe and sound financial structure for the County. Additional information about the County’s long-termdebt can be found in Note 5 of the Notes to the Financial Statements, beginning on page28.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

The County’s elected and appointed officials considered many factors when setting the fiscal-year 2007 budget, including, but not limited to, tax rates and fees that will be charged for services. One of the most significant factors is the current condition of the economy. Although demand for an increase in services continues to rise, as does the expenses to fund services, the economy has not kept pace providing any additional funds. As development has occurred, the tax digest has also increased, and the county has been able to maintain satisfactory levels of services to its citizens while holding the millage rate relatively constant.

The commissioners actively participate in regional planning with State and Federal agencies, neighboring counties and municipalities within the county to maximize services to our citizens and to provide these services as economically reasonable as possible.

It is the desire of the Board of Commissioners to provide the highest level of service at the most economical cost to our citizens.

CONTACTING THE COUNTY’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the County’s finances and to show the County’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Decatur County Board of Commissioners, 203 West Broughton, Bainbridge, Georgia 39817 or call 229-248-3030.

DECATUR COUNTY, GEORGIAStatement of Net AssetsJune 30, 2007

ASSETSGovernmental

Activities Business-Type

Activities Total

Total Component

Units

Cash on hand and in banks 2,427,740$ 208,607$ 2,636,347$ 871,777$ Pooled cash 4,137,423 - 4,137,423 - Receivables (net, where applicable, of allowances for uncollectible): Taxes 98,609 - 98,609 - Accounts 386,503 658,702 1,045,205 8,453,224 Other 303,588 363,200 666,788 1,993,598

Internal balances (347,272) 347,272 - - Due from other governments 1,302,182 - 1,302,182 212,347 Inventory, at cost 15,775 - 15,775 570,374 Prepaid expenses 88,093 21,787 109,880 439,772 Restricted assets - 85,702 85,702 2,043,837 Land and construction in progress 3,226,822 107,128 3,333,950 801,412 Other capital assets, net of depreciation 24,965,948 15,394,883 40,360,831 14,453,650

Total Assets 36,605,411 17,187,281 53,792,692 29,839,991

LIABILITIESAccounts payable and accrued expenses 931,459 136,659 1,068,118 2,053,397 Advances from Health Department - - - - Accrued liabilities 430,417 39,131 469,548 4,129,450 Due to other governments - - - 89,687 Deferred revenue 275,072 - 275,072 - Long-term liabilities:

Portion due and payable within one year:Capital leases, notes and bonds payable 201,957 323,352 525,309 192,321

Portion due and payable after one year:Capital leases, notes and bonds payable 428,755 1,013,488 1,442,243 2,901,528

Current Portion of Revenue Bonds Notes PayableDue to Other Funds Accrued closure/postclosure costs - 4,578,954 4,578,954 - Compensated absences payable 285,437 - 285,437 33,649

Total Liabilities 2,553,097 6,091,584 8,644,681 9,400,032

NET ASSETS

Investment in Capital Assets, net of related debt 27,908,544 14,165,171 42,073,715 12,161,213 Restricted for:

Capital projects 1,020 - 1,020 - Other projects 415,546 - 415,546 - Other purposes-Retirement 1,047,524 85,702 1,133,226 462,074

Unrestricted 4,679,680 (3,155,176) 1,524,504 7,816,672

Total net assets 34,052,314$ 11,095,697$ 45,148,011$ 20,439,959$

The accompanying notes are an integral part of these financial statements.1

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DECATUR COUNTY, GEORGIABalance SheetGovernmental FundsJune 30, 2007

General Fund SPLOST 3 SPLOST 4

Other Governmental

Funds

Total Governmental

FundsASSETS

Cash and cash equivalents 3,870,349$ 1,314,578$ 1,041,391$ 270,648$ 6,496,966$ Taxes receivable, net 98,609 - - - 98,609 Due from other funds 3,855,734 - - - 3,855,734 Receivable from other governments 838,371 - 463,811 - 1,302,182 Other receivables 214,290 - - 475,801 690,091 Inventories 15,775 - - - 15,775 Prepaid expenses 88,093 - - - 88,093

Total assets 8,981,221 1,314,578 1,505,202 746,449 12,547,450

LIABILITIES AND FUND BALANCES

Liabilities:

Accounts payable 437,931$ -$ 401,422$ 21,658$ 861,011$ Due to other funds 195,582 1,314,578 2,472,959 59,495 4,042,614 Deferred revenue 54,894 - - 275,072 329,966 Other accrued expenses 141,794 - - 12,467 154,261 Other payables 280,833 - - - 280,833

Total liabilities 1,111,034 1,314,578 2,874,381 368,692 5,668,685

Fund balances:

Reserved for:Inventories 15,775 - - - 15,775 Retirement 1,047,524 - - - 1,047,524 Other purposes 37,814 - - - 37,814

Unreserved 6,769,074 - (1,369,179) - 5,399,895 Unreserved, reported in non-major:

Special revenue funds - - - 377,732 377,732 Capital projects funds - - - 25 25

Total fund balances 7,870,187 - (1,369,179) 377,757 6,878,765

Total liabilities and fund balances 8,981,221$ 1,314,578$ 1,505,202$ 746,449$ 12,547,450$

The accompanying notes are an integral part of these financial statements4

DECATUR COUNTY, GEORGIAReconciliation of the Governmental Funds Balance Sheetto the Statements of Net Assets

Total fund balance, governmental funds 6,878,765$

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

Capital assets used in governmental activities are not current financial resources and therefore are not reported in this fund financial statement, but are reported in the governmental activities of the Statement of Net Assets. 28,192,773

The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Assets. (157,969)

Some of the County's taxes will be collected after year-end, but are not available soon enough to pay for the current period's expenditures, and therefore are reported as deferred revenue in the funds. 54,894

Some liabilities, (such as Notes Payable, Capital Lease Contracts Payable, Long-term Compensated Absences, and Bonds Payable ), are not due and payable in the current period and are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Assets. (916,149)

Net Assets of Governmental Activities in the Statement of Net Assets 34,052,314$

June 30, 2007


DECATUR COUNTY, GEORGIAStatement of Revenues, Expenditures, and Changesin Fund Balances - Governmental Funds

General Fund SPLOST 3 SPLOST 4

Other Governmental

Funds

Total Governmental

Funds REVENUES

Property Taxes 6,028,007$ -$ -$ -$ 6,028,007$ Sales and miscellaneous taxes 3,965,695 - 2,398,242 58,917 6,422,854 Fees and fines 1,337,634 - - 43,108 1,380,742 Licenses and permits 90,722 - - - 90,722 Intergovernmental 204,334 - 1,300,996 876,273 2,381,603 Charges for services 2,971,187 - - 475,848 3,447,035 Investment earnings 338,027 - 71,509 9,641 419,177 Miscellaneous 221,595 - - - 221,595 Contributions and donations 2,786 - 250,000 1,845 254,631

Total revenues 15,159,987 - 4,020,747 1,465,632 20,646,366

EXPENDITURESCurrent:

General government 1,269,146 - - 11,041 1,280,187 Judicial 1,422,610 - - - 1,422,610 Public Safety 9,840,384 - - 1,108,908 10,949,292 Public Works 1,552,265 - - - 1,552,265 Health and welfare 551,978 - - - 551,978 Culture and recreation 278,025 - - 3,718 281,743 Housing and development 576,108 - - 252,988 829,096

Capital OutlayGeneral government 1,471 - - - 1,471 Public Safety 306,468 - 35,431 162,102 504,001 Public Works 368,184 - 2,617,896 333,393 3,319,473 Culture and recreation 9,999 - 455,998 - 465,997 Housing and development 57,772 - - - 57,772

Debt Service:Principal - - - 137,674 137,674 Interest and other charges - - - 4,535 4,535

Total Expenditures 16,234,410 - 3,109,325 2,014,359 21,358,094

Excess (deficiency) of revenues over expenditures (1,074,423) - 911,422 (548,727) (711,728) OTHER FINANCING SOURCES (USES)

Proceeds from capital leases 242,990 - - 147,997 390,987 Transfers in 700,998 - - 619,373 1,320,371 Transfers out (1,498,798) - (2,367,411) (122,883) (3,989,092)

Total other financing sources (uses) (554,810) - (2,367,411) 644,487 (2,277,734)

SPECIAL ITEMProceeds from sale of assets 8,907 - - - 8,907

Net change in fund balances (1,620,326) - (1,455,989) 95,760 (2,980,555)

Fund balances - beginning 9,490,513 - 86,810 281,997 9,859,320 Fund balances - ending 7,870,187$ -$ (1,369,179)$ 377,757$ 6,878,765$



DECATUR COUNTY, GEORGIAReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Net Activities

Net change in fund balances - total governmental funds: (2,980,555)$

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

Governmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as expense. The outlay is allocated over the assets useful life.This is the amount by which capital outlays $4,655,877 exceeded depreciation $1,552,359 in the current period.

Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. 8,374

Governmental funds report capital lease proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of capital lease principal as an expenditure. In contrast, the Statement of Activities reports this as a reduction of liabilities on the Statement of Net Assets. (253,313)

Governmental funds recognize expenditures for insurance using the purchases method. However, the statement of activities uses the consumption method and thus, only the amount of insurance benefits consumed are recognized. (84,850)

Internal service funds are used by management to charge the costs of certain activities, such as fleet maintenance and information technology, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. (157,969)

Change in net assets of governmental activities (364,795)$

3,103,518



DECATUR COUNTY, GEORGIAStatement of Net AssetsProprietary FundsJune 30, 2007

Business-Type Activities-Enterprise Funds

Water and Sewer

Natural Gas Airport

Ambulance Service Landfill Totals

Internal Service Fund

Assets

Current Assets:Cash on hand and in banks -$ 62,806$ 145,601$ 200$ -$ 208,607$ -$ Accounts receivable 38,741 40,752 9,327 283,290 286,592 658,702 - Other Receivables - - - - 363,200 363,200 - Prepaid insurance 7,117 - 8,640 872 5,158 21,787 - Due from other funds 347,272 - - - - 347,272 107,407

Total current assets 393,130 103,558 163,568 284,362 654,950 1,599,568 107,407

Noncurrent assets:Restricted assets:

Cash and investments, at cost 85,702 - - - - 85,702 - Property, plant & equipment (net of

accumulated depreciation) 3,483,644 69,987 3,631,928 303,041 8,013,411 15,502,011 - Total noncurrent assets 3,569,346 69,987 3,631,928 303,041 8,013,411 15,587,713 -

Total Assets 3,962,476 173,545 3,795,496 587,403 8,668,361 17,187,281 107,407

Liabilities

Current liabilities:Accounts payable 9,999 33,551 23,379 13,362 56,368 136,659 57,982 Accrued expenses 3,332 279 2,962 18,635 3,348 28,556 7,790 Due to other funds 75,353 30,387 30,613 15,134 48,115 199,602 - Accrued interest-G.E.F.A. 2,048 - - - - 2,048 - Note payable-G.E.F.A. 55,201 - - - - 55,201 - Capital leases - - - - 253,151 253,151 -

Total current liabilities 145,933 64,217 56,954 47,131 360,982 675,217 65,772

Current liabilities payable from restricted assets:Accrued revenue bonds interest 8,527 - - - - 8,527 - Revenue bonds 15,000 - - - - 15,000 -

Total current liabilities payable from restricted assets 23,527 - - - - 23,527 -

Noncurrent liabilities:Note payable-G.E.F.A. 73,624 - - - - 73,624 - Accrued closure/postclosure cost - - - - 4,578,954 4,578,954 - Capital leases - - - - 689,864 689,864 - Revenue bonds 250,000 - - - - 250,000 -

Total noncurrent liabilities 323,624 - - - 5,268,818 5,592,442 -

Total Liabilities 493,084 64,217 56,954 47,131 5,629,800 6,291,186 65,772

Net Assets

Investment in capital assets net of related debt 3,089,819 69,987 3,631,928 303,041 7,070,396 14,165,171 - Restricted for debt service 85,702 - - - - 85,702 - Unrestricted 293,871 39,341 106,614 237,231 (4,031,835) (3,354,778) 41,635

Total Net Assets 3,469,392$ 109,328$ 3,738,542$ 540,272$ 3,038,561$ 10,896,095$ 41,635$


DECATUR COUNTY, GEORGIAStatement of Revenues, Expensesand Changes in Fund Net AssetsProprietary Funds

Water and Sewer Natural Gas Airport



Operating RevenuesCharges for services 505,633$ 491,663$ 390,763$ 806,868$ 1,036,140$ 3,231,067$ 1,882,692$ Rental Income - - 17,422 - - 17,422 -

Total Operating Revenue 505,633 491,663 408,185 806,868 1,036,140 3,248,489 1,882,692

Operating ExpensesPersonal services 174,351 17,067 94,059 907,593 176,245 1,369,315 374,278 Services and supplies 294,443 419,881 432,039 212,558 391,672 1,750,593 1,466,779 Allocated administration cost 75,353 30,388 30,614 15,134 48,115 199,604 - Depreciation 80,617 4,899 206,523 39,948 210,062 542,049 - Closure post - closure cost - - - - 292,742 292,742 -

Total Operating Expense 624,764 472,235 763,235 1,175,233 1,118,836 4,154,303 1,841,057

Operating Income (Loss) (119,131) 19,428 (355,050) (368,365) (82,696) (905,814) 41,635

Nonoperating Revenues (Expenses)Intergovernmental - - 239,443 - - 239,443 - Interest earned 1,328 - - - 1,328 - Loss on disposal of assets - - (16,915) - - (16,915) - Interest expense (23,374) - - - (27,043) (50,417) -

Total Nonoperating Revenues (Expenses) (22,046) - 222,528 - (27,043) 173,439 -

Income before Contributed Capital (141,177) 19,428 (132,522) (368,365) (109,739) (732,375) 41,635

Net Income before Transfers (141,177) 19,428 (132,522) (368,365) (109,739) (732,375) 41,635

TransfersTransfers in 242,717 89,900 - 492,793 1,934,959 2,760,369 - Transfers out - - (815,286) - - (815,286) -

Net transfers in (out) 242,717 89,900 (815,286) 492,793 1,934,959 1,945,083 -

Change In net assets 101,540 109,328 (947,808) 124,428 1,825,220 1,212,708 41,635

Net assets-beginning of year 3,367,852 - 4,686,350 415,844 1,213,341 9,683,387 -

Net assets - end of year 3,469,392$ 109,328$ 3,738,542$ 540,272$ 3,038,561$ 10,896,095$ 41,635$

Business-Type Activities - Enterprise Funds



DECATUR COUNTY, GEORGIAStatement of Cash FlowsProprietary FundsFor the Fiscal Year Ended June 30, 2007


Water and Sewer

Natural Gas Airport



Cash flows from Operating Activities

Cash received from customers 553,336$ 451,190$ 575,055$ 694,505$ 787,463$ 3,061,549$ 1,882,692$ Cash payments to suppliers

for goods & services (290,184) (386,331) (335,872) (199,196) (384,351) (1,595,934) (1,516,204) Cash payments to employees for services (172,652) (17,067) (94,059) (898,238) (176,245) (1,358,261) (366,488)

Net cash provided (used) by operating activities 90,500 47,792 145,124 (402,929) 226,867 107,354 -

Cash flows from Noncapital Financing Activities

Transfers in (out) 242,717 15,014 (15,014) 492,793 1,934,959 2,670,469 -

Net cash provided (used) by noncapital financing activities 242,717 15,014 (15,014) 492,793 1,934,959 2,670,469 -

Cash Flows from Capital& Related Financing Activities

Acquisition & construction of capital assets (241,730) - (223,951) (89,864) (2,009,578) (2,565,123) - Principal paid on revenue bonds & loans (67,112) - - - - (67,112) - Interest paid on revenue bonds & loans (23,374) - - - - (23,374) - Contributed capital - - 239,442 - - 239,442 - Proceeds from Capital Lease - - - - 117,300 117,300 - Principal payments - capital lease - - - - (242,505) (242,505) - Interest paid on capital leases - - - - (27,043) (27,043) -

Net cash provided (used) from Capital and related financing activities (332,216) - 15,491 (89,864) (2,161,826) (2,568,415) -

Cash flows from Investing Activities

Interest income 1,328 - - - - 1,328 -

Net cash provided (Used) from investing activities 1,328 - - - - 1,328 -

Net increase (decrease)in cash & cash equivalents 2,329 62,806 145,601 - - 210,736 -

Cash & cash equivalents - beginning of year 83,373 - - 200 - 83,573 -

Cash & cash equivalents - end of year 85,702$ 62,806$ 145,601$ 200$ -$ 294,309$ -$

Displayed as:Cash on hand and in banks -$ 62,806$ 145,601$ 200$ -$ 208,607$ -$ Restricted assets:

Cash and investments, at cost 85,702 - - - - 85,702 -

Totals 85,702$ 62,806$ 145,601$ 200$ -$ 294,309$ -$


DECATUR COUNTY, GEORGIAStatement of Cash FlowsProprietary FundsFor the Fiscal Year Ended June 30, 2007


Water and Sewer

Natural Gas Airport



Reconciliation of operating income to net cash provided by operating activities

Operating income (loss) (119,131)$ 19,428$ (355,050)$ (368,365)$ (82,696)$ (905,814)$ 41,635$

Adjustments to reconcile operating income tonet cash provided by operating activities

Depreciation 80,617 4,899 206,523 39,948 210,062 542,049 -

Change in Assets & Liabilities:(Increase) decrease in accounts receivable 47,703 (40,752) 167,778 (112,363) (248,677) (186,311) - Increase (decrease) in accounts payable 4,259 33,551 13,309 13,362 38,931 103,412 57,982 Increase (decrease) in accrued expenses 1,699 279 (908) 9,355 261,132 271,557 7,790 (Increase) decrease in due from other funds 75,353 30,387 113,472 15,134 48,115 282,461 (107,407)

Net cash provided by operating activities 90,500$ 47,792$ 145,124$ (402,929)$ 226,867$ 107,354$ -$


DECATUR COUNTY, GEORGIAStatement of Fiduciary Assets and LiabilitiesAgency Funds

ASSETS

Cash 303,142$ Receivables 266,292

Total Assets 569,434$

LIABILITIES

Due to other agencies 417,935$ Due to others 151,499

Total Liabilities 569,434$

June 30, 2007


DECATUR COUNTY, GEORGIAStatement of Net AssetsComponent UnitsJune 30, 2007

Hospital Authority of Bainbridge, Decatur

County, GA Decatur County

Health Department March 31, 2007 June 30, 2007 Totals

AssetsCash 63,223$ 808,554$ 871,777$ Accounts receivable - less allowance

for uncollectible 8,451,305 1,919 8,453,224 Other receivables 1,468,071 - 1,468,071 Due from DHR & DCH - 212,347 212,347 Estimated third party payer settlements 100,000 - 100,000 Inventories 570,374 - 570,374 Prepaid expenses 439,772 - 439,772

Total current assets 11,092,745 1,022,820 12,115,565

Assets limited as to use:Internally designated for

capital improvements 1,145,897 - 1,145,897 Internally designated for self-insurance 872,940 - 872,940 By donor for nursing home 25,000 - 25,000

Total assets limited as to use 2,043,837 - 2,043,837

Property, plant and equipment, net 15,177,178 77,884 15,255,062

Notes receivable 425,527 - 425,527

Total assets 28,739,287$ 1,100,704$ 29,839,991$

Current liabilities:

Current installments of long-term debt 192,321$ -$ 192,321$ Accounts payable, trade 2,037,555 15,842 2,053,397 Accrued liabilities 3,556,729 3,738 3,560,467 Due to DHR & DCH - 89,687 89,687 Estimated third party payer settlement 568,983 - 568,983

Total current liabilities 6,355,588 109,267 6,464,855

Compensated absences - 33,649 33,649 Long-term debt, excluding current installments 2,901,528 - 2,901,528

Total liabilities 9,257,116 142,916 9,400,032

Net assets:Invested in capital assets, net of related debt 12,083,329 77,884 12,161,213 Restricted 44,333 417,741 462,074 Unrestricted 7,354,509 462,163 7,816,672

Total net assets 19,482,171 957,788 20,439,959

Total liabilities and net assets 28,739,287$ 1,100,704$ 29,839,991$


DECATUR COUNTY, GEORGIAStatement of ActivitiesComponent Units

Program RevenuesNet (Expenses) Revenues and

Changes in Net Assets

Activities: Expenses

Fees, Fines, and Charges for

Services

Operating Grants and

Contributions

Capital Grants and

Contributions Hospital

Authority Health

Department Total

Component units:

Hospital Authority of Bainbridge, Decatur County, Georgia 36,962,367$ 36,573,242$ -$ -$ (389,125)$ -$ (389,125)$ Decatur County Health Department 1,333,839 370,872 1,060,775 97,808 97,808

Total component units 38,296,206$ 36,944,114$ 1,060,775$ -$ (389,125)$ 97,808$ (291,317)$

General Revenues:

Sales taxes 597,388 - 597,388 Other 237,780 - 237,780

Total General Revenues 835,168 - 835,168

Change in Net Assets 446,043 97,808 543,851

Net assets - beginning 19,036,128 859,980 19,896,108

Net assets - ending 19,482,171$ 957,788$ 20,439,959$



NOTES TO THE FINANCIAL STATEMENTS

Decatur County, GeorgiaNotes to the Financial StatementsJune 30, 2007

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The accounting methods and procedures adopted by Decatur County, Georgia conformed to generally accepted accounting principles as applied to governmental entities. The following notes to the Financial Statements are an integral part of Decatur County, Georgia’s Financial Statements.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Financial Reporting Entity

Decatur County, Georgia was incorporated under the provisions of the basic Charter Act of the Laws of 1823 of the State of Georgia. The Board of Commissioners is the legislative body for Decatur County. There are six elected County Commissioners. There are six elected Constitutional Officers which are: Tax Commissioner, Clerk of Court, Judge of Magistrate Court, Judge of Probate Court, Coroner and Sheriff. The Board of Commissioners’ budget provides all funding used by the separate Constitutional Officers. The operations of the County as a whole, including Constitutional Officers, have been combined in these financial statements. As required by generally accepted accounting principles, as set forth in GASB Statement No. 14, “The financial reporting entity,” the financial statements of the reporting entity include those of Decatur County, Georgia (the primary government) and its component units. The component units discussed below are included in the County’s reporting entity because of the significance of their operational and financial relationship with the County.

COMPONENT UNITS

In conformity with generally accepted accounting principles, the Financial Statements of the following component units have been included in the Financial Reporting Entity.

Blended Component Unit

The Law Library is a legally separate entity governed by a Board of Trustees as established by State statutes. The County governing authority must furnish necessary space, lights, heat, and water, for the maintenance of the Law Library. All law books, reports, texts, and periodicals purchased by the Board of Trustees become property of the County. Because the Law Library provides services exclusively or almost exclusively to the primary government and it would be misleading to exclude it, the County has reported the Law Library as a blended component unit (a special revenue fund). Separate financial statements for the Law Library are not prepared.

Discretely Presented Component Units

The component unit column in the government-wide financial statements includes the financial data of the Decatur County Health Department and Hospital Authority of Bainbridge, Decatur County, Georgia. These component units are reported in a separate column to emphasize that they are legally separate from the county.

The County Board of Health provides health services to the citizenry of Decatur County, Georgia. The County Board of Health is a legally separate entity. The Board of Commissioners of Decatur County appoints a voting majority of the Board of Health in accordance with Georgia Laws O.C.G.A. 31-3-2. The County has the ability to impose its will on the Board of Health in accordance with Georgia Laws O.C.G.A. 31-3-14.

The Hospital Authority of Bainbridge, Decatur County, Georgia is a legally separate entity.


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The Authority was created by the City of Bainbridge and Decatur County, Georgia governing bodies on June 2, 1951, in accordance with provisions of State statutes (Chapter 99-15 of the 1933 Code of Georgia and amendments thereto). The County appoints a voting majority of themembers to the Board of the Hospital Authority. Complete Financial Statements for the Decatur County Board of Health and the Hospital Authority of Bainbridge, Decatur County, Georgia may be obtained at the offices of Decatur County, Georgia.

Related Organizations

The following is a list of related organizations for which Decatur County appoints one or more of the Board of Directors:

! Southwest Georgia Regional Development Center! Bainbridge-Decatur County Development Authority! Tri Rivers Development Authority! Library Board! Board of Family and Children’s Services! Board of Tax Assessors! Southwest Georgia Community Action Council! Decatur/Grady 911 Advisory Board

These organizations are not financially accountable to Decatur County because the County does not impose its will or have a financial benefit or burden relationship with the organization.

The County also appropriates funds to aid in the operation of several independently run non-profit organizations. These operations are as follows:

Sheriff's Rescue Unit Attapulgus Volunteer Fire DepartmentBlackjack Volunteer Fire Department Brinson Volunteer Fire DepartmentClimax Volunteer Fire Department Faceville Volunteer Fire DepartmentFowlstown Volunteer Fire Department Kendrick Volunteer Fire DepartmentMt. Pleasant Volunteer Fire Department 97 South Volunteer Fire DepartmentMental Health Center Family ConnectionsRecovery Volunteer Fire Department Stepping Stones, Inc.Bainbridge-Decatur County Chamber Bainbridge-Decatur County Arts Councilof Commerce

Joint Ventures

Decatur County, in conjunction with cities and counties in the fourteen (14) county Southwest Georgia area are members of the Southwest Georgia Regional Development Center (RDC). Membership in an RDC is automatic for each municipality and county in the state. The official Code of Georgia Section 50-8-34 (Georgia Planning Act of 1989) provides for the organizational structure of the RDC’s. Each county and municipality in the state is required by law to pay minimum annual dues to the RDC. The County paid annual dues in the amount of $14,396 to the RDC for the year ended June 30, 2007. The RDC Board membership includes one board appointed representative from each county and of each municipality. The County Board members and municipal Board members from the same county elect one member of the Board who is a resident (but not an elected or appointed official or employee of the County or municipality) to serve as the non-public Board member from a County.

The Georgia Planning Act of 1989 (O.C.G.A. 50-8-34) defines RDCs as “public agencies and


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instrumentalities of their members”. Georgia laws also provide that the member governments are liable for any debts or obligations of an RDC beyond its resources. (O.C.G.A. 50-8-39.1)

Complete financial statements for Southwest Georgia RDC can be obtained from the RDC office at P.O. Box 346, 30 West Broad Street, Camilla, Georgia 31730-0346 or from the county clerk’s office at the courthouse annex.

On April 6, 1993 Decatur County, Georgia and Grady County, Georgia entered into an agreement to implement a 911 system. The revenue and expenditures of operating the joint venture are recorded in each County’s accounting records based on the agreement. Separate financial statements are not issued for the E911 joint venture. Financial information can be obtained from Decatur County and Grady County, Georgia.

Decatur County, Georgia does not participate in any other joint venture arrangements.

B. Basic Presentation

Government-wide Statements: The statement of net assets and the statement of activities display information about the primary government (the County) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.

The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the County and for each function of the County’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees, fines and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the County’s funds, including its fiduciary funds. Separate statements for each fund category –governmental, proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. Operating expenses for enterprise funds include cost of sales and services, administrative expenses, and depreciation on capital assets. All expenses not meeting this definition are reported as nonoperating expenses.


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The County reports the following major governmental funds:

General Fund – This 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 anotherfund.

SPLOST Capital Projects Funds – This is a capital projects fund established to account for all special local options sales tax revenues as well as the specifically identified projects for which the SPLOST tax was established.

The County reports the following major enterprise funds:

Landfill Fund – This fund accounts for the operation and maintenance of the County’s landfill.

Ambulance Services Fund – This fund accounts for the operation and maintenance of the County’s Emergency Medical Services (ambulance service) for the county.

Water and Sewer Fund – This fund accounts for the operation and maintenance of the County’s Water and Sewer Facilities.

Airport Fund – This fund accounts for the operation and maintenance of the County’s Airport.

Gas Fund – This fund accounts for the operation and maintenance of the County’s Gas System.

The County reports the following fund types:

Internal Service Fund – This fund accounts for various services provided to other departments and funds of the county.

Agency Funds – These funds account for monies held by the County in a trustee capacity or as an agent on behalf of individuals, private organizations, other governments and/or other funds. Following are the agency funds of the County at June 30, 2007: Tax Commissioner, Probate Court, Clerk of Superior Court, and Magistrate Court.

C. Measurement Focus, Basis of Accounting

Government-wide, Proprietary and Fiduciary Fund Financial Statements – The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus. The government-wide, proprietary and fiduciary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Governmental Fund Financial Statements – Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The County considers


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all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Property taxes, sales taxes, franchise taxes, licenses and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.

Under the terms of grant agreements, the County funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the County’s policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues.

All governmental and business-type activities and enterprise funds of the County follow FASB Statements and Interpretations issued on or before November 30, 1989, Accounting Principles Board Opinions and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements.

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 government has elected not to follow subsequent private-sector guidance.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, and then unrestricted resources as they are needed.

D. Encumbrances

There were no material purchase orders, contracts, or other commitments at year-end, which should have been encumbered.

E. Cash and Investments

Cash and cash equivalents

The County’s cash and cash equivalents are considered to be cash on hand, demand deposits, and money market accounts, which are available on demand or have a maturity of three months or less. In addition, because the Georgia Fund 1 pooled cash is sufficiently liquid to permit withdrawal of cash at any time without prior notice or penalty, equity in the pool is also deemed to be a cash equivalent.

All of these accounts are considered cash equivalents for the purpose of the Statement of Cash Flows.

Investments

Investments are recorded at cost plus accrued interest, which approximates market value. See Note 3 for further information regarding investments.

F. Receivables and Payables

All trade and property tax receivables are shown net of an allowance for uncollectibles. Notes receivable in major governmental funds consist of a revolving loan to a local industry associated with a CDBG-EIP grant.


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G. Capital Assets

Capital assets, which include land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond one year are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Infrastructure assets are long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems. Buildings, except these that are an ancillary part of a network of infrastructure assets, will not be considered infrastructure assets. Infrastructure assets acquired prior to fiscal years ended after June 30, 1980 are not reported and will not be reported until fiscal year ended June 30, 2007. Infrastructure assets acquired subsequent to June 30, 2002 are reported. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.

The standard capitalization thresholds for capitalizing assets for each major class of assets established by the Decatur County Board of Commissioners are detailed below:

Class of Capitalization ControlAsset Threshold Threshold

Land/Land Improvements Capitalize All AllBuilding/Building Improvements $ 5,000 $ 500Facilities and Other Improvements 5,000 500Infrastructure 100,000 100,000Equipment 5,000 500Furniture 5,000 500Vehicles, Boats, and Aircraft 5,000 500Software (developed or purchased) 5,000 500Library Books/Materials (collections) Capitalize All AllWorks of Art/Historical Treasures Capitalize All AllLeasehold Improvements 5,000 500

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, net of related interest earned, is included as part of the capitalized value of the assets constructed. There were not any constructed projects with capitalized interest in the business-type activities for the year ended June 30, 2007.

Capital assets are depreciated over their estimated useful lives unless they are inexhaustible. Inexhaustible assets such as land improvements are not depreciated.

Depreciation is reported in the government-wide statement of activities; the proprietary fund statement of revenues, expenses and changes in fund net assets; and the statement of changes in fiduciary net assets.


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Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows:

Assets Class Estimated Useful Lives

Buildings/Building Improvements 20-50 years Facilities and Other Improvements 10-50 yearsInfrastructure 20 yearsEquipment 3-12 yearsFurniture & Fixtures 7 yearsVehicles 6-12 years

H. Inventories and Prepaid Items

Primary Government

All inventories are valued at cost using the first-in/first-out (FIFO) method. The cost of governmental fund-type inventories are recorded as expenditures when purchased (the purchase method) at the individual fund level. Inventories are recorded using the consumption method for proprietary fund-type inventories at the fund level. For governmental and business-type activities in the government-wide financial statements inventories are reported using the consumption method.

Certain payments to vendors reflect cost applicable to future accounting periods and are reported as prepaid items for proprietary-type funds and in the government-wide financial statements and business-type activities.

I. Budget and Budgetary Accounting

Listed below is a summary of the procedures followed by the County in establishing the budgetary data reflected in the budgetary comparison schedule:

At least three months prior to year end the County Administrator and Department Heads begin work on the proposed operating budget for the coming fiscal year;

Approximately thirty days prior to year end, the proposed operating budget is submitted to the County Commissioners. The budget was adopted on July 23, 2006. The budget was amendedon February 13, 2007 and September 5, 2007. The budget includes proposed expenditures and the means of financing them;

Public Hearings are conducted to obtain taxpayer comments;

The budget is legally enacted through passage of a resolution;

Department Heads are restricted to budgeted amounts by line item;

The County adopts a general fund budget that provides for most of the appropriations of the governmental activities of the County. The County adopts budgets for Special Revenue and Debt Service funds as required by Georgia law. These budgets are not adopted on a basis consistent with generally accepted accounting principles. Budgets are prepared for the enterprise funds as a management control device. Budgets for Capital Projects are prepared


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for the project life rather than for the current fiscal year. Project appropriations for these budgets do not lapse at the end of each fiscal year but rather at the conclusion of the project.

All appropriations (except Capital Project Funds’ appropriations) lapse at year-end. There were no material purchase orders, contracts, or other commitments, which were encumbered, because the County does not use encumbrance accounting.

Capital Projects Funds use project budgeting.

Fiduciary type funds are agency funds and budgets are not prepared for these funds.

The legal level of budgetary control is at the department level.

J. Compensated Absences

Annual Leave – All full-time, regular employees earn annual leave on a monthly basis, in proportion to the length of continuous employment. After completion of one month of employment, annual leave is accrued as follows:

Year of Service Rate of Accrual/Days Accrual

0-1 3.33 Hrs/Month1-9 6.66 Hrs/Month/10 (24 Hr. Shifts - 4 Shifts/Year)

10-14 10.0 Hrs/Month/15 (24 Hr. Shifts - 5 Shifts/Year)15-24 13.33 Hrs/Month/20 (24 Hr. Shifts - 7 Shifts/Year)

25 Plus 16.66 Hrs/Month/25 (24 Hr. Shifts - 8 Shifts/Year)

Full time employees who have less than 12 months of continuous employment with the County may carry forward any unused annual leave, one time only.

Full time employees who have more than 12 months up to 5 years of continuous employment with the county must take annually at least 40 hours of personal leave or lose it. Employees with more than 5 years of continuous employment must take annually at least 80 hours of annual leave or lose it.

Any employee having leave available after taking the required minimum may cash in leave for pay or accumulate for future years.

Annual leave may be accumulated and carried over to the next year provided that the maximum accrued leave does not exceed 50 days or 400 hours. At the end of each year, annual leave hours above 400 will be forfeited.

Sick Leave - All full time and acting full time employees earn eight hours of sick leave per month or ninety-six hours per year. Eligible employees with less than ten years continuous service may accumulate up to three hundred twenty hours of sick leave. Eligible employees with more than ten years of continuous service may accumulate up to four hundred eighty hours of sick leave. Full time employees who retire under the Decatur County Retirement Plan will receive payment for all of their remaining accrued sick leave. Accrued sick leave is forfeited on termination of employment. Each December employees may apply for compensation of one-half of their unused annual accrual of sick leave.


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Holiday Leave – When a holiday falls on a Saturday, it is observed on the Friday before; if it falls on a Sunday, it is observed the following Monday. The employees birthday holiday must be used within 30 days of the date of occurrence or it will be forfeited.

Uninterrupted continuation of service is required of some county departments. Consequently, the work schedule of some employees in these departments may necessitate that they work on authorized holidays.

Employees who are scheduled to work on authorized holidays shall be paid eight (8) hours of holiday pay, (12) hours for 24-hour shift workers, plus the number of hours actually worked including any overtime pay earned.

Employees who are scheduled to be off on an authorized holiday shall be paid eight (8) hours, (12) hours for 24-hour shift workers, of holiday pay for that date.

Accumulated sick pay benefits have not been recorded as a liability because these benefits are paid only upon the illness of an employee or at the employee’s option and the amount of such payments cannot be reasonably estimated. It is highly unlikely that the liability would be significant to the financial statements of the county.

K. Restricted Assets

Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net assets because their use is limited by applicable bond covenants. The "revenue bond debt service" account is used to segregate resources accumulated for debt service payments over the next twelve months. The "revenue bond retirement" account is used to report resources set aside to make up potential future deficiencies in the revenue bond current debt service account. The "revenue bond contingency (renewal and extension)" account is used to report resources set aside to meet renewals and replacements.

L. Terminal Annual Leave

Employees eligible for annual leave will be paid 100% of any unused leave upon termination of employment, but not to exceed the number of annual leave days entitled to for that respective year. Accumulated terminal leave benefits have not been recorded as a liability because these benefits are only paid upon an employee’s termination and the amount of such benefits cannot be reasonably estimated.

M. Ambulance Service Funds - Bad Debts

Receivables of the Ambulance Service Fund, which are more than six months old, are considered uncollectible. This policy was adopted by the County due to Medicare payment policies and regulations and past historical collection data of the Ambulance Service Fund receivables.


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NOTE 2- DEPOSITS AND INVESTMENTS

Primary Government

All bank balances of deposits as of the balance sheet date are entirely insured or collateralized with securities held by the County or by its agent in the County’s behalf.

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 established by Georgia law; repurchase agreements; and obligations of other political subdivisions of the State of Georgia; and additionally, certificates of deposits, now accounts and money market accounts of banks which have deposits insured by the Federal Deposit Insurance Corporation; provided, however, that portion of such investment shall be secured by direct obligations of the State of Georgia or the United States which are of a par value equal to 110 percent of funds on deposit at the institution.

The County’s investment policy is to invest only in the type of investments, which are legally authorized by state statues. As of June 30, 2007 all funds invested by the County were in the local government investment pool and identified in the financial statements as pooled cash.

The County participates in the State of Georgia Local Government Investment pool - “Georgia Fund 1”. The Georgia Fund 1 state investment pool is not registered with the Securities and Exchange Commission (“SEC”), but does operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Accordingly, the County’s investments in the Georgia Fund 1 have been determined based on the pool’s share price.

“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, Georgia Fund 1 operates in manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and 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.

Investments (Pooled Cash) are recorded at cost plus accrued interest, which approximates market value.

The County had $ 4,137,423 invested in the State of Georgia Local Government Investment Pool (Georgia Fund 1) as of June 30, 2007, Georgia Fund 1 is managed under the policies included in Georgia Law (O.C.G.A. 36-83-4).


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The entire portfolio, including the County’s pro-rata portion, consists of collateralized certificates of deposit and government or governmental agency securities owned outright and under agreement to resell. The title to all investments, including collateral pledged to secure certificates of deposit, is held in the custody of the Director, Fiscal Division, Office of Treasury and Fiscal Services, State of Georgia in accordance with Georgia law. Since these investments are not evidenced by securities that exist in physical or book entry form; they are not classified by category or credit risk. Additionally, no indication of the level of risk has been provided because these investments are in pools managed by other governments or by other agents.

NOTE 3 - Property Tax Calendar

For fiscal year ending June 30, 2007, property taxes were levied on October 21, 2006, and were due and payable at that time. All unpaid taxes levied on October 21, 2006, became delinquent on December 20, 2006, and attached as an enforceable lien on property as of that date.

Property tax revenues are recognized in the fiscal period for which they are levied and when they become available.

Property tax revenues are considered available when collected within the current period or expected to be collected soon enough thereafter to pay liabilities of the current period. Such time thereafter does not exceed 60 days.



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NOTE 4 – Capital Assets

Capital asset activity for the year ended June 30, 2007 was as follows:

Primary Government

Governmental Activities:

Beginning Balances-Restated Increases Decreases Ending Balances

Capital assets not being depreciated:Land 1,782,314$ -$ -$ 1,782,314$ Land under roads 1,254,366 - - 1,254,366 Construction in progress 552,087 154,299 516,244 190,142

Total capital assets not being depreciated 3,588,767 154,299 516,244 3,226,822

Capital assets being depreciated:Automobiles 1,561,638 228,869 - 1,790,507 Buildings 19,531,916 440,021 - 19,971,937 Infrastructure 11,213,663 3,099,169 - 14,312,832 Camera/security equipment 26,096 7,623 - 33,719 Computers 25,955 147,997 - 173,952 Capital asset software 52,341 - - 52,341 Cooler 8,820 - - 8,820 Fire equipment 2,299,776 - - 2,299,776 Food service equipment 66,265 - - 66,265 Fixtures 148,534 - - 148,534 Heavy equipment 2,826,579 445,691 186,866 3,085,404 Laundry equipment 48,210 24,049 - 72,259 Machinery 207,010 29,861 - 236,871 Radios 6,255 - - 6,255 Miscellaneous equipment 15,155 - - 15,155 Office equipment 548,889 6,600 - 555,489

Total capital assets being depreciated 38,587,102 4,429,880 186,866 42,830,116 Less accumulated depreciation for:

Automobiles 867,918 205,967 - 1,073,885 Buildings 4,676,769 423,580 - 5,100,349 Infrastructure 7,106,938 409,097 - 7,516,035 Camera/security equipment 10,432 3,315 - 13,747 Computers 12,287 6,795 - 19,082 Capital asset software 2,663 16,760 - 19,423 Cooler 2,426 882 - 3,308 Fire equipment 1,616,665 137,612 - 1,754,277 Food service equipment 33,287 6,627 - 39,914 Fixtures 114,723 19,822 - 134,545 Heavy equipment 1,571,036 244,881 51,166 1,764,751 Laundry equipment 11,647 8,136 - 19,783 Machinery 135,618 17,493 - 153,111 Radios 1,826 626 - 2,452 Miscellaneous equipment 2,446 1,010 - 3,456 Office equipment 196,295 49,755 - 246,050 Total Accumulated Depreciation 16,362,976 1,552,358 51,166 17,864,168 Governmental activities capital assets being depreciated, net 25,812,893$ 3,031,821$ 651,944$ 28,192,770$


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Beginning Ending Balance - Restated Increases Decreases Balance

Capital assets not being depreciated:

Land 107,128$ -$ -$ 107,128$ Construction in Progress 5,099,442 - 5,099,442 -

Total capital assets not being depreciated 5,206,570 - 5,099,442 107,128

Capital Assets being depreciated:

Buildings 1,988,604 - 2,245 1,986,359 Structures & Improvements 7,177,685 6,859,537 - 14,037,222 Machinery & Equipment 2,814,336 813,542 234,371 3,393,507 Automobile Equipment 1,012,510 108,600 181,589 939,521 Office Furniture & Fixtures 25,750 - 1,452 24,298

Total capital assets being depreciated: 13,018,885 7,781,679 419,657 20,380,907

Less accumulated depreciation for:

Buildings 1,009,931 65,503 1,909 1,073,525 Structures & Improvements 1,519,661 182,937 - 1,702,598 Machinery & Equipment 1,314,936 255,825 110,428 1,460,333 Automobile Equipment 858,770 37,131 170,090 725,811 Office Furniture & Fixtures 24,556 653 1,452 23,757

Total accumulated depreciation 4,727,854 542,049 283,879 4,986,024

Business-type activities capitalassets being depreciated, net 8,291,031 7,239,630 135,778 15,394,883

Business-type activities capitalassets, net 13,497,601$ 7,239,630$ 5,235,220$ 15,502,011$

Business-type Activities:

Beginning capital asset balances have been restated because $ 1,412,550 in capital assets with $ 688,912 of accumulated depreciation was moved from business-type funds to the general fund.

In addition, beginning governmental capital assets were increased for infrastructure projects back to 1980 forward to comply with GASB 34 in the amount of $ 9,961,392 and accumulated depreciation of $ 7,016,251. In addition, see note 17.


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Depreciation expense was changed to the governmental functions as follows:

General government $ 214,476 Judicial 1,853 Public Safety 589,132 Public Works 680,149 Health & Welfare 18,180 Housing & Development 47,818 Recreation 750

Total governmental depreciation expense: $ 1,552,358

NOTE 5 – Long-term Obligations

In 1980, the County started repaying $505,000 borrowed at a rate of 5.8 % for upgrades to the water and sewer facilities. Below is a summary of future maturities of long-term notes payable to GEFA in the Water and Sewer Fund.

On August 10, 1976, Decatur County adopted an ordinance authorizing the issuance of Series 1979 Bonds totaling $505,000 at a rate of 5%. The purpose of these bonds was in part, to finance the cost of the improvements to the Water and Sewer System of the Industrial Park. The Series 1979 Bonds are dated December 19, 1979; the principal becoming due serially on December 1st of each year, and interest is payable on December 1st of each year.

The Series 1979 Bonds are secured by revenues of Water and Sewer Systems of Decatur County. The County may issue additional revenue bonds, ranking on parity as to lien on net revenues of the system, and other restrictions as outlined in Article II of the Bond Resolution.



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Long-term Obligation Activity

Changes in long-term obligations for the year ended June 30, 2007 are as follows:

July 1, 2006 Increases Decreases June 30, 2007Due within One Year

Governmental activities:

Capital Lease Obligations 377,398$ 390,987$ 137,673$ 630,712$ 201,957$ Compensated absences 285,437 - - 285,437 -

Sub-total-Governmental activities 662,835 390,987 137,673 916,149 201,957

Business-type activities:

Water and Sewer Fund

Revenue Bonds Payable 280,000 - 15,000 265,000 15,000 GEFA Note Payable 180,937 - 52,112 128,825 55,201

Sub-totals-Water & Sewer Fund 460,937 - 67,112 393,825 70,201

Landfill Fund

Accured closure/postclosure cost-Old Landfill 4,319,789 21,015 33,577 4,307,227 - Accured closure/postclosure cost-New Landfill - 271,727 - 271,727 - Captial Leases 705,020 480,500 242,505 943,015 253,151

Sub-total-Landfill Fund 5,024,809 773,242 276,082 5,521,969 253,151

Sub-total-Business-type activities 5,485,746 773,242 343,194 5,915,794 323,352

Total all long-term debt 6,148,581$ 1,164,229$ 480,867$ 6,831,943$ 525,309$

The assets acquired through capital leases are as follows:

Asset:Governmental

Activities Landfill Fund

Machinery and equipment 1,839,085$ 2,065,598$ Less: Accumulated depreciation (698,895) (699,679)

Total 1,140,190$ 1,365,919$


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NOTE 5 – Long-term Obligations (continued)

Debt service requirements on long-term debt at June 30, 2007 are as follows:

Governmental ActivitiesCapital Leases

Year Ending June 30 Principal Interest Totals

2008 201,957$ 21,131$ 223,088$ 2009 163,860 15,155 179,015 2010 151,872 8,358 160,230 2011 89,381 2,647 92,028 2012 22,845 356 23,201 2013 797 6 803

Totals 630,712$ 47,653$ 678,365$

Business-type activitiesCaptial Leases

Year Ending June 30 Principal Interest Totals

2008 253,151$ 30,193$ 283,344$ 2009 293,334 22,031 315,365 2010 222,952 11,730 234,682 2011 147,988 7,821 155,809 2012 25,590 618 26,208

Totals 943,015$ 72,393$ 1,015,408$

GEFA Notes PayableYear

Ending June 30 Principal Interest Totals

2008 55,201$ 6,285$ 61,486$ 2009 58,472 3,014 61,486 2010 15,152 220 15,372

Totals 128,825$ 9,519$ 138,344$


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Revenue BondsEnding June 30 Principal Interest Totals

2008 15,000$ 13,250$ 28,250$ 2009 15,000 12,500 27,500 2010 20,000 11,750 31,750 2011 20,000 10,750 30,750 2012 20,000 9,750 29,750 2013 20,000 8,750 28,750 2014 20,000 7,750 27,750 2015 25,000 6,750 31,750 2016 25,000 5,500 30,500 2017 25,000 4,250 29,250 2018 30,000 3,000 33,000 2019 30,000 1,500 31,500

Totals 265,000$ 95,500$ 360,500$



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The following is a summary of capitalized lease obligations:

Governmental Activities:

PurposeOriginal Amount

Payment Amounts

Interest Rate Payments

Minimum Lease

Payments

Net Present Value

Regions Equipment Finance Corp. Lease-Purchase Contract on 2 2007 Mack Dump Trucks SN 1MAT13C27M002421 &1MAT13C07M002420 199,990$ 4,531$ 4.17% 48 217,480$ 199,990$

Regions Equipment Finance Corp. Lease-Purchase Contract on E-911 Equipment 147,977$ 4,371$ 4.02% 36 157,347$ 147,997$

Caterpillar Financial Services Corporation Lease-Purchase Contract on Medel 140h Motor Grader SN APM02475 186,633$ 3,522$ 5.00% 60 137,359$ 126,695$

Caterpillar Financial Services Corporation Lease-Purchase Contract on Medel 12H Motor Grader, SN AMZ01331 43,000$ 801$ 4.45% 60 48,040$ 43,000$

Caterpillar Financial Services Corporation Lease-Purchase Contract on Model 12H Motor Grader SN 2ZK08045 64,548$ 1,189$ 4.00% 60 15,467$ 15,112$

Caterpillar Financial Services Corporation Lease-Purchase Contract on a 140 H Motor Grader SN CCA00520 70,944$ 1,294$ 3.75% 60 28,500$ 27,501$

Caterpillar Financial Services Corporation Lease-Purchase Contract on Model 12H Cat Motor Grader 27,824$ 513$ 4.05% 60 13,851$ 13,231$

E-One, Inc. Lease-Purchase Contract on E-One Traditional Pumper 138,650$ 50,380$ 4.44% 3 50,380$ 48,238$

Caterpillar Financial Services Corporation Lease-Purchase Contract on Model 12H Cat Motor Grader SN 8MN00944 55,890$ 1,011$ 4.00% 60 9,138$ 8,948$

Totals 935,456$ 677,562$ 630,712$


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Business-type activities:

Landfill Fund

PurposeOriginal Amount

Payment Amounts

Interest Rate Payments

Minimum Lease

Payments Net Present

Value

Caterpillar Financial Services Corporation Lease-Purchase Contract on 324DL Caterpillar Excavator LAB00394 117,300$ 2,184$ 4.45% 60 131,048$ 117,300$

Regions Equipment Finance Corp. Lease-Purchase Contract on 2-JD 300D Off Road Trucks 363,200$ 9,309$ 4.17% 42 390,978$ 363,200$

First Continental Leasing a division of BancorpSouth Bank Lease-Purchase Contract on Cat 623 G CESO9545 206,892$ 3,820$ 4.10% 60 183,325$ 165,587$

Caterpillar Financial Services Corporation Lease-Purchase Contract on 623G Caterpillar Scraper 316,156$ 5,769$ 3.75% 60 172,755$ 165,162$

Caterpillar Financial Services Corporation Lease-Purchase Contract on Cat. Truck Type Tractor 134,884$ 2,461$ 3.75% 60 63,162$ 61,420$

Caterpillar Financial Services Corporation Lease-Purchase Contract on D6R Caterpillar Truck Type Tractor 129,343$ 2,397$ 4.25% 60 74,148$ 70,346$

Totals Business-Type Activities 1,267,775$ 1,015,416$ 943,015$

Total All Activities 2,203,231$ 1,692,978$ 1,573,727$



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NOTE 6 – INTERFUND BALANCES AND ACTIVITIES

Balances Due to/From Other Funds

Major Funds

Interfund Receivable (Due From)

Interfund Payable ( Due To)

Governmental FundsGeneral Fund 3,787,537$ 195,582$ SPLOST Capital Projects Fund # 3 - 1,314,578 SPLOST Capital Projects Fund # 4 - 2,472,959

3,787,537 3,983,119 Proprietary Funds

Natural Gas Fund - 30,387 Airport Fund - 30,613 Ambulance Services Fund - 15,134 Landfill Fund - 48,115 Water & Sewer Fund 347,272 75,353

347,272 199,602 Non-Major Funds

E-911 SRF - 59,495 Internal Service Fund 107,407 -

107,407 59,495

Totals 4,242,216$ 4,242,216$

Entity-wide Inter-fund Balance Reconciliation

Governmental FundsReceivables-Net of amounts due from Agency Funds 3,894,944$ Payables (4,042,614) Netting of Internal Service Fund (199,602)

Internal Balances- Governmental Activities (347,272)$

Business-Type FundsBusiness-type FundsReceivables 347,272$ Business-Type FundsPayables (199,602) Netting of Internal Service Fund 199,602

Internal Balances- Business Type Activites 347,272$

Due to/from balances is the result of short term borrowing between the funds. It is the County’s intent to repay these interfund balances during the next fiscal year.


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Transfers to/from Other Funds

Transfers to/from funds at June 30, 2007 consisted of the following:Transfer In

Transfer Out

Statement of Activities-

GovernmentalGeneral

FundNon-major

Governmental Major

Enterprise Total

General Fund -$ -$ 619,373$ 879,425$ 1,498,798$SPLOST CPF Ref, # 4 - 700,998 - 1,666,413 2,367,411 Major - Enterprise Funds 723,638 * - - 76,634 800,272 Non-major Governmental - - - 122,883 122,883

Totals 723,638$ 700,998$ 619,373$ 2,745,355$ 4,789,364$

Governmental Activities:Total Transfer Out 3,989,092$ Less: Transfer to

Major Governmental (700,998) Non-major Governmental (619,373) Business Type Activities (723,638) *

Net Transfers Out 1,945,083$

Business-Type Activities:Total Transfers In (2,745,355)$ Less: Transfer to

Governmental Activities 723,638 *Business-Type Activities 76,634

Net Transfers In (1,945,083)$

*Transfer of capital assets from enterprise fund to governmental funds. No transfer into the general fund is recorded because under the modified-accrual basis of accounting capital assets are expenses and not placed on the balance sheet. The transfer in, is reported on the entity-wide statement because under the full accrual basis of accounting, capital assets are placed on the balance sheet.

Transfers from the Gas Fund in the amount of $ 723,638 represent the net book value of capital assets being transferred to the Government-wide Statement of Net Assets.

Transfers from the Gas Fund in the amount of $ 74,886 represent the net book value of capital assets being transferred to the Airport Fund.

Transfers from the Gas Fund in the amount of $ 1,748 represent the net book value of capital assets being transferred to the Water and Sewer Fund.

Transfers from the One GA capital projects fund in the amount of $ 122,883 represent capital expenditures being moved to the Water and Sewer Fund to be capitalized and depreciated.


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Transfers from the SPLOST 4 Capital Projects Fund in the amount of $ 700,998 representvarious intergovernmental revenues sources reported in the capital project fund but deposited into the separate general fund pooled cash account.

All other transfers were made for routine and ordinary operating purposes.

NOTE 7 - RETIREMENT PLANS

Primary Government

Effective October 1, 1994, the County participates in the following Defined Benefit Pension Plan:

Plan Description

The County sponsors the Association County Commissioners of Georgia Restated Pension Plan for Decatur County Employees (The Plan), which is a defined benefit pension plan.

The Plan provides retirement, disability and death benefits to plan participants and beneficiaries. The Plan, through execution of an adoption agreement, is affiliated with the Association of County Commissioners of Georgia Second Restated Benefit Plan (The ACCG Plan), an agent multiple-employer pension plan administered by Pension Service Company. The ACCG, in its role as the Plan Sponsor, has the sole authority to amend the provisions of The ACCG Plan, as provided in Section 19.03 of The ACCG Plan document. The County has the authority to amend the adoption agreement, which defines the specific benefit provisions of The Plan, as provided in Section 19.02 of the ACCG Plan document. Pension Service Company issues a publicly available financial report that includes financial statements and required supplementary information for ACCG. That report may be obtained by writing to Pension Service Company, 1100 Circle 75 Parkway, Suite 300, Atlanta, Georgia 30339 or by calling (770)-563-9368. All full-time employees are eligible to participate in the Plan after completing three years of service. Benefits vest after five years of service. Participants become eligible to retire with unreduced benefits at age 65 with 3 years of plan participation. Early retirement options are available at ages 60, with 10 years of service and 3 years of participation and 55 with 25 years of service and 3 years of participation. Upon eligibility to retire, participants are entitled to an annual benefit in the amount of 1.0% of average annual compensation plus $36 for each year of service payable as a life annuity. Compensation is averaged over a five-year period prior to retirement or termination. The Plan also provides benefits in the event of death or disability. These benefit provisions were established by an adoption agreement executed by the County Board of Commissioners.


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As of January 1, 2007, the number of participants was as follows:Retirees & beneficiaries receiving benefits 29Terminated plan participants entitled to future benefits 58Active employees participating in the plan 165

Total number of plan participants 252

Funding Policy

The County is required to contribute an actuarially determined amount annually to the Plan’s trust. The contribution amount is determined using the actuarial methods and assumptions approved by the ACCG Plan trustees and must satisfy the minimum contribution requirements contained in the State of Georgia statutes.

C. Annual Pension Cost

The County’s annual pension cost and net pension obligation for the pension plan for the current year were determined as follows:

Derivation of Net Pension Obligation: 2007 2006

Net Pension Cost as of Beginning of Prior Year (161,475)$ (104,453)$

Annual Pension Cost for Prior Year 439,486 431,452 Actual Contributions to Plan for Prior Year 480,556 488,474 Increase in Net Pension Obligation (41,070) (57,022)

Net Pension Obligation as of Beginning of the Year (202,545)$ (161,475)$

Derivation of Annual Pension Cost:

Annual Required Contribution 464,165$ 438,774$ Interest on Net Pension Obligation (16,204) (12,918) Amortization of Net Pension Obligation 17,096 13,630 Annual Pension Cost 465,057$ 439,486$

Summary of Valuation Results and Basis of Valuation:

(A) Actuarial Valuation Date: January 1, 2007(B) Expected Employee Contributions: $ 0(C) Required County Contribution: $ 464,165(D) County’s Annual Pension Cost: $ 465,057(E) Funding Method: Projected Unit Credit(F) Actuarial Value of Plan Assets: Equals market value of assets, contributions receivable(G) 8.0% per annum on investments (net of administrative expenses)(H) 4.5% per annum projected salary increases (I) 3.0% per annum inflation(J) The unfunded actuarial accrued liability is being amortized as a level dollar amount on a closed basis.


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(K) Actuarial Cost Method: Projected Unit Credit(L) Post Retirement Benefit Increases: N/A(M) Remaining Amortization Period* 10 Years

* Represents the estimated amortization period for all unfunded liabilities combined into one amortization base.

D. Summary of Plan Asset Matters and Accounting Policies

The Plan’s financial statements are prepared on an accrual basis, modified to include unrealized gains or losses on marketable securities owned by the Plan and increments in the cash value of death benefits.

Investments in securities are valued at current market prices. The trust fund is invested, approximately, in 60% equities and 40% fixed income securities on a cost basis.

Plan member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable.

Plan assets do not include any loans, notes, bonds, or other instruments or securities of the County or related parties.

Trend Information for the Plan

Fiscal Year Beginning

Annual Pension Cost (APC)

Actual County Contribution

Percentage of APC

ContributedNet Pension Obligation

January 1, 2007 465,057$ N/A N/A (202,545)$ January 1, 2006 439,486$ 480,556$ 109% (161,475)$ January 1, 2005 431,452$ 488,474$ 113% (104,453)$ January 1, 2004 352,264$ 405,281$ 115% (51,436)$ January 1, 2003 299,201$ 350,637$ 117% -$ January 1, 2002 263,784$ 263,784$ 100% -$ January 1, 2001 232,901$ 232,901$ 100% -$ January 1, 2000 227,298$ 227,300$ 100% -$ January 1, 1999 209,901$ 209,901$ 100% -$ January 1, 1998 189,630$ 189,630$ N/A N/A

Other Retirement Plans

Probate Judges Retirement Fund of Georgia

The Probate Judge is covered under a pension plan, which requires that certain sums from marriage licenses and fines or forfeitures be remitted to the pension plan before the payment of any costs or other claims.


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Clerk of Superior Court Retirement Fund

The Clerk of Superior Court is covered under a pension plan, which requires that certain sums from fees and fines or forfeitures be remitted to the pension plan before the payment of any costs or other claims.

Sheriff’s Retirement Fund/Peace Officer’s Annuity and Benefit Fund

The Sheriff and sheriff deputies are covered under separate pension plans, which require that certain sums from fines or bond forfeitures be remitted by the Probate Judge, or Clerk of Superior Court to the pension plans before the payment of any costs or other claims.

NOTE 8 - RISK MANAGEMENT

Primary Government

The County is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters, for which the County carries commercial insurance. The basis for estimating the liabilities for unpaid claims is “IBNR” established by an actuary.

The County has not compiled a record of the claims paid up to the applicable deductible for the prior or current fiscal year. The County is not aware of any claims, which the County is liable for (up to the applicable deductible) which were outstanding and unpaid at June 30, 2007. No provisions have been made in the financial statements for the year ended June 30, 2007 for any estimate of potential unpaid claims.

Pursuant to Title 34, Chapter 9, Article 5 of the Official Code of Georgia Annotated, Decatur County became a member of the Association of County Commissioners Workers’ Compensation Self-Insurance Fund. The effective date of membership was January 1, 1993. The liability of the fund to the employees of any employer (Decatur County) is specifically limited to such obligations as are imposed by applicable state laws against the employer for workers’ compensation and/or employer’s liability.

The County is obligated to pay all contributions and assessments as prescribed by the pool, to cooperate with the pools’ agents and attorneys, to follow loss reduction procedures established by the fund, and to report as promptly as possible, and in accordance with any coverage descriptions issued, all incidents which could result in the funds being required to pay any claim of loss. The County is also to allow the pools’ agents and attorneys to represent the County ininvestigation, settlement discussions, and all levels of litigation arising out of any claim made against the County within the scope of loss protection furnished by the funds.

The Fund is to defend, in the name of and on behalf of the members, any suits or other proceedings which may at any time be instituted against them on account of injuries or death within the preview of the Workers’ Compensation Law of Georgia, or on the basis of employer’s liability, including suits or other proceedings alleging such injuries and demanding or


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compensation therefore, although such suits, other proceedings, allegations or demands be wholly groundless, false or fraudulent. The Fund is to pay all costs taxed against members in any legal proceeding defended by the members, all interest accruing after entry of judgment, and all expenses incurred for investigation, negotiation or defense.

Decatur County also provides health insurance coverage for its employees through the Association of County Commissioners of Georgia Group Health Benefit Program.

NOTE 9 - CONTINGENT LIABILITIES

Primary Government

The Water and Sewer Fund is subject to many accounting regulations and restrictions according to the bond ordinance. Article V, Section 502 of the Bond resolution states that fees are to be deposited promptly and immediately in the Revenue Fund and expenses are to be paid from that bank account. It is more practical to deposit the fees and pay the operating expenses through the General Fund.

The difference between the revenues and expenses for the month is transferred to or from the Water and Sewer bank account. The method used provides a complete audit trail of all revenues and expenses for audit purposes. Also, Article V, Section 507 states that the Revenue Fund contains a minimum of $5,000 at any time in order for the County to be able to meet any emergency or unforeseen contingency affecting the system. At June 30, 2007, the Revenue Fund had a balance of $33,230.

The County participates in Federal and State-assisted grant programs. These programs are subject to program compliance audits by the grantor or its representative. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time although the County expects such amounts, if any, to be immaterial.



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NOTE 10 – CONDENSED FINANCIAL STATEMENTS - ENTERPRISE FUNDS

Condensed Statement of Net Assets

DescriptionWater &

Sewer Fund Natural Gas Airport Ambulance

Service Fund Landfill Fund Totals

AssetsCurrent 393,130$ 103,558$ 163,568$ 284,362$ 654,950$ 1 ,599,568$ Capital 3 ,569,346 69,987 3,631,928 303,041 8,013,411 15 ,587,713

Total Assets 3 ,962,476$ 173,545$ 3,795,496$ 587,403$ 8,668,361$ 17 ,187,281$

Liabil itiesCurrent 169,460$ 64,217$ 56,954$ 47,131$ 360,982$ 698,744$ Long-term 323,624 - - - 5,268,818 5 ,592,442

Total Liabilit ies 493,084$ 64,217$ 56,954$ 47,131$ 5,629,800$ 6 ,291,186$

Net AssetsInvestments in Capital Assets Net of Related Debt 3 ,089,819$ 69,987$ 3,631,928$ 303,041$ 7,070,396$ 14 ,165,171$ Restricted for Deb t Service 85,702 - - - - 85,702 Unrestricted 293,871 39,341 106,614 237,231 (4,031,835) (3 ,354,778)

Total Net Assets 3 ,469,392$ 109,328$ 3,738,542$ 540,272$ 3,038,561$ 10 ,896,095$

Condensed Statement of Revenues, Expenses and Change in Net Assets

DescriptionWater &


Service Landfill Fund Totals

Operating revenues Charges for Serv ices 505,633$ 491,663$ 390,763$ 806,868$ 1,036,140$ 3,231,067$ Rental Income - - 17,422 - - 17,422 Total operating revenues 505,633 491,663 408,185 806,868 1,036,140 3,248,489 Operating expenses (Exclu ding Depreciation) 544,147 467,336 556,712 1,135,285 908,774 3,612,254 Depreciation 80,617 4,899 206,523 39,948 210,062 542,049

Total operating expenses 624,764 472,235 763,235 1,175,233 1,118,836 4,154,303 Operating income (loss) (119,131) 19,428 (355,050) (368,365) (82,696) (905,814 ) Nonoperating revenues (expenses)

Intergovernmental - - 239,443 - - 239,443 Interest income 1,328 - - - - 1,328 Loss on disposal of assets - - (16,915) - - (16,915 ) Interest expense (23,374) - - - (27,043) (50,417 )

Total Nonope rating income (expenses) (22,046) - 222,528 - (27,043) 173,439 Transfers in (out) 242,717 89,900 (815,286) 492,793 1,934,959 1,945,083 Changes in net assets 101,540 109,328 (947,808) 124,428 1,825,220 1,212,708 Beginning net assets 3,367,852 - 4,686,350 415,844 1,213,341 9,683,387 Ending net assets 3,469,392$ 109,328$ 3,738,542$ 540,272$ 3,038,561$ 10,896,095$


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Condensed Statement of Cash Flows

DescriptionWater &


Service Fund Landfill Fund Totals

Net cash provided (used) by operating activities 90,500$ 47,792$ 145,124$ (402,929)$ 226,867$ 107,354$

Net cash provided (used) by noncapital financing activities 242,717 15,014 (15,014) 492,793 1,934,959 2,670,469 Net cash provided (used) by capital and related financing activities (332,216) - 15,491 (89,864) (2,161,826) (2,568,415) Net cash provided (used) by investing activities 1,328 - - - - 1,328 Net increase (decrease) in cash & cash equivalents 2,329 62,806 145,601 - - 210,736 Beginning cash & cash equivalents 83,373 - - 200 - 83,573 Ending cash & cash equivalents 85,702$ 62,806$ 145,601$ 200$ -$ 294,309$

NOTE 11 – CLOSURE AND POSTCLOSURE COST

Landfill SR309 – Permit 043-006D(SL)

State and Federal laws and regulations require the County to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste. Landfill operating costs were included in the general fund in years prior to June 30, 1999. On July 1, 1999 the County began recording the activity of the landfill in an enterprise fund. The liability for the estimated closure and postclosure care costs was included in the general long-term debt account group in prior years totaling $ 2,241,968. The liability was recognized in the Landfill Enterprise Fund on July 1, 1999 and removed from the general long-term debt account group. These estimated costs based on a calculation using the utilized capacity percentage of the landfill for the year ending June 30, 2006 was $ 21,015, which increases the liability to $ 4,340,804. The total landfill capacity was used up and the landfill was closed in July 2006. Actual cost may be higher due to inflation, changes in technology, or changes in regulations.

Landfill US Hwy 27 – Permit 043-011D(MSWL)

State and Federal laws and regulations require the County to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste. These estimated costs based on a calculation using the utilized capacity percentage of the landfill for the year ending June 30, 2007 was $ 271,727, which increases the liability to $ 271,727. The county will recognize the remaining estimated cost of closure and postclosure care of $ $ 5,275,903 as the remaining estimated capacity is filled. Actual cost may be higher due to inflation, changes in technology, or changes in regulations.


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NOTE 12 – Construction Commitments

On November 4, 2003, a referendum was held to determine whether to continue to impose a 1% Special Purpose Local Option Sales Tax in Decatur County, Georgia for road, street, and bridge purposes and capital outlay projects. The tax period for this referendum is April 1, 2004, to March 31, 2009. With the passage of this referendum on November 4, 2003, the County is obligated to expend up to $6,276,800 for road, street, and bridge improvements and up to $7,250,000 for capital outlay projects of the county for the use and benefit of the citizens of the entire county, consisting of sanitary landfill, animal control, fire station and equipment, jail improvements, livestock facility improvements and recreational projects. Please refer to the Schedule of Special Purpose Local Option Sales Tax.

NOTE 13 – Restricted Net Assets

Net assets restricted for other projects are as follows:Major Funds Nonmajor Funds Total

CDBG EIP -$ 222,745$ 222,745$ Youth Golf - 1,052 1,052 Drug Abuse and Education 37,814 - 37,814 Local Assitance Grant-VFD - 6,250 6,250 Crime Victims Assistance - 12 12 Law Library - 30,125 30,125 Confiscated Assets - 16,689 16,689 E-911 - 100,859 100,859

37,814$ 377,732$ 415,546$

Note 14 – Fund balance reserved for other projects – governmental funds

Reserved for: General Fund Total

Drug Abuse and Education 37,814$ 37,814$ 37,814$ 37,814$

Note 15 – Change in reporting entity

In prior years activates of the airport, natural gas and industrial park were all reported in one enterprise fund. To better manage the county’s financial affairs these activities have been separated into the gas and airport enterprise funds. In addition, activities of the industrial park are now reported as a department in the general fund.


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NOTE 16 – Special Item – sales of capital assets

During the fiscal year ended June 30, 2007 the County sold certain capital assets, which were transactions the County, considers infrequent in occurrence. The County has reported these transactions as special items in the government-wide financial statements as required by GASB 34, paragraph 56. The transactions consisted of the disposition of a surplus equipment and land.

NOTE 17 - Change in Accounting Principles and Restatement of Prior Year

Restatement of Capital Assets – Primary Government

The County will be required by GASB 34 to retroactively capitalize all major general infrastructure assets that were acquired in fiscal years ending after June 30, 1980 for its fiscal year ending June 30, 2007.

Capital assets of the Governmental type funds have been restated as follows:

Infrastructure 9,961,392$ Accumulated Depreciation (7,016,252)

Net increase in BeginningGovernmental Fund Type Net Assets 2,945,140$

NOTE 18 – Deficit Fund Balance

For the fiscal year ended June 30, 2007 the SPLOST 4 Capital Projects Fund had a deficit fund balance of $ 1,369,179. This temporary deficit is the result of short-term borrowing from the general fund to complete capital projects prior to the actual receipt of SPLOST 4 tax proceeds. It is the county’s intent to alleviate this deficit with future receipts of Special Purpose Local Option Sales Taxes.



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NOTE 19 - Discretely Presented Component Unit –Hospital Authority of Bainbridge, Decatur County

A. Bank Deposits

At March 31, 2006 and 2007, the Authority had bank balances as follows:

2006 2007

Insured (FDIC) or collateralized with securities held by the Authority. 431,500$ 431,500$ Collateralized by securities held by the pledging financial institution's trust department in the Authority's name. 2,334,641 1,924,619 Uncollateralized. 57,485 62,527

Total (bank balance) 2,823,626$ 2,418,646$

Carrying value (book value) 2,456,740$ 2,107,060$

B. Capital Assets

A summary of property and equipment at March 31, 2007 follows:

2006 Balance Increase Decrease 2007 Balance

Land 590,408$ -$ -$ 590,408$ Buildings & Improvements 20,044,378 429,271 - 20,473,649 Equipment 16,627,861 785,500 39,933 17,373,428 Construction in progress 234,919 35,810 - 270,729

Total property and equipment 37,497,566 1,250,581 39,933 38,708,214

Less accumulated depreciation:Buildings and improvements 8,529,277 785,927 - 9,315,204 Equipment 13,491,980 741,603 17,751 14,215,832

Total accumulated depreciation 22,021,257 1,527,530 17,751 23,531,036

Net property and equipment 15,476,309$ (276,949)$ 22,182$ 15,177,178$


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C. The following is a summary of changes in long-term debt:

2006 Balance Additions Deletions 2007 Balance

Amount Due in One

Year

Notes payable 3,188,915$ -$ 182,711$ 3,006,204$ 161,674$ Capital leases 117,268 - 29,623 87,645 30,647

Total long term debt 3,306,183$ -$ 212,334$ 3,093,849$ 192,321$

A summary of long-term debt, including capital lease obligations, at March 31, 2007 and 2006, follows:

2007 20064.50% note to First Port City Bank (along with

Family Bank, Park Avenue Bank and PeoplesCommunity Bank of Southwest Georgia) inmonthly installments of $24.470, with the threeyear renewal date in December 2009. The originalnote is amortized over twenty years renewing everythree years with final payment due in July 2018.Collateralized by land, buildings, and equipment. 3,006,204 3,188,915

Capital lease obligations at varying rates of imputed interest from 5.1 % to 8.1 %. Collateralized by leasedequipment. 87,645 117,268

Total long-term debt 3,093,849 3,306,183

Less current installments of long-term debt 192,321 244,966

Long-term debt, excludingCurrent installments 2,901,528$ 3,061,217$

Schedule principal repayments on long-term debt and payments on capital lease obligations for the next five years are as follows:

Long-term Debt Capital Lease Obligations

Year Ended March 31 Principal Interest Principal Interest

2008 161,674$ 131,922$ 30,647$ 5,691$ 2009 169,101 124,544 26,614 3,518 2010 2,675,429 88,330 21,902 1,761 2011 - - 8,482 223

Totals 3,006,204$ 344,796$ 87,645$ 11,193$


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D. Pension

The Authority provides a tax deferred compensation retirement plan for the employees. Employees will contribute a portion of their pre-tax wages and the Authority will fund a matching contribution of one-half an employee’s contribution. The Authority’s maximum contribution will be three percent of an employee’s wages. The authority also contributes an additional $5.00 per employee per pay period. For the years ended March 31, 2007 and 2006, the Authority contributed $ 309,000 and $ 287,000 in matching funds, respectively.

E. Contingencies

Various claims and assertions are made against the Hospital Authority during the ordinary course of business. It is the opinion of management and management’s legal counsel that any losses that may result from such claims and assertions would not materially affect the operations or financial position of the Hospital Authority as of and for the year ended March 31, 2007.

F. Self-Insurance

The Authority has a self-insurance program for employee health insurance under which a third party administrator processes and pays claims. The Authority reimburses the third party administrator monthly for claims incurred and paid. The Authority has purchased stop-loss insurance coverage for claims in excess of $60,000 for each individual employee and total facility cost of $2,900,000. Under this self-insurance program, the Authority incurred expenses of $2,400,000 and $2,200,000 during the years ended March 31, 2007 and 2006, respectively.

The Authority has a partial self-insurance for medical malpractice liability claims. The Authority is self-insured up to $1,000,000 per claim and has purchased liability coverage over $1,000,000 per claim and $3,000,000 in the aggregate.

G. Related Organization

The Memorial Foundation, Inc. was created to support and promote the health care programs, operations, and activities of Memorial Hospital. The Foundation’s funds are distributed to the Hospital in amounts and in periods determined by the Foundation’s Board of Trustees, who may also restrict the use of funds for capital needs.


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A summary of the Foundation’s assets and net assets, results of operations, and changes in net assets follows:

2007 2006Assets 926,774$ $ 880,703

Liabilities - - Net Assets 926,774 880,703 Liabilities and net assets $ 926,774 $ 880,703

Revenues 98,295 105,535 Investing gains (losses) 34,373 38,275 Expenses (28,331) (23,668)Contributions to Memorial Hospital and (81,718) (92,443)Excess of revenues over expenses 22,619 27,699

Changes in net unrealized gains and losses on marketable securities 23,452 46,291

Net assets, beginning of year 880,703 806,713 Net assets, end of year $ 926,774 $ 880,703

NOTE 20 - Discretely Presented Component Unit – Decatur County Health Department

A. Bank Deposits

Total deposits and investments as of June 30, 2007, are summarized as follows:

As reported in the Statement of Net Assets:

Cash and cash equivalents 808,554$

Cash deposited with financial institutions 1,037,971$

Interest rate risk. The Health Department does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Custodial credit risk – deposits. Custodial credit risk for deposits is the risk that, in the event of the failure of a depositary financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. As of June 30, 2007, the HealthDepartment did not have any balances exposed to custodial credit risk as uninsured and uncollateralized as defined by GASB pronouncements.


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B. Capital Assets

Capital asset activity for the fiscal year ended June 30, 2007 was as follows:Balance June 30,

2006 Increase Decrease

Balance June 30,

2007 Vehicles 69,424$ 12,301$ -$ 81,725$ Building 19,492 - 19,492 Equipment 61,683 5,687 67,370 Accumulated Depreciation (64,090) (26,613) - (90,703)

Governmental Activities Capital Assets, Net 86,509$ (8,625)$ -$ 77,884$

C. Compensated Absences

Non-current liabilities on the statement of net assets are made up of compensated absences payable at June 30, 2007. All of the compensated absences are related to governmental activities. Changes in compensated absences for FY2007 are as follows:

Balance June 30, 2006 Additions Deletions

Balance June 30, 2007

51,034$ -$ 17,385$ 33,649$

D. Retirement Plan

The employees of the Decatur County Health Department are covered by the Employee’s Retirement System of the State of Georgia. Total retirement contributions for the year ended June 30, 2007 were $ 55,488 based on qualifying salaries of $ 547,841. Ten year historical information may be obtained from the Employee’s Retirement System of Georgia.

REQUIRED SUPPLEMENTARY INFORMATION

Decatur County, GeorgiaBudgetary Comparison Schedule - General Fund

Original Budget Final Budget

Actual Amounts (Budgetary Basis )

(See Note A)

Variance with Final Budget-

Positive (Negative)

REVENUES

Property Taxes 5,940,000$ 6,026,796$ 6,026,796$ -$ Sales and miscellaneous taxes 4,030,830 3,898,612 3,898,612 - Fees and fines 1,047,000 1,337,634 1,337,634 - Licenses and permits 95,000 90,722 90,722 - Intergovernmental 874,000 854,335 204,334 (650,001) Charges for services 2,766,200 2,750,615 2,942,897 192,282 Investment earnings 225,000 290,503 338,027 47,524 Contributions & donations from private sources 2,000 2,786 2,786 - Miscellaneous 283,000 212,990 212,991 1

TOTAL REVENUES 15,263,030 15,464,993 15,054,799 (410,194)

EXPENDITURES

General Government

Legislative 120,025 102,867 102,867 - Elections 230,038 185,616 185,611 5 Tax Commissioner 436,716 423,437 423,435 2 Tax Assessor 452,835 346,500 346,502 (2) General Govt. Buildings and Grounds 252,524 181,505 181,504 1

General Government 1,492,138 1,239,925 1,239,919 6

Judicial

Superior Court 206,265 206,490 206,490 - Clerk of Courts 533,338 553,544 553,543 1 District Attorney 44,570 44,568 44,568 - State Court 115,189 112,629 112,629 - Magistrate Court 174,962 185,675 185,673 2 Probate Court 144,588 136,357 136,358 (1) Juvenile Court 130,737 150,946 150,946 -

Judicial 1,349,649 1,390,209 1,390,207 2

Public Safety

Sheriff 2,840,069 2,990,190 2,990,193 (3) Jail 2,025,773 2,310,453 2,310,453 - Corrections 3,137,219 3,579,102 3,579,102 - Fire 1,164,828 981,430 981,429 1 Coroner/Medical Examiner 28,152 29,230 29,229 1 Animal Control - 2,322 2,322 - Emergency Management 5,000 7,990 7,990 -

Public Safety 9,201,041 9,900,717 9,900,718 (1)

Public Works

Highways and Streets 2,665,763 2,650,572 2,603,987 46,585 Maint. & Shop 121,616 118,639 118,639 -

Public Works 2,787,379 2,769,211 2,722,626 46,585


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Decatur County, GeorgiaBudgetary Comparison Schedule - General Fund

Original Budget Final Budget

Actual Amounts (Budgetary Basis )

(See Note A)

Variance with Final Budget-

Positive (Negative)


Health and Welfare

Health 218,369 230,721 230,721 - Welfare 335,950 321,257 321,257 -

Health and Welfare 554,319 551,978 551,978 -

Parks and Recreation

Recreation 77,000 67,000 67,000 - Parks 65,754 95,024 95,023 1

Parks and Recreation 142,754 162,024 162,023 1

Housing and Development

Conservation 131,083 122,063 122,064 (1) Planning and Zoning 266,764 201,542 201,541 1 Industrial Park 346,814 296,867 296,868 (1)

Housing and Development 744,661 620,472 620,473 (1)

Total Expenditures - All Departments 16,271,941 16,634,536 16,587,944 46,592

Net Excess before Operating Transfers (1,008,911) (1,169,543) (1,533,145) (363,602)

OTHER FINANCING SOURCES (USES)

Proceeds from capital leases - 199,990 242,990 43,000 Transfers In - - 700,998 700,998 Transfers (Out) - - (1,454,399) (1,454,399)

Total Other Financing Sources (uses) - 199,990 (510,411) (710,401)

SPECIAL ITEMS

Proceeds from sale of capital assets 24,000 8,907 8,907 -

Total Special Items 24,000 8,907 8,907 -

Other budget items

Prior year resources 1,671,338 1,794,012 2,034,649 240,637

Total prior year resources 1,671,338 1,794,012 2,034,649 240,637

Net Excess (deficit) 686,427$ 833,366$ -$ (833,366)$

Budgetary Comparison Reporting

In accordance with Governmental Accounting Standards Board Statement Number 34 (GASB 34), paragraph 131 the County haspresented the budgetary comparison schedule using the same format, terminology, and classifications as the budget document.Additionally, the County has presented in Note A to the budgetary comparison schedule information that reconciles budgetary information togenerally accepted accounting principles (GAAP) information. The County has explained in Note A the basis and perspective differences inaccordance with GASB 34 paragraph 131.

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Financial Statements General Fund and Major Special Revenue Fund: General Fund

RevenuesActual amounts (budgetary basis) "revenues" from the budgetary comparison schedule 15,054,799$

Adjustments:

The county budgets revenues on the cash basis of accounting rather than the modified accrual basis of accounting 105,188

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances-general fund 15,159,987$

Expenditures

Adjustments:

Actual amounts (budgetary basis) "expenditures" from the budgetary comparison schedules 16,587,944$

Adjustments:

The county budgets for certain expenditures on the cash basis of accounting rather than the modified accrual basis of accounting being used by the GAAP basis statements (522,933)

Encumbrances for supplies and equipment ordered but not received is reported in the year the order is placed for budgetary purposes, but in the year the supplies are received for financial reporting purposes. 169,399

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balances-general fund 16,234,410$

Other financing sources

Actual amounts (budgetary basis) "other financing sources and uses" from the budgetary comparison schedule (510,411)$

Adjustments:

The county budgets for certain expenditures on the cash basis of accounting rather than the modified accrual basis of accounting being used by the GAAP basis statements (44,399)

Total other financing sources and uses as reported on the statement of revenues, expenditures and changes in fund balance - general fund. (554,810)$

Note A-Explanation of Differences between Revenues, Expenditures, and Other Financing Sources (Uses) for Budgetary Funds on a Budgetary Basis and GAAP General Fund on a GAAP Basis

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Decatur County, GeorgiaBudgetary ComparisonFor the Fiscal Year Ended June 30, 2007

Note B to Required supplementary Information

Budget and Budgetary Accounting

Listed below is a summary of the procedures followed by the County in establishing the budgetarydata reflected in the budgetary comparison schedule;

At least three months prior to year end the County Administrator and Department Heads beginwork on the proposed operating budget for the coming fiscal year;

Approximately thirty days prior to year end, the proposed operating budget is submitted to theCounty Commissioners. The budget was adopted on July 25, 2006. The budget was amended onFebruary 13, 2007 and September 5, 2007. The budget includes proposed expenditures and themeans of financing them;

Public Hearings are conducted to obtain taxpayer comments;

The budget is legally enacted through passage of a resolution;

Department Heads are restricted to budgeted amounts by line item;

The County adopts a general fund budget that provides for most of the appropriations of thegovernmental activities of the County. The County adopts budgets for Special Revenue and DebtService funds as required by Georgia law. These budgets are not adopted on a basis consistentwith generally accepted accounting principles. Budgets are prepared for the enterprise funds as amanagement control device. Budgets for Capital Projects are prepared for the project life ratherthan for the current fiscal year. Project appropriations for these budgets do not lapse at the end ofeach fiscal year but rather at the conclusion of the project.

All appropriations (except Capital Project Funds’ appropriations) lapse at year end. There were nomaterial purchase orders, contracts, or other commitments which were encumbered, because theCounty does not use encumbrance accounting.

Capital Projects Funds use project budgeting.

Fiduciary type funds are agency funds and budgets are not prepared for these funds.

The legal level of budgetary control is at the department level.

53

Decatur County, GeorgiaRequired Supplementary InformationJune 30, 2007

Retirement PlanGASB 27 Required Supplementary Information-Schedule of Funding Progress

Fiscal Year EndingActuarial Value

of Assets

Actuarial Accrued Liability (AAL) Projected

Unit CreditUnfunded AAL

(UAAL)Funded Ratio Covered Payroll

UAAL as a Percentage of

Covered Payroll

(a) (b) (b-a) (a/b) (c) [(b-a)/c]

December 31, 2006 3,114,959$ 4,710,534$ 1,595,575$ 66.1% 5,538,786$ 28.8%December 31, 2005 2,677,075$ 4,641,578$ 1,964,503$ 57.7% 5,166,770$ 38.0%December 31, 2004 2,214,336$ 3,876,385$ 1,662,049$ 57.1% 4,268,060$ 38.9%December 31, 2003 1,829,083$ 3,145,789$ 1,316,706$ 58.1% 3,737,789$ 35.2%December 31, 2002 1,306,550$ 2,594,590$ 1,288,040$ 50.4% 3,286,059$ 39.2%December 31, 2001 1,168,740$ 2,235,698$ 1,066,958$ 52.3% 2,946,083$ 36.2%December 31, 2000 988,694$ 1,991,669$ 1,002,975$ 49.6% 2,570,702$ 39.0%December 31, 1999 796,092$ 1,668,611$ 872,519$ 47.7% 2,604,012$ 33.5%December 31, 1998 609,347$ 1,442,137$ 832,790$ 42.3% 2,309,806$ 36.1%December 31, 1997 433,813$ 1,216,414$ 782,601$ 35.7% 1,935,177$ 40.4%

The assets and liabilities shown above reflect expected amounts as of the last day of the plan year. These amounts may vary from those used in determining the required contribution, since those calculations use actual amounts as of the first day of the next plan year.

Analysis of the dollar amounts of actuarial value of assets for benefits, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of funded status on a going-concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater the percentage, the stronger the Plan.

Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the Plan's progress in accumulating sufficient assets to pay benefits when due. Generally, the smaller this percentage, the stronger the Plan.

54

Decatur County, GeorgiaEmployee Retirement SystemRequired Supplementary InformationFor the Fiscal Year Ended June 30, 2007

Notes to the Required Supplementary Information

Valuation date: January 1, 2007Actuarial cost method: Projected unit creditAsset valuation method: Market ValueAmortization method: Level Percent of Pay (closed)Remaining amortization period*: 10 Years

The amortization period for this plan is closed.

Actuarial Assumptions Utilized:Investment rate of return: 8.0%Projected salary increases: 4.5%Future payroll growth: 5.5%Cost-of-living adjustments: 2.5%

* Represents the estimated amortization period for all unfunded liabilities combined into one amortization base.

The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:

55

Supplemental Information

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES


NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS

To account for the proceeds of specific revenue sources that

are legally restricted to expenditures for specific purposes.

Debt service funds are used to record the fundingand payment of principal and interest on certain

general long term debt not accounted for in other funds

CAPITAL PROJECTS FUNDS

Capital projects funds are used to account for the acquisition and construction of major capital facilities

other than those financed by proprietary funds and trust fund.


DEBT SERVICE FUND

DECATUR COUNTY, GEORGIANon-Major Governmental FundsCombining Balance SheetJune 30, 2007

Special Revenue

Funds

Debt Service

Fund

Capital Projects Funds Totals

Assets

Cash in bank 270,623$ -$ 25$ 270,648$ Accounts receivable 97,131 - - 97,131

Notes/capital leases receivable 378,670 - - 378,670

Total Assets 746,424$ -$ 25$ 746,449$

Liabilities & Fund Balances

Liabilities

Accounts payable 21,658$ -$ -$ 21,658$ Accrued salaries 12,467 - - 12,467 Due to other funds 59,495 - - 59,495 Deferred revenue 275,072 - - 275,072

Total Liabilities 368,692 - - 368,692

Fund BalancesUnreserved, reported in nonmajor:

Capital projects funds - - 25 25 Special revenue funds 377,732 - - 377,732

Total Liabilities & Fund Balance 746,424$ -$ 25$ 746,449$

56

DECATUR COUNTY, GEORGIANon-Major Governmental FundsCombining Statement of Revenues, Expenditures andChanges in Fund Balance

Special Revenue

Funds

Debt Service Fund

Capital Project Funds Totals

RevenuesTaxes -$ 58,917$ -$ 58,917$ Charges for services 475,848 - - 475,848 Fines and Forfeitures 43,108 - - 43,108 Intergovernmental 542,880 - 333,393 876,273 Donations and contributions 1,845 - - 1,845 Interest 9,641 - - 9,641

Total Revenues 1,073,322 58,917 333,393 1,465,632

ExpendituresCurrent

General government 11,041 - - 11,041 Public Safety 1,108,908 - - 1,108,908 Housing and Development 252,988 - - 252,988 Culture and Recreation 3,718 - - 3,718

Debt ServicePrincipal - 137,674 - 137,674 Interest - 4,535 - 4,535

Capital OutlayPublic Safety 162,102 - - 162,102 Public roads & bridges - - 333,393 333,393

Total Expenditures 1,538,757 142,209 333,393 2,014,359

Excess (deficiency) ofrevenues over expenditures (465,435) (83,292) - (548,727)

Other Financing SourcesProceeds from capital leases 147,997 - - 147,997 Transfers in 536,081 83,292 - 619,373 Transfers out (122,883) - - (122,883)

Total other financing sources 561,195 83,292 - 644,487

Net Change in Fund Balance 95,760 - - 95,760

Fund Balance-beginning of period 281,972 - 25 281,997

Fund Balance-end of period 377,732$ -$ 25$ 377,757$


57

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58

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59

DECATUR COUNTY, GEORGIALaw LibraryBudgetary Comparison Schedule (Non GAAP)

Original Budget Final Budget Actual

Positive (Negative)

Revenues

Fees From Courts 16,000$ 16,000$ 25,033$ 9,033$

Total Revenues 16,000 16,000 25,033 9,033

Expenditures

Books & Publications 16,000 16,000 11,041 4,959

Total Expenditures 16,000 16,000 11,041 4,959

Excess (Deficiency) ofRevenues Over Expenditures - - 13,992 13,992

Fund Balance-Beginning of Period - - 16,133 16,133

Fund Balance-End of Period -$ -$ 30,125$ 30,125$


60

DECATUR COUNTY, GEORGIAConfiscated Assets Budget Comparison Schedule ( Non GAAP )


Positive (Negative)

Revenues

Confiscated Assets 15,000$ 43,108$ 43,108 -$

Interest 40 70 70 -

Total Revenues 15,040 43,178 43,178 -

Public Safety 15,040 52,140 52,140 -

Total Public Safety Expenditures 15,040 52,140 52,140 -

Excess (Deficiency) of

Revenues Over Expenditures - (8,962) (8,962) -

Fund Balance-Beginning of Period 25,651 25,651 25,651 -

Fund Balance-End of Period 25,651$ 16,689$ 16,689$ -$


61

DECATUR COUNTY, GEORGIAE-911 Special Revenue FundBudget Comparison Schedule (Non GAAP)


Positive (Negative)

Revenues

Local Government Units (Grady County) 430,000$ 435,004$ 409,571$ (25,433)$ E-911 Charges 441,738 425,173 425,173 -

Total Revenues 871,738 860,177 834,744 (25,433)

Expenditures

Operating Expenditures 1,103,511 946,770 930,697 16,073 Capital Outlay 8,000 116,533 116,883 (350)

Total Expenditures 1,111,511 1,063,303 1,047,580 15,723

Excess (Deficiency) ofRevenues Over Expenditures (239,773) (203,126) (212,836) (9,710)

Other Financing SourcesProceeds from capital leases - 147,997 147,997 - Operating Transfers In (General Fund) - - 99,592 99,592

Total Other Financing Sources - 147,997 247,589 99,592

Excess (Deficiency) of Revenues andOther Financing Sources overExpenditures and Other Uses (239,773) (55,129) 34,753 89,882

Fund Balance - beginning - Non-GAAP 28,912 28,912 28,912 - Fund Balance - ending - Non-GAAP (210,861)$ (26,217)$ 63,665 89,882$

Adjustments to Generally AcceptedAccounting Principals

Revenue, Expenditure & Transfer Accruals (37,194)

Fund Balance - end of year - GAAP Basis 100,859$


62

DECATUR COUNTY, GEORGIACDBG EIP Special Revenue FundBudget Comparison Schedule

Original Budget

Final Budget Actual

Positive (Negative)

Revenues

Indirect Federal Grants -$ 43,186$ 43,185$ (1)$ Interest Income 8,600 9,568 9,568 -

Total Revenues 8,600 52,754 52,753 (1)

Expenditures

Operating Expenditures 8,600 52,812 - 52,812

Total Expenditures 8,600 52,812 - 52,812

Excess (Deficiency) ofRevenues Over Expenditures - (58) 52,753 52,811

Other Financing SourcesOperating Transfers In (General Fund) - - - -

Total Other Financing Sources - - - -

Excess (Deficiency) of Revenues andOther Financing Sources overExpenditures and Other Uses - (58) 52,753 52,811

Fund Balance beginning of year - Non-GAAP 169,992 169,992 169,992 -

Fund Balance end of year - Non-GAAP 169,992$ 169,934$ 222,745$ 52,811$


63

DECATUR COUNTY, GEORGIAVictim's Assistance Special Revenue FundBudget Comparison Schedule

Original Budget

Final Budget Actual

Positive (Negative)

Revenues

Intergovernmental revenues -$ 80,000$ 62,199$ (17,801)$ Interest Income - 3 3 -

Total Revenues - 80,003 62,202 (17,801)

Expenditures

Victim services payments 25,000 80,000 71,863 8,137

Total Expenditures 25,000 80,000 71,863 8,137

Excess (Deficiency) ofRevenues Over Expenditures (25,000) 3 (9,661) (9,664)

Other Financing SourcesOperating Transfers In (General Fund) - - 9,673 9,673

Total Other Financing Sources - - 9,673 9,673

Excess (Deficiency) of Revenues andOther Financing Sources overExpenditures and Other Uses (25,000) 3 12 9

Fund Balance beginning of year - Non-GAAP - - - -

Fund Balance end of year - Non-GAAP (25,000)$ 3$ 12$ 9$


64

DECATUR COUNTY, GEORGIALocal Assistance Grant VFD - Special Revenue FundBudget Comparison Schedule

Original Budget

Final Budget Actual

Positive (Negative)

RevenuesIntergovernmental revenues 25,000$ 25,000$ 25,000$ -$

Total Revenues 25,000 25,000 25,000 -

Expenditures

Public safety 25,000 25,296 25,296 -

Total Expenditures 25,000 25,296 25,296 -

Excess (Deficiency) ofRevenues Over Expenditures - (296) (296) -

Other Financing SourcesOperating Transfers In (General Fund) - - 9,673 9,673

Total Other Financing Sources - - 9,673 9,673

Excess (Deficiency) of Revenues andOther Financing Sources overExpenditures and Other Uses - (296) 9,377 9,673

Fund Balance beginning of year - Non-GAAP - 296 - (296)

Fund Balance end of year - Non-GAAP -$ -$ 9,377$ 9,377$


65

DECATUR COUNTY, GEORGIAOne Georgia Grant - Special Revenue FundBudget Comparison Schedule

Original Budget

Final Budget Actual

Positive (Negative)

Revenues

Intergovernmental revenues -$ 721,133$ -$ (721,133)$

Total Revenues - 721,133 - (721,133)

Expenditures

Economic development - 375,871 252,988 122,883

Total Expenditures - 375,871 252,988 122,883

Excess (Deficiency) ofRevenues Over Expenditures - 345,262 (252,988) (598,250)

Other Financing SourcesOperating Transfers In - - - - Operating Transfers In (Out) - - (122,883) (122,883)

Total Other Financing Sources - - (122,883) (122,883)

Excess (Deficiency) of Revenues andOther Financing Sources overExpenditures and Other Uses - 345,262 (375,871) (721,133)


Fund Balance end of year - Non-GAAP -$ 345,262$ (375,871)$ (721,133)$


66

DECATUR COUNTY, GEORGIAYouth Golf Program - Special Revenue FundBudget Comparison Schedule

Original Budget

Final Budget Actual

Positive (Negative)

Revenues

Intergovernmental revenues -$ 2,925$ 2,925$ -$ Interest Income - 1,845 1,845 -

Total Revenues - 4,770 4,770 -

Expenditures

Culture and recreation - 3,718 3,718 -

Total Expenditures - 3,718 3,718 -

Excess (Deficiency) ofRevenues Over Expenditures - 1,052 1,052 -


Fund Balance end of year - Non-GAAP -$ 1,052$ 1,052$ -$


67


DEBT SERVICE FUND

Debt service funds are used to record the fundingand payment of principal and interest on certain

general long term debt not accounted for in other funds

FOR THE FISCAL YEAR ENDED June 30, 2007

DECATUR COUNTY, GEORGIANonmajor Debt Service FundBudget Comparison Schedule (Non GAAP)


Positive (Negative)

RevenuesTaxes -$ -$ 58,917$ 58,917$

Total Revenues - - 58,917 58,917

Expenditures

Debt ServicePrincipal - 137,060 137,674 (614) Interest - 13,852 4,535 9,317

Total Expenditures - 150,912 142,209 8,703

Excess (deficiency) ofrevenues over expenditures - (150,912) (83,292) (67,620)

Fund Balance Beginning of Year - - - -

Fund Balance End of Year -$ (150,912)$ (83,292)$ (67,620)$


68


CAPITAL PROJECTS FUNDS

Capital projects funds are used to account for the acquisition and construction of major capital facilities

other than those financed by proprietary funds and trust fund.


DECATUR COUNTY, GEORGIANonmajor Capital Projects FundsCombining Balance SheetsJune 30, 2007

CDBG Slough

Loop Grant

One Ga. Project Fund

CDBG Grant Totals

Assets

Cash in banks 5$ 10$ 10$ 25$

Total Assets 5$ 10$ 10$ 25$

Fund Balances

Unreserved, reported in nonmajor :Capital projects funds 5 10 10 25

Total Fund Equity 5$ 10$ 10$ 25$

69

DECATUR COUNTY, GEORGIANonmajor Capital Projects FundsCombining Statements of Revenues, Expenditures,and Changes in Fund Balances

CDBG Slough Loop Grant

One Ga. ProjectFund

CDBGGrant Totals

Revenues Grant proceeds 333,393$ -$ -$ 333,393$

Total Revenues 333,393 - - 333,393

Expenditures

Capital Outlay Public Works 333,393 - - 333,393

Total Expenditures 333,393 - - 333,393

Excess of revenues over expenditures - - - -

Other Financing Sources Transfers in (General Fund) - - - -

Total Other Financing Sources - - - -

Net Change in Fund Balance - - - -

Fund Balance - beginning of year 5 10 10 25

Fund Balance - end of year 5$ 10$ 10$ 25$


70


FIDUCIARY FUNDS


DECATUR COUNTY, GEORGIAAgency FundsCombining Statement of Changes in Fiduciary Assets and Liabilities

Balance BalanceJune 30, 2006 Additions Deletions June 30, 2007

MAGISTRATE’S COURTAssetsCash 5,156$ 502,705$ 502,415$ 5,446$

LiabilitiesDue to other funds & agencies 4,945$ 176,050$ 180,784$ 211$ Due to others 211 326,655 321,631 5,235

Total Liabilities 5,156$ 502,705$ 502,415$ 5,446$

CLERK OF THE COURTSAssetsCash 193,983$ 1,833,371$ 1,951,096$ 76,258$

Total Assets 193,983$ 1,833,371$ 1,951,096$ 76,258$

LiabilitiesDue to other funds and agencies 22,119$ 1,668,674$ 1,685,139$ 5,654$ Due to others 171,864 164,697 265,957 70,604

Total Liabilities 193,983$ 1,833,371$ 1,951,096$ 76,258$

TAX COMMISSIONERAssetsCash 222,313$ 18,136,274$ 18,137,195$ 221,392$ Receivables 236,420 14,375,532 14,345,660 266,292

Total Assets 458,733$ 32,511,806$ 32,482,855$ 487,684$

LiabilitiesDue to other funds and agencies 417,127$ 31,863,942$ 31,869,045$ 412,024$ Due to others 41,606 647,864 613,810 75,660


PROBATE COURTAssetsCash 46$ 48,356$ 48,356$ 46$

LiabilitiesDue to other funds and agencies 46$ 48,356$ 48,356$ 46$

Total Liabilities 46$ 48,356$ 48,356$ 46$

TOTALS - ALL AGENCY FUNDSAssetsCash 421,498$ 20,520,706$ 20,639,062$ 303,142$ Receivables 236,420 14,375,532 14,345,660 266,292

Total Assets 657,918$ 34,896,238$ 34,984,722$ 569,434$

LiabilitiesDue to other funds and agencies 444,237$ 33,757,022$ 33,783,324$ 417,935$ Due to others 213,681 1,139,216 1,201,398 151,499



71

STATE REPORTING REQUIREMENTS

DECATUR COUNTY, GEORGIASchedule of Special PurposeLocal Option Sales TaxFor the Fiscal Year Ended June 30, 2007

Original Expenditure Estimated Estimated Prior Current Percentage of

Project Cost Year Year Total Completion

November 4, 2003

Solid Waste,Animal Control,Jail Improvements,Livestock Facility Improvements,Recreation Improvements andFire Stationand Equipment 7,250,000$

Solid Waste 3,383,811$ 1,666,413$ 5,050,224$ Animal Control - - - Jail Improvements 2,604 35,431 38,035 Livestock Facility Improvements - 395,588 395,588 Recreation Improvements - 60,410 60,410 Fire Stationand Equipment 1,310 - 1,310 76.49%

Road & BridgeImprovements 6,276,800 1,700,455 2,676,813 4,377,268 69.74%

Total 13,526,800$ 5,088,180$ 4,834,655$ 9,922,835$ 73.36%

The County has entered into several intergovernmental contracts with local governments.A detail of payments to these local governments are as follows:

Prior CurrentYear Year Total

City of Bainbridge 3,694,307$ 1,808,370 5,502,677$ City of Attapulgus 154,731 75,741 230,472 City of Climax 94,051 46,038 140,089 City of Brinson 70,791 34,653 105,444 Hospital Authority 1,213,569 594,045 1,807,614

Total 5,227,449$ 2,558,847$ 7,786,296$

72

DECATUR COUNTY, GEORGIASchedule of Special PurposeLocal Option Sales TaxFor the Fiscal Year Ended June 30, 2007

Original Expenditure Estimated Estimated Prior Current Percentage of

Project Cost Year Year Total Completion

March 16, 1997

Renovation ofCounty Courthouse, Solid WasteFacilities and FireSuppression 4,643,044$

County Courthouse 2,585,373$ -$ 2,585,373$ Solid Waste 1,715,374 - 1,715,374 Facilities and Fire Suppression 625,000 - 625,000 106.09%

Road & BridgeImprovements 3,500,000 3,627,239 - 3,627,239 103.64%

Total 8,143,044$ 8,552,986$ -$ 8,552,986$ 105.03%

The County has entered into several intergovernmental contracts with local governments.A detail of payments to these local governments are as follows:

CurrentPrior Year Year Total

City of Bainbridge 6,691,561$ -$ 6,691,561$ City of Attapulgus 426,527 - 426,527 City of Climax 346,719 - 346,719 City of Brinson 302,550 - 302,550 Hospital Authority 2,707,768 - 2,707,768

Total 10,475,125$ -$ 10,475,125$

73

DECATUR COUNTY, GEORGIACommunity Development Block GrantSource and Application of Funds ScheduleGrant #04p-y-043-1-2976 - Slough LoopJune 30, 2007

Total Program Year 2004 funds allocated to recipient 500,000$

Less: Total Program Year 2004 funds drawn down by recipient 492,822

Funds still available from Program Year 2004Resources 7,178$

Total Program Year 2004 funds drawn down and received by recipient 492,822$

Less: Funds applied and expended to ProgramYear 2004 costs 492,822

Total Program Year 2004 funds held by recipient -$

74

DECATUR COUNTY, GEORGIACommunity Development Block GrantProjects Cost ScheduleGrant #04p-y-043-1-2976 - Slough LoopJune 30, 2007

Latest Accumulative AccumulativeApproved Current Expenditures Expenditures Grand Total

Budget Prior Year Year To Date to Date Expenditures QuestionedProgram Activity Activity CDBG Funds Expenditures Expenditures CDBG Funds Other Funds to Date Costs

Acquisition of Property P-03K-01 344,722$ 43,663$ 301,059$ 344,722$ -$ 344,722$ -$

Street Improvements P-03K-02 125,278 93,766 24,334 118,100 185,980 304,080 -

Administration A-21A-00 30,000 22,000 8,000 30,000 - 30,000 -

Totals 500,000$ 159,429$ 333,393$ 492,822$ 185,980$ 678,802$ -$

75

DECATUR COUNTY, GEORGIACommunity Development Block EIP GrantSchedule of Revolving Loan Funds Reconciliation to Local Revolving Loan Semi-Annual ReportGrant #02q-y-043-1-2761June 30, 2007

Per Audited Financials

Per Local Revolving Loan

Semi-Annual Report

Cash 222,745$ 222,745$

Notes receivable 275,072$ 275,072$

Liabilities and equity 497,817$ 497,817$

76

Decatur County, GeorgiaAnnual Report of 9-1-1 Collections and ExpendituresFor the Fiscal Year Ended June 30, 2007

Line O.C.G.A.No. Reference:

1 Indicate UCOA Fund Type Used to Account for 9-1-1 Activity (choose one):

X Special Revenue Fund _____ Enterprise Fund

2 Monthly 9-1-1 charge billed to each exchange access facility subscriber: 46-5-134(a)(1) $ 1.50

3 Total revenue from exchange access facility subscribers: $ 342,619

4 Does 9-1-1 system provide automatic number identification of awireless telecommunications connection? (choose one)

X Yes _____ No

5 If the answer to Line 4 is "yes", indicate below which of thefollowing apply (choose one)

_____ System provides location of base station or cell site 46-5-134(a)(2)(A)

X System provides automatic location identification 46-5-134(a)(2)(B)

6 If the answer to Line 4 is "yes", identify the monthly 9-1-1 chargebilled to each wireless telecommunications connection subscriber: 46-5-134(a)(2) $ 1.00

7 Total revenue from wireless telecommunications connection subscribers: $ 108,196

8 Total Line 3 plus Line 7 (should equal UCOA Revenue Source 34.2500) $ 450,815

9 Additional revenue sources:9a Federal (UCOA Revenue Source 33.1000) 46-5-134(j)

Identify each funding agency individually. Attach list, if necessary.

$

$

9b State (UCOA Revenue Source 33.4000) 46-5-134(j)Identify each funding agency individually. Attach list, if necessary.

$

$

9c Local (UCOA Revenue Source 33.6000) 46-5-134(j)Identify each unit of local government individually. Attach list, if necessary.

Grady County $ 409,571

$

9d Private (UCOA Revenue Source 37.1000) 46-5-134(j)Identify each private source individually. Attach list, if necessary.

$

$

10 Investment Income (UCOA Revenue Source 36.1000 through 36.3000) $

11 Other revenue sources not included above.Identify each source individually. Transfers from other funds of the

78



local government should be reported on Line 25 and not included here.

$

$

$

$

$

$

$

$

12 Total Revenues (total of all amounts reported on Lines 8 through 11) $ 860,386

Expenditures (UCOA Activity 3800)13 Wireless service supplier cost recovery charges 46-5-134(e)

(identify each supplier individually on lines below - attach list, if necessary)

$

$

$

14 Emergency telephone equipment, including necessary computer hardware,software, and data base provisioning, addressing, and nonrecurring costs ofestablishing a 9-1-1 system:

14a Lease costs 46-5-134(f)(1) $

14b Purchase costs 46-5-134(f)(1) $

14c Maintenance costs 46-5-134(f)(1) $

15 Rates associated with the service suppliers 9-1-1 service and other servicesuppliers recurring charges 46-5-134(f)(2) $

16 Employees hired by the local government solely for the operation andmaintenance of the emergency 9-1-1 system:

Number of employees classified as: Full time 15 Part time 3

16a Salaries and wages 46-5-134(f)(3) $ 501,641

16b Employee benefits 46-5-134(f)(3) $ 118,207

17 Cost of training of employees who work as dispatchers 46-5-134(f)(3) $ 2,010

18 Office supplies of the public safety answering points used directly inproviding emergency 9-1-1 system services 46-5-134(f)(4) $ 9,679

19a Building used as a public safety answering point:

19a1 Lease costs 46-5-134(f)(5) $

19a2 Purchase costs 46-5-134(f)(5) $

79



19b Has the local government completed its street addressing plan? (choose one) 46-5-134(f)(5) $

X Yes _____ No

20 Computer hardware and software used at a public safety answering point, includingcomputer assisted dispatch systems:

20a Lease costs 46-5-134(f)(6) $

20b Purchase costs 46-5-134(f)(6) $ 161,282

20c Maintenance costs 46-5-134(f)(6) $ 6,649

21 Supplies directly related to providing emergency 9-1-1 system services,including the cost of printing emergency 9-1-1 public education materials 46-5-134(f)(7) $

22 Logging recorders used at a public safety answering point to recordtelephone and radio traffic:

22a Lease costs 46-5-134(f)(8) $

22b Purchase costs 46-5-134(f)(8) $

22c Maintenance costs 46-5-134(f)(8) $ -

23 Other expenditures not included in Lines 13 through 22 above.Identify by object and purpose. Transfers to other funds of the local governmentshould be reported on Line 26 and not included here.

Telephone $ 3,482

Advertising $ 261

Travel $ 7,005

Dues and subscriptions $ 245

Contractual Services $ 248,712

Energy $ 2,113

Allocated administrative cost $ 59,495

Other services $ 930

24 Total Expenditures (total of all amounts reported on Lines 13 through 23 above) $ 1,121,711

25 Transfers From Other Funds (identify by fund)

General Fund $ 143,991

$

26 Transfers To Other Funds (identify by fund)

$

$

80

GOVERNMENTAL AUDITING STANDARDS REQUIREMENTS

Appendix B

PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL

The form of Legal Opinion included in this Appendix B has been prepared by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel, and is substantially the form to be given in connection with the delivery of the Bonds.

[Date of Closing] Page 1

Appendix B-1

[Date of Closing]

Board of Commissioners of Decatur County Bainbridge, Georgia

Re: $8,455,000 DECATUR COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009

To the Addressee:

We have acted as bond counsel in connection with the issuance by Decatur County (the “County”) of its GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009, in the principal amount of $8,455,000, dated as of the date of issuance and delivery thereof (the “Bonds”). In this capacity we have examined (i) the Constitution and general laws of the State of Georgia; (ii) certified copies of proceedings of the Board of Commissioners of Decatur County (the “Board of Commissioners”), the governing body of the County, including a resolution adopted on July 8, 2008, calling a special county one percent sales and use tax election in the County on September 16, 2008 (the “Election”); (iii) a certified copy of a bond resolution adopted by the Board of Commissioners on March 12, 2009 (the “Bond Resolution”); (iv) a certified copy of the proceedings in and the judgment of the Superior Court of Decatur County, Georgia by which the Bonds were validated; and (v) other proofs authorizing and relating to the issuance of the Bonds, including a copy of the consolidated returns of the Election.

As to questions of fact material to our opinion, we have relied upon representations of the County contained in the Bond Resolution and in the certified proceedings and other certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation.

The Bonds are subject to transfer and exchange in the manner and on the terms specified in the Resolution. The Bonds are being issued pursuant to a book-entry system in fully registered form. The principal of the Bonds matures on July 1 in the years and amounts shown in the Bond Resolution and are not subject to redemption prior to maturity. Interest on each Bond is payable on January 1 and July 1 in each year, beginning on July 1, 2009, in the manner and at the rate of interest stated in each Bond and the Resolution until the obligation with respect to the payment of the principal of such Bond shall be discharged.

The legal opinions expressed herein are based upon existing law, are subject to judicial discretion regarding usual equity principles and do not relate to compliance by the County, the initial purchasers of the Bonds, or any other party with any statute, regulation or ruling of the State of Georgia or the United States of America regarding the sale (other than the initial sale by the County) or distribution of the Bonds.

The Internal Revenue Code of 1986, as amended (the “Code”) sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for purposes of federal income taxation. Noncompliance with such


Appendix B-2

requirements may cause interest on the Bonds to be included in gross income retroactively to the date of issue thereof. The County has covenanted in the Resolution to comply with the requirements of the Code in order to maintain the exclusion from federal gross income of interest on the Bonds.

In reliance upon and subject to the foregoing, we are of the opinion that:

1. The Bonds have been duly authorized and issued by the County, with the assent of a majority of the qualified voters of the County voting in the Election held for that purpose and in accordance with the Constitution and laws of the State of Georgia.

2. The payment of the Bonds is validly secured by a special county one percent sales and use tax which will be collected within Decatur County beginning upon the termination of the special sales tax now in effect, and shall be collected for a period of time not to exceed six years. The principal of and interest on the Bonds are payable from a separate account in which are to be placed the proceeds received by the County from such sales and use tax. The obligation to pay such principal and interest, however, is a general obligation debt of the County, and constitutes a pledge of the full faith, credit, and taxing power of the County. Any liability on such debt which is not satisfied from the proceeds of the sales and use tax shall be satisfied from the general fund of the County or from a direct annual ad valorem tax to be levied for such purpose.

3. The Bonds were duly confirmed and validated by judgment of the Superior Court of Decatur County entered on November 26, 2008 and no valid appeal may be taken from said judgment of validation.

4. Assuming compliance with the aforementioned covenant by the County to maintain the exclusion from federal gross income of interest on the Bonds, interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and the interest thereon is exempt from taxation by the State of Georgia and any of its political subdivisions. The interest on the Bonds will not be included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations.

The County has designated the Bonds as, and we are of the opinion, based upon the representations of the County, that the Bonds are, “qualified tax-exempt obligations” pursuant to Section 265(b)(3) of the Code. The County has certified that the reasonably anticipated amount of qualified tax-exempt obligations which the County, together with any entity subordinate to the County and all entities which issue obligations on behalf of the County, will issue during the calendar year in which the Bonds are issued and delivered will not exceed $30,000,000 in aggregate principal amount.

Although we have rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, a bondholder’s federal tax liability may otherwise be affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the bondholder’s other items of income or deduction. We express no opinion regarding any such other tax consequences.


Appendix B-3

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur.

Yours very truly,

GRAY & PANNELL LLP

By: ___________________ A Partner

Appendix C

FORM OF THE CONTINUING DISCLOSURE CERTIFICATE

Appendix C - 1

CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by Decatur County, Georgia (the “County), a political subdivision of the State of Georgia, in connection with the issuance of the DECATUR COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009, in the aggregate principal amount of $8,455,000 (the “Bonds”). The Bonds are being issued pursuant to a bond resolution adopted by the Board of Commissioners of the County on March 12, 2009 (the “Resolution”).

The County covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the County for the benefit of the Holders and Beneficial Owners of the Bonds (together, the “Bondholders”) and in order to assist the Participating Underwriter (defined below) in complying with U.S. Securities and Exchange Commission Rule 15c2-12(b)(5).

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

“Annual Report” means any Annual Report provided by the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

“Beneficial Owner” means any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.

“Board of Commissioners” means the Board of Commissioners of Decatur County, Georgia, the governing body of the County, and any successor or successors in office to the present Board of Commissioners.

“Dissemination Agent” means the County or any successor Dissemination Agent designated in writing by the County and which has filed with the County a written acceptance of such designation.

“EMMA” means the MSRB’s Electronic Municipal Market Access System which becomes effective July 1, 2009 and will receive electronic submissions of the Annual Report on the EMMA website at http://www.emma.msrb.org.

“Fiscal Year” means any period of 12 consecutive months adopted by the County as the County’s fiscal year for financial reporting purposes and initially shall mean the period beginning on July 1 of a calendar year and ending on June 30 of the following calendar year.

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

“MSRB” means the Municipal Securities Rulemaking Board.

“Obligated Person” has the meaning set forth in the Rule.

Appendix C - 2

“Participating Underwriter” means Merchant Capital, L.L.C., Atlanta, Georgia, the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

“County” means Decatur County, a political subdivision of the State of Georgia.

SECTION 3. Provision of Annual Reports.

(a) The County will provide, or cause the Dissemination Agent (if other than the County) to provide, to any person who requests it, or at least annually to EMMA, not later than one hundred eighty (180) days after the end of each Fiscal Year, commencing with the report for the Fiscal Year ending June 30, 2009, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report will be made to EMMA as PDF files configured to permit documents to be saved, viewed, printed and retransmitted by electronic means. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the County may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. In such event, the audited financial statements will be submitted promptly upon their availability. If the County’s fiscal year changes, notice of such change shall be given in the same manner as for a Listed Event under Section 5(c).

(b) Not later than fifteen (15) business days prior to the date specified in paragraph (a) of this Section 3 for providing the Annual Report to EMMA, the County shall provide the Annual Report to the Dissemination Agent (if other than the County). If the County is unable to provide an Annual Report by the date required in paragraph (a), the Dissemination Agent shall send a notice to EMMA in substantially the form attached as Exhibit A.

(c) The Dissemination Agent shall:

(i) determine each year, prior to the date for making available or providing the Annual Report, the manner of filing with EMMA; and

(ii) (if the Dissemination Agent is other than the County), file a report with the County certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and the name of the entity to which it was provided.

SECTION 4. Content of Annual Reports. The County’s Annual Report shall contain or incorporate by reference:

(a) The audited financial statements of the County for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as applicable to governmental entities from time to time by the Governmental Accounting Standards Board, and which shall be accompanied by an audit report, if available at the time of submission of the Annual Report to EMMA pursuant to Section 3(a) hereof, resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing standards. If such audited financial statements are not available by the time the Annual Report is required to be filed pursuant to this Disclosure Certificate, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement for the Bonds, and the

Appendix C - 3

audited financial statements shall be filed in the same manner as the Annual Report when they become available.

(b) If generally accepted accounting principles have changed since the last Annual Report was submitted pursuant to this Disclosure Certificate and if such changes are material to the County, a narrative explanation describing the impact of such changes on the County.

(c) Information for the prior fiscal year regarding the following categories of financial information and operating data of the County: (i) Special Sales Tax collections, (ii) legal debt margin, (iii) property tax digest, (iv) millage rates, (v) property tax levies and collections, (vi) ten largest taxpayers, (vii) a statement of direct and overlapping general obligation supported debt of the County, and (viii) the future debt service obligations of the County.

Any or all of the items listed above may be incorporated by specific reference to other documents, including official statements of debt issues with respect to which the County is an “obligated person” (as defined by the Rule), which have been filed with EMMA or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The County must clearly identify each such other document so incorporated by reference.

SECTION 5. Reporting of Significant Events.

(a) The County shall provide or cause to be provided through the Dissemination Agent, in a timely manner, to EMMA notice of the occurrence of any of the following events with respect to the Bonds, if such event is material:

1. Principal and interest payment delinquencies. 2. Non-payment related defaults.

3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds.

7. Modifications to rights of Bondholders. 8. Bond calls which are optional, contingent, or unscheduled. 9. Defeasances.

10. Release, substitution, or sale of property securing repayment of the Bonds. 11. Rating changes.

(b) Notwithstanding the foregoing, notice of Listed Events described in paragraph (a)(8) and (9) above need not be given under this Section 5 any earlier than the notice (if any) of the underlying event is given to Bondholders of affected Bonds pursuant to the Resolution.

(c) The content of any notice of the occurrence of a Listed Event shall be determined by the County and shall be in substantially the form attached as Exhibit B.

SECTION 6. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the County chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this

Appendix C - 4

Disclosure Certificate, the County shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 7. Termination of Reporting Obligation. The County reserves the right to terminate its obligations under this Disclosure Certificate if and when the County no longer remains an Obligated Person with respect to the Bonds within the meaning of the Rule; in particular upon the occurrence of the legal defeasance, prior redemption, or payment in full of all of the Bonds. The County will provide notice of such termination to EMMA.

SECTION 8. Dissemination Agent. The County, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. A Dissemination Agent other than the County shall not be responsible in any manner for the content of any notice or report prepared by the County pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the County.

SECTION 9. Amendment. Notwithstanding any other provision of this Disclosure Certificate, the County may amend this Disclosure Certificate if:

(a) such amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Obligated Person on the Bonds, or type of business conducted;

(b) such amendment is supported by an opinion of counsel expert in federal securities laws, to the effect that the undertakings contained herein, as amended, would have complied with the requirements of the Rule on the date hereof, after taking into account any amendments or official interpretations of the Rule, as well as any change in circumstances; and

(c) such amendment does not materially impair the interests of the Bondholders, as determined either by an unqualified opinion of nationally recognized bond counsel filed with the County, or by the approving vote of the Bondholders pursuant to the terms of the Resolution at the time of such amendment.

If any provision of this Disclosure Certificate is amended, the first release of the Annual Report containing any amended financial information or operating data shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being provided. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5 and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 10. Default. If the County fails to comply with any provision of this Disclosure Certificate, any Bondholder’s right to enforce the provisions of this undertaking shall be limited to a right to obtain mandamus or specific performance by court order of the County’s obligations pursuant to this Disclosure Certificate. Any failure by the County to comply with the provisions of this Disclosure Certificate shall not be an event of default with respect to the Bonds.

Appendix C - 5

SECTION 11. Duties, Immunities, and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and, to the extent allowed by applicable law, the County agrees to indemnify and save the Dissemination Agent (if other than itself), its officers, directors, employees, and agents, harmless against any loss, expense, and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the County under this Section 11 shall survive resignation or removal of the Dissemination Agent (if other than itself) and payment of the Bonds.

SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the County, the Dissemination Agent (if other than the County), the Participating Underwriter, and Bondholders, and shall create no rights in any other person or entity.

SECTION 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

SECTION 14. Governing Law. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State of Georgia.

SECTION 15. Severability. In case any one or more of the provisions of this Disclosure Certificate shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Certificate, but this Disclosure Certificate shall be construed and enforced as if such illegal or invalid provision had not been contained herein.

Date: ___________________, 2009.

DECATUR COUNTY

(SEAL) By:_____________________________ Chairman Board of Commissioners

Attest:___________________________ County Clerk

[SIGNATURE PAGE TO CONTINUING DISCLOSURE CERTIFICATE]

Appendix C - 6

Exhibit A

NOTICE OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Decatur County (Georgia)

Name of Bond Issue: $8,455,000 DECATUR COUNTY GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009

Date of Issuance: _____________, 2009

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate executed by Decatur County on ___________, 2009. The Issuer anticipates that the Annual Report will be filed by _____________.

Dated: _______________

[Name of Dissemination Agent]

By:____________________________ ____________

Appendix C - 7

Exhibit B

NOTICE OF THE OCCURRENCE OF [Insert the Listed Event]

relating to

$8,455,000 DECATUR COUNTY (GEORGIA)GENERAL OBLIGATION SALES TAX BONDS, SERIES 2009 (the “Bonds”)

CUSIP NUMBERS1:

Notice is hereby given that [insert the Listed Event] has occurred. [Describe circumstances leading up to the event, action being taken and anticipated impact.]

This notice is based on the best information available at the time of dissemination and is not guaranteed as to accuracy or completeness. Any questions regarding this notice should be directed to [insert instructions for presenting securities, if applicable].

[Notice of a Listed Event constituting defeasance shall include the following:

The County hereby expressly reserves the right to redeem such refunded or defeased bonds prior to their stated maturity date in accordance with the optional/extraordinary redemption provisions of said defeased Bonds.

OR

The County hereby covenants not to exercise any optional or extraordinary redemption provisions under the Bond Resolution; however, the sinking fund provision will survive the defeasance.

AND

The Bonds have been defeased to [maturity/the first call date, which is __________]. This notice does not constitute a notice of redemption and no Bonds should be delivered to the County or the Paying Agent as a result of this mailing. A Notice of Redemption instructing you where to submit your Bonds for payment will be mailed _______ to _______ days prior to the redemption date.]

Dated:_____________________

DECATUR COUNTY

By:______________________________

1 No representation is made as to the correctness of the CUSIP number either as printed on the Bonds or as contained herein, and reliance may only be placed on other bond identification contained herein.

Appendix C - 8

DISSEMINATION AGENT’S CERTIFICATE

The undersigned hereby certifies that he/she is an officer of __________________, in the City of ________, ________ (the “Bank”), a _______________ [national/state] banking corporation duly created and existing under the laws of the _______________ [USA/State of Georgia], holding the office indicated below his/her signature, that he/she has personal knowledge of the facts herein set forth, and further certifies as follows:

1. The Bank is authorized and qualified to accept the duties of Dissemination Agent pursuant to appointment by a Disclosure Certificate signed on _____________, 20__ by the Board of Commissioners of Decatur County, as the governing body for Decatur County.

2. By acceptance of its appointment as Dissemination Agent, the Bank covenants and agrees that it will perform all services and assume its duties as such imposed by the Disclosure Certificate for the fees and on the conditions agreed upon with Decatur County.

Signed and sealed as of the ____ day of ____________, 20__.

[Name of Dissemination Agent]

(CORPORATE SEAL) By:______________________________ [name] [Title]

Attest:____________________________ [name] [Title]

Appendix D

SPECIMEN FINANCIAL GUARANTY INSURANCE POLICY

of 2 Form NY-FG (05/07)

Financial Guaranty Insurance Policy

Issuer: PPolicy No.:

Obligations: PPremium:

EEffective Date:

Assured Guaranty Corp., a Maryland corporation (“AAssured Guaranty”), in consideration of the payment of the Premium and on the terms and subject to the conditions of this Policy (which includes each endorsement hereto), hereby unconditionally and irrevocably agrees to pay to the trustee (the “TTrustee”) or the paying agent (the “PPaying Agent”) for the Obligations (as set forth in the documentation providing for the issuance of and securing the Obligations) for the benefit of the Holders, that portion of the Insured Payments which shall become Due for Payment but shall be unpaid by reason of Nonpayment.

Assured Guaranty will make such Insured Payments to the Trustee or the Paying Agent on the later to occur of (i) the date

applicable principal or interest becomes Due for Payment, or (ii) the Business Day next following the day on which Assured Guaranty shall have Received a completed Notice of Nonpayment. If a Notice of Nonpayment by Assured Guaranty is incomplete or does not in any instance conform to the terms and conditions of this Policy, it shall be deemed not Received, and Assured Guaranty shall promptly give notice to the Trustee or the Paying Agent. Upon receipt of such notice, the Trustee or the Paying Agent may submit an amended Notice of Nonpayment. The Trustee or the Paying Agent will disburse the Insured Payments to the Holders only upon receipt by the Trustee or the Paying Agent, in form reasonably satisfactory to it of (i) evidence of the Holder's right to receive such payments, and (ii) evidence, including without limitation any appropriate instruments of assignment, that all of the Holder's rights to payment of such principal or interest Due for Payment shall thereupon vest in Assured Guaranty. Upon and to the extent of such disbursement, Assured Guaranty shall become the Holder of the Obligations, any appurtenant coupon thereto and right to receipt of payment of principal thereof or interest thereon, and shall be fully subrogated to all of the Holder's right, title and interest thereunder, including without limitation the right to receive payments in respect of the Obligations. Payment by Assured Guaranty to the Trustee or the Paying Agent for the benefit of the Holders shall discharge the obligation of Assured Guaranty under this Policy to the extent of such payment.

This Policy is non-cancelable by Assured Guaranty for any reason. The Premium on this Policy is not refundable for any

reason. This Policy does not insure against loss of any prepayment premium or other acceleration payment which at any time may become due in respect of any Obligation, other than at the sole option of Assured Guaranty, nor against any risk other than Nonpayment.

Except to the extent expressly modified by any endorsement hereto, the following terms shall have the meanings specified

for all purposes of this Policy. “AAvoided Payment” means any amount previously distributed to a Holder in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable preference with respect to such Holder. “BBusiness Day” means any day other than (i) a Saturday or Sunday, (ii) any day on which the offices of the Trustee, the Paying Agent or Assured Guaranty are closed, or (iii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the City of New York or in the State of Maryland. “Due for Payment” means (i) when referring to the principal of an Obligation, the stated maturity date thereof, or the date on which such Obligation shall have been duly called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment is due by reason of a call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty in its sole discretion elects to make any principal payment, in whole or in part, on such earlier date) and (ii) when referring to interest on an Obligation, the stated date for payment of such interest. “HHolder” means, in respect of any Obligation, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Obligation to payment of principal or interest thereunder, except that Holder shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Obligations. “IInsured Payments” means that portion of the principal of and interest on the Obligations that shall become Due for Payment but shall be unpaid by reason of Nonpayment. Insured Payments shall not include any additional amounts owing by the Issuer solely as a result of the failure by the Trustee or the Paying Agent to pay such amount when due and payable, including without limitation any such additional amounts as may be attributable to penalties or to interest accruing at a default rate, to amounts payable in respect of indemnification, or to any other additional amounts payable by the Trustee or the Paying Agent by reason of such failure. “NNonpayment” means, in respect of an Obligation, the failure of the Issuer to have provided sufficient funds to the Trustee or the Paying Agent for payment in full of all principal and interest Due for Payment on such Obligation. It is further understood that the term "Nonpayment" in respect of an Obligation includes any Avoided Payment. “RReceipt” or “RReceived” means actual receipt or notice of or, if notice is given by overnight or other delivery service, or by certified or registered United States mail, by a delivery receipt signed by a person authorized to accept delivery on behalf of the person to whom the notice was given. Notices to Assured Guaranty may be mailed by registered mail or personally delivered or telecopied to it at 1325 Avenue of the Americas, New York, New York 10019, Telephone Number: (212) 974-0100, Facsimile Number: (212) 581-3268, Attention: Risk Management Department – Public Finance Surveillance, with a copy to the General Counsel, or to such other address as shall be specified by Assured Guaranty to the Trustee

of 2 Form NY-FG (05/07)

or the Paying Agent in writing. A Notice of Nonpayment will be deemed to be Received by Assured Guaranty on a given Business Day if it is Received prior to 12:00 noon (New York City time) on such Business Day; otherwise it will be deemed Received on the next Business Day. “TTerm” means the period from and including the Effective Date until the earlier of (i) the maturity date for the Obligations, or (ii) the date on which the Issuer has made all payments required to be made on the Obligations.

At any time during the Term of this Policy, Assured Guaranty may appoint a fiscal agent (the “FFiscal Agent”) for purposes of this Policy by written notice to the Trustee or the Paying Agent, specifying the name and notice address of such Fiscal Agent. From and after the date of Receipt of such notice by the Trustee or the Paying Agent, copies of all notices and documents required to be delivered to Assured Guaranty pursuant to this Policy shall be delivered simultaneously to the Fiscal Agent and to Assured Guaranty. All payments required to be made by Assured Guaranty under this Policy may be made directly by Assured Guaranty or by the Fiscal Agent on behalf of Assured Guaranty. The Fiscal Agent is the agent of Assured Guaranty only, and the Fiscal Agent shall in no event be liable to the Trustee or the Paying Agent for any acts of the Fiscal Agent or any failure of Assured Guaranty to deposit, or cause to be deposited, sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, Assured Guaranty hereby waives, in each case for the benefit of the Holders only, all rights and defenses of any kind (including, without limitation, the defense of fraud in the inducement or in fact or any other circumstance that would have the effect of discharging a surety, guarantor or any other person in law or in equity) that may be available to Assured Guaranty to deny or avoid payment of its obligations under this Policy in accordance with the express provisions hereof. Nothing in this paragraph will be construed (i) to waive, limit or otherwise impair, and Assured Guaranty expressly reserves, Assured Guaranty’s rights and remedies, including, without limitation: its right to assert any claim or to pursue recoveries (based on contractual rights, securities law violations, fraud or other causes of action) against any person or entity, in each case, whether directly or acquired as a subrogee, assignee or otherwise, subsequent to making any payment to the Trustee or the Paying Agent, in accordance with the express provisions hereof, and/or (ii) to require payment by Assured Guaranty of any amounts that have been previously paid or that are not otherwise due in accordance with the express provisions of this Policy.

This Policy (which includes each endorsement hereto) sets forth in full the undertaking of Assured Guaranty with respect to the subject matter hereof, and may not be modified, altered or affected by any other agreement or instrument, including, without limitation, any modification thereto or amendment thereof. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. This Policy will be governed by, and shall be construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, Assured Guaranty has caused this Policy to be affixed with its corporate seal, to be signed by its duly authorized officer, and to become effective and binding upon Assured Guaranty by virtue of such signature.

ASSURED GUARANTY CORP.

(SEAL)

By:__________________________________ [Insert Authorized Signatory Name] [Insert Authorized Signatory Title]

Signature attested to by:

_______________________________ Counsel