ESPLOST Joint Resolution by Valdosta and Lowndes County Boards of Education

WHEREAS, the Board of Education of Lowndes County (the "Lowndes County Board of Education") acting by, for and on behalf of the Lowndes County School District (the "Lowndes County School District"), the boundaries of which comprise all of Lowndes County except the corporate limits of the City of Valdosta, has determined that there exists a need for the (i) retirement of previously incurred general obligation debt, and (ii) the acquisition, construction and equipping of new school buildings and school facilities and the acquisition and purchase of property necessary and desirable therefore, both real and personal, within the Lowndes County School District (the "Lowndes Projects") as more particularly described in the "Notice of Election" (the "Notice") which is attached hereto as Exhibit A and made a part hereof; and

WHEREAS, and the Board of Education for the City of Valdosta (the "Valdosta Board of Education") acting by, for and on behalf of the Valdosta City School System (the "Valdosta School System"), the boundaries of which comprise the corporate limits of the City of Valdosta, has determined that there exists a need for the acquisition, construction and equipping new school buildings and school facilities and the acquisition and purchase of property necessary and desirable therefore, both real and personal, within the Valdosta School System (the "Valdosta Projects") as more particularly described in the Notice; and

WHEREAS, the Lowndes County Board of Education and the Valdosta Board of Education have considered and evaluated the provisions of Article VIII, Section VI, Paragraph IV of the Constitution of the State of Georgia, and Part 2 of Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated (collectively, the “Act”) which authorize a one percent sales and use tax for the purposes of financing certain capital outlay projects for educational purposes (the “sales tax”), such tax to correspond with and be levied in the same manner as the special county one percent sales and use tax provided for under Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated; and

WHEREAS, an educational sales tax is currently being collected in Lowndes County, which tax the Lowndes County Board of Education and the Valdosta Board of Education anticipate will cease to be collected on September 30, 2012; and

WHEREAS, the Lowndes County Board of Education and the Valdosta Board of Education have each determined that it is in the best interest of the citizens of Lowndes County who reside in the Lowndes County School District and in the City of Valdosta, respectively, that the sales tax continue to be imposed in Lowndes County upon termination of the educational sales tax presently in effect, for the purposes described in this resolution; and

WHEREAS, reimposition of the sales tax will permit the Lowndes County School District, as required by the Act, to reduce, beginning in 2013, the amount of ad valorem property taxes scheduled to be levied in the School District to pay the principal of and interest on the outstanding LOWNDES COUNTY SCHOOL DISTRICT GENERAL OBLIGATION BONDS, SERIES 2006, LOWNDES COUNTY SCHOOL DISTRICT GENERAL OBLIGATION BONDS, SERIES 2007, LOWNDES COUNTY SCHOOL DISTRICT GENERAL OBLIGATION BONDS, SERIES 2008 and the LOWNDES COUNTY SCHOOL DISTRICT GENERAL OBLIGATION BONDS, SERIES 2009, and, instead, to retire such outstanding bonds with proceeds from the sales tax; and

WHEREAS, the Valdosta Board of Education recognizes that the most feasible method of financing a portion of the Valdosta Projects is through the issuance of general obligation debt pursuant to the Constitution and laws of the State of Georgia; and

WHEREAS, the Lowndes County Board of Education and the Valdosta Board of Education desire to provide the voters of Lowndes County with the opportunity to vote in favor of or against the reimposition of the sales tax and the issuance of general obligation debt of the Valdosta School System described above; and

WHEREAS, pursuant to provisions of the Act, the board of education of each county school district and the board of education of each independent school district within such county shall adopt concurrent resolutions with respect to the imposition, levy and collection of a one percent sales and use tax for educational purposes; and

WHEREAS, the Valdosta Board of Education has determined and declares by adoption of this resolution that during each year in which any payment of principal of or interest on the general obligation debt of the Valdosta School System will come due, the Valdosta School System will receive from the sales tax net proceeds sufficient to fully satisfy its obligation with respect to the payment of such principal and interest on a current basis;

NOW, THEREFORE, BE IT RESOLVED by the Lowndes County Board of Education and the Valdosta Board of Education in public meetings assembled, and it is hereby resolved by authority of the same that:

1. There is hereby called an election to be held in all voting precincts in Lowndes County on March 15, 2011, for the purpose of submitting to the qualified voters of Lowndes County the question presented on the form of the ballot set forth the Notice attached hereto as Exhibit A.

2. Subject to the assent of a majority of the qualified voters residing in the City of Valdosta voting in the election, the issuance of general obligation debt of the Valdosta School System described on the ballot is hereby authorized. Such general obligation debt shall constitute a pledge of the full faith and credit of the Valdosta School System.

3. Any general obligation debt which may be issued by the Valdosta School System shall not exceed $25,000,000 in principal amount. The purposes for which the general obligation debt is to be issued shall be to pay a portion of the cost of the Valdosta Projects described in the Notice and to pay capitalized interest on, and the cost of issuance of, such debt. The maximum interest rate or rates such general obligation debt shall bear shall be seven percent (7.0%) per annum. The maximum amount of principal to be paid in each year during the life of such general obligation debt shall be as follows:

Year	Principal Amount
Year 1	$4,880,000
Year 2	4,930,000
Year 3	4,985,000
Year 4	5,060,000
Year 5	5,145,000

4. Subject to the assent of a majority of the qualified voters residing in Lowndes County voting in the election, in order to raise $94,875,000 for the Lowndes County School District to finance the Lowndes Projects at an estimated cost of $55,675,000 and retire previously incurred general obligation debt of the Lowndes County School District in a maximum amount of $39,200,000, and in order to raise $70,125,000 for the Valdosta School System to pay the costs of the Valdosta Projects and to finance the payment of the general obligation debt referred to above, there shall be imposed, levied and collected within Lowndes County and the City of Valdosta a one percent sales and use tax for educational purposes in accordance with the Act. The maximum cost of said capital outlay projects to be funded with sales tax proceeds and to retire previously incurred general obligation debt, which shall also be the maximum amount of net proceeds to be raised by the sales tax and received by the Lowndes County School District and the Valdosta School System, respectively, is set forth in the Notice. The Lowndes County School District and the Valdosta School System, respectively, may utilize such other funds as may be lawfully available to pay the costs of said capital outlay projects which exceed said maximum amount of net proceeds. In accordance with the provisions of the Act, the net proceeds of the sales tax

5. shall be distributed between the Lowndes County School District and the Valdosta School System according to the ratio the student enrollment in the Lowndes County School District and the Valdosta School System each bear to the total of such student enrollment. Student enrollment shall be based on the latest FTE count prior to the election on imposing the sales tax. The FTE for October, 2010 was 17,338 students; 9,977 students for the Lowndes County School District (57.5%) and 7,361 students for the Valdosta School System (42.5%).

6. The maximum period of time for which the sales tax shall be imposed shall be twenty consecutive calendar quarters, commencing upon termination of the sales tax currently in effect.

7. To the extent possible, the Lowndes County School District and the Valdosta School System each intend to combine their respective available State of Georgia funds with their respective revenues from the sales and use tax and other available funds to finance their respective projects. A copy of this resolution shall be delivered to the Board of Elections and

8. Registration for Lowndes County as election superintendent (the “Board of Elections”) and the Board of Elections is hereby requested to issue the call for the election to be held on March 15, 2011, for the purpose of submitting the question of the imposition of the sales tax to the voters of the Lowndes County School District and the City of Valdosta. Such call shall be issued not less than thirty days prior to the date of the referendum. The Board of Elections shall cause the date and purposes of the referendum to be published once a week for five weeks immediately preceding the date of the referendum in the official organ of Lowndes County and the notice thereof will be substantially in the form attached hereto and made a part hereof as Exhibit A.

9. The Board of Elections shall hold and conduct the referendum under the same rules and regulations as govern special elections. The Board of Elections shall canvass the returns, declare the results of the referendum, and certify the result to the Secretary of State and to the Commissioner of the Department of Revenue of the State of Georgia.

10. Excess proceeds of the sales tax received by the Lowndes County School District or the Valdosta School System which remain following expenditure of proceeds for retiring previously incurred general obligation debt or for authorized projects or purposes for education as described in the Notice, shall be used solely for the purpose of reducing any indebtedness of the Lowndes County School District or the Valdosta School System, as the case may be. In the event there is no indebtedness, such excess proceeds shall be used for the purpose of reducing the millage rate of the Lowndes County School District or the Valdosta School System in an amount equivalent to the amount of such excess proceeds.

11. Should general obligation debt of the Valdosta School System be authorized, the Mayor and Council of the City of Valdosta shall levy a tax upon all property subject to taxation for general obligation bond purposes within the City of Valdosta sufficient in amount to pay the principal of and interest on said general obligation debt to the extent of any deficiency in the sales tax proceeds.

12. (a) If general obligation debt of the Valdosta School System is to be issued, the Valdosta Board of Education reasonably expects that, prior to issuance of such debt, it will be necessary to expend funds on the acquisition, construction, and equipping of the Valdosta Projects described in the Notice and wishes to be reimbursed for such expenditures from proceeds from the sale of such general obligation debt. Therefore, subject to approval of the voters of the City of Valdosta, the Valdosta Board of Education hereby declares its official intent to issue general obligation debt in a principal amount not to exceed $25,000,000 and to reimburse original expenditures on the Valdosta Projects up to said amount with proceeds from the sale of such debt (to the extent permitted by Section 1.150-2 of the Treasury Regulations). The Valdosta School System will pay original expenditures on the capital outlay projects from a construction or other account maintained by the Valdosta School System.

(b) The Valdosta School System shall make its reimbursement allocations not later than 18 months after the later of (i) the date the original expenditure is paid or (ii) the date the capital outlay projects are placed in service or abandoned, but in no event more than three years after the original expenditure is paid.

13. The Secretary of the Lowndes County Board of Education and/or the Secretary of the Valdosta School System are hereby authorized and directed to deliver to the Board of Elections a certified copy of this resolution.

14. The proper officers and agents of the Valdosta School System are hereby authorized to retain the services of Morgan Keegan & Company, Inc., Atlanta, Georgia, to provide placement agent or underwriting services and the services of the law firm of Gray & Pannell LLP, Savannah, Georgia as bond counsel with regard to the proper issuance of the general obligation indebtedness authorized hereby and as disclosure counsel with regard to a public offering, if any, with regard to said general obligation indebtedness, and such officers and agents are further authorized to take any and all further actions as may be required in connection with the calling and holding of the referendum, imposition of the sales tax, expenditure of tax proceeds, and the issuance of general obligation debt, as herein provided.

15. All resolutions or parts of resolutions, if any, in conflict herewith, shall be and the same are hereby repealed.

ADOPTED, this December 13, 2010.

LOWNDES COUNTY SCHOOL DISTRICT Chairman, Board of Education of Lowndes County VALDOSTA SCHOOL SYSTEM Chairman, Board of Education for the City of Valdosta