SHELBY COUNTY COMMISSIONERS Van D

THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION OR AMENDMENT. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. As of this date, this Preliminary Official Statement has been deemed “final” by the County for purposes of SEC Rule 15c2-12(b)(1) except for the omission of certain information permitted by SEC Rule 15c2-12(b)(1). and estatetaxes,Tennesseefranchiseexcisetaxes.Foramorecompletedescription,see“TAXMATTERS”herein. income therefrom shall be free from all state, county and municipal taxation in the State of Tennessee, except inheritance, transfer the federalalternativeminimumtax.BondCounselisfurtherofopinionthat,underexistinglaw,Series2019Bondsand of 1986, as amended to the date of delivery of the Series 2019 Bonds, and such interest is not a specific preference item for purposes of (defined below) is excludable from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of certain representations and continuous compliance with certain covenants described herein, interest on the Series 2019 Bonds Improvement and School Bonds, 2009 Series C (Federally Taxable – Build America Bonds – Direct Payment) (the “2009 Series C Bonds” C “ See Bonds. 2019B Series the Series of issuance of costs the pay “2009 (b) and Bonds”) “Refunded the Bonds, (the B Series 2009 the with together and Payment) Direct – Bonds America Build – Taxable (Federally C Series 2009 Bonds, School and Improvement the refund currently County’s (a) General Obligation to: Public used Improvement be and will School Bonds Bonds, 2009 2019B Series Series B the (the of “2009 Series proceeds B The Bonds”) Bonds. and 2019A General Obligation Series Public the of issuance of costs the pay (c) and Note”), 2017 “Series (the 2017 Series Note, Anticipation Bond Obligation General outstanding County’s the on due principal the (b) pay January 14,2019(collectively,the“BondResolution”). 49-3-1005 Annotated 9-21-101 Annotated Code Tennessee to, pursuant issued being are Bonds 2019 Series The Bonds”). 2019 “Series the principal amount of General Obligation Refunding Bonds, 2019 Series B (the “Series 2019B Bonds”, and together with the Series 2019A Bonds amount of General Obligation Public Improvement and School Bonds, 2019 Series A (the “Series 2019A Bonds”) and $72,460,000* in aggregate * Preliminary subjecttochange. Dated: February___, 2019 the book Financial Advisors to theCounty fortheissuanceofSeries2019Bonds.The Bondsareexpectedto be deliveredthrough Co- as serving are Tennessee, Memphis, LLC, Advisors Financial PFM and Tennessee, Memphis, Partners, ComCap Attorney. County Tennessee, asDisclosureCounsel totheCounty.Certainlegalmatterswillbepasseduponfor CountybyMarlineeC.Iverson,Esquire, Tennessee, as Bond Counsel to the County. Certain legal matters will be passed upon for the County by Carpenter Law, PLLC, Memphis, Memphis, LLP, Snow Butler of opinion approving the to subject and notice, without offer the of modification or withdrawal to and sale information essentialtothemakingofaninformedinvestmentdecision. Bonds. Prospective investors must read this entire Official Statement (including the cover page and all appendices attached hereto) to obtain the Series 2019BBonds. to relating Sale of Notice Official the in provided as all Monitor, Market Municipal Thomson through provided notice with County the by determined be may as time or date other such on or Time, Central a.m. 9:30 at 2019, 29, January on PARITY® via received be will Bonds 2019B Series the of purchase the for proposals Electronic Bonds. 2019A Series the to relating Sale of Notice Official the in provided as all Time, or on such other date or time as may be determined by the County with notice provided through Thomson Municipal Market Monitor, and herein BONDS” 2019 SERIES THE FOR PAYMENT “APPENDIX A – GENERAL INFORMATIONREGARDINGTHE COUNTYOFSHELBY,TENNESSEE”attachedhereto. OF SOURCE AND “SECURITY See law. by limited or authorized taxes other to addition all in due, become shall same the as Bonds 2019 Series the on interest and principal the pay to sufficient tax a collect and levy to agreed has County The Bonds. 2019 Series the on interest and principal the of payment punctual the to pledged are County the in property Dated: DateofDelivery NE October 1 of each year, commencing October 1, 2019. The Series 2019 Bonds are subject to redemption prior to maturity as more fully more as maturity to prior redemption to subject are Bonds described herein.See“DESCRIPTIONOFTHESERIES2019BONDS 2019 Series The 2019. 1, October commencing year, each 1 and of April 1 on October semiannually payable date their from interest bear will and Statement Official this of page cover inside the on specified as system isdiscontinued.See“Book-EntryOnlySystem”herein. only book-entry the unless Bonds 2019 Series the in interests ownership beneficial the representing certificates of delivery physical receive book in made be will Bonds 2019 Series the in interests ownership beneficial of Purchases Bonds. 2019 Series the for depository securities as act will which (“DTC”), Company Trust Depository The of nominee as Cede & Co., of name the in registered be will initially and Statement Official this of page cover inside the on shown amounts principal the to equal thereof multiple meanings assignedtheretointheBondResolution. of G FINANCE” and “SOURCES AND USES OF FUNDS” herein. All capitalized terms used and not otherwise defined herein shall have the have shall herein defined otherwise not and used terms capitalized All herein. FUNDS” OF USES AND “SOURCES and FINANCE” ENERAL W In theopinionofBondCounsel,underexistinglaws,regulations,rulings,andjudicialdecisionsassumingaccuracy The proceeds of the Series 2019A Bonds will be used to: (a) finance various public works projects in the County and for school purposes; This Official Statement relates to the issuance by the County of Shelby, Tennessee (the “County”) of $170,865,000* in aggregate principal The Series2019Bondsarebeing offeredwhen,asandifissuedbytheCountyreceived by theUnderwriter,subjecttoprior 2019 Series the to relating matters the of summary a not is It only. reference quick for information limited contains page cover This Electronic proposals for the purchase of the Series 2019A Bonds will be received via PARITY® on January 29, 2019, at 9:15 a.m. Central taxable all to as power taxing unlimited and credit and full-faith its and County the of obligations direct are Bonds 2019 Series The The Series 2019 Bonds will be dated their date of delivery, will mature on April 1 in each of the years and in the principal amounts principal the in and years the of each in 1 April on mature will delivery, of date their dated be will Bonds 2019 Series The The Series 2019 Bonds will be issued only in fully registered form, without coupons, in authorized denominations of $5,000 or any integral ISSUE ‑ AN entry onlysystem ofDTConoraboutFebruary 14,2019. D -BOOK- OB SCH LI ., (the “Act”), and those resolutions duly adopted by the Board of County Commissioners (as defined herein) on herein) defined (as Commissioners County of Board the by adopted duly resolutions those and “Act”), (the et seq., OO This Preliminary Official G EN A $170,865,000*

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MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS†

$170,865,000* COUNTY OF SHELBY, TENNESSEE GENERAL OBLIGATION PUBLIC IMPROVEMENT AND SCHOOL BONDS, 2019 SERIES A

Maturity Principal Interest Initial (April 1) Amount Rate Price Yield CUSIP No.† 2020 $ 4,140,000 2021 5,460,000 2022 5,730,000 2023 6,020,000 2024 6,320,000 2025 6,635,000 2026 6,970,000 2027 7,315,000 2028 7,680,000 2029 8,065,000 2030 8,470,000 2031 8,895,000 2032 9,335,000 2033 9,805,000 2034 10,295,000 2035 10,810,000 2036 11,350,000 2037 11,915,000 2038 12,515,000 2039 13,140,000

$______- ____% Term Bond, Due April 1, 20__, Yield _____%, Price ____, Initial CUSIP No. ______†

* Preliminary; subject to change.

† Initial CUSIP numbers have been assigned to the Series 2019A Bonds by an organization not affiliated with the County and are included for the convenience of the owners of the Series 2019A Bonds. The County is not responsible for the selection, use or accuracy of the CUSIP numbers nor is any representation made as to the accuracy of the CUSIP numbers as to the Series 2019A Bonds, or as indicated above.

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS‡

$72,460,000* COUNTY OF SHELBY, TENNESSEE GENERAL OBLIGATION REFUNDING BONDS, 2019 SERIES B

Maturity Principal Interest Initial (April 1) Amount Rate Price Yield CUSIP No.† 2020 $ 3,310,000 2021 3,950,000 2022 4,145,000 2023 4,350,000 2024 4,570,000 2025 4,095,000 2026 4,315,000 2027 4,535,000 2028 4,770,000 2029 5,015,000 2030 5,280,000 2031 5,565,000 2032 5,865,000 2033 6,180,000 2034 6,515,000

$______- ____% Term Bond, Due April 1, 20__, Yield _____%, Price ____, Initial CUSIP No. ______†

* Preliminary; subject to change.

† Initial CUSIP numbers have been assigned to the Series 2019B Bonds by an organization not affiliated with the County and are included for the convenience of the owners of the Series 2019B Bonds. The County is not responsible for the selection, use or accuracy of the CUSIP numbers nor is any representation made as to the accuracy of the CUSIP numbers as to the Series 2019B Bonds, or as indicated above.

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COUNTY OF SHELBY, TENNESSEE ELECTED OFFICIALS MAYOR Lee Harris

BOARD OF SHELBY COUNTY COMMISSIONERS Van D. Turner, Jr, Chairman Mark Billingsley, Chairman, Pro Tempore David C. Bradford Reginald Milton Willie F. Brooks, Jr. Brandon Morrison Edmund Ford, Jr. Tami Sawyer Eddie S. Jones, Jr. Michael Whaley Mickell Lowery Mick Wright Amber Mills

SHELBY COUNTY ADMINISTRATION Patrice Thomas…………………………………… ...... Chief Administrative Officer Chris McLean…………………………………… ...... Director of Administration and Finance Marlinee C. Iverson ...... County Attorney Dorcas Young Griffin ...... Director of Community Services John Zeanah ...... Director of Planning and Development Alisa R. Haushalter ...... Director of Health Services Thomas E. Needham ...... Director of Public Works Anthony Alexander...... Director of Corrections John Halbert ...... Chief Information Officer Brenda Jones ...... Director of Office of Preparedness

CONSULTANTS TO SHELBY COUNTY Bond Counsel

Butler Snow LLP Memphis, Tennessee

Disclosure Counsel

Carpenter Law, PLLC Memphis, Tennessee

Co-Financial Advisors

ComCap Partners PFM Financial Advisors LLC Memphis, Tennessee Memphis, Tennessee External Auditor

Watkins & Uiberall, PLLC Memphis, Tennessee

This Official Statement does not constitute a contract between the County or the Underwriter and any one or more owners of the Series 2019 Bonds, nor does it constitute an offer to sell or the solicitation of an offer to buy the Series 2019 Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer in such jurisdiction.

No dealer, salesman or any other person has been authorized by the County or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement, in connection with the offering of the Series 2019 Bonds, and if given or made, such information or representations must not be relied upon as having been authorized by the County or any other person. The information and expressions of opinion in this Official Statement are subject to change without notice, and this Official Statement speaks only as of its date. Neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create the implication that there has been no change in the matters described herein since the date hereof. Except as otherwise indicated, the information contained in this Official Statement, including in the appendices attached hereto, has been obtained from representatives of the County and from public documents, records and other sources considered to be reliable.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2019 BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2019 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE SERIES 2019 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE BOND RESOLUTION BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2019 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 2019 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2019 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

In making an investment decision, investors must rely on their own examination of the County and the terms of the offering, including the merits and risks involved. The Series 2019 Bonds have not been recommended by any federal or state securities commission or regulatory authority. Any representation to the contrary may be a criminal offense.

The order and placement of information in this Official Statement, including the appendices attached hereto, are not an indication of relevance, materiality or relative importance and this Official Statement, including the appendices attached hereto, must be read in its entirety. The captions and headings in this Official Statement are for convenience only and in no way define, limit or describe the scope or intent, or affect the meaning or construction, of any provision or section in this Official Statement.

References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader's convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for any purpose, including for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission.

TABLE OF CONTENTS Page

INTRODUCTION...... 1 General ...... 1 Shelby County, Tennessee ...... 1 Authority for Issuance ...... 1 Purpose of the Series 2019 Bonds ...... 2 Description of the Series 2019 Bonds ...... 2 Security and Source of Payment for the Series 2019 Bonds ...... 2 Paying Agent and Registrar ...... 2 Continuing Disclosure ...... 2 Forward-Looking Statements ...... 3 Additional Information ...... 3

PLAN OF FINANCE ...... 4 Series 2019A Bonds ...... 4 Series 2019B Bonds ...... 4 Refunded Bonds ...... 5

SOURCES AND USES OF FUNDS ...... 6

DESCRIPTION OF THE SERIES 2019 BONDS ...... 7 General ...... 7 Redemption Provisions ...... 7 Selection of the Series 2019 Bonds to be Redeemed ...... 8 Notice of Redemption; Conditional Notice of Redemption ...... 8 Book-Entry Only System ...... 9

SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2019 BONDS ...... 12 General ...... 12 Direct Obligations ...... 12

DEBT SERVICE ...... 13

SHELBY COUNTY FINANCES AND DEBT MANAGEMENT ...... 14 Short-Term Debt Financing ...... 14 Long-Term Debt Issuance ...... 14 Debt Ratios ...... 15

RETIREMENT SYSTEM & POST-EMPLOYMENT BENEFIT INFORMATION ...... 16 Shelby County Retirement System ...... 16 Pension Plan Reform ...... 17 Other Post-Employment Benefits ...... 17

BONDHOLDERS’ RISKS ...... 20 General ...... 20 Assessed Value of Property ...... 20 Potential Delay and Limitations on Tax Collections ...... 20 Additional Obligations ...... 20

Early Payment Prior to Maturity ...... 21 Loss of Tax Exemption ...... 21 Limited Protection Against Loss of Tax Exemption of the Series 2019 Bonds ...... 21 Enforceability of Remedies ...... 21 Ratings on the Series 2019 Bonds ...... 21 Suitability of the Series 2019 Bonds for Investment ...... 22

LITIGATION ...... 22 General ...... 22

TAX MATTERS ...... 24 General ...... 24 Original Issue Discount...... 24 Original Issue Premium ...... 25 Backup Withholding ...... 25 Changes in Federal and State Tax Law ...... 26

APPROVAL OF LEGAL MATTERS ...... 26

CO-FINANCIAL ADVISORS ...... 27

INDEPENDENT AUDITOR ...... 27

RATINGS ...... 27

UNDERWRITING ...... 27

CONTINUING DISCLOSURE ...... 28

MISCELLANEOUS ...... 28

APPENDICES

APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE

APPENDIX B – AUDITED FINANCIAL STATEMENTS OF THE COUNTY OF SHELBY, TENNESSEE FOR THE FISCAL YEAR ENDED JUNE 30, 2018

APPENDIX C – FORMS OF OPINIONS OF BOND COUNSEL

APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT

OFFICIAL STATEMENT

$170,865,000* $72,460,000* GENERAL OBLIGATION PUBLIC IMPROVEMENT GENERAL OBLIGATION REFUNDING BONDS, AND SCHOOL BONDS, 2019 SERIES A 2019 SERIES B

INTRODUCTION

This introduction contains a summary of the offering and certain documents. Investors must read this Official Statement, including the appendices attached hereto, in its entirety.

General

The purpose of this Official Statement, which includes the cover page and the appendices attached hereto, is to provide certain information in connection with the issuance and sale by the County of Shelby, Tennessee (the “County”), of $170,865,000* in aggregate principal amount of General Obligation Public Improvement and School Bonds, 2019 Series A (the “Series 2019A Bonds”) and $72,460,000* in aggregate principal amount of General Obligation Refunding Bonds, 2019 Series B (the “Series 2019B Bonds”, and together with the Series 2019A Bonds the “Series 2019 Bonds”). All capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the hereinafter defined Bond Resolution.

Shelby County, Tennessee

The County was established in 1819 and covers 783 square miles in southwest Tennessee. Of this, 317 square miles are within the city limits of Memphis (the “City of Memphis” or the “City”). The County has jurisdiction over all unincorporated areas of the County and provides some major services within the City of Memphis, such as supplemental funding for Regional One Health Hospital and a complex of healthcare facilities.

The County is governed by a mayor-commissioner form of government under a Home Rule Charter that went into effect on October 1, 1986. Each serves a 4-year term. The Mayor is the County's chief executive officer (“Mayor”) and oversees the operation of seven divisions - Administration and Finance; Community Services; Corrections; Health Services; Information Technologies; Planning and Development; and Public Works. The Mayor must sign all contracts.

The thirteen-member Board of County Commissioners of Shelby County (the “County Commission”), the legislative branch of the government, is responsible for reviewing and approving the administration's programs and budgets. See “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE” attached hereto.

Authority for Issuance

The Series 2019 Bonds are being issued pursuant to the Constitution and statutes of the State, including the provisions of the Local Government Public Obligations Act of 1986, as amended, codified as Tennessee Code Annotated 9-21-101 et seq., and Tennessee Code Annotated 49-3-1005 et seq., (the “Act”), and those certain resolutions duly adopted by the County Commission on January 14, 2019 (collectively, the “Bond Resolution”). ______* Preliminary subject to change.

Purpose of the Series 2019 Bonds

The proceeds of the Series 2019A Bonds will be used to: (a) finance various public works projects in the County and for school purposes; (b) pay the principal due on the County’s outstanding General Obligation Bond Anticipation Note, Series 2017 (the “Series 2017 Note”), and (c) pay the costs of issuance of the Series 2019A Bonds. The proceeds of the Series 2019B Bonds will be used to: (a) currently refund the County’s General Obligation Public Improvement and School Bonds, 2009 Series B (the “2009 Series B Bonds”) and General Obligation Public Improvement and School Bonds, 2009 Series C (Federally Taxable – Build America Bonds – Direct Payment) (the “2009 Series C Bonds” and together with the 2009 Series B Bonds, the “Refunded Bonds”) and (b) pay the costs of issuance of the Series 2019B Bonds. See “PLAN OF FINANCE” and “SOURCES AND USES OF FUNDS” herein. All capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution.

Description of the Series 2019 Bonds

The Series 2019 Bonds will be dated their date of delivery, will mature on April 1 in each of the years and in the principal amounts as specified on the inside cover page of this Official Statement and will bear interest from their date payable semiannually on April 1 and October 1 of each year, commencing October 1, 2019. The Series 2019 Bonds are subject to redemption prior to maturity as more fully described herein. See “DESCRIPTION OF THE SERIES 2019 BONDS – Redemption Provisions” herein.

Security and Source of Payment for the Series 2019 Bonds

Paying Agent and Registrar

The Trustee of Shelby County, Tennessee, will act as the initial paying agent and registrar for the Series 2019 Bonds (in that capacity, the “Paying Agent and Registrar”).

Continuing Disclosure

In order to assist the Underwriter (as defined herein) in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the “SEC”) promulgated pursuant to the Securities Exchange Act of 1934, as in effect on the date hereof (the “Rule”), simultaneously with the issuance of the Series 2019 Bonds, the County will enter into a Continuing Disclosure Agreement (the “Disclosure Agreement”) with Digital Assurance Certification, L.L.C. (“DAC”) for the benefit of the Beneficial Owners (as defined herein), under which the County will provide continuing disclosure with respect to the Series 2019 Bonds and the County has designated DAC as initial disclosure dissemination agent. The annual continuing disclosure report and notices of certain enumerated events (as described in the Disclosure Agreement) will be filed by DAC, on behalf of the County, with the repository designated by the SEC, presently the Municipal Securities Rulemaking Board (the “MSRB”), through the Electronic Municipal Market Access system (“EMMA”) in an electronic format prescribed by the MSRB. See “CONTINUING DISCLOSURE”

herein and “APPENDIX D - FORM OF CONTINUING DISCLOSURE AGREEMENT” attached hereto.

Forward-Looking Statements

The statements contained in this Official Statement, including the appendices that are not purely historical, are forward-looking statements, including statements regarding the County’s expectations, hopes, intentions or strategies regarding the future. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget,” “project,” “forecast,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “intend” or other similar words. Prospective investors should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the County on the date hereof, and the County assumes no obligation to update any such forward-looking statements with new forward-looking statements. It is important to note that the County’s actual results likely will differ, and could vary materially from those in such forward-looking statements.

The forward-looking statements herein are based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, among others, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult to predict accurately and many of which are beyond the control of the County. Therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate.

Additional Information

All references in this Official Statement to the general information regarding the County is attached hereto as APPENDIX A. Financial statements of the County for the Fiscal Year ended June 30, 2018 are attached hereto as APPENDIX B. The forms of the approving opinions of Bond Counsel that will be delivered in connection with the issuance of the Series 2019 Bonds are attached hereto as APPENDIX C. The form of the Continuing Disclosure Agreement entered into by and between the County and DAC is attached hereto as APPENDIX D. This Official Statement speaks only as of its date and the information contained herein is subject to change.

This Official Statement, including the appendices attached hereto, contain brief descriptions of, among other matters, the County, the Series 2019 Bonds, the security and source of payment for the Series 2019 Bonds, the Bond Resolution and the Disclosure Agreement. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions, statutes, the Bond Resolution, the Series 2019 Bonds, the Disclosure Agreement and other documents are intended as summaries only and are qualified in their entirety by reference to such documents. References herein to the Series 2019 Bonds are qualified in their entirety to the form thereof included in the Bond Resolution. Copies of the Bond Resolution, the Disclosure Agreement and other relevant documents and information are available, upon written request and payment of a charge for copying, mailing and handling, from Mr. Chris McLean, Director of Administration and Finance, 160 North Main Street, Memphis, Tennessee 38103; (901 222-2228).

PLAN OF FINANCE

The County, pursuant to Section 9-21-101 through 9-21-916, and in the case of bonds issued for school purposes Section 49-3-1001, et seq., of the Tennessee Code Annotated (“T.C.A.”), has the power and is authorized to issue by resolution general obligation bonds for public works projects, including schools, and general obligation refunding bonds to refund obligations lawfully issued and provide for the rights of the holders of such general obligation bonds and general obligation refunding bonds, and to secure such bonds as provided in Part I, Part II and Part IX of Section 9-21-101, et seq. of the T.C.A., and in the case of the bonds issued for school purposes as provided in Section 49-3-1005, et seq. of the T.C.A.

Series 2019A Bonds

Series 2019B Bonds

The proceeds of the Series 2019B Bonds will be used to: (a) currently refund the County’s General Obligation Public Improvement and School Bonds, 2009 Series B (the “2009 Series B Bonds”) and the General Obligation Public Improvement and School Bonds, 2009 Series C (Federally Taxable – Build America Bonds – Direct Payment) (the “2009 Series C Bonds” and together with the 2009 Series B Bonds, the “Refunded Bonds”) and (b) pay the costs of issuance of the Series 2019B Bonds. See “SOURCES AND USES OF FUNDS” herein.

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Refunded Bonds

The Refunded Bonds* are more particularly described in the table below:

Maturity Interest Par Call Call Bond Date Rate Amount Date Price

G.O. Public Improvement and School Bonds, Series 2009B: SERIAL 04/01/2019 3.250% $4,425,000 04/01/2020 4.000% 4,570,000 04/01/2019 100.000 04/01/2021 5.000% 4,755,000 04/01/2019 100.000 04/01/2022 5.000% 4,990,000 04/01/2019 100.000 04/01/2023 4.500% 5,240,000 04/01/2019 100.000 04/01/2024 4.000% 5,475,000 04/01/2019 100.000 29,455,000

G.O. Public Improvement and School Bonds, Series 2009C: TERM BAB 2029 04/01/2029 5.625% $27,030,000 04/01/2019 100.000

TERM BAB 2034 04/01/2034 5.750% 32,970,000 04/01/2019 100.000 $60,000,000

$89,455,000 ______* Preliminary, subject to change.

Except as hereinafter provided, a portion of the proceeds of the sale of the Series 2019 Bonds, together with other available funds of the County, will be deposited in refunding trust funds (the “Refunding Trust Funds”) to be created pursuant to a refunding trust agreement to be dated as of the date of the Series 2019 Bonds (the “Refunding Trust Agreement”), between the County and Regions Bank, Nashville, Tennessee, as refunding trustee thereunder (the “Refunding Trustee”), to be used, together with the earnings thereon, to redeem the Refunded Bonds on April 1, 2019, which is the first optional redemption date for the Refunded Bonds.

The Refunding Trustee shall invest monies on deposit in the Refunding Trust Funds in direct obligations of, or obligations, the principal of and interest on which are guaranteed by, the United States of America, obligations of any agency or instrumentality of the United States or any other obligations which at the time of the purchase thereof are permitted investments under Tennessee law which bonds or other obligations shall not be subject to redemption prior to their maturity other than at the option of the registered owner thereof (the “Government Obligations”).

The Refunded Bonds will not be defeased as a result of the deposit of the Government Obligations and will remain outstanding and continue to be secured by the pledge of the full faith and credit and unlimited taxing power as to all taxable property in the County until the redemption date of the Refunded Bonds.

SOURCES AND USES OF FUNDS

The table below sets forth the estimated sources and uses of funds in connection with the issuance of the Series 2019 Bonds:

Series 2019A Series 2019B Total

Sources of Funds

Par Amount $______$ ______$______[Reoffering Premium/Discount] ______Other Available Monies ______Total Sources $______$ ______$ ______

USES

Deposit to 2019A Project Fund $______$______$______Deposit to 2019B Refunding Trust Fund ______Cost of Issuance* ______

Total Uses $______$______$______

______* Includes Underwriters' discount, legal counsel fees, financial advisor fees, rating agencies fees, printing and mailing expenses and other costs of issuance of the Series 2019 Bonds.

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DESCRIPTION OF THE SERIES 2019 BONDS

General

The Series 2019 Bonds will be dated their date of delivery and will bear interest and mature on the dates set forth on the inside front cover page of this Official Statement. Interest on the Series 2019 Bonds is payable semiannually on April 1 and October 1 of each year, commencing October 1, 2019, until paid in full (each such date, an “Interest Payment Date”), to the registered owners in whose names the Series 2019 Bonds are registered on the books of registry kept and maintained by the Paying Agent and Registrar as of the close of business on the fifteenth (15th) day, whether or not a business day, of the calendar month preceding the month in which such interest is payable. Interest on the Series 2019 Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Principal on the Series 2019 Bonds is payable on April 1 of each year, commencing April 1, 2020.

The Series 2019 Bonds will be issued only in fully registered form, without coupons, in authorized denominations of $5,000 or any integral multiple thereof and initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), which will act as securities depository for the Series 2019 Bonds. Purchases of beneficial ownership interests in the Series 2019 Bonds will be made in book-entry only form and purchasers will not receive physical delivery of certificates representing the beneficial ownership interests in the Series 2019 Bonds unless the book-entry only system is discontinued. Transfers of ownership interests in the Series 2019 Bonds will be accomplished by book entries made by DTC and, in turn, by the DTC Participants (defined herein) who act on behalf of the indirect participants of DTC and the Beneficial Owners (as defined herein) of the Series 2019 Bonds.

Unless the County and the Paying Agent and Registrar agree otherwise, so long as DTC or its nominee is the registered owner of the Series 2019 Bonds at such securities depository, payments of principal, premium, if any, and interest on the Series 2019 Bonds will be made by wire transfer to DTC or its nominee, Cede & Co., as registered owner of the Series 2019 Bonds, which will in turn remit such payments to the DTC Participants for subsequent disbursement to the Beneficial Owners of the Series 2019 Bonds. Transfers of such payments to DTC Participants will be the responsibility of DTC. Transfers of such payments to Beneficial Owners of the Series 2019 Bonds by DTC Participants will be the responsibility of such participants and other nominees of such Beneficial Owners. If the book-entry only system is discontinued, the Series 2019 Bonds will be delivered as described in the Bond Resolution, the Beneficial Owners or their nominees will become the registered owners of the Series 2019 Bonds and interest on the Series 2019 Bonds will be payable and ownership of the Series 2019 Bonds may be transferred as described in the Bond Resolution. See “Book-Entry Only System” below.

Redemption Provisions

Optional Redemption. The Series 2019 Bonds (or portions thereof in authorized denominations of $5,000 and integral multiples thereof) are subject to optional redemption by the County on and after April 1, 2029, in whole or in part, at any time in such order as determined by the County and by lot within a maturity (if less than a full maturity is to be redeemed), at a redemption price equal to the principal amount of the Series 2019 Bonds or portion thereof to be redeemed, together with interest accrued thereon to the date fixed for redemption.

[Mandatory Redemption. Bidders, in their bids for purchase of the Series 2019 Bonds, may designate principal amounts of Series 2019 Bonds as term bonds as set forth in the Official Notice of Sale for any two or more consecutive years as a single term maturity which will mature in the latest of the years designated, and will have a stated maturity amount equal to the sum of the annual principal amounts

designated as a part of such term maturity. Bidders may designate no more than four term maturities in such manner, and only one term maturity may be subject to mandatory sinking fund redemption in any year. Upon such designation, the Series 2019 Bonds of such term maturity shall be subject to mandatory sinking fund redemption in part by lot on April 1 in the principal amounts which would otherwise have matured in such designated years, at a price equal to par plus accrued interest to the redemption date, without premium.]

Selection of the Series 2019 Bonds to be Redeemed

If fewer than all of the Series 2019 Bonds of like maturity are called for prior redemption, the particular Series 2019 Bonds or portions of Series 2019 Bonds to be redeemed will be selected by lot by the Paying Agent and Registrar.

Notice of Redemption; Conditional Notice of Redemption

If the Series 2019 Bonds or any portion of the principal amount thereof shall be called for redemption, notice of the redemption thereof, specifying the date and number of the Series 2019 Bonds, the date and place or places fixed for the redemption, the premium payable upon such redemption, if any, and, if less than the entire principal amount of the Series 2019 Bonds is to be redeemed, that the Series 2019 Bonds must be surrendered in exchange for the principal amount thereof to be redeemed and the issuance of new Series 2019 Bonds equaling in principal amount that portion of the principal amount thereof not redeemed, shall be mailed not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for redemption by first class mail, postage prepaid, to the registered owner of the Series 2019 Bonds at such owner's address as it appears on the books of registry kept by the Paying Agent and Registrar as of the close of business on the 45th day preceding the date fixed for redemption; provided, however, that any notice of redemption may state that redemption is conditioned upon the receipt by the Paying Agent and Registrar of sufficient moneys to pay the redemption price plus interest accrued and unpaid to the redemption date or upon satisfaction of any other condition, or that it may be rescinded upon the occurrence of any other event. Any conditional notice so given may be rescinded at any time before payment of such redemption price and accrued interest if the condition is not satisfied or if any other such event occurs. Notice of such rescission shall be given by the Paying Agent and Registrar to affected registered owners of Series 2019 Bonds as promptly as practicable following the failure of such condition or the occurrence of such other event, and shall be given in the same manner that the notice of redemption was given.

If notice of redemption shall have been given as aforesaid and payment of the principal amount of the Series 2019 Bonds (or portion of the principal amount thereof to be redeemed) and of the accrued interest and premium, if any, payable upon such redemption shall have been duly made or provided for, then interest thereon shall cease to accrue from and after the date specified for the redemption. The failure of the registered owner to receive any such mailed notice shall not affect the sufficiency or validity of proceedings for the redemption of the Series 2019 Bonds. See “Book-Entry Only System” below.

Notwithstanding the foregoing, so long as the Series 2019 Bonds are registered in the name of a securities depository for purchase in book-entry only form, (a) any notice of redemption or of rescission of conditional notice of redemption will be given only to the securities depository or its nominee, (b) notice of redemption given to the securities depository may be given at such time and in such manner as is required by the operational procedures of the securities depository, (c) the selection of beneficial ownership interests in the Series 2019 Bonds to be redeemed within a maturity may be determined in accordance with such procedures, and (d) the County shall not be responsible for providing any Beneficial Owner (as defined herein) of the Series 2019 Bonds with any such notice.

Book-Entry Only System

The information in this section concerning DTC and DTC's book-entry only system has been obtained from DTC and the County does not make any representation or warranty or take any responsibility for the accuracy or completeness of such information.

DTC will act as securities depository for the Series 2019 Bonds. The Series 2019 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 Series 2019 Bond certificate will be issued for each maturity of the Series 2019 Bonds as set forth on the inside front cover page of this Official Statement, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market instruments 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 accounts of Direct Participants. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants” and, together with the Direct Participants, the “DTC Participants”). The DTC rules applicable to DTC Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.

Purchases of Series 2019 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2019 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2019 Bond (a “Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered the transaction. Transfers of ownership interests in the Series 2019 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 Series 2019 Bonds, except in the event that use of the book-entry only system for the Series 2019 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2019 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 the Series 2019 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 Series 2019 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2019 Bonds

are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements which may be in effect from time to time. Beneficial Owners of the Series 2019 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2019 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2019 Bonds may wish to ascertain that the nominee holding the Series 2019 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Series 2019 Bonds within a maturity of the Series 2019 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such series or maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2019 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Series 2019 Bonds are credited on the record date, as identified in a listing attached to the Omnibus Proxy.

Principal, premium, if any, and interest payments on the Series 2019 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 and Registrar in accordance with their respective holdings shown on DTC's records. Payments by Direct Participants or Indirect 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 Direct Participant or Indirect Participant and not of DTC, the Paying Agent and Registrar or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest on the Series 2019 Bonds, as applicable, to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC is the responsibility of the County or the Paying Agent and Registrar. Disbursement of such payments to Direct Participants will be the responsibility of DTC and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct Participants and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Series 2019 Bonds at any time by giving reasonable notice to the County or the Paying Agent and Registrar. Under such circumstances, in the event that a successor depository is not obtained, Series 2019 Bonds certificates are required to be printed and delivered to holders of Series 2019 Bonds.

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, Series 2019 Bonds certificates will be printed and delivered to the holders of the Series 2019 Bonds.

THE ABOVE INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE COUNTY AND THE UNDERWRITER BELIEVE TO BE RELIABLE, BUT THE COUNTY AND THE UNDERWRITER TAKE NO RESPONSIBILITY FOR THE ACCURACY THEREOF. NEITHER THE COUNTY NOR THE PAYING AGENT AND REGISTRAR WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS, BENEFICIAL OWNERS OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS FOR (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (B) DISTRIBUTION OF CERTIFICATES REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2019 BONDS; (C) THE PAYMENT BY DTC OR BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT TO THE PRINCIPAL AMOUNT OR REDEMPTION OR PURCHASE PRICE OF, OR INTEREST ON, ANY SERIES 2019 BONDS; (D) THE DELIVERY OF ANY NOTICE BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (E) THE ELECTION OF THE DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2019 BONDS; OR (F) ANY CONSENT GIVEN OR ANY OTHER ACTION TAKEN BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT.

So long as Cede & Co., as nominee for DTC, is the registered owner of the Series 2019 Bonds, references herein to the registered owners of the Series 2019 Bonds shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Series 2019 Bonds.

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SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2019 BONDS

General

The Series 2019 Bonds are being issued pursuant to the Constitution and statutes of the State, including the provisions of the Local Government Public Obligations Act of 1986, as amended, codified as T.C.A. 9-21-101 et seq., T.C.A. 49-3-1005 et seq., (the “Act”), and the Bond Resolution duly adopted by the County Commission on January 14, 2019.

Direct Obligations

The Series 2019 Bonds are direct obligations of the County and its full-faith and credit and unlimited taxing power as to all taxable property in the County are pledged to the punctual payment of the principal and interest on the Series 2019 Bonds. In the Bond Resolution, the County has agreed that a tax sufficient to pay, when due, the principal of and interest on the Series 2019 Bonds shall be levied annually and assessed, collected and paid, in like manner with the other taxes of the County and shall be in addition to all other taxes authorized or limited by law. Under the Act, it is the duty of the County Commissioners to include in the annual levy a tax sufficient to pay the principal of and interest on the Series 2019 Bonds as the same become due. The Act further provides that when any part of the principal of or interest on the Series 2019 Bonds shall not be paid when due, there shall be levied and assessed by the County Commissioners and collected by the proper collecting officers at the first assessment, levy and collection of taxes in the County, after such omission or failure, a tax sufficient to pay the same. For more information about taxation in the County, see “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE” attached hereto.

Any holder or holders of the Series 2019 Bonds shall have the right, in addition to all other rights: (a) by mandamus or other suit, action or proceeding in any court of competent jurisdiction to enforce its or their rights against the County and the County Commissioners and any officer, agent or employee of the County, including, but not limited to, the right to require the County, the County Commissioners and any proper officer, agent or employee of the County to assess, levy and collect taxes adequate to carry out any agreement as to, or pledge of, such taxes and to require the County, the County Commissioners and any officer, agent or employee of the County, to carry out any other covenants and agreements and to perform its and their duties under the provisions of the Act; and (b) by action or suit in equity, to enjoin any acts or things which may be unlawful or a violation of the rights of such holder or holders of the Series 2019 Bonds.

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DEBT SERVICE

SHELBY COUNTY FINANCES AND DEBT MANAGEMENT

This section sets forth the County’s (i) short-term debt financing, (ii) future long-term debt issuance and (iii) debt ratios chart. For more information about the County’s finances and debt management, see “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE” and “APPENDIX B – AUDITED FINANCIAL STATEMENTS OF THE COUNTY OF SHELBY, TENNESSEE FOR THE FISCAL YEAR ENDED JUNE 30, 2018” attached hereto.

Short-Term Debt Financing

From time to time, the County has issued capital outlay notes and bond anticipation notes, such as the Series 2017 Note to fund its capital improvement budget. The Series 2017 Note will be refinanced with the proceeds of the Series 2019A Bonds.

Long-Term Debt Issuance

The County expects to issue up to $150 million in new short-term debt during Fiscal Year 2020 for projects approved in the Fiscal Year 2019-2023 Capital Improvements Plan, to be replaced by long-term general obligation bonds over the next two fiscal years. This does not include the retirement of the Series 2017 Note which is to be refunded with proceeds of the Series 2019A Bonds.

Long-Term Debt Summary (As of June 30, 2018) Shelby County Direct GO Bonded Debt $ 746,365,000 Other Obligations (2) 143,675,212 Total Direct GO Bonded Debt and Other Obligations 890,040,212 Underlying Bonded Debt (3) 1,785,349,573 Total Direct and Underlying Bonded Debt and Other Obligations $ 2,675,389,785

______

Source: Shelby County Finance Department

(1) Outstanding debt of the County as of June 30, 2018. Underlying Debt for the other incorporated areas as of June 30, 2018. (2) Includes the County's portion of the Port Commission Development Revenue Bonds, Series 2011 payable from non-ad valorem taxes, the Special General Obligation School Refunding Bonds, 2012 Series B payable from local option sales taxes, the County's proportionated share of Qualified School Construction Bonds issued by the Tennessee State School Bond Authority in 2009 and 2010. (3) The Underlying Bonded Debt, which is as of June 30, 2018, including gross debt for Arlington, Bartlett, Collierville, Germantown, Lakeland, Memphis, and Millington.

DEBT RATIOS (As of June 30, 2018)

Debt % Debt % Debt Per Assessed Assessed Capita (a) Valuation (b)Valuation (c) Total Countywide Bonded Indebtedness Total Direct GO Bonded Indebtedness $797 3.69% 1.11% Total Direct GO Bonded Debt and Other Obligations $950 4.40% 1.32% Total Direct GO Bonded Debt, Other Obligations and Underlying Bonded Debt $2,855 13.21% 3.97%

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RETIREMENT SYSTEM & POST-EMPLOYMENT BENEFIT INFORMATION

Shelby County Retirement System

The Shelby County Retirement System (the “System”) is a single-employer defined benefit public employee retirement system (“PERS”) established by the Shelby County, Tennessee. PERS provides retirement, disability, and death benefits to participants and survivors who meet the eligibility requirements. The System is administered by a board, the majority whose members are nominated by the Shelby County Mayor, subject to approval by the Shelby County Board of Commissioners.

Substantially all permanent full-time salaried employees of the County are required, as a condition of employment, to participate in the System and shall remain a participant as long as he or she is an employee of the County. Retirement benefits vest after ten years of service.

The System consists of four plans (Plans A, B, C, and D) which are legally one reporting entity. All System plans are contributory. All plans provide retirement as well as survivor and disability benefits.

• Plan A is for employees hired between December 1, 1978 and February 28, 2005 and those employees that elected to transfer to Plan A from Plan B before January 1, 1981. • Plan B is for employees hired prior to December 1, 1978.

• Plan C (effective September 1, 2005) is for employees hired after February 28, 2005 but before July 1, 2011 and includes all full-time, part-time and elected employees, and employees of all joint City/County agencies administered by Shelby County, and members of Plan A electing to transfer to Plan C. Certain employees – CETA employees, Board of Education employees, employees electing Social Security coverage, and joint City/County agencies not administered by Shelby County cannot participate. • Plan D includes all employees hired on or after July 1, 2011.

The following table summarizes the membership of the System as of June 30, 2017, the valuation and measurement date:

Plan A Plan B Plan C Plan D Total Inactive employees and beneficiaries 1,911 926 964 --- 3,801 currently receiving benefits Inactive employees and beneficiaries 150 --- 56 1 207 entitled to but not yet receiving benefits Inactive participants entitled to a refund of 29 --- 73 165 267 contributions County to City transfers 165 --- 13 2 180 Active participants 1,339 5 2,073 1,594 5,011 Total 3,594 931 3,179 1,762 9,466

As of June 30, 2018, the System had net position of $1,191,573,647. Total employer and employee contributions were $53,250,780 and $16,313,839, respectively. Benefits paid to members totaled $83,006,953 during the same period. See “Comprehensive Annual Financial Report of Shelby County, Tennessee for the Fiscal Year Ended June 30, 2018 -- Notes to Financial Statements”, page D-40 for information relating to the County’s pension obligations.

Pension Plan Reform

The Tennessee "Public Employee Defined Benefit Financial Security Act of 2014" (the "Public Employee Defined Benefit Act") was signed into law on May 22, 2014 and was codified as Title 9, Chapter 3, Part 5, Tennessee Code Annotated. In order to improve financial security of public defined benefit plans, the Public Employee Defined Benefit Act, among other things, requires each political subdivision which has established and maintains, directly or indirectly, a defined benefit pension plan for the benefit of its employees not administered by the Tennessee Consolidated Retirement System to: (a) adopt a resolution delineating a funding policy for financing the obligations under the pension plan for fiscal years beginning after June 15, 2015 (the "Funding Policy Resolution"); (b) utilize the level dollar amortization method for financing the unfunded accrued liability beginning no later than the plan fiscal year commencing after June 15, 2020; and (c) annually make a payment to the pension plan of no less than 100% of the actuarially determined annual required contribution that incorporates both the normal cost of benefits and the amortization of the pension plan's unfunded accrued liability (the "ADC"), provided however, the affected political subdivision may make a payment of more than 100% of the ADC. If the political subdivision fails to fund the ADC, the Public Employee Defined Benefit Act permits the State Commissioner of the Department of Finance and Administration, at the direction of the Comptroller of the Treasury, to withhold such amount or part of such amount from any state-shared taxes that are otherwise apportioned to such political subdivision.

As of June 30, 2018, the County is in compliance with the Public Employee Defined Benefit Act and currently makes a payment of no less than 100% of the actuarially determined annual required contribution to the plan. The total actuarially determined annual required contribution was $55,831,986 as of June 30, 2018.

Other Post-Employment Benefits

Retired employees of the County and former employees receiving long-term disability benefits through the County’s program may participate in postemployment benefits (health and life insurance) through the Shelby County OPEB Trust (“Trust”). The Trust is a single-employer defined benefit plan. The benefits provided are health insurance and life insurance.

The Trust provides postemployment health care, life insurance, accident/death and dismemberment (AD&D), medical and prescription drugs to eligible retirees and their dependents. As of June 30, 2018, the total number of OPEB plan members and their beneficiaries was 8,194 with 3,183 retirees receiving benefits and 5,011 active plan members. The retiree and their beneficiaries receive this coverage for the life of the retiree.

See “Comprehensive Annual Financial Report of Shelby County, Tennessee for the Fiscal Year Ended June 30, 2018 -- Notes to Financial Statements”, page D-35 for information relating to the County’s Other Postemployment Benefits obligations.

The charts below set forth the Shelby County Fiduciary Funds and Post-Employment Benefit Trust Funds for: (i) combining statement of fiduciary net position as of June 30, 2018 and (ii) statements of changes in fiduciary net position for the Fiscal Year ended June 30, 2018 in connection with the issuance of the Series 2019 Bonds:

SHELBY COUNTY, TENNESSEE FIDUCIARY FUNDS POSTEMPLOYMENT BENEFIT TRUST FUNDS COMBINING STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2018

Other Postemployment Shelby County Total Benefits Trust Retirement Fund System Assets: Cash and cash equivalents $ 17,027,998 $ 41,789,880 $ 58,817,878 Investments Domestic equity 105,001,225 329,742,871 434,744,096 International equity 35,954,475 209,562,305 245,516,780 Fixed income 39,748,028 209,259,063 249,007,091 Global low-volatility equity 15,597,987 54,407,586 70,005,573 Hedge funds --- 140,334,459 140,334,459 Private real estate and infrastructure 5,396,454 19,631,365 25,027,819 Alternative investments 22,988,288 --- 22,988,288 Limited partnership interests --- 95,373,632 95,373,632 Master limited partnership 19,129,808 93,308,356 112,438,164 Total investments 243,816,265 1,151,619,637 1,395,435,902

Accounts receivable and accrued revenues 35,252 --- 35,252 Accrued interest and dividends receivable --- 2,242,812 2,242,812 Due from brokers - investment sales --- 55,393,815 55,393,815 Total assets 260,879,515 1,251,046,144 1,511,925,659

Deferred outflows of resources: Fair value of hedging derivatives ------Total deferred outflows of resources ------

Liabilities: Accounts payable 76,843 801,985 878,828 Due to brokers and others 831,298 57,502,239 58,333,537 Total liabilities 908,141 58,304,224 59,212,365

Deferred inflows of resources: Fair value of hedging derivatives --- 1,168,273 1,168,273 Total deferred inflows of resources --- 1,168,273 1,168,273

Net position restricted for other postemployment $ 259,971,374 $ 1,191,573,647 $ 1,451,545,021 and pension benefits

SHELBY COUNTY, TENNESSEE FIDUCIARY FUNDS POSTEMPLOYMENT BENEFIT TRUST FUNDS STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED JUNE 30, 2018

Other Postemployment Shelby County Benefits Trust Retirement Total Additions: Contributions Employer contributions $ 14,255,535 $ 53,250,780 $ 67,506,315 Member contributions 4,508,490 16,313,839 20,822, 329 Total contributions 18,764,025 69,564,619 88,328,644

Investment income Net change in fair value of investments 16,091,010 51,309,883 67,400,893 Interest income 287,150 6,252,820 6,539,970 Dividend income 4,840,488 18,303,325 23,143,813 Other income 2,541,562 168,866 2,710,428 Total investment income 23,760,210 76,034,894 99,795,104 Less investment management expenses (664,122) (3,715,569) (4,379,691) Net investment income (loss) 72,319,325 95,415,413

Security lending activities Securities lending income 406,948 406,948 Securities lending expenses (122,017) (122,017) Net securities lending activities --- 284,931 284,931

Net additions 41,860,113 142,168,875 184,028,988

Deductions: Benefit payments 13,388,064 83,006,953 96,395,017 Administrative expenses 621,531 6,748,700 8,034,353 Refund of member contributions --- 1,129,015 1,129,015 Total deductions 14,009,595 90,884,668 105,558,385

Change in net position 27,850,518 51,284,207 79,134,725

Net position restricted for benefits June 30, 2017 232,120,856 1,140,289,440 1,372,410,296

June 30, 2018 $ 259,971,374 $ 1,191,573,647 $ 1,451,545,021

BONDHOLDERS’ RISKS

General

Investment in the Series 2019 Bonds involves certain risks. The following is a discussion of certain risk factors that should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Series 2019 Bonds. This discussion is not comprehensive or definitive and does not summarize all risks that may be associated with the Series 2019 Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of County property owners to pay their general ad valorem real property taxes when due. Failures to pay the real property taxes could result in the inability to make full and punctual payments of debt service on the Series 2019 Bonds.

Assessed Value of Property

The Property Tax Act requires that property reappraisals be revenue neutral in the aggregate. As a result, upon the reappraisal of all property within the County, which occurs every four (4) years, the property tax rates of the County must be adjusted by the Board of the County Commissioners, so that, when levied against the new aggregate assessed value of property within the County, it generates revenues identical to the prior tax rate, when levied against the prior aggregate assessed property value. See “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE” attached hereto.

Potential Delay and Limitations on Tax Collections

The payment of property taxes and sales taxes, and the ability of the County and/or the State to recover delinquent unpaid ad valorem taxes may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights. The ability of the County to recover delinquent unpaid real property taxes through the sale of the related real property may be limited.

The ability of the County to recover delinquent unpaid real property taxes through the sale of the related real property may be limited with regard to properties in which the Federal Deposit Insurance Corporation (“FDIC”) may acquire an interest. The FDIC has adopted policies regarding the payment of state and local property taxes. While this federal instrumentality has acknowledged a policy of paying ad valorem taxes and assessments in certain circumstances, it has also indicated an intention to assert federal preemptive power to challenge any prior taxes and assessments where it is in its interest to do so, including the requirement that local governmental entities obtain the consent of the FDIC in order to sell property at tax sale to recover delinquent ad valorem taxes.

In addition, prospective investors should be aware that any recovery of any ad valorem taxes is subject to County procedures for providing notice to record holders of the property of the pending tax sale and delays by subsequent purchasers of the property at tax sales to initiate proceedings to foreclose redemption of the property. Prospective investors should also be aware that during any period of time in which property is offered for sale and remains unsold, none of the delinquent ad valorem taxes will be paid.

Additional Obligations

The County may issue additional general obligation bonds that will be direct obligations of the County and its full-faith and credit and unlimited taxing power as to all taxable property in the County will be pledged to the punctual payment of the principal and interest on such general obligation bonds. See

“APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE” attached hereto.

Early Payment Prior to Maturity

The Series 2019 Bonds may be subject to optional redemption prior to maturity. See “SEE SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2019 BONDS – Redemption Provisions” herein. A prospective investor should consider this right when making any investment decision. Following a redemption, the Owners of Series 2019 Bond that are redeemed may not be able to reinvest their funds at a comparable interest rate.

Loss of Tax Exemption

The interest on the Series 2019 Bonds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2019 Bonds because of a failure of the County to comply with certain provisions of the Code. Should such an event of taxability occur, the Series 2019 Bonds are not subject to early redemption and may remain outstanding until maturity or until redeemed under the redemption provisions of the Bond Resolution. See “TAX MATTERS” herein.

Limited Protection Against Loss of Tax Exemption of the Series 2019 Bonds

There is no provision for the redemption of any of the Series 2019 Bonds or for the payment of additional interest on any of the Series 2019 Bonds in the event that interest on any of the Series 2019 Bonds becomes includable in gross income for federal income tax purposes. In the event that interest on the Series 2019 Bonds becomes includable in gross income for federal income tax purposes, the value and marketability of such Series 2019 Bonds would likely be adversely affected. The County covenanted not to do anything that would adversely affect the tax-exempt status of the Series 2019 Bonds.

Enforceability of Remedies

The remedies available to the Bondholders of the Series 2019 Bonds upon an Event of Default under the Series 2019 Bonds are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including the federal bankruptcy code, any remedies available to the Bondholders of the Series 2019 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2019 Bonds will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery.

Ratings on the Series 2019 Bonds

The ratings of the Series 2019 Bonds may be lowered or withdrawn depending on various factors, including the ratings agencies’ assessment of the County’s financial strength.

Three credit rating agencies have assigned preliminary credit ratings to the Series 2019 Bonds. The ratings of the Series 2019 Bonds are not a recommendation to purchase, hold or sell the Series 2019 Bonds, and the ratings do not comment on the market price or suitability of the Series 2019 Bonds for a particular investor. The ratings of the Series 2019 Bonds may not remain for a given period of time and may be lowered or withdrawn depending on, among other things, each ratings agency’s assessment of the County’s financial strength and changes in each rating agency’s methodology in assigning a credit rating to the Series 2019 Bonds. The County is not required to maintain a specified rating in respect to the Series 2019 Bonds.

Suitability of the Series 2019 Bonds for Investment

No dealer, broker, salesman or other person has been authorized by the County or the Underwriter to give any information or make any representations, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing.

THIS SECTION DOES NOT PURPORT TO SUMMARIZE ALL RISKS THAT MAY BE ASSOCIATED WITH PURCHASING OR OWNING THE SERIES 2019 BONDS AND PROSPECTIVE PURCHASERS ARE ADVISED TO READ THIS OFFICIAL STATEMENT IN ITS ENTIRETY (INCLUSIVE OF THE ATTACHED APPENDICES HERETO) FOR A MORE COMPLETE DESCRIPTION OF BONDHOLDERS’ RISKS RELATING TO THE SERIES 2019 BONDS.

LITIGATION

General

At the time of original delivery of the Series 2019 Bonds, there will also be furnished to the Underwriters a certificate of certain officers of the County stating that except as disclosed in the Official Statement there is no litigation then pending, or to their knowledge threatened, affecting the validity of the Series 2019 Bonds or the power of the County to levy and collect ad valorem taxes to pay them.

MLGW

In November 2011, the City of Memphis filed suit against the County seeking declaratory and other relief, alleging under Tennessee law and prior agreements that it had overpaid the County over $87,000,000 for gas and electric payments in lieu of taxes (“PILOT”) from the City’s utility, Memphis Light Gas and Water, between 1981 and 2000. City of Memphis, Tennessee v. Shelby County, Tennessee Chancery Court, No. DH-11-1817-2. The parties agreed prior to trial to limit the monetary claims to only those that arose between Fiscal Years 2005 and 2011. A mediated settlement was reached for electric PILOTs owed to the County for Fiscal Years 2010 and 2011 in the amount of $7,109.267 After conducting a trial, the court ruled that nothing was due to either party for the Fiscal Years prior to 2010, and interpreted state law concerning the calculation and distribution of electric and gas Pilots from Fiscal Year 2012 going forward. In 2015 the County filed a Complaint for Declaratory Judgment and Unjust Enrichment in Chancery Court (Shelby County, Tennessee v. City of Memphis, Tennessee, Case No. CH-15-0123-2), seeking to recover approximately $44.6 million in past gas and electric PILOTs improperly retained by the City during Fiscal Years 2012 through 2015. In May of 2016, the County filed a Complaint for Declaratory Judgment and Unjust Enrichment in Chancery Court (Shelby County, Tennessee v. City of Memphis, Tennessee, Case No. CH-16-0809-1), seeking to recover approximately $10.1 million in past gas and electric Pilots improperly retained by the City for Fiscal Year 2016. Both cases are currently pending before the Chancery Court and are in mediation before Judge Valerie Smith in Circuit Court. Should mediation fail, the County will proceed with the litigation relating to the aggregate unpaid PILOTs due the County for Fiscal Years 2012 through 2016.

Powell v. Oldham; Brown v. Oldham; Ingram v. County of Shelby (consolidated case Scott Turnage v. Oldham)

On November 17, 2016, Issaacca Powell filed suit in the United States District Court for the Western District of Tennessee, Case No. 2:16-cv-02907-SHM-tmp, against the Shelby County Sheriff in his official and individual capacity. On January 9, 2017 Cortez Brown, and others, filed Case No.2:17-cv-

0215 in the same United States District Court for the Western District of Tennessee, alleging deprivation by the Sheriff and others of civil rights protected by the Fourth and Fourteenth Amendments of the United States Constitution. The lawsuits arise out of the implementation of the new electronic docket, intake and record keeping system at the Shelby County Integrated Criminal Justice System, assert constitutional causes of action under 42 U.S.C. § 1983, and allege that some arrestees were detained for excessive periods of time prior to hearings before the court and/or were detained after having posted bond or other disposition of their charges. The Complaints seek damages on behalf of a class of individuals. The extent of the potential class is unknown. On March 13, 2017, U.S. District Court Judge Samuel Mays of the U.S. District Court for the Western District of Tennessee, consolidated the Powell and Brown cases (Scott Turnage, et al. v. Bill Oldham, et al., No. 2:16-cv-2907-SHM/tmp). The consolidated plaintiffs filed an amended complaint now seeking damages in the amount of $144 million on behalf of the class. Discovery has not yet begun in the consolidated case. At this time, no assessment of potential for liability or damages has been made.

Ingram v. Shelby County Government

On December 24, 2016 a third lawsuit, Ingram v. Shelby County Government, Case No CT-005180- 16, was filed in the Circuit Court of Shelby County Tennessee, 30th Judicial District at Memphis, alleging violations of the Government Tort Liability Act and common law claims for damages. This case is filed as a class action arising out of the same electronic docket implementation system conversion. A Motion to Dismiss the state court lawsuit is pending. The plaintiffs have identified twenty-four (24) class members to date. The Tennessee Governmental Tort Liability Act, described below, generally imposes a liability limit per individual of $300,000 and a total liability limit for all persons of $700,000 resulting from a single accident, occurrence or act.

Danecia S. Edwards et al v. Shelby County Division of Corrections et al.

This is a lawsuit pending in the Circuit Court of Shelby County, Tennessee, 30th Judicial District at Memphis, in which a motion has been recently filed to certify the litigation as a class action. The case alleges that female correctional employees of the County were exposed to a hostile work environment, sexual harassment, and sex discrimination by inmates being held by the County. At this early stage of the litigation, the County intends to vigorously defend the lawsuit. If the Court certifies a class action, for each plaintiff certified in the class, the maximum recovery would be $300,000, attorney’s fees, and possibly lost wages. At this time, no assessment of potential liability or damages has been made.

Other Litigation

The County is a defendant in various other lawsuits arising in the ordinary course of operations from those seeking awards for property damage and personal injury, contesting its taxing authority, and questioning certain personnel practices and policies. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the County’s administration that the ultimate disposition of these matters will not materially affect the financial condition of the County. Under the Tennessee Governmental Tort Liability Act, §§ 29-20-101 through 29-20-408 of the Tennessee Code Annotated (the “Act”), all governmental entities in Tennessee are immune from suit for any injury which may result from the activities of such governmental entities when engaged in the exercise and discharge of any function, except within the limits provided in the Act. Pursuant to the Act there are limits for liability for governmental entities for bodily injury or death of any one person in any one accident, occurrence or act, unless and to the extent insurance is provided. Pursuant to the Act there are limits for liability for governmental entities for bodily injury or death of any one person in any one accident, occurrence or act of $300,000 and $700,000 for all persons resulting from any one single accident, occurrence or act and $100,000 for injury or destruction of property of others in any one (1) accident, occurrence or act. The County is self-insured within these limits.

TAX MATTERS

General

In the opinion of Butler Snow LLP, Memphis, Tennessee, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2019 Bonds (including any original issue discount properly allocable to the owner of a Series 2019 Bond) is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described above assumes the accuracy of certain representations and compliance by the County with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Series 2019 Bonds. Failure to comply with such requirements could cause interest on the Series 2019 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2019 Bonds. The County has covenanted to comply with such requirements. Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2019 Bonds.

The accrual or receipt of interest on the Series 2019 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2019 Bonds. The extent of these other tax consequences will depend on such owners’ particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion regarding any such consequences. Purchasers of the Series 2019 Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States of America), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of social security or railroad retirement benefits, taxpayers entitled to claim the earned income credit, taxpayers entitled to claim the refundable credit in Section 36B of the Code for coverage under a qualified health plan or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Series 2019 Bonds.

Bond Counsel also is of the opinion that, under existing law, the Series 2019 Bonds and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) inheritance, transfer and estate taxes, (b) Tennessee excise taxes on all or a portion of the interest on the Series 2019 Bonds during the period the Series 2019 Bonds are held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee, and (c) Tennessee franchise taxes by reason of the inclusion of the book value of the Series 2019 Bonds in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee. Ownership of the Series 2019 Bonds or interest thereon may be subject to state or local taxation in jurisdictions other than the State of Tennessee under applicable state or local laws, as to which Bond Counsel expresses no opinion. Each prospective investor and purchaser of the Series 2019 Bonds should consult its, his or her own tax advisor regarding the status of the interest on the Series 2019 Bonds in a particular state or local jurisdiction other than Tennessee.

[Original Issue Discount

The Series 2019 Bonds that have an original yield above their respective interest rates, as shown on the inside cover of this Official Statement (collectively, the “Discount Bonds”), are being sold at an original issue discount. The difference between the initial public offering prices of such Discount Bonds and their stated amounts to be paid at maturity constitutes original issue discount treated in the same manner for federal income tax purposes as interest, as described above.

The amount of original issue discount that is treated as having accrued with respect to a Discount Bond or is otherwise required to be recognized in gross income is added to the cost basis of the owner of the bond in determining, for federal income tax purposes, gain or loss upon disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received on disposition of such Discount Bond that are attributable to accrued or otherwise recognized original issue discount will be treated as federally tax-exempt interest, rather than as taxable gain, for federal income tax purposes.

Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual Discount Bond, on days that are determined by reference to the maturity date of such Discount Bond. The amount treated as original issue discount on such Discount Bond for a particular semiannual accrual period is equal to (a) the product of (i) the yield to maturity for such Discount Bond (determined by compounding at the close of each accrual period) and (ii) the amount that would have been the tax basis of such Discount Bond at the beginning of the particular accrual period if held by the original purchaser, less (b) the amount of any interest payable for such Discount Bond during the accrual period. The tax basis for purposes of the preceding sentence is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts that have been treated as original issue discount for such purposes during all prior periods. If such Discount Bond is sold between semiannual compounding dates, original issue discount that would have been accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period.

Owners of Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date, with respect to when such original issue discount must be recognized as an item of gross income and with respect to the state and local tax consequences of owning a Discount Bond. Subsequent purchasers of Discount Bonds that purchase such Discount Bonds for a price that is higher or lower than the “adjusted issue price” of the Discount Bonds at the time of purchase should consult their tax advisors as to the effect on the accrual of original issue discount.]

[Original Issue Premium

The Series 2019 Bonds that have an original yield below their respective interest rates, as shown on the inside cover of this Official Statement (collectively, the “Premium Bonds”), are being sold at a premium. An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price at maturity constitutes premium on such Premium Bond. A purchaser of a Premium Bond must amortize any premium over such Premium Bond’s term using constant yield principles, based on the purchaser’s yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, generally by amortizing the premium to the call date, based on the purchaser’s yield to the call date and giving effect to any call premium). As premium is amortized, the amount of the amortization offsets a corresponding amount of interest for the period, and the purchaser’s basis in such Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser’s basis may be reduced, no federal income tax deduction is allowed. Purchasers of the Premium Bonds should consult their tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to the state and local tax consequences of owning a Premium Bond.]

Backup Withholding

As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on federally tax-exempt obligations such as the Series 2019 Bonds is subject to information reporting in a

manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments to any owner of the Series 2019 Bonds that fail to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. The reporting requirement does not in and of itself affect or alter the excludability of interest on the Series 2019 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling federally tax-exempt obligations.

Changes in Federal and State Tax Law

From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to under this heading “TAX MATTERS” or adversely affect the market value of the Series 2019 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2019 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2019 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2019 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based on existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2019 Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation.

PROSPECTIVE PURCHASERS OF THE SERIES 2019 BONDS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS PRIOR TO ANY PURCHASE OF THE SERIES 2019 BONDS AS TO THE IMPACT OF THE CODE UPON THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE SERIES 2019 BONDS.

APPROVAL OF LEGAL MATTERS

Certain legal matters incident to the authorization, issuance, validity, sale and delivery of the Series 2019 Bonds is subject to the approving opinions of Butler Snow LLP, Memphis, Tennessee, Bond Counsel, whose approving opinions (in substantially the forms attached hereto as “APPENDIX C – FORMS OF OPINIONS OF BOND COUNSEL” will be delivered concurrently with the issuance of the Series 2019 Bonds.

Certain legal matters incident to the authorization, issuance, validity, sale and delivery of the Series 2019 Bonds is subject to the approving opinion of Carpenter Law, PLLC, Memphis, Tennessee, Disclosure Counsel. In addition, certain legal matters will be passed upon for the County by Marlinee C. Iverson, Esquire, County Attorney.

No representation is made to the holders of the Series 2019 Bonds that Bond Counsel has verified the accuracy, completeness or fairness of the statements in this Official Statement and Bond Counsel assumes no responsibility to the holders of the Series 2019 Bonds except for the matters that will be set forth in its approving opinion.

The legal opinions to be delivered concurrently with the delivery of the Series 2019 Bonds express the professional judgment of the attorneys rendering the opinions regarding the legal issues expressly addressed therein. By rendering legal opinions, the attorneys providing such opinions do not become insurers or guarantors of the result indicated by that expression of professional judgment with respect to the

transaction on which the opinions are rendered or of the future performance of parties to the transaction. Furthermore, the rendering of an opinion does not guarantee the outcome of any legal dispute that may arise out of the transaction.

CO-FINANCIAL ADVISORS

ComCap Partners, Memphis, Tennessee and PFM Financial Advisors LLC, Memphis, Tennessee, (collectively, the Co-Financial Advisors), employed by the County to perform professional services for the Series 2019 Bonds. The Co-Financial Advisors assisted in matters relating to the planning, structuring and issuance of the Series 2019 Bonds and provided other advice. The Co-Financial Advisors did not engage in any underwriting activities with regard to the issuance and sale of the Series 2019 Bonds.

INDEPENDENT AUDITOR

An electronic link to the County's comprehensive annual financial statements as of the fiscal year ended June 30, 2018 is included herein and such financial statements have been audited by Watkins & Uiberall, PLLC, Memphis, Tennessee, Certified Public Accountants, independent auditor, as stated in its report attached hereto as “APPENDIX B – AUDITED FINANCIAL STATEMENTS OF THE COUNTY OF SHELBY, TENNESSEE FOR THE FISCAL YEAR ENDED JUNE 30, 2018” (the “Audited Financial Statements”).

Watkins & Uiberall, PLLC Certified Public Accountants have not been engaged to perform and have not performed, since the date of its report included herein, any procedure on the Audited Financial Statements addressed in that report and has not performed any procedures relating to this Official Statement.

RATINGS

The Series 2019 Bonds have been rated “AA+” by Fitch Ratings Inc., “AA+” by S&P Global Ratings Group and “Aa1” by Moody’s Investors Service. The ratings reflect only the respective views of such organizations and the County makes no representation as to the appropriateness of the ratings. Any explanation of the significance of the ratings may be obtained only from the respective rating agency furnishing the same at the following addresses: Fitch Ratings Inc., 33 Whitehall Street New York, New York 10004; S&P Global Ratings Group, 55 Water Street, New York, New York 10041; Moody’s Investors Service, 7 World Trade Center, New York, New York 10004. The County furnished to each rating agency certain information and materials, some of which may not have been included in this Official Statement, relating to the County and its outstanding debt. Generally, rating agencies base their ratings upon such information and materials and upon investigations, studies and assumptions by the ratings agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by any or all of such rating companies, if in the judgment of any or all companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or any of them, may have an adverse effect on the market price of the Series 2019 Bonds. The County has not undertaken any responsibility to oppose any such revisions, suspension or withdrawal.

UNDERWRITING

The Series 2019A Bonds were sold by the County at a public auction on ______, 2019. Details concerning the sale of the Series 2019A Bonds were provided to bidders in the Notice of Sale relating to the Series 2019A Bonds, which were distributed with the Official Statement.

The Series 2019A Bonds are being purchased by ______(the “2019A Underwriter”), as the successful bidder in a competitive sale, at an aggregate purchase price of $______,

representing the principal amount of the Series 2019A Bonds of $______, [plus a bond premium of $______, less an original issue discount of $______] and less an underwriter's discount of $______.

The Series 2019B Bonds were sold by the County at a public auction on ______, 2019. Details concerning the sale of the Series 2019B Bonds were provided to bidders in the Notice of Sale relating to the Series 2019B Bonds, which were distributed with the Official Statement.

The Series 2019B Bonds are being purchased by ______(the “2019B Underwriter”), as the successful bidder in a competitive sale, at an aggregate purchase price of $______, representing the principal amount of the Series 2019B Bonds of $______, [plus a bond premium of $______, less an original issue discount of $______] and less an underwriter's discount of $______.

The 2019A Underwriter and 2019B Underwriter obligations are subject to certain conditions precedent. The 2019A Underwriter and 2019B Underwriter, respectively, will be obligated to purchase all of the Series 2019A Bonds and Series 2019B Bonds, respectively, if any Series 2019A Bonds and Series 2019B Bonds are purchased.

The Series 2019A Bonds and Series 2019B Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2019 Bonds into investment trusts) at prices lower than the public offering prices. Public offering prices may be changed from time to time by the Underwriters.

CONTINUING DISCLOSURE

In order to assist the Underwriters in complying with Rule 15c2-12(b)(5) of the SEC promulgated pursuant to the Securities Exchange Act of 1934, as in effect on the date hereof (the “Rule”), simultaneously with the issuance of the Series 2019 Bonds, the County will enter into a Continuing Disclosure Agreement (the “Disclosure Agreement”) with Digital Assurance Certification, L.L.C, as initial dissemination agent (“DAC”), for the benefit of the holders of the Series 2019 Bonds.

The County, as an “obligated person” under the Rule, will undertake in the Disclosure Agreement to provide: (a) certain financial information and operating data relating to the Series 2019 Bonds in each year (the “Annual Report”); and (b) notice of the occurrence of certain enumerated events (each a “Listed Event Notice”). The Annual Report and each Listed Event Notice, if applicable, will be filed by DAC, on behalf of the County, on the Electronic Municipal Market Access system (“EMMA”), a service of the Municipal Securities Rulemaking Board. The form of the Disclosure Agreement specific nature and timing of filing the Annual Report and each Listed Event Notice, and other details of the County's undertakings, are more fully described in “APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT” attached hereto.

MISCELLANEOUS

The references, excerpts and summaries of all documents referred to in this Official Statement do not purport to be complete statements of the provisions of such documents and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series 2019 Bonds, the security for and the sources for repayment for the Series 2019 Bonds and the rights and obligations of the bondholders. The information in this Official Statement, including the appendices attached hereto, has been compiled from official and other sources deemed by the County to be reliable and, while not

guaranteed as to completeness or accuracy, is believed by the County to be correct as of the date of this Official Statement.

Use of the words “shall” or “will” in this Official Statement or in summaries of documents to describe future events or continuing obligations is not intended as a representation that such event or obligation will occur but only that the document contemplates or requires such event to occur or obligation to be fulfilled. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the owners of the Series 2019 Bonds.

[Signatures On Following Page]

AUTHORIZATION OF AND CERTIFICATION CONCERNING THE OFFICIAL STATEMENT

The execution and delivery of this Official Statement, and its distribution and use by the Underwriters in connection with the original public offer, sale and distribution of the Series 2019 Bonds by the Underwriters, have been duly authorized and approved by the County.

COUNTY OF SHELBY, TENNESSEE

By: Lee Harris, County Mayor

By:______Van D. Turner, Jr., Chairman, Board of County Commissioners

APPENDIX A

GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE

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SHELBY COUNTY GOVERNMENT SUPPLEMENTAL INFORMATION STATEMENT

In addition to providing audited financial information as of and for the year ended June 30, 2018, Shelby County, Tennessee (the “County”) intends that this Supplemental Information Statement will be used, together with information to be specifically provided by the County for that purpose, in connection with the offering and issuance by the County of its Bonds. Except of otherwise described in the Official Statement under the heading “CONTINUING DISCLOSURE” the County undertakes no obligation to update the information contained in this Supplemented Information Statement. The County has prepared a comprehensive annual financial report containing additional financial statements for fiscal year ended June 30, 2018, in addition to other information for the periods covered by this Supplemental Information Statement. Please contact Mr. Chris McLean, Director of Administration and Finance, Shelby County Government, Suite 1100, 160 N. Main Street, Memphis, Tennessee, 38103 (901-222-2228) for questions regarding information in this Supplemental Information Statement.

The date of this Supplemental Information Statement is June 30, 2018. (Unless otherwise stated herein)

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THE GOVERNMENT OF SHELBY COUNTY, TENNESSEE

General

Board of Shelby County Commissioners

The thirteen-member Board of County Commissioners of Shelby County (the “County Commission”), the legislative branch of the government, is responsible for reviewing and approving the administration's programs and budgets. The following thirteen (13) individuals serve as the County Commissioners for Shelby County as of September 1, 2018:

Van D. Turner, Jr, Chairman Mark Billingsley, Chairman, Pro Tempore David C. Bradford Reginald Milton Willie F. Brooks, Jr. Brandon Morrison Edmund Ford, Jr. Tami Sawyer Eddie S. Jones, Jr. Michael Whaley Mickell Lowery Mick Wright Amber Mills

Together the Administration and Board of County Commissioners are responsible for governing the most populous of Tennessee's 95 counties, with a personnel staff of approximately 5,067 people and have the direct duty of providing services for 938,069 citizens according to the U.S. Bureau of Census.

Shelby County Administration

Lee Harris, Mayor of Shelby County – in August 2018, Lee Harris was elected as the 6th Mayor of Shelby County, Tennessee. Prior to his election, Mayor Harris served in the Tennessee Senate and the Memphis City Council. Throughout his political career, Mayor Harris has been an unwavering voice for neighborhoods, public safety, environmental protections, and a strong middle class. He has won numerous awards because of his work in politics and government, including selection to the prestigious Aspen-Rodel Fellows program and as a New Deal Leader. Mayor Lee Harris is a proud product of the public schools in Memphis (Alcy Elem., John P. Freeman Middle, and Overton High). He was a top student at Morehouse College and worked his way through law school at Yale. After law school, Mayor Harris practiced law and later joined the faculty of the University of Memphis Law School. He is believed to be the first African American tenured full professor of law at the University of Memphis.

A-1

Patrice Thomas, Chief Administrative Officer – was appointed Chief Administrative Officer (CAO) on September 1, 2018. Prior to becoming CAO, Ms. Thomas served as the Deputy Chief Operating Officer for the City of Memphis where she provided advice on operational matters to the Chief Operating Officer and Mayor. During Ms. Thomas’ fourteen-year tenure with the City of Memphis, she also served in other roles including Deputy Director of Public Works and the City Comptroller. As the City of Memphis Comptroller for over ten years, Ms. Thomas was responsible for management of the accounting and financial reporting activities of the City. This responsibility includes the preparation of financial reports, the processing of all disbursement activities, and the retention and retrieval of all records including the preparation and retention of the agendas and minutes of the City Council Meetings. As Comptroller, Ms. Thomas also served as a member of the Healthcare, Pension Board and Pension Investment Committees. Overall, Ms. Thomas has over twenty years of public, private and governmental accounting and real estate management experience. She is recognized by the State of Tennessee as a Certified Public Accountant. She has previously been recognized as a Certified Municipal Finance Officer, an affiliate Real Estate Broker (inactive) and a Certified Property Maintenance and Housing Inspector. She received dual Bachelor of Science degrees from Christian Brothers University in Accounting and Telecommunications/Information Systems Management. She also holds a Master of Science in Business Administration degree with a concentration in finance, real estate and insurance from the University of Memphis.

Chris McLean, Director of Administration and Finance – became the Finance and Administration for Shelby County effective January 1, 2019. Prior to joining the County he served as the Chief Financial Officer and Executive Vice President of Finance for Methodist Le Bonheur Healthcare from 2001 until his retirement in 2018. Methodist Healthcare is a $2 billion integrated healthcare system located in Memphis. Mr. McLean began his healthcare career at Methodist in 1984 in corporate finance. He left in 1992 to work for several health systems in east Tennessee. He returned to Methodist in 1998 as Vice President of the Mississippi division and was appointed System CFO in 2001. He holds a Bachelor of Science degree in Accounting from Christian Brothers University and a Master’s Degree in Business Administration from the University of Memphis. He has previously served on community boards that include Seeding Success, Village of Germantown, Wesley Housing and Leadership Memphis. He has also served on numerous boards where Methodist was a joint venture partner.

Marlinee C. Iverson, Esquire, County Attorney – was appointed as County Attorney on September 12, 2018. She has over twenty-one years of experience in diverse and challenging legal fields. Most recently, Ms. Iverson presided over child dependency/neglect, delinquency, and custody matters as a magistrate judge for the Shelby County Juvenile Court and represented Shelby County in civil litigation, in particular, facilitating juvenile justice reform through compliance measures with the United States Department of Justice. Her prior experience includes: prosecuting misdemeanors and felonies for the State of Tennessee and for the United States (as a Special Assistant United States Attorney) emphasis on prosecutions for Project Safe Neighborhoods, a nationwide initiative to reduce gun and gang crime; teaching introduction to law courses as an adjunct professor for Christian Brothers University; and representing clients both locally and nationally in labor relations and employment matters, including government audits on workplace safety and affirmative action. Ms. Iverson received her Bachelor of Arts degree from Rhodes College and her Juris Doctor degree from the University of Memphis School of Law.

Dorcas Young Griffin, Director of Community Services – Ms. Griffin was appointed Director of the Division of Community Services in January 2018. She has worked for Shelby County Government for 11 years in various roles that include Public Health Coordinator, Ryan White HIV Program Administrator and Deputy Director for the Division of Community Services. Prior to joining Shelby County, Ms. Griffin worked for the University of Memphis Center for Community Building and Neighborhood Action, Glorious Future Head Start and The Church Health Center. She has extensive experience in grants management, leadership, program planning, development and implementation. Ms. Griffin holds a Bachelor of Arts degree in Sociology from the University of North Carolina at Chapel Hill and a Masters of Public

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Administration from the University of Memphis. Her community involvement includes REACH Memphis Board Chair, Thistle and Bee Board of Directors, New Memphis Fellows Program, Leadership Memphis Executive Program and Delta Sigma Theta Sorority, Inc.

John Zeanah, Director of Planning and Development – assumed the position as Director of Planning and Development in January 2018. He oversees the joint division of City of Memphis and Shelby County that provides guidance and direction in the adoption of policies and regulations to encourage long- range community development, as well as planning, zoning, and building permitting services. Prior to his promotion to this role, Mr. Zeanah served as Deputy Division Director and Administrator with the Memphis-Shelby County Office of Sustainability. Mr. Zeanah holds a Bachelor of Arts degree in Political Science from Rhodes College and a Master of City and Regional Planning from the University of Memphis. He is certified with the American Institute of Certified Planners and a member of American Planning Association.

Alisa R. Haushalter, Director of Health Services – was appointed the new Director of Health Services in January 2016. Ms. Haushalter has over 30 years of public health leadership experience having served most recently as Senior Director for the Department of Population Health, Project Director for the Center for Medicare and Medicaid Innovation Grant and Director for the Department of Healthcare Engagement for Nemours Health and Prevention Services in Newark, DE. From 1983 to 2013, Ms Haushalter was employed in various positions with the Metro Public Health Department in Nashville, Tennessee which included Director of the Bureau of Population, Project Director for Communities Putting Prevention to Work, Director of Health Promotions, and Director of Tuberculosis Elimination, among other positions. Ms Haushalter received an Associate Degree in Nursing from Belmont University, a Masters of Science in Nursing Degree in Family Practice from Vanderbilt University, both in Nashville, Tennessee, and a Doctor of Nursing Practice in Public Health Nursing Leadership from the University of Tennessee Health Science Center in Memphis Tennessee. Ms Haushalter has also served on the faculties of Tennessee State University, Southeastern National Tuberculosis Training Center, Meharry Medical College and Vanderbilt University School of Nursing. She is a member of the American Public Health Association, National Association of City and County Health Officials and Doctor of Nursing Practice, Inc. She is also a licensed registered Nurse in the State of Tennessee.

Thomas E. Needham, Director, Division of Public Works – assumed his position as Director of Public Works in September 2010. From 2006 – 2009, he was the Chief Operating Officer for SR Ellers, Inc. He practiced engineering in the State of Tennessee as design engineer, project manager, construction manager, personnel management, including training, and overall management of an architectural/engineering firm. He is a professional engineer in the states of Tennessee, Kansas, North Carolina and Mississippi. He has held a number of positions in professional memberships, including but not limited to, Past President of ACEC of Tennessee 1996-1997; Past National Director for American Companies of Engineering Consultants, Tennessee 2003-2005; and Past President of Tennessee Society of Professional Engineers.

Anthony Alexander, Director of Corrections – began his career in corrections in 1985 as a Juvenile Detention Monitor with Shelby County Juvenile Court. He began working at Shelby County Division of Corrections in 1988 as a Corrections Officer and he has been promoted throughout his career to the ranks of Sergeant, Lieutenant, Captain, Deputy Administrator, Administrator, Deputy Director and Director. Mr. Alexander has managed the Division’s Policy and Accreditation Office, Internal Affairs Unit, and he established the Division’s Corrections Emergency Response Team (CERT) and Transportation Unit. Throughout his thirty years of service, Director Alexander has received multiple certifications from the Federal Law Enforcement Training Academies in Glynco, Georgia and Artesia, New Mexico. He has served as an Auxiliary Probation Officer with Shelby County Juvenile Court and he has also received training and certification through the National Organization of Victim’s Assistance (NOVA) as a Crisis Counselor.

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Director Alexander served in the United States Air Force and he majored in criminal justice at Shelby State Community College and at the University of Phoenix.

John Halbert, Jr., Chief Information Officer – assumed his position as Chief Information Officer in January 2012. Most of his professional IT career has been with a single organization, Jefferson County, AL. He was with Jefferson County for over 20 years. His last held position with Jefferson County was the Deputy Chief Information Officer; however, he served as Acting Chief Information Officer for 18 months. During his long history with Jefferson County, he served in positions such as Senior Systems Analyst, Systems Analyst, Economic Development Officer, Geographic Information Systems Manager and Assistant Director. His skills include, but are not limited to, strategic planning, project management, needs assessment, budget administration, contract management and negotiations, technical support, policy and procedure development, and regulatory compliance.

Brenda Jones, Director of Office of Preparedness – was recently appointed as Director of the Office of Preparedness. Ms. Jones joins Shelby County Government with 40 plus years of public service. She started her public service career in 1974 with the Memphis Police Department. She became a commissioned police officer in 1979 and rose through the ranks to retire as the first female Deputy Chief of the Memphis Police Department in 2002. From there, Ms. Jones continued her public service career with the Tennessee Department of Transportation when she was employed in 2003 as the West Tennessee Law Enforcement Liaison responsible for highway traffic safety for the 21 counties west of the Tennessee River. In 2015, Brenda Jones was promoted to Assistant Law Enforcement Administrator for the Tennessee Department of Transportation. In 2017, she was appointed to the position of Law Enforcement Administrator for the Tennessee Department of Safety and Homeland Security. Director Brenda Jones holds a Bachelor of Liberal Arts Degree from the University of New York, Regents College.

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Shelby County Government Organizational Chart As of June 30, 2018

Electorate

Chancery Court Chancery Court Sheriff Board Mayor Clerk Judges Of Commissioners Circuit Court Circuit Court County Clerk Judges Clerk Legislative Chief Public Affairs Operations Administrative Criminal Court Criminal Court Register Equal Opportunity Officer Clerk Judges Compliance Divorce Referee General Sessions General Sessions County Attorney Trustee Jury Commission Court Clerk Court Judges

Office of Preparedness Probate Court Probate Court Assessor Human Resources Clerk Judges Internal Audit Juvenile Court Juvenile Court Election Clerk Judge Commission

Attorney General Public Defender

Division of Division of Division of Division of Division Division of Division of Administration & Information Planning & Public of Health Community Finance Technology Development Works Corrections Services Services

Finance Chief Information Officer Codes Enforcement Environmental Programs Administration & Finance Forensic Services Community Services Board of Equalization Information Technology Department of Housing Parks & Grounds Facility Operations Administration and Finance Agency Purchasing Operations Regional Services Maintenance Environmental Health Diverson Services Telecommunitcations Local Planning Fire Department Community Health Crime Victims Center Roads and Bridges Health Planning & Promotion Pre-Trial Services Support Services Inmate Medical Care Aging Commission Stormwater Public Health Safety Ryan W hite Program Vector Control Air Emissions

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ECONOMIC AND DEMOGRAPHIC INFORMATION

General

Shelby County is the largest county in the State of Tennessee with Memphis as the County seat. The County is located in the southwest corner of Tennessee on the east bank of the Mississippi River and is the hub of the 105-county Mid-South Region. Contained within the County's square miles are seven incorporated cities, which include Arlington, Bartlett, Collierville, Germantown, Lakeland, Memphis, and Millington.

Population

The County’s population over the last several years is shown in the table below.

Population: County, State and Nation (In Thousands)

2017 2016 2015 2014 2013 Shelby County 937 937 938 938 939 Tennessee 6,716 6,649 6,591 6,540 6,491 United States 325,719 323,406 321,040 318,623 316,235

______Source: U.S. Census Bureau, Annual Estimates of Resident Population, Release Date, September 2018.

Population By Age

The breakdown of population by age group is shown in the two tables below:

2017 Population by Age Group: County, State and Nation

______Source: U.S. Census Bureau, 2017 American Survey 1-Year Estimates.

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Per Capita Income

The following table sets forth the per capita income for the County, the State of Tennessee, the Southeast Region and the United States for the years 2013-2017:

Per Capita Personal Income: Shelby County, Tennessee, Southeast Region and United States

2017 2016 2015 2014 2013 Shelby County $ 47,655 $ 46,321 45,324$ $ 43,920 $ 42,682 Tennessee 45,517 43,932 42,810 40,977 39,549 Southeast Region (1) 45,198 43,723 42,950 41,206 39,271 United States 51,640 49,831 48,940 47,025 44,826

______Source: U.S. Bureau of Economic Analysis, Last update: September 2018.

(1) Southwest Region includes Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia.

Labor Relations and Employment

In a Policy Statement issued by the County Mayor and approved by the Board of County Commissioners on June 14, 1979, some County administrative employees were given the right to join or to refrain from joining, through an orderly process, a bona-fide organization for purposes of representation in matters of collective bargaining. Secret ballot elections may be provided in accordance with this Policy Statement, similar to the procedures followed by the National Labor Relations Board, but in keeping with the law of the State of Tennessee applicable to labor unions in public employment.

Within the County Mayor's area of responsibility, approximately 589 employees are represented by several labor organizations including the International Brotherhood of Electrical Workers Union, Local #474, whose two memorandums of understanding (Support Services and Craft, Trade and Labor) have been extended until March 31, 2019; the International Firefighters Association, Local #2585, whose memorandum of understanding was recently renegotiated and expires August 31, 2019; and the American Federation of State, County and Municipal Employees (AFSCME), Local #1733 for Correction Officers, whose agreement has not been extended but the County and AFSCME continue to operate under the same terms and conditions until such time as an extension can be finalized.

Within the County Sheriff's area of responsibility, approximately 458 employees are represented by the Deputy Sheriff's Association, Local #58. This agreement was extended to August 31, 2015, by agreement but has not been extended or renegotiated since so it is in automatic annual renewal. Approximately 720 Deputy Jailers are represented by AFSCME #1733 whose memorandum was extended until December 31, 2015 and has been unilaterally extended. A unit of approximately 70 employees in Records and Information, and Maintenance is represented by IBEW #474 and has a memorandum of understanding, which was extended until March 31, 2017, and which thereafter went into automatic annual renewal status.

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Countywide Labor and Employment

The table below sets forth the employment and labor trends in the County for the years 2008 to 2017:

Labor Force Trends (In Thousands)

Ye ar Employed Unemployed Shelby County Tennessee United States 2017 420.4 19.0 4.3% 3.7% 4.4% 2016 411.1 23.1 5.3% 4.7% 4.9% 2015 401.8 27.5 6.4% 5.6% 5.3% 2014 395.1 32.6 7.6% 6.5% 6.2% 2013 400.0 38.6 8.8% 7.8% 7.4% 2012 407.7 38.4 8.6% 7.9% 8.1% 2011 408.3 42.9 9.5% 9.0% 8.9% 2010 405.0 43.3 9.8% 9.7% 9.6% 2009 393.8 44.3 10.1% 10.5% 9.3% 2008 409.6 30.4 6.9% 6.7% 5.8%

______Source: U.S. Bureau of Labor Statistics, Revised, February, 2018.

The major areas of employment in the metropolitan area are services, governmental services and retail trade. Comparatively, both the State of Tennessee and the United States show a heavier concentration in manufacturing than does the County, but they also display higher employment in services and governmental services.

Principal Industries

The industrial economy of Shelby County and the City of Memphis encompasses many industries. Twenty major industrial groups and over 425 sub-groups, as classified by the Bureau of the Budget, are listed in the Directory of Memphis Manufacturers. Major industries include: chemicals, electronics, foods and beverages, paper products, hardwood lumber products, pharmaceuticals, medical devices, soybean and cotton oil derivatives and fertilizers.

The following three tables present (i) the top 25 largest manufacturing companies in the County (ranked by number of employees), (ii) the top 25 largest employers in the County (ranked by number of employees), and (iii) the number of permits issued by the County for the years 2009-2018:

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Shelby County’s Top 25 Manufacturing Companies Local Company Employees Products 1 Smith & Nephew Inc. 2,297 Joint Reconstruction and Trauma Devices 2 UTC-Carrier Corp. 1,600 Split System Condensing Units 3 ABB Electrification Products 1,500 Electrical Connectors and Components 4 Electrolux 1,030 Stoves, Ovens And Freestanding Ranges 5 Hino Motors Manufacturing USA 782 Rear Axle for Trucks; Front End Suspension 6 Unilever 700 Ice Cream, Klondike Bars, Popsicles 7 Wright Medical Group N.V. 629 Orthopedic Implants 8 MicroPort Orthopedics Inc. 526 Orthopedic Products, Implants 9 K.T.G. (USA) Inc. 480 Tissue and Paper Towels 10 Nucor Steel of Memphis Inc. 400 Steel 10 The Hershey Co. 400 Candy, Mints and Gum 12 Cummins Inc. 394 Diesel Components and Engines 13 Kellogg Co. 350 Cereal 14 Buckman 320 Specialty Industrial Chemicals 15 Bryce Corp. 311 Flexible Packaging 16 Valero Energy Corp. 310 Gasoline, Fuel, Petrochemicals 17 Charms, Division of Tootsie Roll Industries 300 Hard Candy 17 GlaxoSmithKline 300 Over-The-Counter Consumer Products 17 ThyssenKrupp Elevator Manufacturing Inc. 300 Elevators & Industrial Lifting Equipment 20 Barr Brands International Inc. 298 Heavy Duty Cleaning 21 DuPont Protein Solutions 280 Soy Protein 22 Competition Cams Inc. 275 Automotive Performance Aftermarket 22 Mueller Industries Inc. 275 Tubular Products, Fittings and Valves 24 Kellogg Co. 250 Waffles 24 Olympus Surgical Technologies of America 250 Ear Nose and Throat Implants

______Source: Memphis Business Journal: Book of Lists 2018-2019.

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Shelby County’s Top 25 Employers

Local Company Employees Type of Business 1 Federal Express Corporation 30,000 Transportation, e-commerce & business services 2 Tennessee State Government 14,500 State Government 3 United States Government 13,400 Federal Government 4 Methodist Le Bonheur Healthcare 12,923 Integrated Healthcare Delivery System 5 Shelby County Schools 11,500 Primary & Secondary Education 6 Baptist Memorial Health Care Corp. 7,405 Integrated Healthcare System 7 City of Memphis 7,000 City Government 8 The Kroger Co. 6,560 Retail Groceries 9 Naval Support Activity Mid-South 6,500 Military Installation 10 Wal-Mart Stores, Inc. 6,280 Discount General Merchandise 11 Shelby County Government 4,968 County Government 12 St. Jude Children’s Research Hospital 4,405 Medical Research Hospital 13 Desoto County School District 4,275 Primary & Secondary Education 14 University of TN Health Science Center 3,800 Health Science University 15 XPO Logistics Supply Chain 3,534 Warehousing & Logistics 16 Technicolor 3,500 Distribution of Movies, DVD’s, Games 17 Regional One Health 3,277 Healthcare System 18 Century Management Inc. 3,100 Operation of Quick-Service Restaurants 19 The University of Memphis 3,019 Post-Secondary, Graduate & Legal Education 20 Memphis Light, Gas & Water 2,700 Utilities 20 Nike Inc. 2,700 Sports & Fitness Footwear & Apparel 22 ServiceMaster Global Holdings Inc. 2,600 Commercial & Residential Services 23 Saint Francis Healthcare 2,430 Healthcare 24 International Paper Co. 2,400 Packaging, Paper & Distribution 24 Veterans Affairs Medical Center 2,325 Medical Center 25 Smith & Nephew 2,297 Orthopedic Medical Devices ______Source: Memphis Business Journal: Book of Lists 2018-2019.

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Shelby County Building Permits(1)

Total Number Valuation

Year Issued (in $000) 2009 5,974 $ 835,758 2010 6,738 842,590 2011 6,133 751,702 2012 7,055 1,267,770 2013 6,748 1,011,308 2014 6,495 1,099,217 2015 6,640 1,162,150 2016 6,460 1,123,072 2017 6,968 1,315,647 2018 6,903 1,269,587

______Source: Shelby County Building Department, November 2018. (1) Totals do not include building permits issued for Bartlett and Collierville.

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Financial Institutions

There are more than thirty-five (35) financial institutions operating in the County. The following table sets forth an alphabetical listing of the larger banks operating in the County:

Shelby County Banks (In Thousands of Dollars)

Corporate Numbe r of Total Local Bank Name Headquarters Local Deposits Bancorpsouth Bank MS 8 $ 260,288 Bank of America N.A. NC 14 1,339,460 Bank of Bartlett TN 8 321,499 Bank3 TN 2 84,912 BankTennessee TN 5 184,383 Brighton Bank TN 1 1,426 Cadence Bank, N.A. AL 4 148,221 Citizens Savings B&T Co TN 1 9,775 Commericial Bank & Trust Co. TN 3 203,079 Community Bank of MS MS 1 7,250 Evolve Bank & Trust AR 1 258,261 Financial Federal Bank TN 1 380,369 First Alliance Bank TN 3 102,850 FirstBank TN 3 90,242 First Capital Bank TN 2 245,536 First Citizens National Bank TN 4 211,711 First National Bank of Eastern, AR AR 1 995 First Tennessee Bank N.A. TN 30 10,368,512 FSNB, N.A. OK 7 6,789 Iberiabank LA 8 351,724 Independent Bank TN 9 854,963 INSOUTH Bank TN 2 63,726 Landmark Community Bank TN 5 667,879 Paragon Bank TN 4 321,504 Patriot Bank TN 3 183,436 Pinnacle Bank TN 5 1,010,204 Regions Bank AL 35 3,946,031 Renasant Bank MS 7 627,304 Simmons Bank AR 2 43,166 SunTrust Bank GA 21 2,211,286 The Bank of Fayette County TN 1 17,183 Tri-State Bank of Memphis TN 1 78,082 Triumph Bank TN 4 605,175 Trustmark National Bank MS 10 436,370 Wells Fargo Bank N.A. SD 7 475,710 Total 223 $ 26,119,301

______Source: FDIC; as of June 30, 2018.

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Shelby County Economy

In recent years, the economy of the County has experienced notable success in attracting new businesses along with the continued growth of existing businesses. This success is due in large part to the County's location near the geographic center of the nation combined with excellent transportation facilities. Also, the County benefits from serving as the trade center for the surrounding area.

Trade Area

Trade and retail facilities in the County are extensive and serve a trade area of 105 counties, with a radius of roughly 200 miles east and west and a longer radius paralleling the Mississippi River 300 miles north and south. This trade territory includes 13 counties in Arkansas, one county in Kentucky, 41 counties in Mississippi, two counties in Missouri, and 19 counties in Tennessee.

Agribusiness

The Mid-South area, encompassing the Mississippi River Delta, is one of the richest agricultural areas in the nation. Farming is a major occupation of the region and has developed into major agribusiness activities. The 200-day growing season and favorable climate encourage the production of a variety of products. The major emphasis is on soybeans, cotton, and cattle, with additional interest in rice, corn, peaches, apples, and a variety of vegetables.

An international agricultural market center, Agricenter International, was established in 1985. The 140,000 square-foot exhibition center provides a forum for manufacturers, researchers and agribusiness organizations and producers from across the country. Facilities at Agricenter include a 1,000-acre demonstration farm, both indoor and outdoor exhibition space, and an auditorium with seating capacity of 500. Agricenter is located in the eastern section of the County about 30 minutes from downtown Memphis. It is a nonprofit entity that operates on a management contract with the Shelby County Agricenter Commission.

Tourism

The County's tourism industry has shown considerable growth since 1990. Among the principal reasons for the growth include the investment of public funds into tourism development projects, the area's music culture and industry and the development of casino gaming in nearby Northern Mississippi. Much of the area's tourism activity is focused on downtown Memphis. For example, Mud Island, a park and museum devoted to the history, environment and culture of the Mississippi River, is located in Memphis' harbor.

Beale Street Historic District

The County's two largest tourist attractions draw on the area's rich music heritage. The Beale Street Historic District is located in downtown Memphis and on an annual basis attracts approximately four million patrons, both tourists and residents. Entertainment in the District focuses on the Blues, which developed on Beale Street throughout the early and middle part of the 20th century.

Graceland Memphis

The other large music-related attraction is Graceland, the home of the late Elvis Presley, which serves as a museum honoring the early rock and roll pioneer. Graceland attracts an annual average of more than 750,000 people, many of whom make Graceland the primary reason for their visit to the County.

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National Civil Rights Museum

The National Civil Rights Museum is a complex of museums and historic buildings in Memphis, Tennessee; its exhibits trace the history of the Civil Rights Movement in the United States from the 17th century to the present. The museum is built around the former Lorraine Motel, which was the site of the assassination of civil rights activist Martin Luther King Jr. on April 4, 1968. Two other buildings and their adjacent property, also connected with the King assassination, have been acquired as part of the museum complex. The museum reopened in 2014 after renovations that increased the number of multi-media and interactive exhibits, including numerous short movies to enhance features.

Memphis Grizzlies' Basketball Arena

In 2001, the NBA Vancouver Grizzlies were refranchised and relocated to Memphis. An arena, the FedEx Forum, was constructed just south of Beale Street for the Grizzlies' use. The construction of the FedEx Forum, an approximately 18,200 seat multipurpose sports, entertainment and public assembly facility with suites, lounge boxes and other premium seating, was completed in September 2004 and opened for the 2004-2005 NBA season. It is the home of the Memphis Grizzlies of the NBA, the University of Memphis men’s basketball team and various concerts and other events.

Cook Convention Center

The Memphis Cook Convention Center currently offers 300,000 square feet of space designed especially for conventions, tradeshows and performing arts. The Convention Center is located in the downtown convention district on the Trolley Line, convenient to hotels, attractions, shopping and entertainment, and is only 12 miles from the Memphis International Airport. The Convention Center currently attracts over 500,000 visitors annually. The Convention Center includes a 125,000 square foot exhibition hall, a 35,000 square foot secondary exhibit hall, a 28,000 square foot ballroom, 31 meeting rooms and the Cannon Center for the Performing Arts, which seats 2,100 people and is the permanent home of the Memphis Symphony Orchestra. In May 2018, the City issued financing to fund up to $175 million in renovations to the Convention Center and the City is expected to commence construction in the 1st quarter of 2019 with completion scheduled by the 1st quarter of 2020.

Memphis Redbirds/Memphis 901FC and AutoZone Park

In 2000, Memphis became the home of the Memphis Redbirds, a minor league baseball team, and constructed a new stadium, AutoZone Park, in the heart of downtown. The Memphis Redbirds (the AAA farm club of the St. Louis Cardinals) play at the AutoZone Park, a baseball stadium in downtown Memphis containing approximately 10,000 seats and two upper decks with 48 luxury Club suites. AutoZone Park provides grass berm seating down both the left field line and the right field line and has a family-oriented games and amusement area. In 2018 Memphis welcomed Memphis 901FC, as a professional franchise in the USL Championship (United Soccer League), which will use AutoZone Park as its home. The USL Championship includes a membership of more than 30 clubs across the United States and Canada.

BassPro Shop

In 2015, BassPro Shops opened a retail store and tourist attraction in the Pyramid building located in downtown Memphis on the banks of the Mississippi River. In addition to its retail store, the 220,000 square foot facility includes a hotel, a bowling alley, restaurants, an aquarium, an indoor shooting range, a duck aviary and an alligator pit.

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Other Tourist Attractions

Many other features enhance the County's ability to attract visitors. These include Shelby Farms, the City's 4,500-acre park system which is one of the largest urban park systems in the United States, as well as the Memphis Zoo and Aquarium, a number of fine art galleries, the Overton Square entertainment district and the 62,000-seat Liberty Bowl Memorial stadium.

There are more than 22,000 hotel rooms available to serve the County area, including the historic Peabody Hotel, the Sheraton Memphis Downtown Hotel, the Westin Hotel, along with a number of large hotels in the eastern part of the City of Memphis and County. The Sheraton Memphis Downtown Hotel is a 600-room hotel adjacent to the Cook Convention Center, the largest hotel in Shelby County.

Shelby County Libraries

The Library System has 18 branches throughout the area, and an annual circulation of about four million books. The Memphis library system houses five million volumes. The Benjamin L Hooks Central Library serves as the flagship information hub of the Mid-South. Situated in the middle of the City, the 330,000 square-foot facility is larger and more accessible to all residents. Each incorporated municipality in Shelby County operates its own public library branch.

Economic Development

One of the County's primary attractions for economic development opportunities is the combination of its central location in the United States and its excellent transportation facilities, including air, rail and water (See “Transportation and Distribution” below). Another attractive feature for certain companies is the relatively low cost of living compared with other urban areas, including real estate prices.

The County and the City of Memphis have a combined agency to promote economic development in the City and County, the Memphis-Shelby County Division of Planning and Development.

The Downtown Memphis Commission (“DMC”) is responsible for oversight of the Central Business District located in downtown Memphis. The DMC operates two industrial development corporations: the Center City Revenue Finance Corporation which issues mortgage revenue bonds for qualified projects and administers a payment-in-lieu-of-taxes (PILOT) program for the center city area and the Center City Development Corporation which promotes comprehensive redevelopment of the central business district. The Downtown Memphis Commission is engaged in mobilizing resources and support for downtown projects.

The Economic Development Growth Engine (“EDGE”) is a county-wide agency which promotes industrial or labor intensive development. EDGE administers a separate PILOT Program that promotes business expansion and industrial development throughout the City and County. Additional economic development efforts are led by the Memphis Area Chamber of Commerce, a private organization that receives financial support from its members. The Tennessee Department of Economic and Community Development is also active in working to attract industrial and business prospects to the areas as a part of its state-wide recruiting efforts.

Central Business District

The Central Business District encompasses all of downtown Memphis, the medical district and parkway areas of the City. Major redevelopment has been promoted with a combination of private and

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public investment during the past decade. The DMC coordinates all downtown revitalization among local governments and the private sector.

Residential Development

At present, there are more than 14,000 residential units, and 24,300 residents, in the Central Business District. The occupancy rate in downtown is consistently in excess of 93% for both rental and sale housing.

Office Space

The market for office space in downtown has an occupancy rate of approximately 80%. Major renovations are being made to downtown buildings that will enhance the downtown office market by providing additional Class A space in the core as well as in adjacent districts.

Transportation and Distribution

Memphis International Airport

The Memphis International Airport (“MEM”) is located in Shelby County, approximately ten miles southeast of downtown Memphis and 3.5 miles north of the Tennessee-Mississippi state line. MEM occupies 5,100 acres of land. Access to MEM is provided predominately via Interstate 240 (I-240), Plough Boulevard, and Tchulahoma Road. I-240 is the southern half of the Memphis beltway connecting Interstate 40 and Interstate 55. MEM is governed by the Memphis-Shelby County Airport Authority (the “Authority”), which was created in 1969 pursuant to the Metropolitan Airport Authority Act and is body politic and corporate of the State of Tennessee. The Authority is governed by a seven-member Board of Commissioners (the “Board”), five of whom are appointed by the Mayor of the City of Memphis and two by the Mayor of Shelby County. The Memphis City Council confirms these appointments for seven-year staggered terms. A member of the Board may be removed from office by a two-thirds vote of the City Council, but only after notice of cause for the removal has been served and the member has been granted an opportunity for a public hearing on the matter.

In August 2018, the Authority announced its plans for their historic Concourse B Modernization Project (the “Project”). The Project completely redesigns, reconstructs, and expands the major spine and southeast leg of Concourse B to provide a more efficient facility with additional passenger amenities such as higher ceilings, increased natural lighting, wider corridors, larger gate areas, new concessions, moving walkways, additional seating, children’s play area, military lounge, and charging stations. Another significant portion of the Project involves bringing Concourse B up to modern seismic standards, because MEM is located near the New Madrid Seismic Zone which is a major seismic zone in the United States. The Project is scheduled to be completed by Spring 2021.

As of January 2019, MEM had scheduled passenger service provided by six U.S. passenger carriers and one foreign flag carrier. MEM provides daily nonstop service to 26 markets with a total of 73 average daily flights. Primary Origin and Destination markets with a significant number of daily nonstop flights to Atlanta and Dallas Metroplex (DAL & DFW) with 10 daily flights, nine daily flights to Chicago (MDW & ORD) on three airlines, seven daily flights to Charlotte and Houston (HOU and IAH) followed by nonstop flights to many of the network carrier hubs (Los Angeles, Miami, New York, Orlando, Phoenix & Washington D.C.). In addition to a strong network carrier presence, MEM is served by two Ultra Low Cost Carriers (ULCC), Allegiant and Frontier, offering no frills low fare flights to 12 destinations two to four times a week. Passenger activity to MEM has trended higher since 2015 with 1.8 million enplaned passengers to 2 million in 2017. MEM is the world’s second largest cargo hub behind Hong Kong, China, and home to Federal Express Corporation.

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The following table sets forth MEM’s aviation activities regarding their enplaned passengers and their enplaned and deplaned cargo handled for the years 2013-2017:

Memphis International Airport Aviation Activities

2017 2016 2015 2014 2013 Enplaned Passengers By Airline Type Major/National 1,452,157 1,308,932 1,128,865 1,067,114 1,210,562 Regional/Commuter 631,403 687,785 736,788 719,910 1,079,634 Non-Scheduled 887 478 7,340 8,408 6,765 Total 2,084,447 1,997,195 1,872,993 1,795,432 2,296,961 Aircraft Total Movements (1) 190,618 191,260 186,218 186,246 205,770 Aircraft Landed Weight (in thousand pound units) 26,473,882 26,333,844 24,921,008 24,922,007 24,835,830

Per Thousand Pounds of Cargo Handled 2017: Domestic International Air Mail Total Cargo - Enplaned 4,276,092.9 646,873.9 10,307.6 4,933,274.4 Cargo - Deplaned 3,861,211.9 757,178.2 10,873.2 4,629,263.4 Total Cargo Handled 2017 8,137,304.8 1,404,052.1 21,180.9 9,562,537.7 Total Cargo Handled 2016 8,385,290.3 1,124,617.8 20,257.3 9,530,165.4

Increase (Decrease) (2017 vs. 2016) (247,985.5) 279,434.3 923.6 32,372.4 Percent Increase (Decrease) (2.96%) 24.85% 4.56% 0.34%

______Source: Memphis-Shelby County Airport Authority, Calendar Year Statistics

(1) Excludes Military and General Aviation activity.

Federal Express Corporation

Federal Express Corporation (“FedEx”), an all-cargo air carrier, has its world headquarters in Memphis, Tennessee, and operates its Super Hub at MEM (the “FedEx SuperHub”). The FedEx SuperHub is the primary sorting facility for FedEx and serves as the center of its global hub-and-spoke system. The FedEx SuperHub operates 24 hours a day and 365 days per year and occupies approximately 945 acres and includes 3.8 million square-feet of sorting and handling facilities, that are capable of processing 475,000 packages per hour, aircraft hangars, aircraft ramp areas, vehicle parking areas, flight training and fuel facilities, administrative offices and warehouse space.

In an environmental assessment dated October 2017, FedEx outlined plans to update its facilities at MEM including demolishing 24 outdated structures and replacing structures with facilities specifically designed to accommodate modernized, more efficient equipment that is compatible with its current aircraft fleet. This modernization project would be constructed in phases as funding becomes available and is estimated to begin in 2019 and be completed by 2025. Additionally, in January 2018, FedEx applied for a building permit to add 7 new aircraft parking positions and support facilities at MEM at an estimated cost of $35.4 million. FedEx has announced that it will invest $1 billion dollars into its modernization of the FedEx SuperHub, which will create new jobs and efficiencies that better utilize technology, automation and modernization.

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Water

The Mississippi River ranks third in length, fourth in drainage area and fifth in volume in the world. Among the world's ten largest rivers, reaching from the Gulf of Mexico deep into the heartlands of the United States, the Mississippi River system encompasses about 8,900 miles of navigable inland waterways. This system has also helped make Memphis a close neighbor of the agricultural Midwest and the industrial East and West Coasts. The waterways allow for barge service to New Orleans and other Gulf Ports along the Gulf Intercoastal Waterway. This intracoastal waterways system of approximately 1,173 miles connects Florida and Texas and has offered Memphis' industry unprecedented growth opportunities. There is an abundance of usable industrially zoned land in the County, much of which is located where industry may utilize the water and the low-cost transportation of the Mississippi River. The Mississippi River provides extraordinary opportunities for the attraction of industries. Lying just off of the river, McKellar Lake, President's Island, Frank Pidgeon, and Rivergate Industrial Parks are excellent industrial locations. All of them front or are near a stillwater harbor that has a minimum depth of twelve feet.

In terms of freight handled, Memphis is the third largest shallow draft river port in the U.S. and second largest inland shallow draft river port on the Mississippi River. The Memphis port provides favorable transportation rates for waterborne movements and excellent port facilities that interconnect with other modes of transportation. The port handles more than 14 million tons of barge driven cargo each year. The navigation channel is maintained by the U.S. Army Corps of Engineers.

The following tables below sets forth the total tonnage shipped through the Port of Memphis for the years 2007-2016:

Total Tonnage Port of Memphis (2007-2016)

Year Total Tonnage 2016 12,184,332 2015 12,025,514 2014 14,748,636 2013 14,243,251 2012 13,564,063 2011 12,611,541 2010 12,155,049 2009 13,980,433 2008 16,361,042 2007 18,825,124

______Source: Waterborne Commerce Statistics of the United States; http://www.iwr.usace.army.mil/ndc/index.htm.

Two still-water harbors in the Memphis area provide shelter from the river current. Wolf River Harbor is the original harbor, located in north Memphis; and McKellar Lake is a $50 million, man-made harbor just south of the Central Business District. Public facilities include three public terminals; LASH service; roll-on, roll-off service; bulk loading facilities to barges; bulk sacking facilities; chemical fertilizer storage tanks; heavy lifts up to 100 tons (CBI Nuclear heavy lift to 1200T); two boat/barge repair facilities; and six grain elevators.

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Most major common carrier barge lines provide service to the Memphis Port including American Commercial Barge Lines, Federal Barge Lines, Ohio Barge Lines, Sioux City and New Orleans Barge Lines, DRAVO-Mechling Corporation, Riverway Barge Corporation, and Valley Barge Lines.

Rail

Six Class One railroads operate out of the County with competitive freight service to all principal cities in the U.S. and direct, on-line service to 35 states. Serving the County area are the Norfolk Southern Railroad, Burlington Northern, Seaboard System, St. Louis-Southwestern Railway Lines, and the Union Pacific System. Eighteen other rail carriers maintain off-duty offices in the County for the development and coordination of traffic over their lines. The rail lines offer a variety of modern, specialized equipment and services, including piggy-back and containerized freight.

Highway

The County is connected to the rest of the nation by eight federal, three interstate, and seven state highway systems. These highways combined with a circumferential expressway and two highway bridges crossing the Mississippi River make all parts of Memphis readily accessible to its surrounding communities.

Public Transit

The Memphis Area Transit Authority (“MATA”) provides public mass transportation in the City, and the portions of the City of Bartlett and Lakeland (Paratransit Service), City of Germantown, and unincorporated Shelby County, Tennessee. A contract service is also operated in the City of West Memphis, Arkansas. MATA provides fixed route bus and paratransit services throughout the service area, and rail trolley service in the downtown area. Annual ridership is about 10.4 million passengers. The Fixed Route bus system operates about 7.6 million miles annually on 32 routes. Service is available 365 days per year. MATA Plus Paratransit service for individuals with disabilities operates in the same areas and the same times as Fixed Route service. Paratransit service runs about 1.7 million miles per year. The rail trolleys system operates about 450,000 miles annually on three lines in the downtown area. MATA’s Trolley service operates along seven miles of track in downtown Memphis, riverfront and midtown. The Trolley shuttle service serves numerous restaurants, retail stores and attractions throughout downtown, such as a spectacular view of the Mississippi, the Cook Convention Center, Beale Street, The Orpheum Theatre, The Bass Pro Shops at the Pyramid and the National Civil Rights Museum.

Interstate Bus Lines

Continental Trailways/Greyhound Bus Lines is the major interstate bus line serving the County, offering bus service from its Memphis terminals to the continental United States and Canada and supported by three smaller lines: Bridge Transit Corp., Great Southern Coaches, MegaBus and Gulf Transport Co.

Memphis Light, Gas and Water Division

The Memphis Light, Gas and Water Division (“MLGW”) is a municipally owned utility which distributes electric power and natural gas throughout the City of Memphis and the County, as well as, water within the City of Memphis and certain adjacent areas. MLGW was created by an amendment to the Charter of the City by Chapter 381 of the Private Acts of the General Assembly, adopted March 9, 1939. MLGW is managed by its board, which consists of five members nominated by the City of Memphis Mayor and approved by the Council. Board members serve for three-year terms. MLGW has control over the administration of its activities in connection with MLGW's business affairs. It operates as three separate

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divisions (Electric, Gas, and Water), for accounting and financial purposes. MLGW's fiscal year is the calendar year.

MLGW is committed to purchase almost all of its power from Tennessee Valley Authority (“TVA”) under a contract, subject to termination by either MLGW or TVA, on not less than ten years' prior written notice.

MLGW contracts with Texas Gas Transmission Corporation to receive gas from Texas and Louisiana fields. MLGW also purchases gas from various suppliers on the “spot market”.

Memphis water is provided through an excellent artesian water supply. The water is soft bicarbonate, low in sulphate and chlorides, and contains no organic matter or harmful bacteria. It is aerated, filtered, chlorinated and fluoridated. There are nine pumping stations in Memphis, each adjacent to its well field.

Medical Facilities

Shelby County has one of the most comprehensive collections of health care centers in the nation with 21 hospitals providing over 4,000 beds and numerous other health care facilities. These health facilities are both a regional destination for patients in the area and a national/international destination for patients treated by St Jude. The health care industry contributes over $10.4 billion to the economy annually.

Regional One Health Hospital

Regional One Health Hospital (“Regional One”) is a private hospital owned by a not-for-profit corporation, which receives annual appropriations from the County. Much of its debt funding is also provided through the County. With more than 15,000 admissions and over 124,000 outpatient visits per year, the hospital trains approximately 750 medical students, residents, and fellows annually in connection with the University of Tennessee Medical Units. The hospital has the only accredited skin bank in the State and the Diggs-Kraus Sickle Cell Research Center.

Regional One’s Centers of Excellence include the Elvis Presley Memorial Trauma Center, which is the only Level 1 trauma center in the region and the third busiest in the nation; the Firefighters Regional Burn Center, the only full-service center in a 150-mile radius; the Sheldon B. Korones Newborn Center (an intensive care unit for premature and distressed newborns), the only Level IV center in West Tennessee; the Wound Care Center, which specializes in the treatment of chronic non-healing wounds; and High Risk Obstetrics.

Baptist Memorial HealthCare Corporation

Baptist Memorial Healthcare Corporation (“Baptist”) is a multi-facility health care system serving the regional communities of the Mid-South. The health care facilities presently owned or leased, and operated, by Baptist Memorial Health Care include 18 general acute care hospitals with 2,316 staffed beds, and one rehabilitation and specialty care facility. Facilities owned and operated by Baptist in Shelby County include Baptist Memphis, Baptist Collierville, and Baptist Women’s and Children’s Hospital. Baptist also is a joint venture partner in Shelby County in a rehab hospital, restorative care hospital and behavioral health hospital. Baptist also provides a wide continuum of outpatient services that includes surgery centers, diagnostic centers, home health, hospice and physician practices. In total Baptist employs over 15,000 people in all locations and over 6,000 in Shelby County.

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Methodist LeBonheur Healthcare

Methodist LeBonheur Healthcare (“Methodist”), one of Tennessee’s largest healthcare providers, is an integrated delivery system providing a broad spectrum of inpatient and outpatient care services to patients from over 60 counties in Tennessee, Mississippi, Arkansas and Missouri. The healthcare facilities presently owned and operated by Methodist include 6 acute care hospitals. Methodist Healthcare–Memphis Hospitals is the largest affiliate of Methodist. Methodist Memphis owns and operates four adult acute care facilities as well as Le Bonheur Children’s Hospital which is a regional pediatric referral center. Methodist Memphis also has two joint venture rehab hospitals. All Methodist Memphis facilities are located in Shelby County, Tennessee. Under an affiliation agreement with the University of Tennessee, Methodist adult and Le Bonheur Children’s hospital are the principal private teaching hospitals for the University of Tennessee in the Memphis area. Methodist has over 325 residents from the University of Tennessee. Methodist also provides a wide continuum of outpatient services that includes surgery centers, diagnostic centers, home health, hospice and physician practices. In total Methodist has over 13,000 employees in Shelby County

St. Jude Children’s Research Hospital

St. Jude Children’s Research Hospital (“St. Jude”) was founded by the late actor, Danny Thomas. Located in Downtown Memphis, Tennessee. The mission of St. Jude is to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment, which is consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family's ability to pay. St. Jude is the world’s leading childhood cancer research center and one of the only institutions devoted solely to the study of catastrophic childhood illnesses, with its primary focus on leukemia and solid tumors. The hospital serves approximately 7,800 active patients annually. The hospital also has 78 beds for patients requiring hospitalization during treatment. St. Jude has treated children nationally and globally, all with no charge to the patient. American Lebanese Syrian Associated Charities (“ALSAC”) was founded by Danny Thomas in 1957 to be the fundraising and awareness organization for St. Jude, and its sole mission is to raise the funds and awareness necessary to operate and maintain the hospital. ALSAC is responsible for raising 75% of the funds necessary to operate St. Jude. As of 2017, St. Jude requires more than $2.4 million in operating costs each day, and public contributions provide more than 75% of the funds necessary to operate the hospital. Only 14% of the money to operate the hospital comes from insurance recoveries and 9% comes from grants.

St. Jude’s Cancer Center supports five major interdisciplinary research programs that are organized with the specific intent of translating basic science discoveries into curative therapies for children with cancer, while minimizing long-term side effects. St. Jude’s three disease-oriented programs focus on Developmental Biology and Solid Tumors, Hematological Malignancies, and Neurobiology and Brain Tumors; our Cancer Control and Survivorship Program strives to improve the quality of life of individuals surviving childhood cancer; and their Cancer Biology Program embeds basic cancer research within the heart of the center, facilitating direct interaction between the disease-oriented programs and the major laboratory resources in the center.

In 2017, St. Jude announced their plans for their $1 billion capital expansion of the Downtown campus, which will be one of the largest capital projects in Memphis history. Within this development, St. Jude will erect a $412 million research center complete with futuristic, glass-walled laboratories nestled amid open-space areas to give scientists a chance to share ideas and discoveries.

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United States Government

Navy Memphis Complex at Millington – The U.S. Navy operates several key offices and commands at its complex in north Shelby County within the city limits of Millington. There is a total of more than 6,000 civilian and military employees at the facility. The major offices that were relocated to the complex in 1999 include:

• The headquarters of the Bureau of Naval Personnel • The Naval Recruiting Command • The Navy Personnel Research and Development Center

Also, the Department of Defense has located a satellite office of the Defense Finance and Accounting Service and the headquarters of the U.S. Army Corps of Engineers Finance and Accounting Office at the Millington complex.

Internal Revenue Service - The Internal Revenue Service Center serves a six-state area and is the only one of the 10 facilities in the country to be designated as a computer center, a customer service site and a submission-processing site. Its employment varies from 2,300 to 4,200 during the year, peaking during tax season. The local payroll is in excess of $90 million.

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SHELBY COUNTY FINANCIAL MANAGEMENT SYSTEM

General

The following is a summary of the County’s financial management system regarding its debt, financial reporting and other material disclosure. See “APPENDIX B – FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT.”

Division of Administration and Finance

The Division of Administration and Finance (the “Division”) is the unit responsible for all fiscal affairs, financial management, purchasing and related systems of the County. The Director of the Division is charged with overall County financial policy and reports directly to the Chief Administrative Officer. The Director is the primary administrative officer responsible for budgeting, accounting, financial reporting, debt policy, and financial support systems. The Director is appointed by the County Mayor.

Fiscal Year

The County operates on a fiscal year, which commences July 1 and ends June 30.

Audited Financial Reporting

The County maintains a financial reporting system, which provides timely and accurate reports of revenues, expenditures, and financial status. The County's financial statements are audited annually by independent certified accountants as required by law. The report of such accountants with respect to the County's Financial Statements for the fiscal year ended June 30, 2018, are referenced in APPENDIX B of this Official Statement.

Budgeting and Appropriation Procedures

The formal budgetary process is preceded by a goal-setting workshop for senior administrative management. After identifying and prioritizing general goals and objectives, specific strategies and action plans for implementation are prepared at the division management level. This planning process serves as the basis for formulation of departmental budgets. These budgets are reviewed by the respective division directors and a combined division budget is prepared incorporating administrative review changes at that level. Division budgets are submitted to the Chief Administrative Officer for a final level of administrative review. Subsequent to necessary revisions and a final executive review by the Mayor, a consolidated budget for the County Administration is prepared.

Elected officials submit their respective budgets to the budget office to be included in a consolidated budget document that is presented to the Budget and Finance Committee of the Board of County Commissioners. The Budget and Finance Committee conducts public review meetings and recommends revisions to the consolidated budget. The revised consolidated budget is presented for approval to the Board of County Commissioners. The legislative body is responsible for final approval of the consolidated budget and sets the property tax rate.

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The following table sets forth the County’s budget for the fiscal year ending June 30, 2019:

BUDGET FOR THE FISCAL YEAR ENDING JUNE 30, 2019

General Fund Revenue FY2019 Property Taxes $ 295,445,000 Other Local Taxes 34,475,000 State Revenue 23,718,452 Federal and Local Revenue 6,986,833 Charges for Services 3,030,195 Fines, Fees and Permits 68,382,520 Other Revenue 949,500 Investment Income 1,307,500 Total Revenue $ 434,295,000

General Fund Expenditures General Government $ 29,832,264 Hospitals (Regional One) 29,408,000 Planning & Development 341,676 Public Works 26,697,862 Health Services 33,629,578 Community Services 10,394,979 Sheriff 187,829,100 Judicial 72,265,361 Other Elected Officials 36,658,388 Total Expenditures $ 427,057,207

Other Financing Sources (Uses) Other Sources & Uses $ (200,000) Transfers In (1,049,824) Transfer Out 18,177,066 Planned Change in Fund Balance (9,689,448) Total Financing Sources $ 7,237,794

Net Change in Fund Balance -

______Source: Shelby County Adopted Budget for Fiscal Year 2019.

Shelby County Board of Education

The policy making body of the County’s school system is the Shelby County Board of Education (the “Board of Education”), which is composed of nine (9) members. The Board of Education appoints the

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system superintendent for a four (4) year term. The Board of Education establishes educational policies and approves the budget for submission to the County Commissioners for final appropriation. It has no separate taxing or bonding authority. All tax allocations must be set by the County Commissioners and bonds are sold by the County for school capital purposes. All funds appropriated by the County must be distributed to the County’s school system and the newly formed municipal school districts on an average daily attendance basis.

Shelby County Schools

As of July 1, 2014, the County has seven (7) separate school districts. The school districts are: Arlington Community Schools, Bartlett City Schools, Collierville Schools, Germantown Municipal School District, Lakeland School System, Millington Municipal Schools and Shelby County Schools (collectively, the “School Districts”). Each School District has a board composed of five members except Millington Municipal Schools which has a board composed of seven members and Shelby County Schools which has a board composed of nine (9) members.

All School Districts are approved by the Tennessee State Department of Education. The School Districts within Shelby County, the number of schools within their jurisdiction, average daily membership and average daily attendance are shown in the table below:

2014 - 2015 2015 - 2016 2016 - 2017 Average Average Average Average Average Average Number of Daily Daily Daily Daily Daily Daily Year Schools (1) Membership Attendance Membership Attendance Membership Attendance Arlington Community Schools (ACS) 4 4,850 4,630 4,985 4,794 5,087 4,910 Bartlett City Schools (BCS) 11 8,332 7,935 8,500 8,108 8,691 8,323 Collierville Schools 8 7,853 7,529 8,021 7,682 8,290 7,940 Germantown Municipal School District 5 5,676 5,478 5,727 5,511 5,877 5,663 Lakeland School System (2) 1 844 812 901 867 944 909 Millington Municipal Schools 4 2,653 2,510 2,539 2,386 2,544 2,413 Shelby County Schools 206 110,807 104,305 106,455 100,469 103,703 97,957

______Source: State of Tennessee, Department of Education, Annual Statistical Report - fiscal years ended June 30, 2015–2017.

(1) As of 2016-2017 fiscal year. (2) Through an interlocal agreement, Lakeland middle and high school students attend schools in the ACS and BCS districts.

Merger of Shelby County and City of Memphis School Systems; New Municipal School Districts

The Memphis City Schools (“MCS”) and Shelby County Schools systems merged at the beginning of the 2013-2014 school year after the surrender by the MCS of its Charter on February 11, 2011 and a subsequent voter referendum.

Effective July 1, 2014, each of the municipalities in the County except Memphis created its own school system separate and apart from the Shelby County system. (The City of Memphis remains within the Shelby County Schools system). The Shelby County Schools system has entered into an agreement with each of the municipal school systems to transfer substantially all school facilities located in the municipalities to the municipal school systems; in exchange, the municipal school districts have agreed to

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pay a specified dollar amount annually for twelve years to the Shelby County Schools, which will be applied to reduce a portion of the Shelby County Schools’ unfunded retiree health and life insurance liabilities incurred as of May 31, 2014.

Property taxes of the County collected for school operations and maintenance are allocated to both the Shelby County Schools and municipal school districts based on the student average daily attendance of the respective school districts pursuant to T.C.A. Section 49-3-315. Beginning with the school year 2015- 2016, the County is also required to allocate to the municipal school districts a portion of the proceeds of its school bonds issued for capital projects and payable from County-wide taxes on a similar basis under T.C.A. Section 49-3-1003.

SHELBY COUNTY PROPERTY TAX

Assessments

All real estate and personal property, including some utilities not under the jurisdiction of the Tennessee Comptroller of the Treasury, Office of State Assessed Properties (OSAP) are assessed by the County Assessor of Property. Utilities and Carriers (railroads, truck lines, airlines, bus lines, etc.) are assessed by the OSAP, and some intangible personal property assessments related to banks are assessed by the State Division of Property Assessments.

Appraised values approximate market value. The ratios of assessment under the Property Assessment and Classification Act of 1973, provides for assessing farm and residential real property at 25% of the current market value, commercial and industrial real property at 40% of the current market value, personal property at 30% of the current market value and real and personal property and public utilities at 55% of the current value with corresponding reductions in tax rates.

New appraisal changes in real estate occur only for new construction. Reappraisal does not occur based on property sales. Personal property assessments are made annually based upon returns submitted by the taxpayers and are, therefore, maintained on a current basis. Appraisals by the OSAP for utilities and carriers are made annually based upon returns and are also maintained at current market value. The County, as required by State law, plans to revise all assessments every four years in the future based on current market values. The last County-wide reappraisal occurred for the 2017 tax year (collections in FY 2018).

Real estate and personal property are assessed by the County Assessor of Property at the percent of total actual value indicated. All assessments may be appealed for review by the Shelby County Board of Equalization and the State Board of Equalization.

Public Utilities are assessed by the OSAP and are automatically reviewed by the State Board of Equalization. These assessments include real estate and personal property on the basis of location and usage. Currently, under a ruling by the State Board of Equalization, the appraised value of public utilities is being reduced by multiplying it by a factor computed by dividing the appraised valuation for tax purposes of all real property within the County by the current market value. The assessed value is based on this reduced appraised value.

Billing, Collection and Delinquencies

The County property taxes are collected by the Shelby County Trustee (the “County Trustee”). The County Trustee sends a tax bill to taxpayers on or before September 15 of each year. The County property taxes must be paid by February 28 of the following year, after which the taxes become delinquent. Delinquent

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County property taxes are subject to an interest rate of one and one-half percent (1.5%) per month calculated on the first (1st) day of each month and added to the delinquent balance until paid in full.

The City property taxes are collected by the Treasurer of the City of Memphis, Tennessee, Treasury Office (the “City Treasurer”). The City Treasurer sends a tax bill to taxpayers in July of each year. The City property taxes are due on August 31 and thereafter interest and penalty charges accrue at one and one-half percent (1.5%) per month (18% annually) after the original due date until paid in full.

To aid in the collection of property taxes, the Property Tax Act imposes a lien on the property to secure payment of the taxes. The lien for taxes becomes a first lien on the property as of January 1 of the tax year, and takes priority over any pre-existing liens on the property, except for pre-filed federal tax liens. The Property Tax Act authorizes the County, approximately one (1) year after delinquency, to file suit in Chancery or Circuit Court to collect the delinquent property taxes, as well as the penalties, interest and costs of collection, including attorney's fees. The Property Tax Act also authorizes the County, approximately two (2) years after delinquency, to seize and sell the property, if the County is unable to collect delinquent property taxes by other means.

If the County is unable to sell the seized property for an amount equal to the amount of the delinquent taxes (including penalties, interest and expenses), then the County is required to take ownership of the property. The Property Tax Act then requires the County to arrange for the sale of the property. The sale price is required to be no less than the amount of the delinquent taxes, unless the County certifies that a sale on such terms is not feasible. The proceeds from the sale are first applied to the payment of the delinquent taxes.

Taxation Rate Limitations

The ad valorem (real estate and personal property) tax levy is without legal limit. All prior limitations and restrictions, whether restrictive as to total dollar amount or restrictive as to specific uses or a combination of the two, have been repealed. The table below lists the top ten (10) largest taxpayers in the County:

TEN LARGEST TAXPAYERS

Assessment % of Total Federal Express Corporation $ 720,952,520 3.56% Bellsouth Telecommunications Inc. 85,010,205 0.42% G&I VII Retail Carriage LLC 74,068,520 0.37% Kroger Companies 72,939,095 0.36% Lightman Michael A (and affiliated LPs) 71,813,210 0.35% AT&T Mobility LLC 70,715,839 0.35% Galleria at Wolfchase, LLC 64,822,570 0.32% AMISUB (SFH) Inc. 63,509,110 0.31% Baptist Memorial Hospital 52,536,535 0.26% Highwoods Realty LP 51,506,670 0.25% Top Ten Taxpayers 1,327,874,274 6.56% Balance of Assessed Valuation 18,919,664,753 93.44% Total Assessed Valuation $ 20,247,539,027 100.00%

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Tax Rate Distribution

The table below sets forth the tax-rate distribution for the last five (5) years as of June 30, 2018 in connection with the issuance of the Series 2019 Bonds:

TAX RATE DISTRIBUTION (For Fiscal Years Ended June 30) (1)

2014 2015 2016 2017 2018 General Government $ 1.45 1.45$ 1.45$ 1.43$ $ 1.49 Schools (2) 2.14 2.14 2.14 1.99 1.94 Principal and Interest 0.79 0.78 0.78 0.69 0.62 Total Direct Tax Rate $ 4.38 4.37$ 4.37$ 4.11$ $ 4.05 Special General Obligation School Bonds (3) 0.04 - - - - Total Tax Rate $ 4.42 4.37$ 4.37$ 4.11$ $ 4.05

Source: Shelby County 2018 CAFR

(1) All property within the County was reappraised for the tax levy in fiscal 2017. (2) Under State law the County is required to allocate property taxes between Shelby County Schools and other municipal school systems based upon the ratio of average daily attendance of each system. From 2011 to 2013, a portion of the funds were allocated to Memphis City Schools and a portion to County schools. As a result of the merger of Memphis City Schools and Shelby County Schools in July 2013, all of the tax rate was allocated to Shelby County Schools in FY2014. In FY2015, six municipalities formed municipal school systems and property taxes are allocated based on average daily attendance with approximately 80% allocated to the Shelby County Schools and the remainder to the municipal school systems. (3) The Special General Obligation School Bonds Tax is applicable to those properties that are located outside the boundaries of the Board of Education of the City of Memphis, which is generally that portion of Shelby County outside of the City of Memphis. The tax rate is no longer in effect as of FY2015 as the local option sales tax will be used to pay the remaining balance of the Special General Obligation Schools Bonds.

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SHELBY COUNTY, TENNESSEE PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS

Revenue Capacity Information

Property Tax Levies and Collections Last Ten Fiscal Years

Collected within the

Fiscal Fiscal Year of the Levy Total Collections to Date

Year Original Taxes Collections Percentage Percentage Ended Tax Levied for the Percentage of in Subsequent Adjusted of of June 30, Year Fiscal Year Amount Original Levy Years Tax Levy Amount Adjusted Levy Original Levy

2009 2008 736,461,361 684,698,542 92.97% 45,600,215 730,825,997 730,298,757 99.93% 99.16% 2010 (a) 2009 791,055,910 719,276,815 90.93% 34,602,482 755,375,587 753,879,297 99.80% 95.30% 2011 2010 776,865,051 713,667,892 91.87% 29,901,124 746,458,748 743,569,016 99.61% 95.71% 2012 2011 764,302,988 710,934,070 93.02% 30,284,600 745,929,752 741,218,670 99.37% 96.98% 2013 2012 760,525,341 713,245,234 93.78% 27,529,133 745,211,280 740,774,367 99.40% 97.40% 2014 (a) 2013 798,327,814 741,958,610 92.94% 24,464,957 770,506,815 766,423,567 99.47% 96.00% 2015 2014 783,507,158 750,097,124 95.74% 20,115,064 775,147,167 770,212,188 99.36% 98.30% 2016 2015 784,554,974 754,081,040 96.12% 18,683,210 779,210,554 772,764,250 99.17% 98.50% 2017 2016 791,094,783 761,608,732 96.27% 16,390,759 787,771,708 777,999,491 98.76% 98.34% 2018 (a) 2017 832,173,142 797,712,672 95.86% N/A 823,187,542 797,712,672 96.91% 95.86%

(a) The effect of property reappraisals are reflected in FY 2010, 2014, and 2018 amounts. Source: Shelby County Trustee Offices.

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SHELBY COUNTY, TENNESSEE ASSESSED AND ESTIMATED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

Total Estimated Assessed Total Taxable Direct Actual Value as a Fiscal Tax Residential Commercial Personal Assessed Tax Taxable Percentage of Year Year Property (b) Property (b) Property (b) Public Utilities (a) Value Rate Value Actual Value (c)

2009 2008$ 10,259,997,845 $ 5,530,133,410 $ 1,402,492,320 $ 896,680,554 $ 18,089,304,129 $ 4.04 $ 61,383,315,080 29.47% 2010 (d) 2009 10,954,449,590 6,285,548,950 1,468,617,700 948,762,385 19,657,378,625 4.02 66,374,654,928 29.62% 2011 2010 10,794,438,245 6,116,755,995 1,388,887,495 1,012,006,455 19,312,088,190 4.02 65,216,500,736 29.61% 2012 2011 10,721,303,794 5,828,574,575 1,380,179,795 1,069,425,931 18,999,484,095 4.02 64,287,973,983 29.55% 2013 2012 10,649,905,970 5,660,543,555 1,438,945,120 1,098,465,902 18,847,860,547 4.02 63,834,911,731 29.53% 2014 (d) 2013 9,588,110,655 5,919,308,700 1,533,153,805 1,125,314,171 18,165,887,331 4.38 60,586,935,365 29.98% 2015 2014 9,553,959,920 5,650,054,415 1,473,774,000 1,289,100,925 17,966,889,260 4.37 59,884,233,964 30.00% 2016 2015 9,595,800,610 5,701,519,115 1,426,582,015 1,215,978,130 17,939,879,870 4.37 59,897,289,027 29.95% 2017 2016 9,658,521,795 5,751,939,895 1,461,401,325 1,230,992,434 18,102,855,449 4.37 60,418,966,162 29.96% 2018 (d) 2017 10,678,297,610 6,763,926,870 1,521,169,795 1,284,144,752 20,247,539,027 4.11 67,338,526,740 30.07%

(a) Public Utilities information is based on information received from the State of Tennessee Comptroller of the Treasury assessments.

(b) Assessed value is the most current tax year value prepared by the County Assessor of Property as of April 20 prior to the beginning of each fiscal year.

(c) The State of Tennessee tax statutes classify property as follows for computing assessed valuations: Real Estate-Residential and Farms 25% of actual value Real Estate-Commercial and Industrial 40% of actual value Personal Property-Commercial and Industrial 30% of actual value Public Utilities 55% of actual value

(d) The effect of property reappraisals are reflected in FY 2010, 2014 and FY2018 amounts.

Source: Shelby County 2018 CAFR, Shelby County Assessor and Trusstee Offices.

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UNDERLYING DEBT

The following table of jurisdictions with boundaries within the County's boundaries is based upon information received by the County from the sources specified in the notes to the table. It does not include authorized but unissued indebtedness of those jurisdictions, according to the information that the County has received. The County has not assumed responsibility to verify any information received by it.

Schedule of Underlying Debt June 30, 2018 Underlying (1) Subdivision Indebtedness City of Memphis $ 1,476,685,000 City of Germantown 57,300,000 City of Bartlett 90,846,335 City of Collierville 117,630,000 City of Lakeland 14,203,151 Town of Arlington 16,742,000 Town of Millington 11,943,087 Total $ 1,785,349,573

Source: Shelby County 2018 CAFR

(1) The Unaudited Underlying Bonded Indebtedness, which is as of June 30, 2018, includes Gross Debt for Memphis, Germantown, Bartlett, Collierville, Lakeland, Arlington and Millington.

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______

Source: Shelby County Finance Department

DEBT RATIOS (As of June 30, 2018)

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CONTRACTUAL AGREEMENTS AND OTHER LONG-TERM OBLIGATIONS

Operating Leases

The County leases office space and other equipment under operating leases expiring during the next five years. Rent expense for the year ended June 30, 2018 was $2,615,000 for the primary government.

Capital Leases

The County has entered into a capital lease agreement with the State of Tennessee for a new Regional Forensic Center. The State issued bonds in March 2013 for long term funding of construction costs. The lease agreement provides that the County’s lease payments will be the amount required to fund debt service requirements for $8 million of the bonds issued by the State. The remaining amount owed for this lease is included with long term debt. The estimated annual capital lease cost, including interest, will be approximately $400,000 to $515,000 per year. As of June 30, 2018, the remaining balance on this lease is $5,036,947.

Sports Authority Senior Lien Bonds- FedEx Forum

The construction of the FedEx Forum (the “Arena”), an 18,200 seat state of the art multipurpose sports, entertainment and public assembly facility with suites, loge boxes and other premium seating, was completed in September 2004 and funded, in part, with the issuance of $202,290,000 revenue bonds by the Memphis Shelby County Sports Authority (the “Authority”) in 2002. In 2007, the Series 2002A and Series 2002B Bonds were refunded, in part, by the $187,335,000 Series 2007 Series A, B, C and D Bonds. On July 9, 2009, the 2007 Series A and B Bonds were currently refunded by the Authority’s Revenue Refunding Bonds, 2009 Series A and B.

Pursuant to an interlocal agreement, in the event the revenues pledged to the support of the Bonds shall prove to be insufficient to pay debt service on such Bonds in any bond year (ending on October 31), the County and the City of Memphis, Tennessee (the “City”), pursuant to the provisions of Section 7-67- 116 of the Tennessee Code Annotated, have covenanted to timely appropriate from legally available non- ad valorem revenues, not later than October 31 of the fiscal year ending June 30 following the date of such deficit, sufficient moneys to replenish draws (“Debt Service Reserve Fund Replenishment Obligations”) from the Debt Service Reserve Fund used to make scheduled debt service on the Bonds in the prior year.

The obligation of the County and the City to replenish draws on the Debt Service Reserve Fund relating to the Bonds shall be apportioned on the following basis: 50% County, and 50% City, and shall not be joint. The maximum amount of the County's or City's Debt Service Reserve Fund Replenishment Obligation, respectively, under the Interlocal Agreement is the debt service payments on not to exceed $115,000,000 of the Authority's Bonds, which is approximately one-half (1/2) of the authorized Bonds. The obligation to replenish the Debt Service Reserve Fund is not a general obligation of the County or the City. Financial statements for the Memphis and Shelby County Sports Authority, Inc. may be obtained from the Shelby County Finance Department, 160 N Main Street, 8th Floor, Memphis, Tennessee 38103.

Also pursuant to the same interlocal agreement, the County collects and remits certain revenues. During the year ended June 30, 2018 the County transferred to the Sports Authority for debt services purposes the amount of $2,281,890 from car rental taxes and $4,861,210 from hotel/motel taxes.

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Port Commission Electrolux Bonds

The Memphis and Shelby County Port Commission issued Development Revenue Bonds, Series 2011, (“2011 Port Bonds”) in the aggregate amount of $40,795,000 to pay the costs of acquisition and construction of the infrastructure improvements and development of the proposed appliance manufacturing and assembly facility, warehouse and distribution facility, and regional headquarters facility, to be located within the Port Commission’s boundaries and jurisdiction.

Pursuant to an Interlocal Agreement, the County and the City, pursuant to provisions of the Constitution and Laws of the State of Tennessee including particularly, Chapter 500 and 529 of the Private Acts of 1947 of the State of Tennessee, have covenanted to timely appropriate from legally available non- ad valorem revenues sufficient moneys to pay scheduled debt service on the 2011 Port Bonds. Also under the Interlocal agreement, the County and the City have agreed to pay the costs of administration of the 2011 Port Bonds, including the fees and expenses of the Trustee and Paying Agent.

The obligation of the County and the City to support the payment of debt service on the 2011 Port Bonds is apportioned on the following basis: 50% County, and 50% City, and is not a joint obligation. The maximum amount of the County’s or City’s support obligation, respectively, under the Interlocal Agreement is the debt service is not to exceed $22,000,000 of the principal amount of the 2011 Port Bonds. The obligation to support the payment of debt service on the 2011 Port Bonds is not a general obligation of the County or the City. As of June 30, 2018, the County’s principal obligation is $16,807,500.

Qualified School Construction Bonds - 2009

In 2009, the State issued Qualified School Construction Bonds (Tax Credit Bonds), Series 2009 (“Series 2009 QSCB Bonds”) through the Tennessee State School Bond Authority (“Authority) specifically for school construction bond projects to certain cities, towns, counties, metropolitan governments and special districts. The County entered into a loan agreement (the “2009 Loan Agreement”) with the Authority to borrow a portion of the Series 2009 QSCB Bond proceeds in the principal amount of $55,120,000.

The Series 2009 QSCB Bonds were issued by the State pursuant to the provision of the Tennessee State School Bond Authority Act, Title 49, Chapter 3, Part 12, Tennessee Code Annotated, as amended and a bond resolution and under the provisions of the American Recovery and Reinvestment Act of 2009 and as defined in Section 54F of the Internal Revenue Code of 1986, as amended (the “Code”).

Pursuant to the 2009 Loan Agreement, the County agreed to pay its proportionate share of the principal, plus interest at a supplemental coupon rate (the initial tax credit rate) together with additional interest at a conversion coupon rate if the Series 2009 QSCB Bonds are converted to interest bearing bonds, and its share of administrative expenses, investment losses and other costs (“Loan Payments”). The County, pursuant to Section 49-3-1206(e) (1) of the Tennessee Code Annotated, as amended, has pledged to such payments its full faith and credit and unlimited taxing power. In addition, the county pledged its unobligated state-shared taxes (as defined in the 2009 Loan Agreement) to the extent necessary and available, to provide for the loan payments and authorized the Authority to direct such unobligated state-shared taxes be withheld by the State and paid to the Authority to the extent any such payment of the County under the 2009 Loan Agreement with respect to such payment is delinquent. As of June 30, 2018, the County’s principal obligation under the 2009 Loan Agreement was $27,891,402.

Qualified School Construction Bonds - 2010

In 2010, the State issued Qualified School Construction Bonds (Federally Taxable-Direct Subsidy Bonds), Series 2010 (“Series 2010 QSCB Bonds”) through the Authority specifically for school

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construction bond projects to certain cities, towns, counties, metropolitan governments and special districts. The County entered into a loan agreement (the “2010 Loan Agreement”) with the Authority to borrow a portion of the Series 2010 QSCB Bond proceeds in the principal amount of $67,260,000.

The Series 2010 QSCB Bonds were issued pursuant to the provisions of the Tennessee State School Bond Authority Act, Title 49, Chapter 3, Part 12, Tennessee Code Annotated, as amended and a bond resolution, and are subject to certain requirements of the American Recovery and Reinvestment Act of 2009 as amended and the Code and other applicable law.

Pursuant to the 2010 Loan Agreement, the County agreed to pay its proportionate share of the principal of, interest on, administrative expenses and investment losses, if any, and, pursuant to Section 49- 3-1206(e)(1) of the Tennessee Code Annotated, as amended, pledged to such payments its full faith and credit and unlimited taxing power. In addition, the County pledged it unobligated state-shared taxes (as defined in the 2010 Loan Agreement) to the extent necessary and available, to provide for the payment of the principal and interest, and premium, if any, and authorized the Authority to direct such unobligated state-shared taxes be withheld by the State and paid to the Authority to the extent any such payment of the County under the 2010 Loan Agreement with respect to such payment is delinquent. As of June 30, 2018, the County’s principal obligation under the 2010 Loan Agreement was $38,231,310.

Interest Rate Swaps

In fiscal years 2005 and 2006, the County authorized the execution and delivery of certain interest rate swap agreements with Goldman Sachs Mitsui Marine Derivative Products, L.P. (“GSMMDP”), Morgan Keegan Financial Products, Inc. (“MKFP”, now Raymond James Financial Products, Inc.) and Loop Financial Products, LLC (“Loop”). The Loop Swap was terminated on February 3, 2016. An aggregated notional amount of $150,145,000 is outstanding at June 30, 2018. The County’s two outstanding swaps are outlined below:

On February 14, 2006 the County entered into two (2) swaps relative to the County’s General Obligation Variable Rate Demand Public Improvement and School Bonds, 2006 Series B. One swap (the “2006B GSMMDP Swap”) is with GSMMDP in the original notional amount of $119,590,000, and the second swap (the “2006B MKFP Swap”) is with MKFP in the notional amount of $40,000,000. Under the terms of both swaps, the County pays a fixed rate of 3.503% until March 1, 2016 and 4.43% thereafter, and receives a variable rate equal to the SIFMA Index. The termination of both swaps is March 31, 2031. As of June 30, 2018, the notional amounts of the 2006B GSMMDP Swap and the 2006B MKFP Swap are $112,512,320 and $37,632,680, respectively.

Compensated Absence Liabilities

Governmental Accounting Standards Board (GASB) Statements 16 and 34 require recognition in the Countywide Statement of Net Assets of the liability for vacation and sick pay which has been earned and is reasonably expected to be paid to existing employees. The County has estimated its obligations for compensated absence liabilities to be $29,111,348 as of June 30, 2018.

Tax Abatements

The County expects to participate, from time to time, in tax increment financings (“TIFs”) related to economic development. In a TIF, an instrumentality of the County and/or the City will issue its tax increment financing bonds and grant the proceeds to a developer to incentivize the completion of an economic development project. The County and the City agree to divert all or a portion of the incremental real and personal property tax revenues related to the project to the payment of debt service on the tax

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increment financing bonds. In addition, two jointly governed organizations: the Center City Revenue Finance Corporation and EDGE, and one related organization, the Health, Housing and Education Facilities Board, serve as the conduit organizations for the County to administer the Payment in Lieu of Taxes (PILOT) program. The County does not take on any commitments or obligations in connection with the PILOT agreements but forgoes property tax revenue. For more detailed descriptions of the TIF and PILOT programs offered within the County, see “Comprehensive Annual Financial Report of Shelby County, Tennessee for the Fiscal Year Ended June 30, 2018 – Notes to Financial Statements” “- Note III.D. – Tax Abatements,” “- Note IV.B – Property Taxes Receivable” and “- Note IV.N. – Joint Ventures, Jointly Governed Organizations and Related Organizations.”

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PERCENTAGE OF ANNUAL DEBT SERVICE FOR GENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES, 2009-2018

______Source: Shelby County 2018 CAFR and Shelby County Finance Department

PERCENTAGE OF GENERAL BONDED DEBT TO APPRAISED AND ASSESSED VALUE

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GENERAL OBLIGATION BOND AUTHORIZATION

General Obligation Bonds, other than general obligation bonds that refund other general obligation bonds, are authorized on behalf of the County by an initial resolution of the Board of County Commissioners. The initial resolution must be published one time in a newspaper of general circulation in the County. Unless ten percent (10%) of the registered voters of the County protest the issuance of the bonds within twenty days of publication, the general obligation bonds may be issued as authorized.

Debt Limit

Section 9-21-103, of the T.C.A. provides that bonds issued under Chapter 21 of Title 9 of the T.C.A. may be issued “without regard to any limit on indebtedness….”

OUTSTANDING GENERAL OBLIGATION DEBT

The table below sets forth the Outstanding General Obligation debt and School Bonds debt for the last five (5) years as of June 30, 2018:

Shelby County, TN Principal of Outstanding General Obligation Debt (1) Past Five Years (As of June 30)

2018 2017 2016 2015 2014 Long Term Debt: General Obligation $ 155,496,629 $ 172,737,832 $ 173,825,728 $ 202,059,538 $ 251,559,124 School Bonds 734,543,583 817,008,700 824,234,883 941,290,513 1,017,631,941 Total GO Indebtedness $ 890,040,212 $ 989,746,532 $ 998,060,611 $ 1,143,350,051 $ 1,269,191,065

______Source: Shelby County Finance Department

(1) Includes direct general obligation debt and other obligations of the County.

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GENERAL FUND

The table below sets forth the General Fund for the years ended June 30 2014-2018:

General Fund Revenues, Expenditures and Changes in Fund Balance For Years Ended June 30 2014-2018

2018 2017 2016 2015 2014 Revenue Property Taxes $ 276,604,440 $ 253,574,154 $ 231,044,834 $ 252,568,769 $ 246,933,780 Other Local Taxes 31,430,272 32,530,119 32,605,263 32,350,888 34,048,774 State Revenue 22,424,187 23,874,375 23,143,771 20,557,390 19,588,987 Federal and Local Revenue 9,963,936 7,650,925 8,876,511 7,258,449 11,270,945 Charges for Services 2,335,215 2,752,321 3,408,401 3,753,188 3,360,557 Fines, Fees, and Permits 61,188,452 64,529,688 65,979,564 64,200,149 64,612,993 Other Revenue 684,519 1,460,135 1,582,433 815,236 272,660 Investment Income 2,190,483 1,098,719 858,906 382,755 371,433 Total Revenue 406,821,504 387,470,436 367,499,683 381,886,824 380,460,129

Expenditures General Government 31,687,335 28,590,124 28,245,469 27,044,572 29,336,358 Hospital 28,408,000 28,408,000 27,408,000 26,816,000 26,816,000 Planning and Development 340,223 340,323 340,164 342,510 335,351 Public Works 23,915,400 22,067,024 20,608,432 19,280,451 18,695,710 Health Services 29,384,911 27,170,751 25,835,779 25,050,299 24,898,776 Community Services 9,026,595 8,048,223 8,489,379 8,148,112 8,424,102 Law Enforcement 176,004,697 164,753,429 161,029,412 156,278,726 155,727,953 Judicial 66,160,613 63,052,461 61,958,949 67,435,886 65,921,980 Other Elected Officials 29,979,226 30,930,316 29,482,914 29,320,545 25,209,151 Total Expenditures 394,907,000 373,360,651 363, 398,498 359,717,101 355,365,381

Excess (Deficiency) of Revenue & Other Sources over (under) Expenditures & Other Uses 11,914,504 14,109,785 24,101,185 22,169,723 25,094,748

Other Financing Sources (Uses) Operating Transfers Net Total Other Financing Sources (Uses) (15,557,616) (14,099,958) (17,248,081) (16,814,065) (17,467,034)

Net Change on Fund Balance (3,643,112) 9,827 6,853,104 5,355,658 7,627,714 Beginning Fund Balance 115,606,342 115,596,515 108,743,411 103,387,753 95,760,039

Ending Fund Balance $ 111,963,230 $ 115,606,342 $ 115,596,515 $ 108,743,411 $ 103,387,753

______Source: Shelby County 2018 CAFR for years ended 2014-2018.

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SPECIAL REVENUE FUNDS

The table below sets forth the Special Revenue Funds for the years ended June 30 2014-2018:

Special Revenue Funds Revenues, Expenditures and Changes in Fund Balance For Years Ended June 30 2014-2018

2018 2017 2016 2015 2014 Revenue Property Taxes $ 385,464,792 $ 374,240,475 $ 370,507,567 $ 372,756,577 $ 363,926,777 Other Local Taxes 71,755,078 62,854,351 39,540,486 25,671,562 36,800,279 State Revenue 63,262,755 68,641,230 69,188,615 60,710,857 63,139,071 Federal and Local Revenue 18,852,734 14,507,539 16,546,433 19,736,610 41,847,536 Charges for Services 1,666,424 2,369,875 1,656,065 1,876,503 2,287,438 Fines, Fees, and Permits 6,280,822 6,132,846 6,395,146 6,530,519 6,343,352 Other Revenue 2,043,170 3,313,468 3,973,667 3,320,286 8,585,756 Investment Income 492,453 258,708 186,143 162,728 173,070 Total Revenue 549,818,228 532,318,492 507,994,122 490,765,642 523,103,279

Expenditures General Government 23,252,915 18,946,380 19,925,858 16,699,699 16,614,451 Hospital - - - - - Planning and Development 7,988,465 5,209,356 7,501,507 7,377,356 7,460,868 Public Works 22,000,140 24,899,930 25,180,949 20,033,415 16,556,748 Corrections 592,013 412,503 809,010 1,380,175 971,686 Health Services 28,262,937 27,045,552 28,479,425 27,385,315 28,687,885 Community Services 24,163,323 29,917,572 27,604,702 28,212,617 60,580,656 Law Enforcement 5,015,614 3,130,716 4,515,854 3,910,875 3,813,119 Judicial 5,892,233 5,284,623 4,664,317 5,138,086 5,094,763 Other Elected Officials - 175,944 370,101 136,904 180,621 Education 419,471,000 417,010,516 391,288,000 383,088,000 384,764,432 Total Expenditures 536,638,640 532,033,092 510,339,723 493,362,442 524,725,229

Excess (Deficiency) of Revenue & Other Sources over (under) Expenditures & Other Uses 13,179,588 285,400 (2,345,601) (2,596,800) (1,621,950)

Other Financing Sources (Uses) Operating Transfers Net Total Other Financing Sources (Uses) 4,113,525 4,314,096 2,829,814 4,039,181 7,627,730

Net Change on Fund Balance 17,293,113 4,599,496 484,213 1,442,381 6,005,780 Beginning Fund Balance 44,827,708 40,228,212 39,743,999 38,301,618 32,295,838

Ending Fund Balance $ 62,120,821 $ 44,827,708 $ 40,228,212 $ 39,743,999 $ 38,301,618

______Source: Shelby County 2018 CAFR for years ended 2014-2018.

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DEBT SERVICE FUND

The table below sets forth the Debt Service Fund for the years ended June 30 2014-2018:

Debt Service Fund Revenues, Expenditures and Changes in Fund Balance For Years Ended June 30 2014-2018

2018 2017 2016 2015 2014 Revenue Property Taxes $ 133,844,038 $ 136,445,315 $ 135,999,860 $ 136,836,915 $ 138,029,247 Other Local Taxes 14,594,741 13,752,784 34,572,133 47,942,527 35,195,483 State Revenue - - - - 67,436 Federal and Local Revenue 1,114,966 1,113,771 994,950 1,115,919 1,204,036 Charges for Services 188,125 206,938 225,750 225,750 225,749 Other Revenue 551,616 576,879 641,241 614,370 717,739 Investment Income 2,088,513 514,673 1,468,280 1,306,293 1,058,206 Total Revenue 152,381,999 152,610,360 173,902,214 188,041,774 176,497,896

Expenditures Community Services - 119,563 254,300 267,565 271,500 Debt Services 148,058,929 248,940,527 280,988,214 161,545,109 167,442,452 Total Expenditures 148,058,929 249,060,090 281,242,514 161,812,674 167,713,952

Excess (Deficiency) of Revenue & Other Sources over (under) Expenditures & Other Uses 4,323,070 (96,449,730) (107,340,300) 26,229,100 8,783,944

Other Financing Sources (Uses) Operating Transfers Net Total Other Financing Sources (Uses) - 93,968,257 79,139,811 (22,087,256) (6,280,000)

Net Change on Fund Balance 4,323,070 (2,481,473) (28,200,489) 4,141,844 2,503,944 Beginning Fund Balance 60,731,484 63,212,957 91,413,446 87,271,602 84,767,658

Ending Fund Balance $ 65,054,554 $ 60,731,484 $ 63,212,957 $ 91,413,446 $ 87,271,602

______Source: Shelby County 2018 CAFR for years ended 2014-2018.

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APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE COUNTY OF SHELBY, TENNESSEE FOR THE FISCAL YEAR ENDED JUNE 30, 2018

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AUDITED FINANCIAL STATEMENTS OF THE COUNTY OF SHELBY, TENNESSEE FOR THE FISCAL YEAR ENDED JUNE 30, 2018

Audited Financial Statements of the County of Shelby, Tennessee, and supplementary information as of and for the Fiscal Year ended June 30, 2018, together with the independent auditor’s report from Watkins & Uiberall, PLLC, Memphis, Tennessee, Certified Public Accountants: (i) have been filed with the nationally recognized municipal securities information repository, as described herein under “Continuing Disclosure,” and may be obtained from them in accordance with their respective procedures, and (ii) are available through the website of Shelby County’s Department of Finance at: www.shelbycountytn.gov/ArchiveCenter/ViewFile/Item/6498 and are hereby incorporated by reference as part of this APPENDIX B.

To the extent there are any differences between the electronically posted financial statements of the County and the printed financial statements of the County, the printed version shall control.

Only the following items, each of which has been posted on the website referenced above, are described above and incorporated herein by reference:

For the Year Ended June 30, 2018

• Independent Auditors’ Report, dated December 21, 2018 • Management’s Discussion and Analysis • Statement of Net Assets • Statement of Activities • Balance Sheet, Governmental Funds • Reconciliation of Fund Balances of Governmental Funds to the Statement of Net Assets • Statement of Revenues, Expenditures, and Changes in Fund Balances, Governmental Funds • Reconciliation of Changes in Fund Balances of Governmental Funds to the Statement of Activities • Statement of Net Assets, Proprietary Funds • Statement of Revenues, Expenses and Changes in Fund Net Assets, Proprietary Funds • Statement of Cash Flows, Proprietary Funds • Statement of Fiduciary Net Assets, Fiduciary Funds • Statement of Changes in Fiduciary Net Assets, Fiduciary Funds • Combining Statement of Net Assets, Component Units • Combining Statement of Activities, Component Units • Notes to the Financial Statements • Budgetary Comparison Schedules, General Fund • Budgetary Comparison Schedules, Education Fund • Budgetary Comparison Schedules, Grants Fund • Shelby County Retirement System, Required Supplemental Information

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APPENDIX C

FORMS OF OPINIONS OF BOND COUNSEL

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February__, 2019

Board of County Commissioners of Shelby County, Tennessee Memphis, Shelby County, Tennessee

$170,865,000* Shelby County, Tennessee General Obligation Public Improvement and School Bonds 2019 Series A

The Honorable Mayor and Commissioners:

We have acted as bond counsel in connection with the issuance by Shelby County, Tennessee (the “County”), a political subdivision of the State of Tennessee (the “State”), of its Shelby County, Tennessee, General Obligation Public Improvement and School Bonds, 2019 Series A, in the original aggregate principal amount of $170,865,000* (the “Series 2019A Bonds”). In such capacity, we have examined: (a) the Constitution and the statutes of the State, including specifically Title 9, Chapter 21, as amended, and Sections 49-3-1001, et seq., as amended, of the Tennessee Code Annotated (the “Acts”); (b) a certified copy of that certain initial resolution adopted by the Board of County Commissioners (the “Board”) on September 25, 2017 ( the “2017 Initial Resolution”); (c) a certified copy of that certain initial resolution adopted by the Board on October 29, 2018 (the “2018 Initial Resolution”, and together with the 2017 Initial Resolution, the “Initial Resolutions”); (d) a certified copy of that certain resolution authorizing the Series 2019A Bonds adopted by the Board on January 14, 2019 (the “Authorizing Resolution”), and other proceedings authorizing the issuance, sale, and delivery of the Series 2019A Bonds; and (e) such other laws, documents and proofs as we have deemed necessary as a basis for this opinion. The Initial Resolutions and the Authorizing Resolution are collectively referred to herein as the “Resolution.” Capitalized terms used, but not defined, herein shall have the meanings assigned thereto in the Resolution.

The Series 2019A Bonds are being issued for the purpose of (a) financing public works projects in the County and for school purposes, (b) paying only the principal of the County’s General Obligation Bond Anticipation Note, Series 2017 (the “Series 2017 Note”), and (c) providing for the payment of costs of issuance of the Series 2019A Bonds.

For the purposes of this opinion letter, we have not made any independent investigation into any financial matters of the County, and we have not prepared or investigated any financial information that has been or may be furnished to any purchaser of the Series 2019A Bonds. Accordingly, we express no opinion whatsoever herein as to the accuracy or completeness of any such financial information furnished in connection with the issuance and delivery of the Series 2019A Bonds.

In rendering our opinions set forth below, we have (a) relied as to questions of fact material to our opinion, without undertaking to verify the same by independent investigation, upon certified

______* Preliminary subject to change.

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proceedings, certifications and representations of public officials, including representations of officials and representatives of the County, including, without limitation, representations as to the use and investment of the proceeds of the Series 2019A Bonds and (b) assumed continuous compliance by the County of its covenants contained in the Resolution and documents related thereto, including, without limitation, covenants as to the use and investment of the proceeds of the Series 2019A Bonds.

The County has covenanted in connection with the Series 2019A Bonds that it will not use any proceeds of the Series 2019A Bonds to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments except as may be otherwise permitted by Section 148 of the Internal Revenue Code of 1986, as amended (the “Code,” and all applicable regulations promulgated under the Code, including any proposed or temporary regulations, are collectively referred to herein as the “Regulations”), that it will comply with the arbitrage rebate requirements of Section 148(f) of the Code and the Regulations, and that it will comply with all other applicable provisions of the Code and the Regulations with respect to the Series 2019A Bonds.

Based on the foregoing, and subject to the assumptions and qualifications contained herein, we are of the opinion that, on the date hereof:

1. The Series 2019A Bonds have been authorized and issued in accordance with the Constitution and statutes of the State of Tennessee, and constitute valid and legally binding obligations of the County, and the County has the power and is obligated to levy and provide for the collection of taxes, in addition to all other taxes authorized or limited by law, upon all taxable property in the County, sufficient to provide for the payment of the principal of and interest on the Series 2019A Bonds as the same become due.

2. Based on existing statutes, regulations, rulings and court decisions and assuming compliance by the County with the above-described covenants, interest on the Series 2019A Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax. The opinion set forth in the immediately preceding sentence assumes and is subject to the accuracy of the representations and certifications of the County and continuous compliance by the County with the covenants contained in the official proceedings related to the Series 2019A Bonds, including covenants to the effect that the County will comply with all requirements of the Code and the Regulations promulgated thereunder that must be satisfied subsequent to the issuance of the Series 2019A Bonds in order that interest thereon be, and continue to be, excludable from gross income of the recipients thereof for federal income tax purposes. Failure to comply with certain of such requirements may cause interest on the Series 2019A Bonds to be includable in gross income for federal income tax purposes retroactive to the date of the issuance of the Series 2019A Bonds.

3. Under existing law, the Series 2019A Bonds and the income therefrom are exempt from all present State, county and municipal taxes in the State except (a) inheritance, transfer and estate taxes, (b) State excise taxes on all or a portion of the interest on the Series 2019A Bonds during the period the Series 2019A Bonds are held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State, and (c) State franchise taxes by reason of the inclusion of the book value of the Series 2019A Bonds

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in the State franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State.

We express no opinion regarding other federal or state tax consequences arising with respect to the Series 2019A Bonds or any other matter with respect to the Series 2019A Bonds except as set forth herein. Ownership of the Series 2019A Bonds may result in other collateral federal or state income tax consequences to certain taxpayers depending on the particular taxpayer’s tax status and other items of income or deduction. We express no opinion regarding any federal or state collateral tax consequences related to the Series 2019A Bonds.

The rights of the owners of the Series 2019A Bonds and the enforceability of the Series 2019A Bonds and the Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally, judicial discretion and principles of equity applicable to the availability of specific performance and other equitable relief, and the exercise of the sovereign police powers of the State.

In rendering this opinion letter, we have not considered the laws of any jurisdiction other than the laws of the State and the federal income tax laws of the United States of America, and we are not rendering any opinion, by implication or otherwise, regarding the laws of any jurisdiction other than the laws of the State and such federal income tax laws.

This opinion letter is an expression of professional judgment regarding the matters expressly addressed herein. It is neither a guarantee of result nor an insurance policy with respect to the transaction or the future actions or performance of any party or entity. Our services have not included any financial or other non-legal advice. We express no opinion other than as herein expressly stated in this letter, and no expansion of our opinion may be made by implication or otherwise. The opinions herein are given as of the date hereof and are based upon statutes, regulations, rulings and court decisions in effect on the date hereof and not as of any future date. We assume no responsibility to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may occur hereafter.

Sincerely,

BUTLER SNOW LLP

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February__, 2019

Board of County Commissioners of Shelby County, Tennessee Memphis, Shelby County, Tennessee

$72,460,000* Shelby County, Tennessee General Obligation Refunding Bonds 2019 Series B

The Honorable Mayor and Commissioners:

We have acted as bond counsel in connection with the issuance by Shelby County, Tennessee (the “County”), a political subdivision of the State of Tennessee (the “State”), of its Shelby County, Tennessee, General Obligation Refunding Bonds, 2019 Series B, in the original aggregate principal amount of $72,460,00* (the “Series 2019B Bonds”). In such capacity, we have examined: (a) the Constitution and the statutes of the State, including specifically Title 9, Chapter 21, as amended, and Sections 49-3-1001, et seq., as amended, of the Tennessee Code Annotated (the “Acts”); (b) a certified copy of that certain initial resolution adopted by the Board of County Commissioners (the “Board”) on February 11, 2008 ( the “Initial Resolution”); (c) a certified copy of that certain resolution authorizing the Series 2019B Bonds adopted by the Board on January 14, 2019 (the “Authorizing Resolution”), and other proceedings authorizing the issuance, sale, and delivery of the Series 2019B Bonds; and (d) such other laws, documents and proofs as we have deemed necessary as a basis for this opinion. The Initial Resolution and the Authorizing Resolution are collectively referred to herein as the “Resolution.” Capitalized terms used, but not defined, herein shall have the meanings assigned thereto in the Resolution.

The Series 2019B Bonds are being issued for the purpose of a) refunding in advance of their maturities (i) all or a portion of the County’s General Obligation Public Improvement and School Bonds, 2009 Series B, and (ii) all or a portion of the County’s General Obligation Public Improvement and School Bonds, 2009 Series C (Federally Taxable—Build America Bonds— Direct Payment), and (b) providing for the payment of costs of issuance of the Series 2019B Bonds.

For the purposes of this opinion letter, we have not made any independent investigation into any financial matters of the County, and we have not prepared or investigated any financial information that has been or may be furnished to any purchaser of the Series 2019B Bonds. Accordingly, we express no opinion whatsoever herein as to the accuracy or completeness of any such financial information furnished in connection with the issuance and delivery of the Series 2019B Bonds.

In rendering our opinions set forth below, we have (a) relied as to questions of fact material to our opinion, without undertaking to verify the same by independent investigation, upon certified

______* Preliminary subject to change.

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proceedings, certifications and representations of public officials, including representations of officials and representatives of the County, including, without limitation, representations as to the use and investment of the proceeds of the Series 2019B Bonds and (b) assumed continuous compliance by the County of its covenants contained in the Resolution and documents related thereto, including, without limitation, covenants as to the use and investment of the proceeds of the Series 2019B Bonds.

The County has covenanted in connection with the Series 2019B Bonds that it will not use any proceeds of the Series 2019B Bonds to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments except as may be otherwise permitted by Section 148 of the Internal Revenue Code of 1986, as amended (the “Code,” and all applicable regulations promulgated under the Code, including any proposed or temporary regulations, are collectively referred to herein as the “Regulations”), that it will comply with the arbitrage rebate requirements of Section 148(f) of the Code and the Regulations, and that it will comply with all other applicable provisions of the Code and the Regulations with respect to the Series 2019B Bonds.

Based on the foregoing, and subject to the assumptions and qualifications contained herein, we are of the opinion that, on the date hereof:

1. The Series 2019B Bonds have been authorized and issued in accordance with the Constitution and statutes of the State of Tennessee, and constitute valid and legally binding obligations of the County, and the County has the power and is obligated to levy and provide for the collection of taxes, in addition to all other taxes authorized or limited by law, upon all taxable property in the County, sufficient to provide for the payment of the principal of and interest on the Series 2019B Bonds as the same become due.

2. Based on existing statutes, regulations, rulings and court decisions and assuming compliance by the County with the above-described covenants, interest on the Series 2019B Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax. The opinion set forth in the immediately preceding sentence assumes and is subject to the accuracy of the representations and certifications of the County and continuous compliance by the County with the covenants contained in the official proceedings related to the Series 2019B Bonds, including covenants to the effect that the County will comply with all requirements of the Code and the Regulations promulgated thereunder that must be satisfied subsequent to the issuance of the Series 2019B Bonds in order that interest thereon be, and continue to be, excludable from gross income of the recipients thereof for federal income tax purposes. Failure to comply with certain of such requirements may cause interest on the Series 2019B Bonds to be includable in gross income for federal income tax purposes retroactive to the date of the issuance of the Series 2019B Bonds.

3. Under existing law, the Series 2019B Bonds and the income therefrom are exempt from all present State, county and municipal taxes in the State except (a) inheritance, transfer and estate taxes, (b) State excise taxes on all or a portion of the interest on the Series 2019B Bonds during the period the Series 2019B Bonds are held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State, and (c) State franchise taxes by reason of the inclusion of the book value of the Series 2019B Bonds

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in the State franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State.

We express no opinion regarding other federal or state tax consequences arising with respect to the Series 2019B Bonds or any other matter with respect to the Series 2019B Bonds except as set forth herein. Ownership of the Series 2019B Bonds may result in other collateral federal or state income tax consequences to certain taxpayers depending on the particular taxpayer’s tax status and other items of income or deduction. We express no opinion regarding any federal or state collateral tax consequences related to the Series 2019B Bonds.

The rights of the owners of the Series 2019B Bonds and the enforceability of the Series 2019B Bonds and the Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally, judicial discretion and principles of equity applicable to the availability of specific performance and other equitable relief, and the exercise of the sovereign police powers of the State.

Sincerely,

BUTLER SNOW LLP

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APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT

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CONTINUING DISCLOSURE AGREEMENT

By and between

COUNTY OF SHELBY, TENNESSEE

and

DIGITAL ASSURANCE CERTIFICATION, L.L.C.

relating to:

GENERAL OBLIGATION PUBLIC IMPROVEMENT AND SCHOOL BONDS, 2019 SERIES A

and

GENERAL OBLIGATION REFUNDING BONDS, 2019 SERIES B

DATED AS OF FEBRUARY , 2019

[THIS PAGE INTENTIONALLY LEFT BLANK]

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (the “Disclosure Agreement”), dated as of February , 2019, is executed and delivered by the County of Shelby, Tennessee (the “County”) and Digital Assurance Certification, L.L.C. , and any successor disclosure dissemination agent serving hereunder as dissemination agent (the “Dissemination Agent” or “DAC”) in order to assist the Underwriter (defined herein) in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (“SEC”) promulgated pursuant to the Securities Exchange Act of 1934, as in effect on the date hereof (the "Rule"), and for the benefit of the holders of the Series 2019 Bonds (defined herein) (the “Holders”).

RECITALS:

A. Contemporaneously with the execution of this Disclosure Agreement, the County will issue its General Obligation Public Improvement and School Bonds, 2019 Series A (the “Series 2019A Bonds”) and its General Obligation Refunding Bonds, 2019 Series B (the “Series 2019B Bonds”, together with the Series 2019A Bonds are collectively, the “Series 2019 Bonds”), pursuant to certain authorizing resolutions adopted by the Commission of the County (the “County Commission”) on January 14, 2019 (collectively, the “Bond Resolution”).

B. The County has authorized the preparation and distribution of the Preliminary Official Statement dated January 23, 2019, with respect to the Series 2019 Bonds (the “Preliminary Official Statement”).

C. Upon the sale of the Series 2019 Bonds to the underwriter(s) named in the Official Statement (defined herein) (collectively, the “Underwriter”), the County authorized the preparation and use of the Official Statement dated February , 2019, with respect to the Series 2019 Bonds (the “Official Statement”).

D. As a condition precedent to the initial purchase of the Series 2019 Bonds by the Underwriter in accordance with the County’s Notice of Sale, dated January 23, 2019 related to the Series 2019 Bonds and in compliance with the Underwriter’s obligations under the Rule, the County has agreed to undertake certain disclosures obligations with respect to the Series 2019 Bonds for the benefit of the Holders, as specified hereunder on an ongoing basis during the term hereof and has agreed to retain DAC to perform certain disclosure dissemination tasks as provided for herein.

NOW THEREFORE, in consideration of the purchase of the Series 2019 Bonds by the Underwriter and the mutual promises and agreements made herein, the receipt and sufficiency of which consideration is hereby mutually acknowledged, the County and DAC do hereby certify and agree as follows:

SECTION 1. Incorporation of Recitals. The above recitals are true and correct and are incorporated into and made a part hereof.

SECTION 2. Definitions. Capitalized terms used, but not otherwise defined, in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Bond Resolution or the Official Statement, as applicable. In addition to the terms defined elsewhere herein, the following capitalized terms shall have the meanings for the purposes of this Disclosure Agreement:

"Annual Report" means the Annual Report described in and consistent with Sections 3 and 4 of this Disclosure Agreement.

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"Annual Filing Date" means the date, set in Sections 3(a) and 3(f) hereof, by which the Annual Report is to be filed with the Repository.

"Annual Financial Information" means annual financial information, as such term is defined in paragraph (f)(9) of the Rule and specified in Section 4(a) of this Disclosure Agreement.

"Audited Financial Statements" means the basic financial statements of the County, prepared in accordance with GAAP (as defined herein), for the prior Fiscal Year, certified by an independent auditor.

"Business Day" means a day other than a Saturday or a Sunday or a day on which banks in the State are authorized or required by law to close.

"Certification" means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice required to be submitted to each Repository under this Disclosure Agreement. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the County and include the full name of the Series 2019 Bonds and, to the best of its knowledge, the 9-digit CUSIP numbers for all Series 2019 Bonds to which the document applies.

"Disclosure Representative" means the Director of Administration & Finance of the County or his designee, or such other person as the County shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent.

"Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C., acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the County pursuant to Section 10 hereof.

"EMMA" means the MSRB's Electronic Municipal Market Access system as described in 1934 Act Release No. 59062 and maintained by the MSRB for purposes of the Rule. Further information regarding EMMA can be retrieved by visiting the website http://emma.msrb.org.

"Fiscal Year" means the fiscal year of the County, which currently is the twelve month period beginning July 1 and ending on June 30 of the following year, or any such other twelve month period designated by the County, from time to time, to be its fiscal year.

"GAAP" means generally accepted accounting principles promulgated by the Government and Financial Accounting Standards Boards, as in effect from time to time in the United States.

"Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2019 Bonds (including persons holding Series 2019 Bonds through nominees, depositories or other intermediaries, or (b) treated as the owner of any Series 2019 Bonds for federal income tax purposes.

"Information" means the Annual Financial Information, the Audited Financial Statements (if any), the Notice Event notices and the Voluntary Reports.

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"MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(l) of the Securities Exchange Act of 1934. Currently, MSRB's address, phone number and fax number for purposes of the Rule is:

MSRB c/o CDINet 1900 Dulce Street Suite 600 Alexandria, VA 22314 Phone: (703) 797-6000 Fax: (703) 683-1930

"Notice Event" means an event listed in Section 5(a) of this Disclosure Agreement.

"Obligated Person" means the County and any person who is either generally or through an enterprise, fund or account of such person committed by contract or other arrangement to support payment of all or part of the obligations on the Series 2019 Bonds (other than providers of municipal bond insurance, letters of credit or other liquidity facilities). The County confirms that currently it is the only Obligated Person.

"Repository" means each entity authorized and approved by the SEC from time to time to act as a repository for purposes of the Rule, as reflected on the website of the SEC at www.sec.gov. Currently, the sole Repository is the MSRB, which currently accepts continuing disclosure submissions through EMMA.

"Rule" means Rule 15c2-12 of the SEC promulgated pursuant to the Securities Exchange Act of 1934.

"SEC" means the United States Securities and Exchange Commission. "State" means the State of Tennessee.

"Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the County pursuant to Section 8 of this Disclosure Agreement.

SECTION 3. Provision of Annual Reports.

(a) The County shall provide annually, an electronic copy of the Annual Report to the Disclosure Dissemination Agent on or before the Annual Filing Date. Promptly upon the receipt of an electronic copy of the Annual Report, the Disclosure Dissemination Agent shall provide the Annual Report to each Repository on or before the Annual Filing Date. If the Annual Filing Date is not a Business Day, the Annual Report will be due on the first Business Day thereafter. The Annual Report may be submitted as a single document or as separate documents or may include by specific reference to documents available to the public on the MSRB’s website or filed with the SEC, as further provided in Section 3(a) of this Disclosure Agreement.

(b) If the Disclosure Dissemination Agent has not received a copy of the Annual Report by 12:00 noon Eastern Time on the Annual Filing Date, the Disclosure Dissemination Agent shall contact the Disclosure Representative by email and telephone to remind the County of its undertaking to provide the Annual Report pursuant to Section 3(a) of this Disclosure Agreement. If the Disclosure Dissemination Agent has not received either (i) an Annual Report by 6:00 p.m. Eastern Time on the Annual Filing Date (or, if such Annual Filing Date is not a Business Day, then the first Business Day thereafter), or (ii) notice

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from the County that it intends to deliver the Annual Report to the Dissemination Agent before 11:59 p.m. on the Annual Filing Date, then an event described in Section 5(b) of this Disclosure Agreement shall have occurred and the County irrevocably directs the Disclosure Dissemination Agent, and the Disclosure Dissemination Agent agrees, to send a notice to the Repository the following Business Day in substantially the form attached to this Disclosure Agreement as EXHIBIT A without reference to the anticipated filing date for the Annual Report, accompanied by such information as may be required by the Repository.

(c) If the Audited Financial Statements are not available prior to the Annual Filing Date, the County shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent for filing with each Repository.

(d) The Disclosure Dissemination Agent shall:

(i) upon receipt, and no later than the Annual Filing Date, promptly file with each Repository each Annual Report received under Section 3(a) of this Disclosure Agreement in electronic format as prescribed by the MSRB;

(ii) upon receipt, promptly file with each Repository each Audited Financial Statement received under Section 3(c) of this Disclosure Agreement in electronic format as prescribed by the MSRB; and

(iii) provide the County evidence of the filings of each of the above when made, which shall be made by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement.

(e) The County may adjust the Annual Filing Date upon change of its Fiscal Year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent and the Repositories, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. Further, the County reserves the right to modify from time to time the specific types of information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the County; provided that the County agrees that any such modification will be done in a manner consistent with the Rule.

SECTION 4. Content of the Annual Report.

(a) Each Annual Report shall contain Annual Financial Information with respect to the County, consisting of or cross-referencing the following:

(i) The Audited Financial Statements; and

(ii) Audited updates of the following historical financial information and operating data included in the Official Statement:

(A) the table entitled “Fiduciary Funds Postemployment Benefit Trust Funds Combining Statement of Fiduciary Net Position;” (B) the table entitled “Fiduciary Funds Postemployment Benefit Trust Funds Statements of Change in Fiduciary Net Position;”

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(D) the table entitled “Property Tax Levies and Collections” attached to the Official Statement as “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE – SHELBY COUNTY PROPERTY TAX – Property Tax Levies and Collections;”

(E) the table entitled “Ten Largest Taxpayers” attached to the Official Statement as “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE–SHELBY COUNTY PROPERTY TAX – Ten Largest Taxpayers;”

(F) the table entitled “Assessed and Estimated Values of Taxable Property” attached to the Official Statement as “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE – SHELBY COUNTY PROPERTY TAX – Assessed and Estimated Values of Taxable Property;” and

(G) the table entitled “Underlying Debt” attached to the Official Statement as “APPENDIX A – GENERAL INFORMATION REGARDING THE COUNTY OF SHELBY, TENNESSEE – SHELBY COUNTY PROPERTY TAX – Underlying Debt.”

(b) Audited Financial Statements will be included in the Annual Report; provided however, if the Audited Financial Statements are not completed prior to the Annual Filing Date of any year, the County shall provide unaudited financial statements on such date and shall provide the Audited Financial Statements as soon as practicable following the completion thereof. Audited Financial Statements completed after the Annual Filing Date will be provided pursuant to Section 3(c) of this Disclosure Agreement.

(c) Any or all of the items listed above may be included 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 previously filed with MSRB or the SEC. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The County will clearly identify such document so incorporated by reference.

SECTION 5. Reporting of Notice Events.

(a) Disclosure of Certain Events. In accordance with the Rule, the County or the Dissemination Agent shall file with the Repository, in the appropriate format required by the Repository and in a timely manner not in excess of ten (10) Business Days after the occurrence of the following Notice Events, notices of the occurrence of any of the following Notice Events with respect to the Series 2019 Bonds:

(1) principal and interest payment delinquencies;

(2) non-payment related defaults, if material;

(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;

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(6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Series 2019 Bonds, or other material events affecting the tax status of the Series 2019 Bonds;

(7) modifications to rights of Holders of the Series 2019 Bonds, if material;

(8) bond calls, if material, and tender offers;

(9) defeasances;

(10) release, substitution, or sale of any property securing repayment of the Series 2019 Bonds, if material;

(11) rating changes;

(12) bankruptcy, insolvency, receivership or similar event of the County or any other Obligated Person (which is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the County in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the County, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the County);

(13) the consummation of a merger, consolidation, or acquisition involving the County or the sale of all or substantially all of the assets of the County, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(14) the appointment of a successor or additional trustee or the change of name of a trustee, if material.

(b) In accordance with the provisions of the Rule, the County or the Disclosure Dissemination Agent shall file with the Repository, in the appropriate format required by the Repository and in a timely manner, notice of the failure of the County or any Obligated Person to provide the Annual Report on or before the Annual Filing Date, together with a completed notice substantially in the form attached to this Disclosure Agreement as EXHIBIT A.

(c) The County shall promptly notify the Disclosure Dissemination Agent in writing of the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to immediately report the occurrence pursuant to subsection (a) of this Section 5. Such notice shall be accompanied by the text of the disclosure that the County desires to make (the “Notice of Event Filing”), the written authorization of the County for the Disclosure Dissemination Agent to disseminate such information and the date on which the County desires the Disclosure Dissemination Agent to disseminate the information.

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(d) The Disclosure Dissemination Agent is under no obligation to notify the County or the Disclosure Representative of any event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the County or Disclosure Representative, the Disclosure Representative will, within the earlier of: two (2) Business Days after receipt of such notice or nine (9) Business Days after the occurrence of such event, instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to immediately report the occurrence pursuant to subsection (c) of this Section 5, together with the Notice Event Filing, the written authorization of the County for the Disclosure Dissemination Agent to disseminate such information and the date on which the County desires the Disclosure Dissemination Agent to disseminate the information.

(e) If the Disclosure Dissemination Agent has been instructed by the County as prescribed in subsections (a), (b), (c), or (d) of this Section 5 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly, and in any event within the time required to report the Notice Event, file with the Repository a Notice Event Filing, together with such other information as may be required by the Repository.

SECTION 6. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference into the Annual Reports, Audited Financial Statements, Notice Event Filings and Voluntary Reports filed pursuant to Section 8(a) of this Disclosure Agreement, the County shall indicate the full name of the Series 2019 Bonds and, to the best of its knowledge, the 9-digit CUSIP numbers for the Series 2019 Bonds as to which the provided information relates. The County by providing the CUSIP numbers is not representing or certifying as to the accuracy thereof.

SECTION 7. Additional Disclosure Obligations. The County acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule l0b-5 promulgated under the Securities Exchange Act of 1934, may apply to the County, and that the failure of the Disclosure Dissemination Agent to so advise the County shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The County acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement.

SECTION 8. Voluntary Reports.

(a) The County may instruct the Disclosure Dissemination Agent to file any information with the Repositories from time to time, pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary Report").

(b) Nothing in this Disclosure Agreement shall be deemed to prevent the County from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Audited Financial Statement, Voluntary Report or Notice Event Filing, in addition to that required by this Disclosure Agreement. If the County chooses to include any information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event Filing in addition to that which is specifically required by this Disclosure Agreement, the County shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Audited Financial Statement, Voluntary Report or Notice Event Filing.

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SECTION 9. Termination of Reporting Obligation.

(a) The obligations of the County and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Series 2019 Bonds (i) upon the legal defeasance, prior redemption or payment in full of all of the Series 2019 Bonds, (ii) when the County is no longer an Obligated Person with respect to the Series 2019 Bonds, or (iii) upon the termination of the continuing disclosure requirements of the Rule by legislative, judicial or administrative action.

(b) If in the opinion of nationally recognized bond counsel satisfactory to the County, the Rule shall be amended, modified or changed so that all or any part of the information currently required to be provided thereunder shall no longer be required to be provided thereunder, then such information shall no longer be required to be provided hereunder and, if and to the extent in the opinion of nationally recognized bond counsel satisfactory to the County the Rule, or any provisions thereof, shall be declared by a federal court of competent and final, non-appealable jurisdiction to be, in whole or in part, invalid, unconstitutional, null and void, or otherwise inapplicable to the Series 2019 Bonds, then the information required to be provided hereunder, insofar as it was required to be provided by a provision of the Rule so declared, shall no longer be required to be provided hereunder.

SECTION 10. Disclosure Dissemination Agent. The County has appointed DAC as the exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The County may, upon thirty (30) days written notice to the Disclosure Dissemination Agent, replace the Disclosure Dissemination Agent or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by notice of the County or DAC, the County agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of the Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Series 2019 Bonds. The Disclosure Dissemination Agent may resign at any time by providing thirty (30) days prior written notice to the County.

SECTION 11. Remedies. In the event of a failure of the County or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' rights to enforce the provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this Disclosure Agreement, it being the County's position that money damages would be inadequate recompense and difficult to ascertain. A default under this Disclosure Agreement shall not constitute a default on the Series 2019 Bonds or be deemed to be a default under the Bond Resolution or under any other document relating to the Series 2019 Bonds and all rights and remedies shall be limited to those expressly stated herein.

SECTION 12. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the County has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosure or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information, disclosure or notice provided to it by the County and shall not be deemed to be acting in any fiduciary capacity for the County, the Holders of the Series 2019 Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the County's failure to report to the Disclosure Dissemination Agent a Notice Event and shall have no duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the County has complied with this Disclosure Agreement.

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SECTION 13. Amendment; Waiver.

(a) Notwithstanding any other provision of this Disclosure Agreement, the County may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if:

(i) Such amendment or waiver 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 with respect to the Series 2019 Bonds or the type of business conducted by the Obligated Person;

(ii) Such amendment or waiver is supported by an opinion of counsel expert in federal securities laws to the effect that such amendment or waiver would have complied with the requirements of the Rule if such amendment or waiver had been effective on the date hereof, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(iii) Such amendment or waiver does not materially impair the interests of the beneficial owners of the Series 2019 Bonds, as determined either by an unqualified opinion of nationally recognized bond counsel filed with the County or by the approving vote of the Holders of the Series 2019 Bonds pursuant to the terms of the Bond Resolution at the time of the amendment.

(b) If any provision of Section 4 hereof is amended or waived, the first Annual Report containing any amended, or omitting any waived, operating data or financial information shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided.

(c) If the provisions of this Disclosure Agreement specifying the accounting principles to be followed in preparing the Audited Financial Statements are amended or waived, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison should include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the Obligated Person to meet its obligations. To the extent reasonably feasible, the comparison shall also be quantitative. The County shall file a notice of the change in the accounting principles with the Repository on or before the effective date of any such amendment or waiver.

(d) Notwithstanding the preceding paragraph, the County shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the SEC from time to time by giving not less than twenty (20) days written notice of its intent to do so together with a copy of the proposed amendment to the Disclosure Dissemination Agent.

SECTION 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the County, the Disclosure Dissemination Agent, the Underwriter and the Holders from time to time of the Series 2019 Bonds and shall create no rights in any other person or entity.

SECTION 15. No Personal Liability. None of the members or employees of the County shall be charged personally with any liability or held liable under any term or provision of this Disclosure Agreement because of its execution or attempted execution or because of any breach or attempted or alleged breach thereof.

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SECTION 16. Severability. In case any part of this Disclosure Agreement is held to be illegal or invalid, such illegality or invalidity shall not affect the remainder or any other section of this Disclosure Agreement. This Disclosure Agreement shall be construed or enforced as if such illegal or invalid portions were not contained therein, nor shall such illegality or invalidity of any application of this Disclosure Agreement affect any legal and valid application.

SECTION 17. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which shall constitute but one and the same instrument.

SECTION 18. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the internal laws of the State of Tennessee (without regard to conflict of law principles thereof), provided that, to the extent this Disclosure Agreement addresses matters of federal securities laws, including the Rule, this Disclosure Agreement shall be construed in accordance with such federal securities laws and official interpretations thereof.

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The Disclosure Dissemination Agent and the County have caused this Continuing Disclosure Agreement to be executed on the date first written above by their respective officers duly authorized.

DIGITAL ASSURANCE CERTIFICATION, L.L.C., As Disclosure Dissemination Agent

By: Name: Title:

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The Disclosure Dissemination Agent and the County have caused this Continuing Disclosure Agreement to be executed on the date first written above by their respective officers duly authorized.

COUNTY OF SHELBY, TENNESSEE

By: Lee Harris, County Mayor

By:______Van D. Turner, Jr., Chairman, Board of County Commissioners

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EXHIBIT A

NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT

Issuer: County of Shelby, Tennessee (the "County")

Obligated Person: County of Shelby, Tennessee

Name of Bond Issue:

Date of Issuance: February , 2019

NOTICE IS HEREBY GIVEN that the County has not provided an Annual Report with respect to the above-named bonds as required by the Continuing Disclosure Agreement, dated as of February , 2019, between the County and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The County has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by .

Dated:

DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Disclosure Dissemination Agent, on behalf of the County

cc: County of Shelby, Tennessee

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