accepted accepted be NEW ISSUE – FULL BOOK ENTRY Ratings: Moody’s “Aa3” Standard & Poor’s “AA+” PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 2, 2009 nor may offers to buy nor may offers Under the Internal Revenue Code of 1986 as amended (the “Code”), the interest on the Series 2009 Bonds (including any original issue discount properly allocable to an owner thereof) is included in gross income for federal income tax purposes. In the opinion of Steptoe & Johnson PLLC, Lexington, Kentucky, Bond Counsel, interest on the Series 2009 Bonds is exempt from Kentucky income taxation. See “Tax Matters” herein. ecurities may not be sold be may not ecurities $35,805,000* Lexington-Fayette Urban County Government Taxable Sewer System Revenue Bonds, Series 2009 (Build America Bonds – Direct Pay) ful prior to registration or qualification under the securities laws of any such such securities laws of any under the or qualification to registration ful prior Dated: Date of Delivery Due: January 1, As Shown on Inside Cover ent without notice. These s ent without notice. This Official Statement contains information relating to the Lexington-Fayette Urban County Government’s Taxable Sewer System Revenue Bonds, Series 2009 (Build America Bonds – Direct Pay) (the “Series 2009 Bonds”). The Series 2009 Bonds are issuable as fully-registered bonds in denominations of $5,000 or any integral multiple thereof as provided in the Ordinance (as defined herein). Interest on the Series 2009 licitation or sale would be unlaw or sale would licitation Bonds (payable semi-annually on each January 1 and July 1, commencing January 1, 2010) is payable by payment to DTC or its nominee as the registered owner of the Series 2009 Bonds. Disbursements of payments of interest and of principal to DTC Participants is the responsibility of DTC, and ubject to completion or amendm or completion ubject to disbursement of such payments to the owners of book-entry interest is the responsibility of DTC Participants and Indirect Participants as more fully described herein. The Series 2009 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as more fully described herein. See “THE SERIES 2009 BONDS” herein. The Series 2009 Bonds do not constitute general obligations of the Lexington-Fayette Urban ed in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of any offer to to any offer of solicitation a sell or to offer an constitute Statement Official this Preliminary shall circumstances no Under form. final in ed sdictionoffer, in whichso such County Government or an indebtedness or pledge of the faith and credit of such Urban County Government within the meaning of the Constitution or statutes of the Commonwealth of Kentucky. The Series 2009 Bonds are payable solely from and secured by a pledge of a fixed portion of the gross income and revenue of the sanitary sewer system of the Urban County Government. The Series 2009 Bonds will be issued subject to the approval of legality by Steptoe & Johnson PLLC, and the information contained therein are s are therein contained the information and Lexington, Kentucky, Bond Counsel, as described herein. Certain matters will be passed on for the Issuer by Logan Askew, Commissioner of the Issuer’s Division of Corporate Counsel. It is expected that the Series 2009 Bonds will be available in definite form for delivery at the Depository Trust Company, in New York, New York, on or about October 22, 2009. fficial Statement ____________________ * Preliminary, Subject to Change 1 This Preliminary O This Preliminary rior to the time the Preliminary Official Statement is deliver Statement Official the Preliminary time the rior to juri any in securities these of sale any be there uy nor shall urisdiction. p b j $35,805,000* (Total Par Amount) MATURITY SCHEDULE* Maturity* Principal Interest Maturity* Principal Interest July 1 Amount* Rate Yield July 1 Amount* Rate/Yield 2011 $1,280,000 % 2021 $1,760,000 % 2012 1,310,000 % 2022 1,830,000 % 2013 1,345,000 % 2023 1,900,000 % 2014 1,385,000 % 2024 1,980,000 % 2015 1,425,000 % 2025 2,060,000 % 2016 1,465,000 % 2026 2,145,000 % 2017 1,515,000 % 2027 2,230,000 % 2018 1,570,000 % 2028 2,325,000 % 2019 1,630,000 % 2029 2,425,000 % 2020 1,695,000 % 2030 2,530,000 % _______________ * Preliminary; Subject to Change i 2 LEXINGTON-FAYETTE URBAN COUNTY GOVERNMENT Mayor Jim Newberry Council Members At-Large Jim Gray (Vice-Mayor) Linda Gorton Chuck Ellinger Council Members by Districts 1ST DISTRICT 5TH DISTRICT 9TH DISTRICT Andrea James Cheryl Blanton Feigel Jay McChord 2ND DISTRICT 6TH DISTRICT 10TH DISTRICT Tom Blues Kevin Stinnett Doug Martin 3RD DISTRICT 7TH DISTRICT 11TH DISTRICT Diane Lawless K.C. Crosbie Peggy Henson 4TH DISTRICT 8TH DISTRICT 12TH DISTRICT Julian Beard George Myers Ed Lane Clerk of the Urban County Council Susan Lamb Acting Commissioner of Finance Bill O’Mara Commissioner of Environmental Quality Cheryl Taylor Bond Counsel Steptoe & Johnson PLLC Financial Advisor Morgan Keegan & Co., Inc. ii 3 TABLE OF CONTENTS Cover Page and Maturity Schedule ............................................................................................................................. i Lexington-Fayette Urban County Government Officials .......................................................................................... ii Table of Contents ...................................................................................................................................................... iii Disclaimers ............................................................................................................................................................... iv Introductory Statement .............................................................................................................................................. 1 The Series 2009 Bonds .............................................................................................................................................. 2 Series 2009 Bonds to be Parity Bonds ....................................................................................................................... 3 Book-Entry-Only System .......................................................................................................................................... 4 The Issuer .................................................................................................................................................................. 5 Background of the System ......................................................................................................................................... 6 Purpose ...................................................................................................................................................................... 6 Estimated Sources and Uses of Funds – Series 2009 ................................................................................................. 7 Authority and Security ............................................................................................................................................... 7 Flow of System Funds ............................................................................................................................................... 7 Additional Covenants Respecting the System ........................................................................................................... 8 Miscellaneous Covenants .......................................................................................................................................... 9 Additional Bonds ....................................................................................................................................................... 9 Designation of Series 2009 Bonds as Build America Bonds .................................................................................... 9 Tax Matters .............................................................................................................................................................. 10 Continuing Disclosure Agreement ........................................................................................................................... 13 Absence of Material Litigation ................................................................................................................................ 13 Legal Matters ........................................................................................................................................................... 13 Official Statement .................................................................................................................................................... 14 Ratings ..................................................................................................................................................................... 14 Financial Advisor ..................................................................................................................................................... 14 Reference to Documents .......................................................................................................................................... 14 Appendix A: Estimated Debt Service and other Information Regarding the Sanitary Sewer System Appendix B: Demographics, Economic and Financial Data of the Lexington-Fayette