$27,565,000* FORSYTH COUNTY WATER AND SEWERAGE AUTHORITY ...

This Preliminary Official Statement and the information contained herein are subject to completion or amendment without notice. These securities may not be sold nor may offers to buy be accepted prior to the time

the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the 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 any such jurisdiction.

PRELIMINARY OFFICIAL STATEMENT DATED MARCH 30, 2012

NEW ISSUE

(Book-Entry Only)

RATINGS

Moody¡¯s: Aaa

Standard & Poor¡¯s: AA+

See ¡°MISCELLANEOUS - Ratings¡± herein.

In the opinion of Bond Counsel, under existing law, (a) interest on the Series 2012 Bonds (including any original issue discount

properly allocable to a holder thereof) is excluded from gross income for federal income tax purposes, (b) interest on the Series 2012

Bonds is not a specific ¡°item of tax preference¡± for purposes of the federal alternative minimum tax imposed on individuals and

corporations, and (c) interest on the Series 2012 Bonds is exempt from State of Georgia income taxation, subject to the conditions and

limitations described herein. The opinion contains greater detail, and is subject to exceptions, as noted in ¡°LEGAL MATTERS - Tax

Exemption¡± herein.

$27,565,000*

FORSYTH COUNTY WATER AND SEWERAGE AUTHORITY (GEORGIA)

Refunding Revenue Bonds, Series 2012

Dated: Date of Issuance

Due: April 1, as shown below

The Refunding Revenue Bonds, Series 2012 (the ¡°Series 2012 Bonds¡±) are being issued by the Forsyth County Water and Sewerage

Authority (the ¡°Authority¡±) for the purpose of refunding a portion of the Authority¡¯s Revenue Bonds, Series 2002. See ¡°PLAN OF

FINANCING¡± herein.

Interest on the Series 2012 Bonds is payable semiannually on October 1 and April 1 of each year, commencing on October 1, 2012.

All Series 2012 Bonds bear interest from their date of issuance. See ¡°THE SERIES 2012 BONDS - Description¡± herein.

The Series 2012 Bonds will be issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository

Trust Company, New York, New York (¡°DTC¡±), to which payments of principal, premium, if any, and interest will be made. Purchasers

will acquire beneficial interests in the Series 2012 Bonds in book-entry form only. DTC will remit such payments to its participants who

will be responsible for remittance to beneficial owners. See ¡°INTRODUCTION - Description of the Series 2012 Bonds¡± herein.

The Series 2012 Bonds are subject to optional redemption prior to maturity as described herein. See ¡°THE SERIES 2012 BONDS

- Redemption¡± herein.

The Authority and Forsyth County, Georgia (the ¡°County¡±) have heretofore entered into a Lease Contract, dated as of July 1, 1998,

as amended by a First Amendment to Lease Contract, dated as of June 1, 2000, a Second Amendment to Lease Contract, dated as of

April 1, 2001, a Third Amendment to Lease Contract, dated as of December 1, 2002, a Fourth Amendment to Lease Contract, dated as of

May 1, 2005, a Fifth Amendment to Lease Contract, dated as of October 1, 2007, a Sixth Amendment to Lease Contract, dated as of

March 1, 2011, and a Seventh Amendment to Lease Contract, dated as of August 1, 2011, and to be further amended by an Eighth

Amendment to Lease Contract, to be dated as of April 1, 2012 (collectively the ¡°Lease¡±), for a period not to exceed 50 years, pursuant to

which the Authority has leased its water and sewer system (the ¡°System¡±) to the County, and the County makes payments to the

Authority (the ¡°Lease Payments¡±) in time and amount sufficient to enable the Authority to pay the principal of, premium, if any, and

interest on the Authority¡¯s heretofore issued Prior Bonds (as defined herein) that are not being refunded and on the Series 2012 Bonds.

The County¡¯s obligations under the Lease are absolute and unconditional and are secured by a pledge of the net revenues of the System

and by a pledge of the County¡¯s full faith and credit. Under the Lease, the County has agreed to levy a tax on all taxable property located

within the territorial limits of the Special Tax District (as defined herein), at such rates, without limitation, as may be necessary to make

the Lease Payments. The Series 2012 Bonds are special limited obligations of the Authority secured by and payable solely from a first

lien pledge of the Lease Payments ranking on a parity with the Prior Bonds that are not being refunded and any additional revenue bonds

of the Authority hereafter issued on a parity with the Prior Bonds that are not being refunded and the Series 2012 Bonds. The Series

2012 Bonds do not constitute a charge, lien, or encumbrance, legal or equitable, on any other property of the Authority. See

¡°SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2012 BONDS¡± herein.

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

Maturity

Principal

Amount*

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

$ 95,000

95,000

100,000

100,000

105,000

110,000

110,000

110,000

115,000

120,000

Interest

Rate

Price or

Yield

Maturity

Principal

Amount*

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

$ 125,000

125,000

135,000

3,205,000

3,370,000

3,535,000

3,715,000

3,900,000

4,095,000

4,300,000

Interest

Rate

Price or

Yield

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read

the entire Official Statement to obtain information essential to making an informed investment decision.

The Series 2012 Bonds are offered when, as, and if issued by the Authority and accepted by the Underwriter, subject to prior sale

and to withdrawal or modification of the offer without notice, and are subject to the approving opinion of Murray Barnes Finister LLP,

Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed on for the Authority and the County by their counsel, Jarrard &

Davis, LLP, Cumming, Georgia, and for the Underwriter by its counsel, McKenna Long & Aldridge LLP, Atlanta, Georgia. The Series

2012 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on

or about _________, 2012.

Dated: _________, 2012

________________________

* Preliminary; subject to change.

FORSYTH COUNTY WATER AND SEWERAGE AUTHORITY

Jim Boff, Chairman

Patrick B. Bell, Vice Chairman

Todd Levent, Secretary

R.J. (Pete) Amos

Brian R. Tam

Tim Perkins

BOARD OF COMMISSIONERS OF FORSYTH COUNTY

Jim Boff, Chairman

Patrick B. Bell, Vice Chairman

Todd Levent, Secretary

R.J. (Pete) Amos

Brian R. Tam

COUNTY CLERK

Sonya Bush

COUNTY MANAGER

Doug Derrer

FINANCE DIRECTOR

David Gruen

DIRECTOR OF COUNTY WATER AND SEWER DEPARTMENT

Tim Perkins

COUNSEL TO THE AUTHORITY AND THE COUNTY

Jarrard & Davis, LLP

Cumming, Georgia

AUDITORS

Mauldin & Jenkins LLC

Atlanta, Georgia

BOND COUNSEL

Murray Barnes Finister LLP

Atlanta, Georgia

UNDERWRITER

Merchant Capital LLC

Atlanta, Georgia

UNDERWRITER¡¯S COUNSEL

McKenna Long & Aldridge LLP

Atlanta, Georgia

TABLE OF CONTENTS

Page

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

The Authority.............................................................................................................................................................1

The County ................................................................................................................................................................1

Purpose of the Series 2012 Bonds..............................................................................................................................1

Security and Sources of Payment for the Series 2012 Bonds ....................................................................................1

Description of the Series 2012 Bonds ........................................................................................................................3

Tax Exemption...........................................................................................................................................................3

Professionals Involved in the Offering.......................................................................................................................3

Legal Authority..........................................................................................................................................................4

Offering and Delivery of the Series 2012 Bonds .......................................................................................................4

Continuing Disclosure................................................................................................................................................4

Other Information ......................................................................................................................................................4

PLAN OF FINANCING................................................................................................................................................6

Estimated Sources and Applications of Funds ...........................................................................................................6

Refunding Program....................................................................................................................................................6

THE SERIES 2012 BONDS..........................................................................................................................................7

Description.................................................................................................................................................................7

Redemption ................................................................................................................................................................7

Book-Entry Only System ...........................................................................................................................................7

Legal Authority..........................................................................................................................................................9

Investments ..............................................................................................................................................................10

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2012 BONDS....................................................10

Lease ........................................................................................................................................................................10

Bond Resolution.......................................................................................................................................................11

Special Tax District..................................................................................................................................................11

Revenue Fund ..........................................................................................................................................................11

Reserve Account and Abolition of Reserve Account...............................................................................................12

Additional Bonds .....................................................................................................................................................13

Limited Obligations .................................................................................................................................................13

Enforceability of Remedies......................................................................................................................................14

THE AUTHORITY .....................................................................................................................................................14

Introduction..............................................................................................................................................................14

Authority Administration and Officials ...................................................................................................................14

THE SYSTEM.............................................................................................................................................................15

Introduction..............................................................................................................................................................15

System Management ................................................................................................................................................15

Service Area.............................................................................................................................................................15

Water System ...........................................................................................................................................................16

Sewer System...........................................................................................................................................................21

Water and Sewer Customers ....................................................................................................................................24

Rates, Fees and Charges...........................................................................................................................................27

Rate Setting Process.................................................................................................................................................29

Billing and Collection ..............................................................................................................................................29

Governmental Approvals and Environmental Regulation .......................................................................................29

Employees, Employee Relations, and Labor Organizations ....................................................................................30

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Page

SYSTEM FINANCIAL INFORMATION ..................................................................................................................30

Accounting System and Policies..............................................................................................................................30

Historical and Pro Forma Capital Structure .............................................................................................................31

Debt Service Requirements......................................................................................................................................33

Five Year Operating History....................................................................................................................................34

Management¡¯s Discussion and Analysis of Results of Operations ..........................................................................36

Historical and Pro Forma Debt Service Coverage Ratios ........................................................................................37

Operating Budget .....................................................................................................................................................39

Capital Improvements Program ...............................................................................................................................40

Insurance Coverage..................................................................................................................................................40

THE COUNTY............................................................................................................................................................41

Introduction..............................................................................................................................................................41

County Administration and Officials .......................................................................................................................41

County Services .......................................................................................................................................................42

County Facilities ......................................................................................................................................................42

Demographic Information........................................................................................................................................43

Economic Information .............................................................................................................................................43

Employees, Employee Relations, and Labor Organizations ....................................................................................46

COUNTY DEBT STRUCTURE .................................................................................................................................47

Summary of County Debt By Category ...................................................................................................................47

Proposed Debt..........................................................................................................................................................47

Debt Service Requirements......................................................................................................................................48

Overlapping Debt.....................................................................................................................................................49

Debt Ratios ..............................................................................................................................................................49

Debt History.............................................................................................................................................................50

Limitations on County Debt.....................................................................................................................................50

COUNTY AD VALOREM TAXATION....................................................................................................................51

Introduction..............................................................................................................................................................51

Property Subject to Taxation....................................................................................................................................51

Assessed Value ........................................................................................................................................................52

Annual Tax Levy .....................................................................................................................................................52

Property Tax Collections .........................................................................................................................................52

Historical Property Tax Data ...................................................................................................................................54

Ten Largest Taxpayers.............................................................................................................................................56

COUNTY FINANCIAL INFORMATION .................................................................................................................57

Accounting System and Policies..............................................................................................................................57

Five Year General Fund History ..............................................................................................................................57

Management Comments Concerning Material Trends in Revenues and Expenditures ...........................................59

Budgetary Process....................................................................................................................................................59

General Fund Budgets..............................................................................................................................................61

Sources of Tax Revenues.........................................................................................................................................63

Employee Benefits ...................................................................................................................................................63

Insurance Coverage and Governmental Immunity...................................................................................................64

LEGAL MATTERS ....................................................................................................................................................65

Pending Litigation....................................................................................................................................................65

Tax Exemption.........................................................................................................................................................66

Pending Federal Legislation.....................................................................................................................................67

State of Georgia Tax Reform Legislation ................................................................................................................67

Validation Proceedings ............................................................................................................................................68

Closing Certificates..................................................................................................................................................68

(ii)

Page

MISCELLANEOUS....................................................................................................................................................68

Ratings .....................................................................................................................................................................68

Underwriting ............................................................................................................................................................68

Verification of Arithmetical Computations..............................................................................................................69

Independent Auditors...............................................................................................................................................69

Additional Information ............................................................................................................................................69

CERTIFICATION .......................................................................................................................................................70

APPENDIX A: FINANCIAL STATEMENTS OF THE COUNTY........................................................................A-1

APPENDIX B: SUMMARY OF CERTAIN PROVISIONS OF THE BOND RESOLUTION AND LEASE........B-1

APPENDIX C: FORM OF DISCLOSURE AGREEMENT ....................................................................................C-1

APPENDIX D: FORM OF LEGAL OPINION........................................................................................................D-1

(iii)

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