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OFFICIAL STATEMENT

NEW ISSUE - BOOK- ENTRY ONLY RATINGS: S&P (Insured Bonds only) (as defined herein): “AA”
S&P (underlying): “A+”
See “RATINGS” herein
In the opinion of Butler Snow LLP, Ridgeland, Mississippi (“Bond Counsel”), under existing laws, regulations, rulings
and judicial decisions and assuming the accuracy of certain representations and continuous compliance with certain
covenants described herein, interest on the Series 2018 Bonds (as defined herein) is excludable from gross income for federal
tax purposes pursuant to Section 103 of the Code (as defined herein), and such interest is not a specific preference item
for purposes of the federal alternative minimum tax. Bond Counsel is further of the opinion that under existing laws,
regulations, rulings and judicial decisions, interest on the Series 2018 Bonds is exempt from income taxation in the State
(as defined herein). For a more complete description, see “TAX MATTERS” herein and APPENDIX D - FORM OF OPINION
OF BOND COUNSEL attached hereto.

$65,000,000
MISSISSIPPI DEVELOPMENT BANK
SPECIAL OBLIGATION BONDS, SERIES 2018
(JACKSON PUBLIC SCHOOL DISTRICT
GENERAL OBLIGATION BOND PROJECT)
Dated: Date of Delivery Due: October 1, as shown inside front cover
The $65,000,000 Mississippi Development Bank Special Obligation Bonds, Series 2018 (Jackson Public School District General
Obligation Bond Project) (the “Series 2018 Bonds”) are being issued by the Mississippi Development Bank (the “Bank”), will be dated the
date of delivery thereof and will bear interest from that date to their respective maturities in the amounts and at the rates set forth on the
inside cover. The Series 2018 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of CEDE
& CO., as nominee for The Depository Trust Company, New York, New York (“DTC”). Purchases of beneficial interests in the Series 2018
Bonds will be made in book-entry-only form, in the denomination of $5,000 or any integral multiple thereof. Purchasers of beneficial
interests in the Series 2018 Bonds will not receive physical delivery of certificates representing their interests in the Series 2018 Bonds.
Interest on the Series 2018 Bonds is payable semiannually on April 1 and October 1 of each year, commencing on April 1, 2019. So long
as DTC or its nominee is the Registered Owner of the Series 2018 Bonds, interest, together with the principal of and premium, if any, on
the Series 2018 Bonds will be paid directly to DTC by Trustmark National Bank, Jackson, Mississippi, as trustee (the “Trustee”) under the
Indenture (as defined herein). See “DESCRIPTION OF THE SERIES 2018 BONDS - Book-Entry-Only System.”
The Series 2018 Bonds are issued by the Bank for the principal purpose of providing funds for the purchase of the District Bond
(as defined herein) being issued by the Jackson Public School District (the “District”) as more fully described in this Official Statement.
The Series 2018 Bonds are subject to optional redemption prior to maturity. See “DESCRIPTION OF THE SERIES 2018 BONDS –
Redemption and Redemption Prices and Terms for the Series 2018 Bonds” herein.
The scheduled payment of principal of and interest on the 2021 through 2038 maturities of the Series 2018 Bonds (collectively,
the “Insured Bonds”) when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery
of the Series 2018 Bonds by BUILD AMERICA MUTUAL ASSURANCE COMPANY (“BAM”). See “BOND INSURANCE” herein.

THE SERIES 2018 BONDS ARE LIMITED AND SPECIAL OBLIGATIONS OF THE BANK AND ARE PAYABLE SOLELY
OUT OF THE TRUST ESTATE OF THE BANK PLEDGED THEREFOR UNDER THE INDENTURE, INCLUDING THE DISTRICT
BOND AND PAYMENTS DERIVED THEREFROM, AS MORE FULLY DESCRIBED HEREIN. THE SERIES 2018 BONDS DO
NOT CONSTITUTE A DEBT, LIABILITY OR LOAN OF THE CREDIT OF THE BANK, THE STATE OF MISSISSIPPI OR ANY
POLITICAL SUBDIVISION THEREOF UNDER THE CONSTITUTION AND LAWS OF THE STATE OF MISSISSIPPI, OR A
PLEDGE OF THE FULL FAITH, CREDIT AND TAXING POWER OR MORAL OBLIGATION OF THE BANK, THE STATE OF
MISSISSIPPI OR ANY POLITICAL SUBDIVISION THEREOF. THE BANK HAS NO TAXING POWER. THE DISTRICT BOND
SECURING THE SERIES 2018 BOND IS, HOWEVER, A GENERAL OBLIGATION OF THE DISTRICT, SECURED BY THE
FULL FAITH, CREDIT AND A SPECIAL TAX OF THE DISTRICT, AS MORE FULLY DESCRIBED HEREIN.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY
OF THIS OFFICIAL STATEMENT. PROSPECTIVE INVESTORS MUST READ THIS ENTIRE OFFICIAL STATEMENT
(INCLUDING THE APPENDICES) TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED
INVESTMENT DECISION.
The Series 2018 Bonds are offered subject to the final approval of the legality thereof by Butler Snow LLP, Ridgeland, Mississippi,
Bond Counsel. Certain other legal matters will be passed upon for the Bank by Balch & Bingham LLP, Jackson, Mississippi and for
the Underwriters (described below) by Young Law Group, PLLC and The May Law Firm, PLLC, serving as co-underwriter’s counsel.
Certain other legal matters will be passed upon for the District by its in-house counsel, JoAnne Nelson Shepherd, Jackson, Mississippi.
Government Consultants, Inc., Madison, Mississippi serves as the Municipal Advisor to the District and the Bank in connection with
the sale and issuance of the Series 2018 Bonds and the purchase of the District Bond. It is expected that the Series 2018 Bonds will be
delivered through the facilities of The Depository Trust Company in New York, New York, on or about November 29, 2018.

Siebert Cisneros Shank & Co., L.L.C.


Crews & Associates, Inc. Duncan-Williams, Inc. Stephens, Inc.
NOVEMBER 15, 2018
$65,000,000
MISSISSIPPI DEVELOPMENT BANK
SPECIAL OBLIGATION BONDS, SERIES 2018
(JACKSON PUBLIC SCHOOL DISTRICT
GENERAL OBLIGATION BOND PROJECT)

MATURITIES, PRINCIPAL AMOUNTS,


INTEREST RATES, YIELDS AND CUSIPS

Maturity Principal Interest Initial


(October 1) Amount Rate Yield Price CUSIP†

2019 $ 1,960,000 4.000% 2.170% 101.510 60534WYF9


2020 2,050,000 5.000 2.340 104.757 60534WYG7
2021* 2,155,000 5.000 2.400 107.090 60534WYH5
2022* 2,265,000 5.000 2.530 108.978 60534WYJ1
2023* 2,380,000 5.000 2.640 110.651 60534WYK8
2024* 2,500,000 5.000 2.770 111.942 60534WYL6
2025* 2,630,000 5.000 2.880 113.071 60534WYM4
2026* 2,765,000 5.000 2.990 113.949 60534WYN2
2027* 2,905,000 5.000 3.120 114.421 60534WYP7
2028* 3,055,000 5.000 3.240 114.722 60534WYQ5
2029* 3,215,000 5.000 3.380** 113.459 60534WYR3
2030* 3,375,000 5.000 3.470** 112.656 60534WYS1
2031* 3,550,000 5.000 3.550** 111.948 60534WYT9
2032* 3,735,000 5.000 3.590** 111.596 60534WYU6
2033* 3,925,000 5.000 3.640** 111.157 60534WYV4
2034* 4,105,000 4.000 4.070 99.184 60534WYW2
2035* 4,270,000 4.000 4.100 98.787 60534WYX0
2036* 4,475,000 5.250 3.690** 112.768 60534WYY8
2037* 4,715,000 5.250 3.730** 112.417 60534WYZ5
2038* 4,970,000 5.250 3.770** 112.066 60534WZA9

*Insured by BAM
**Yield to optional call date of October 1, 2028

† The CUSIP numbers listed above have been assigned by an organization not affiliated with the Bank or the District and are being provided solely for the
convenience of the holders of the Series 2018 Bonds, and the Bank, the District and the Underwriters do not make any representation with respect to such
CUSIP numbers or undertake any responsibility for their accuracy. The CUSIP numbers are subject to being changed after the issuance of the Series
2018 Bonds as a result of various subsequent actions, including but not limited to a refunding in whole or in part of the Series 2018 Bonds.
THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITY
OTHER THAN THE ORIGINAL OFFERING OF THE SERIES 2018 BONDS IDENTIFIED ON THE
COVER HEREOF. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION OTHER THAN THAT CONTAINED IN THIS OFFICIAL
STATEMENT; AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS OFFICIAL STATEMENT
DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY,
AND THERE SHALL NOT BE ANY SALE OF THE SERIES 2018 BONDS BY ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE.
THE INFORMATION AND EXPRESSION OF OPINIONS HEREIN ARE SUBJECT TO CHANGE
WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR THE
SALE OF ANY OF THE SERIES 2018 BONDS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF. ALL OPINIONS, ESTIMATES OR ASSUMPTIONS, WHETHER OR NOT
EXPRESSLY IDENTIFIED, ARE INTENDED AS SUCH AND NOT AS REPRESENTATIONS OF FACT.

THE UNDERWRITERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION


IN THIS OFFICIAL STATEMENT. THE UNDERWRITERS HAVE REVIEWED THE INFORMATION
IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS A PART OF, THEIR
RESPONSIBILITIES UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND
CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITERS DO NOT GUARANTEE
THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. INFORMATION HEREIN HAS
BEEN OBTAINED FROM THE BANK, THE DISTRICT, DTC, BAM AND OTHER SOURCES
BELIEVED TO BE RELIABLE, BUT THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION IS NOT GUARANTEED BY THE UNDERWRITERS.

UPON ISSUANCE, THE SERIES 2018 BONDS WILL NOT BE REGISTERED BY THE BANK
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND
WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE
SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE OR OTHER
GOVERNMENTAL ENTITY OR AGENCY, OTHER THAN THE BANK AND THE DISTRICT (TO THE
EXTENT DESCRIBED HEREIN), WILL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2018 BONDS FOR SALE.

THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT OR


AGREEMENT BETWEEN THE BANK AND THE PURCHASERS OR HOLDERS OF THE SERIES 2018
BONDS. ALL ESTIMATES AND ASSUMPTIONS CONTAINED HEREIN ARE BELIEVED TO BE
REASONABLE, BUT NO REPRESENTATION IS MADE THAT SUCH ESTIMATES OR ASSUMPTIONS
ARE CORRECT OR WILL BE REALIZED.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR


EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES
2018 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 PRICES AT WHICH THE SERIES 2018 BONDS ARE OFFERED TO THE PUBLIC BY THE
UNDERWRITERS (AND THE YIELDS RESULTING THEREFROM) MAY VARY FROM THE INITIAL
PUBLIC OFFERING PRICES OR YIELDS APPEARING ON THE INSIDE COVER PAGE HEREOF. IN
ADDITION, THE UNDERWRITERS MAY ALLOW CONCESSIONS OR DISCOUNTS FROM SUCH
INITIAL PUBLIC OFFERING PRICES TO DEALERS AND OTHERS. IN ORDER TO FACILITATE
DISTRIBUTION OF THE SERIES 2018 BONDS, THE UNDERWRITERS MAY ENGAGE IN
TRANSACTIONS INTENDED TO STABILIZE THE PRICE OF THE SERIES 2018 BONDS AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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BUILD AMERICA MUTUAL ASSURANCE COMPANY (“BAM”) MAKES NO
REPRESENTATION REGARDING THE SERIES 2018 BONDS OR THE ADVISABILITY OF
INVESTING IN THE SERIES 2018 BONDS. IN ADDITION, BAM HAS NOT INDEPENDENTLY
VERIFIED, MAKES NO REPRESENTATION REGARDING, AND DOES NOT ACCEPT ANY
RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT
OR ANY INFORMATION OR DISCLOSURE CONTAINED HEREIN, OR OMITTED HEREFROM,
OTHER THAN WITH RESPECT TO THE ACCURACY OF THE INFORMATION REGARDING BAM,
SUPPLIED BY BAM AND PRESENTED UNDER THE HEADING “–“BOND INSURANCE” AND
“APPENDIX G - SPECIMEN MUNICIPAL BOND INSURANCE POLICY”.

CAUTIONARY STATEMENTS REGARDING


FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT

Certain statements included or incorporated by reference in this Official Statement constitute


“forward-looking statements.” Such statements are generally identifiable by the terminology such as
“expects,” “forecasts,” “projects,” “intends,” “anticipates,” “estimates” or similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN


SUCH FORWARD-LOOKING STATEMENTS INVOLVES KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY
FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. NEITHER THE BANK NOR THE DISTRICT PLANS TO ISSUE
ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN
CHANGES TO THEIR EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON
WHICH SUCH STATEMENTS ARE BASED, OCCUR.

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TABLE OF CONTENTS

Page

INTRODUCTION ......................................................................................................................................................... 1
The Bank ................................................................................................................................................................... 1
Sources of Payment and Security for the Series 2018 Bonds ................................................................................... 1
Bond Insurance ......................................................................................................................................................... 2
Purpose of the Series 2018 Bonds............................................................................................................................. 2
Authority for Issuance .............................................................................................................................................. 2
Description of the Series 2018 Bonds ....................................................................................................................... 2
Tax Matters ............................................................................................................................................................... 3
Professionals Involved in the Offering ..................................................................................................................... 3
Offering and Delivery of the Series 2018 Bonds ...................................................................................................... 3
Risks to the Owners of the Series 2018 Bonds ......................................................................................................... 3
Other Information ..................................................................................................................................................... 4
Format of Official Statement .................................................................................................................................... 4
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2018 BONDS ...................................................... 5
General...................................................................................................................................................................... 5
The District Bond...................................................................................................................................................... 5
Provisions for Payment of the District Bond ............................................................................................................ 5
BOND INSURANCE .................................................................................................................................................... 5
Bond Insurance Policy .............................................................................................................................................. 5
Build America Mutual Assurance Company ............................................................................................................ 6
DESCRIPTION OF THE DISTRICT PROJECT .......................................................................................................... 7
RISKS TO THE OWNERS OF THE SERIES 2018 BONDS....................................................................................... 8
General...................................................................................................................................................................... 8
District Bond ............................................................................................................................................................. 8
Tax Covenants .......................................................................................................................................................... 8
Ratings ...................................................................................................................................................................... 8
Remedies; Litigation; Bankruptcy ............................................................................................................................ 9
Failure to Compel the Levy of Taxes on the District ................................................................................................ 9
Additional Risks ..................................................................................................................................................... 10
DESCRIPTION OF THE SERIES 2018 BONDS ....................................................................................................... 10
General Description ................................................................................................................................................ 10
Book-Entry-Only System........................................................................................................................................ 11
Redemption ............................................................................................................................................................. 13
APPLICATION OF THE PROCEEDS OF THE SERIES 2018 BONDS................................................................... 14
DEBT SERVICE REQUIREMENTS FOR THE SERIES 2018 BONDS .................................................................. 15
THE MISSISSIPPI DEVELOPMENT BANK ............................................................................................................ 16
General.................................................................................................................................................................... 16
Organization and Membership of the Bank ............................................................................................................ 16
Prior Bonds of Bank ............................................................................................................................................... 17
AUTHORIZATION OF SERIES 2018 BONDS ......................................................................................................... 17
General.................................................................................................................................................................... 17
FUNDS AND ACCOUNTS ........................................................................................................................................ 17
Creation of Funds and Accounts ............................................................................................................................. 17
Deposit of Net Proceeds of the Series 2018 Bonds and Other Receipts ................................................................. 17

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OPERATION OF FUNDS AND ACCOUNTS .......................................................................................................... 18
General Fund .......................................................................................................................................................... 18
Rebate Fund ............................................................................................................................................................ 19
Moneys to be Held in Trust .................................................................................................................................... 19
Amounts Remaining in Funds or Accounts ............................................................................................................ 19
Investment of Funds................................................................................................................................................ 19
THE INDENTURE...................................................................................................................................................... 20
Provisions for Issuance of Refunding Bonds .......................................................................................................... 20
Remedies; Rights of Bondholders .......................................................................................................................... 24
THE SERIES 2018 BONDS AS LEGAL INVESTMENTS ....................................................................................... 29
LITIGATION .............................................................................................................................................................. 29
TAX MATTERS ......................................................................................................................................................... 29
LEGAL MATTERS .................................................................................................................................................... 31
CONTINUING DISCLOSURE................................................................................................................................... 32
Failures Regarding Prior Undertakings................................................................................................................... 32
RATINGS .................................................................................................................................................................... 33
UNDERWRITING ...................................................................................................................................................... 33
FINANCIAL STATEMENTS ..................................................................................................................................... 34
MUNICIPAL ADVISOR ............................................................................................................................................ 34
PENSION PLAN ......................................................................................................................................................... 34
VALIDATION ............................................................................................................................................................ 35
MISCELLANEOUS .................................................................................................................................................... 35
CERTIFICATION ....................................................................................................................................................... 36

APPENDIX A – INFORMATION CONCERNING THE DISTRICT


APPENDIX B – FINANCIAL INFORMATION CONCERNING THE DISTRICT
APPENDIX C – INFORMATION CONCERNING THE DISTRICT RESOLUTION AND
THE DISTRICT BOND
APPENDIX D – FORM OF OPINION OF BOND COUNSEL
APPENDIX E – DEFINITIONS
APPENDIX F – FORM OF CONTINUING DISCLOSURE AGREEMENT
APPENDIX G – SPECIMEN MUNICIPAL BOND INSURANCE POLICY

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OFFICIAL STATEMENT

$65,000,000
MISSISSIPPI DEVELOPMENT BANK
SPECIAL OBLIGATION BONDS, SERIES 2018
(JACKSON PUBLIC SCHOOL DISTRICT
GENERAL OBLIGATION BOND PROJECT)

INTRODUCTION

The purpose of this Official Statement, including the cover page and the appendices, is to set forth certain
information concerning the sale and issuance by the Mississippi Development Bank (the “Bank”) of its Special
Obligation Bonds, Series 2018 (Jackson Public School District General Obligation Bond Project) (the “Series 2018
Bonds”) issued in the aggregate principal amount of $65,000,000. All capitalized terms used herein and not
otherwise defined herein are used with the meanings assigned thereto in “APPENDIX E – Definitions” attached
hereto.

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to,
and is qualified by, more complete and detailed information contained in the entire Official Statement, including the
cover page, the inside cover page and all appendices hereto, and the documents summarized or described herein. A
full review should be made of the entire Official Statement. The offering of the Series 2018 Bonds to potential
investors is made only by means of the entire Official Statement, including the appendices. No person is authorized
to detach this Introduction from the Official Statement or otherwise use it without the entire Official Statement,
including the appendices hereto.

The Bank

The Bank was established in 1986 as a separate body corporate and politic of the State of Mississippi (the
“State”) for the public purposes set forth under the provisions of Sections 31-25-1 et seq., Mississippi Code of 1972,
as amended (the “Bank Act”). The Bank is not an agency of the State, is separate from the State in its corporate and
sovereign capacity and has no taxing power. The Bank is governed by a Board of Directors composed of nine
members.

Pursuant to the Bank Act, the purpose of the Bank is to assist “local governmental units,” defined in the
Bank Act to be (a) any county, municipality, utility district, regional solid waste authority, county cooperative
service district or political subdivision of the State, (b) the State or any agency thereof, (c) the institutions of higher
learning of the State, (d) any education building corporation established for institutions of higher learning, or (e) any
other governmental unit created under state law, through programs of purchasing the bonds, notes or evidences of
indebtedness of such local governmental units under agreements between such local governmental units and the
Bank. The Jackson Public School District (the “District”), as further described in APPENDIX A hereto, is a local
governmental unit under the Bank Act.

Sources of Payment and Security for the Series 2018 Bonds

The Series 2018 Bonds will be issued under and secured by an Indenture of Trust, dated as of November 1,
2018 (the “Indenture”), by and between the Bank and Trustmark National Bank, Jackson, Mississippi, as trustee (the
“Trustee”). The principal of, premium, if any, and interest on the Series 2018 Bonds are payable from those Funds
and Accounts (as defined herein) of the Bank and from a general obligation bond issued by the District and
designated as the $65,000,000 Jackson Public School District, General Obligation Bond, Series 2018 (the “District
Bond”) assigned to the Trustee pursuant to the Indenture for the benefit of the owners of the Series 2018 Bonds
equally and ratably without priority.

The Series 2018 Bonds are limited and special obligations of the Bank and are payable solely out of the
Trust Estate (as defined herein) pledged therefor under the Indenture, including the District Bond and payments
derived therefrom, as more fully described herein. The Series 2018 Bonds do not constitute a debt, liability or loan
of the credit of the Bank, the State or any political subdivision thereof under the constitution and laws of the State,

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or a pledge of the faith, credit, taxing power or moral obligation of the Bank, the State or any political subdivision
thereof.

The District Bond securing the Series 2018 Bonds is, however, a general obligation of the District, secured
by the full faith, credit and taxing power of the District.

The District Bond is being issued pursuant to Sections 37-59-1 through 37-59-45, Mississippi Code of
1972, as amended (the “District Bond Act” together with the Bank Act, the “Act”). The District Bond will be
purchased by the Bank with the proceeds of the Series 2018 Bonds. The sources of payment for the District Bond
are further described under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2018
BONDS” herein and APPENDIX C hereto.

Bond Insurance

Concurrently with the issuance of the Series 2018 Bonds, Build America Mutual Assurance Company
(“BAM”) will issue its Municipal Bond Insurance Policy for certain maturities of the Series 2018 Bonds (the
“Policy”). The Policy guarantees the scheduled payment of principal of and interest on certain maturities of the
Series 2018 Bonds when due as set forth in the form of the Policy included as APPENDIX G to this Official
Statement. See “BOND INSURANCE” herein.

Purpose of the Series 2018 Bonds

The Series 2018 Bonds are being issued to provide funds for the purchase of the Series 2018 District Bond,
paying the costs, including the costs of borrowing, for the purpose of purchasing, erecting, repairing, equipping,
remodeling and enlarging school buildings and related facilities, and purchasing land therefor; establishing and
equipping school athletic fields and necessary facilities connected therewith, and purchasing land therefor, and
providing necessary water, light, heating, air conditioning and sewerage facilities for school buildings and
purchasing land therefor, all for the purpose of extending the useful life of many District owned facilities,
eliminating overcrowding and potentially dangerous conditions, and improving, repairing and upgrading school
safety, including but not limited to, the following generally described projects: (a) making various site
improvements, constructing, erecting, repairing, equipping, remodeling and enlarging school buildings, science labs,
libraries, performing arts facilities, classrooms, restrooms, school athletic fields and related facilities, constructing
a new baseball/softball complex and a JROTC building, (b) making other building additions, repairs, renovations
and remodeling and providing and upgrading necessary water, light, heating, air conditioning and sewerage facilities
for school buildings and related facilities throughout the District and (c) paying the costs of issuance for the Series
2018 Bonds and the District Bond (the “District Project”).

Authority for Issuance

The Series 2018 Bonds are issued pursuant to the provisions of the Act and the Indenture.

Description of the Series 2018 Bonds

If the District directs the Bank to redeem the Series 2018 Bonds pursuant to the District Resolution (as
defined herein) the Bank has agreed under the Indenture to accept redemption and to redeem the Series 2018 Bonds
in the following instances:

Redemption. The Series 2018 Bonds (or any portions thereof in integral multiples of $5,000 each) which
mature on or after October 1, 2029 are subject to optional redemption prior to their stated date of maturity in whole
or in part, in principal amounts and maturities as selected by the Bank on any date on or after October 1, 2028, at
par, plus accrued interest to the date of redemption thereof. Selection of the Series 2018 Bonds to be redeemed
within a maturity will be made by lot by the Trustee.

Denominations. The Series 2018 Bonds will be issued in denominations of $5,000 or any integral multiple
thereof.

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Registration, Transfers and Exchanges. The Series 2018 Bonds will be issued only as fully registered
bonds and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust
Company, New York, New York (“DTC”). Purchases of beneficial interests in the Series 2018 Bonds will be made
in book-entry-only form. Purchasers of beneficial interests in the Series 2018 Bonds will not receive physical
delivery of certificates representing their respective interests in the Series 2018 Bonds.

Payments. Interest on the Series 2018 Bonds is payable on April 1 and October 1 of each year,
commencing April 1, 2019. So long as DTC or its nominee is the Registered Owner of the Series 2018 Bonds,
interest, together with the principal of and premium, if any, on the Series 2018 Bonds will be paid directly to DTC
by the Trustee. The final disbursement of such payments to a Beneficial Owner (as defined herein) of the Series
2018 Bonds will be the responsibility of the DTC Participants and the Indirect Participants, all as more fully defined
and described herein under the caption “DESCRIPTION OF THE SERIES 2018 BONDS -- Book-Entry-Only
System.”

For a more complete description of the Series 2018 Bonds and the basic documentation pursuant to
which the Series 2018 Bonds are being issued, see the captions “DESCRIPTION OF THE SERIES 2018
BONDS,” “FUNDS AND ACCOUNTS” and “OPERATION OF FUNDS AND ACCOUNTS” in this Official
Statement.

Tax Matters

In the opinion of Butler Snow LLP (“Bond Counsel”), assuming continuing compliance with certain
covenants by the Bank and the District, under existing laws, regulations, rulings, and judicial decisions, interest on
the Series 2018 Bonds is excludable from gross income for federal tax purposes. Interest on the Series 2018 Bonds
is not a specific preference item for purposes of the federal alternative minimum tax. Under existing laws,
regulations, rulings, and judicial decisions, interest on the Series 2018 Bonds is exempt from all income taxation in
the State. For a more complete description of such opinion and certain other tax consequences incident to the
ownership of the Series 2018 Bonds, see “TAX MATTERS” herein and APPENDIX D - FORM OF OPINION OF
BOND COUNSEL attached hereto.

Professionals Involved in the Offering

Trustmark National Bank, Jackson, Mississippi, will act as trustee under the Indenture for the Series 2018
Bonds. Government Consultants, Inc., Madison, Mississippi, is employed as Municipal Advisor to the District and
the Bank with respect to the Series 2018 Bonds and the Bank’s purchase of the District Bond. Certain proceedings
in connection with the issuance of the Series 2018 Bonds are subject to the approval of Butler Snow LLP,
Ridgeland, Mississippi, Bond Counsel. Certain other legal matters will be passed upon for the Underwriters by
Young Law Group, PLLC, Jackson, Mississippi and The May Law Firm, PLLC, Jackson, Mississippi, serving as co-
underwriters’ counsel, for the Bank by Balch & Bingham, LLP, Jackson, Mississippi, and for the District by its in-
house counsel, JoAnne Nelson Shepherd, Jackson, Mississippi. See the captions “LEGAL MATTERS” and
“MUNICIPAL ADVISOR” in this Official Statement.

Offering and Delivery of the Series 2018 Bonds

Siebert Cisneros Shank & Co., L.L.C., on behalf of itself as senior managing underwriter and on behalf of
Crews & Associates, Inc., Duncan-Williams, Inc. and Stephens, Inc. as co-managing underwriters (collectively, the
“Underwriters”) have agreed to purchase all of the Series 2018 Bonds subject to certain conditions set forth in the
Bond Purchase Agreement, dated November 15, 2018, by and among the Underwriters, the Bank and the District
(the “Bond Purchase Agreement”). The Series 2018 Bonds are expected to be available in definitive form for
delivery in New York, New York on or about November 29, 2018.

Risks to the Owners of the Series 2018 Bonds

There are certain risks involved in the ownership of the Series 2018 Bonds which should be considered by
prospective purchasers. The ability of the Bank to pay principal of, premium, if any, and interest on the Series 2018
Bonds depends upon the receipt by the Bank of payments of principal (and premium, if any) and interest on the
District Bond. There can be no representation or assurance that the District will realize sufficient revenues to make

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the required payments on the District Bond. See the caption “SECURITY AND SOURCES OF PAYMENT FOR
THE SERIES 2018 BONDS” herein. Failure of the Bank and/or the District to comply with certain tax covenants
may also adversely affect the exempt status of the interest on the Series 2018 Bonds. See the caption “RISKS TO
THE OWNERS OF THE SERIES 2018 BONDS” in this Official Statement.

Other Information

This Official Statement speaks only as of its date, and certain information contained herein is subject to
change.

Copies of other documents and information are available, upon request, and upon payment to the Bank of a
charge for copying, mailing and handling, from E.F. “Buddy” Mitcham, Executive Director, Mississippi
Development Bank, 735 Riverside Drive, Suite 300, Jackson, Mississippi 39202, telephone: (601) 355-6232.

NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO


GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS OFFICIAL STATEMENT; AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS OFFICIAL
STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF THE SERIES 2018 BONDS BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE
SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH HEREIN HAS BEEN
OBTAINED FROM THE BANK, THE DISTRICT, DTC, AND OTHER SOURCES WHICH ARE
BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR
COMPLETENESS. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT
TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL
STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
BANK OR THE DISTRICT SINCE THE DATE HEREOF.

THE SERIES 2018 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Format of Official Statement

There follows in this Official Statement a description of the security and sources of payment for the Series
2018 Bonds, the Project (as defined herein), the Bank, and summaries of certain provisions of the Series 2018
Bonds, the Indenture, and certain provisions of the Act. All discussions of the Act and the Indenture are qualified in
their entirety by reference to the Act and the Indenture, copies of which are available from the Bank, and all
discussions of the Series 2018 Bonds are qualified in their entirety by reference to the definitive form and the
information with respect to the Series 2018 Bonds contained in the Indenture.

Certain information relating to the District is set forth in APPENDIX A - INFORMATION


CONCERNING THE DISTRICT; certain financial information relating to the District is set forth in APPENDIX B
– FINANCIAL INFORMATION CONCERNING THE DISTRICT; certain information concerning the District
Resolution and the District Bond are set forth in APPENDIX C – INFORMATION CONCERNING THE
DISTRICT RESOLUTION AND THE DISTRICT BOND; the proposed form of opinion of Bond Counsel with
respect to the Series 2018 Bonds is set forth in APPENDIX D - FORM OF OPINION OF BOND COUNSEL;
definitions of certain terms used in this Official Statement are set forth in APPENDIX E – DEFINITIONS; the form
of the continuing disclosure agreement of the District is set forth in APPENDIX F - FORM OF CONTINUING
DISCLOSURE AGREEMENT. Each of the Appendices to this Official Statement is an integral part of this Official
Statement and should be read in its entirety by any and all owners or prospective owners of the Series 2018 Bonds.

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SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2018 BONDS

General

The Series 2018 Bonds are payable only out of the Trust Estate created under the Indenture. The Indenture
creates a continuing pledge of and lien upon the Trust Estate to secure the full and final payment of the principal of,
premium, if any, and interest on all of the Series 2018 Bonds. The Series 2018 Bonds do not constitute a debt,
liability or loan of the credit of the Bank, the State or any political subdivision thereof under the constitution of the
State or a pledge of the full faith and credit and taxing power or moral obligation of the Bank, the State or any
political subdivision thereof other than the District. The Bank has no taxing power. The District Bond securing the
Series 2018 Bonds is, however, a general obligation of the District, secured by the full faith, credit and taxing power
of the District. The sources of payment of, and security for, the Series 2018 Bonds are more fully described below.

Under the Indenture, the Series 2018 Bonds are secured by a pledge to the Trustee of the District Bond and
all District Bond Payments, as described herein. In addition, the Indenture pledges to the payment of the Series
2018 Bonds all proceeds of the Trust Estate, including without limitation all cash and securities held in the Funds
and Accounts created by the Indenture, except for the Rebate Fund, together with investment earnings thereon and
proceeds thereof (except to the extent transferred to the Rebate Fund from such Funds and Accounts under the
Indenture), and all other funds, accounts and moneys pledged by the Bank to the Trustee as security under the
Indenture, to the extent of any such pledge.

The District Bond

From the proceeds of the Series 2018 Bonds, the Bank intends to purchase the District Bond from the
District and, upon purchase, will pledge to the Trustee the District Bond as described in APPENDIX C.

Provisions for Payment of the District Bond

The District Bond securing the Series 2018 Bonds is a general obligation of the District, secured by the full
faith, credit and taxing power of the District. The issuance of the District Bond has been authorized by a resolution
adopted by the Board of Trustees of the Jackson Public School District (the “Board”) on October 16, 2018, pursuant
to the Act (the “District Resolution”).

In the District Resolution, the District covenants to cause the City of Jackson, Mississippi to levy a direct,
continuing special tax upon all of the taxable property within the geographical limits of the District, adequate and
sufficient, after allowance shall have been made for the expenses of collection and delinquencies in the payment of
taxes, to produce sums required for the payment of the principal of, premium, if any, and the interest on the District
Bond. Said tax shall be levied annually by the City of Jackson, Mississippi and shall be extended upon the tax rolls
and collected in the same manner and at the same time as other taxes of the District are collected, and the rate of tax
which shall be so extended shall be sufficient in each year fully to produce the sums required as aforesaid, without
limitation as to time, rate or amount; provided, however, that such tax levy for any year shall be abated pro tanto to
the extent the District, on or prior to June 1 of that year, has transferred money to the Series 2018 Bond Fund (as
defined in the District Resolution) for the District Bond, or has made other provisions for funds, to be applied
toward the payment of the principal of and interest on the District Bond due during the ensuing fiscal year of the
District, in accordance with the provisions of the District Resolution. The avails of said tax are irrevocably pledged
in the District Resolution for the payment of the principal of, premium, if any, and interest on the District Bond as
the same shall mature and accrue.

See APPENDIX C – “INFORMATION CONCERNING THE DISTRICT RESOLUTION AND THE


DISTRICT BOND” for further description of the District Bond.

BOND INSURANCE

Bond Insurance Policy

Concurrently with the issuance of the Series 2018 Bonds, Build America Mutual Assurance Company
(“BAM”) will issue its Municipal Bond Insurance Policy (the “Policy”) for the Series 2018 Bonds maturing on

5
October 1 of the years 2021 through 2038, inclusive (collectively, the “Insured Bonds”). The Policy guarantees the
scheduled payment of principal of and interest on the Insured Bonds when due as set forth in the form of the Policy
included as APPENDIX G to this Official Statement.

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

Build America Mutual Assurance Company

BAM is a New York domiciled mutual insurance corporation and is licensed to conduct financial guaranty
insurance business in all fifty states of the United States and the District of Columbia. BAM provides credit
enhancement products solely to issuers in the U.S. public finance markets. BAM will only insure obligations of
states, political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the
exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No member of
BAM is liable for the obligations of BAM.

The address of the principal executive offices of BAM is: 200 Liberty Street, 27th Floor, New York, New
York 10281, its telephone number is: 212-235-2500, and its website is located at: www.buildamerica.com.

BAM is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of
the State of New York and in particular Articles 41 and 69 of the New York Insurance Law.

BAM’s financial strength is rated “AA/Stable” by S&P Global Ratings, a business unit of Standard &
Poor’s Financial Services LLC (“S&P”). An explanation of the significance of the rating and current reports may be
obtained from S&P at www.standardandpoors.com. The rating of BAM should be evaluated independently. The
rating reflects the S&P’s current assessment of the creditworthiness of BAM and its ability to pay claims on its
policies of insurance. The above rating is not a recommendation to buy, sell or hold the Series 2018 Bonds, and such
rating is subject to revision or withdrawal at any time by S&P, including withdrawal initiated at the request of BAM
in its sole discretion. Any downward revision or withdrawal of the above rating may have an adverse effect on the
market price of the Series 2018 Bonds. BAM only guarantees scheduled principal and scheduled interest payments
payable by the issuer of the Series 2018 Bonds on the date(s) when such amounts were initially scheduled to become
due and payable (subject to and in accordance with the terms of the Policy), and BAM does not guarantee the market
price or liquidity of the Series 2018 Bonds, nor does it guarantee that the rating on the Series 2018 Bonds will not be
revised or withdrawn.

Capitalization of BAM

BAM’s total admitted assets, total liabilities, and total capital and surplus, as of September 30, 2018 and as
prepared in accordance with statutory accounting practices prescribed or permitted by the New York State
Department of Financial Services were $524 million, $104.1 million and $419.9 million, respectively.

BAM is party to a first loss reinsurance treaty that provides first loss protection up to a maximum of 15%
of the par amount outstanding for each policy issued by BAM, subject to certain limitations and restrictions.

BAM’s most recent Statutory Annual Statement, which has been filed with the New York State Insurance
Department and posted on BAM’s website at www.buildamerica.com, is incorporated herein by reference and may
be obtained, without charge, upon request to BAM at its address provided above (Attention: Finance Department).
Future financial statements will similarly be made available when published.

BAM makes no representation regarding the Series 2018 Bonds or the advisability of investing in the
Series 2018 Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does
not accept any responsibility for the accuracy or completeness of this Official Statement or any information or
disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information
regarding BAM, supplied by BAM and presented under the heading “BOND INSURANCE”.

6
Additional Information Available from BAM

Credit Insights Videos. For certain BAM-insured issues, BAM produces and posts a brief Credit Insights
video that provides a discussion of the obligor and some of the key factors BAM’s analysts and credit committee
considered when approving the credit for insurance. The Credit Insights videos are easily accessible on BAM's
website at www.buildamerica.com/creditinsights. (The preceding website address is provided for convenience of
reference only. Information available at such address is not incorporated herein by reference.)

Credit Profiles. Prior to the pricing of bonds that BAM has been selected to insure, BAM may prepare a
pre-sale Credit Profile for those bonds. These pre-sale Credit Profiles provide information about the sector
designation (e.g. general obligation, sales tax); a preliminary summary of financial information and key ratios; and
demographic and economic data relevant to the obligor, if available. Subsequent to closing, for any offering that
includes bonds insured by BAM, any pre-sale Credit Profile will be updated and superseded by a final Credit Profile
to include information about the gross par insured by CUSIP, maturity and coupon. BAM pre-sale and final Credit
Profiles are easily accessible on BAM’s website at buildamerica.com/obligor/. BAM will produce a Credit Profile
for all bonds insured by BAM, whether or not a pre-sale Credit Profile has been prepared for such bonds. (The
preceding website address is provided for convenience of reference only. Information available at such address is
not incorporated herein by reference.)

Disclaimers. The Credit Profiles and the Credit Insights videos and the information contained therein are
not recommendations to purchase, hold or sell securities or to make any investment decisions. Credit-related and
other analyses and statements in the Credit Profiles and the Credit Insights videos are statements of opinion as of the
date expressed, and BAM assumes no responsibility to update the content of such material. The Credit Profiles and
Credit Insight videos are prepared by BAM; they have not been reviewed or approved by the issuer of or the
underwriter for the Series 2018 Bonds, and the issuer and underwriter assume no responsibility for their content.

BAM receives compensation (an insurance premium) for the insurance that it is providing with respect to
the Series 2018 Bonds. Neither BAM nor any affiliate of BAM has purchased, or committed to purchase, any of the
Series 2018 Bonds, whether at the initial offering or otherwise.

DESCRIPTION OF THE DISTRICT PROJECT

On June 7, 2018, the Board of Trustees of the District adopted (a) a resolution declaring its intent and
necessity for the issuance of a general obligation bond or bonds of the District, in one or more series, in a total
aggregate principal amount of not to exceed $65,000,000 for the purpose of financing the District Project; and (b) a
resolution providing for the calling and holding of a special election within the District on Tuesday, August 7, 2018
for the purpose of submitting to the qualified electors of the District the proposition of the issuance of a general
obligation bond or bonds of the District and directing that a Notice of Bond Election be published in accordance
with the District Bond Act.

A special election was held within the District on August 7, 2018 for the purpose of submitting to the
qualified electors of the District the proposition of whether or not such general obligation bond or bonds of the
District should be issued. On August 15, 2018 the Board of Trustees adopted a resolution (a) finding and
determining that the election was validly held pursuant to the District Bond Act and that at least three-fifths (3/5ths)
of the qualified electors of the District who voted on the proposition of the issuance of the general obligation bond
or bonds of the District voted in favor of the issuance of the general obligation bond or bonds of the District and (b)
authorizing the issuance of the District Bond to finance a portion of the District Project.

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The District will use the proceeds from the sale of the District Bond to the Bank for the purpose of
financing the cost of, including the costs of borrowing, of purchasing, erecting, repairing, equipping, remodeling and
enlarging school buildings and related facilities, and purchasing land therefor; establishing and equipping school
athletic fields and necessary facilities connected therewith, and purchasing land therefor, and providing necessary
water, light, heating, air conditioning and sewerage facilities for school buildings and purchasing land therefor, all
for the purpose of extending the useful life of many District owned facilities, eliminating overcrowding and
potentially dangerous conditions, and improving, repairing and upgrading school safety, including but not limited to,
the following generally described projects: (a) making various site improvements, constructing, erecting, repairing,
equipping, remodeling and enlarging school buildings, science labs, libraries, performing arts facilities, classrooms,
restrooms, school athletic fields and related facilities, constructing a new baseball/softball complex and a JROTC
building, (b) making other building additions, repairs, renovations and remodeling and providing and upgrading
necessary water, light, heating, air conditioning and sewerage facilities for school buildings and related facilities
throughout the District and (c) paying the costs of issuance of the Series 2018 Bonds and the District Bond.

RISKS TO THE OWNERS OF THE SERIES 2018 BONDS

General

The Series 2018 Bonds will be payable solely from the payments to be made by the Bank under the
Indenture. Pursuant to the Indenture, such payments are limited to District Bond Payments payable by the District
on the District Bond pursuant to the District Resolution. No reserve fund has been established for the payment of
debt service on the Series 2018 Bonds or the District Bond. Purchasers of the Series 2018 Bonds are advised of
certain risk factors with respect to the District Bond. The factors set forth below, among others, may affect the
security for the Series 2018 Bond.

In addition, purchasers of the Series 2018 Bonds are advised of certain additional information in connection
with the District as set forth in APPENDIX A and APPENDIX B.

District Bond

The ability of the Bank to pay the principal of, premium, if any, and interest on the Series 2018 Bonds
depends upon the receipt by the Bank of District Bond Payments from the District which is obligated under the
District Resolution to make such payments to the Bank. There is no Fund or Account established by the Indenture
which would be required to contain amounts to make up for any deficiencies in the event of one or more “defaults”
by the District in making the District Bond Payments, and there is no source from which the General Fund (as
defined herein) will be replenished except from the District Bond Payments and investment income on moneys in
the Funds and Accounts. Further, no reserve fund is created in the Indenture or the District Resolution to pay debt
service on the Series 2018 Bonds or the District Bond.

Tax Covenants

The Bank has covenanted under the Indenture that it will comply with certain requirements under the Code
(as defined herein) to ensure continuing exclusion from gross income for federal income tax purposes of interest on
the Series 2018 Bonds. Failure by the Bank to comply with such covenants could cause the interest on the Series
2018 Bonds to be taxable retroactive to the date of issuance of the Series 2018 Bonds. Further, the District has
covenanted in the District Resolution that it will comply with certain requirements under the Code to ensure
continuing exclusion from gross income for federal income tax purposes of interest on the Series 2018 Bonds.
Failure by the District to comply with such requirements could cause the interest on the Series 2018 Bonds to be
taxable retroactive to the date of issuance of the Series 2018 Bonds. See also “TAX MATTERS” herein.

Ratings

S & P Global Ratings (“S&P”), has provided a rating on the Series 2018 Bonds. See “RATINGS” herein.
No other ratings are being applied for by the District or the Bank.

There is no assurance that the ratings assigned to the Series 2018 Bonds at the time of issuance will not be
lowered or withdrawn at any time, the effect of which could adversely affect the market price for and the

8
marketability of the Series 2018 Bonds. If and when a Bondholder elects to sell a Series 2018 Bond prior to
maturity, there is no assurance that a market will be in existence for the purchase and sale of the Series 2018 Bonds,
and there is no assurance as to the purchase price which a buyer would be willing to pay.

Remedies; Litigation; Bankruptcy

The remedies available to the Trustee, to the Bank or to the owners of the Series 2018 Bonds upon an event
of default under the Indenture or under the terms of the District Bond purchased by the Bank 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 specifically 11 U.S.C. Sections 101 et seq. (the “Bankruptcy Code”),
the remedies provided in the Indenture and under the District Bond may not be readily available or may be limited.

The pledge of the avails of an unlimited, continuing, direct, special tax to be levied annually by the City of
Jackson on the taxable property within the District pursuant to the District Resolution and the District Bond Act for
payment of the District Bond granted by the Governing Body in the District Resolution may be limited by a number
of factors, including the ability to collect levied taxes. Under current law, such a pledge may be further limited by
the following: (a) statutory liens; (b) rights arising in favor of the United States of America or any agency thereof;
(c) prohibitions against assignment set forth in federal statutes; (d) constructive trusts, equitable liens or other rights
which might be impressed or conferred by any state or federal court in the exercise of equitable jurisdiction; (e) the
Bankruptcy Code’s treatment of taxes and other revenues of the District received within 90 days preceding and
following any effectual institution of bankruptcy, liquidation or reorganization proceedings by or against the
District; (f) rights of third parties in revenues converted to cash and not in the possession of the Trustee; and (g)
sales, liens and/or pledges made by the District. If an event of default does occur, it is uncertain that the Trustee
could successfully obtain an adequate remedy at law or in equity.

Furthermore, if a bankruptcy court concludes that the Trustee has “adequate protection,” it may enter orders
affecting the security of the Trustee, including orders providing for the substitution, subordination and sale of the
security of the Trustee. In addition, a reorganization plan may be adopted even though it has not been accepted by
the Trustee if the Trustee is provided with the benefit of its original lien or the “indubitable equivalent.” Thus, in the
event of the bankruptcy of the District, the amount realized by the Trustee may depend on the bankruptcy court’s
interpretation of “indubitable equivalent” and “adequate protection” under the then existing circumstances. The
bankruptcy court may also have the power to invalidate certain provisions of the District Resolution and the District
Bond or related documents that make bankruptcy and related proceedings by the District an event of default
thereunder. All of these events would adversely affect the payment of debt service on the Series 2018 Bonds.

Failure to Compel the Levy of Taxes on the District

The District Bond will be a general obligation of the District payable as to principal, premium, if any, and
interest out of and secured by an irrevocable pledge of the avails of a direct and continuing tax to be levied annually
without limitation as to rate or amount upon the taxable property within the geographical limits of the District. The
District will levy annually a special tax upon all taxable property within the geographical limits of the District
adequate and sufficient to provide for the payment of the principal of, premium, if any, and the interest on the Series
2018 Bonds as the same falls due.

The qualified electors of the State voted in a general election held on November 7, 1995, to amend the
Mississippi Constitution of 1890 (the “Constitution”) to add the following new Section 172A (the “Amendment”):

SECTION 172A. Neither the Supreme Court nor any inferior court of this state shall have the
power to instruct or order the state or any political subdivision thereof, or an official of the state or
any political subdivision, to levy or increase taxes.

The Amendment does not affect the underlying obligation to pay the principal of and interest on the District
Bond as it matures and becomes due, nor does it affect the obligation to levy a tax sufficient to accomplish that
purpose. However, even though it appears that the Amendment was not intended to affect remedies of a holder of
the District Bond in the event of a payment default, it potentially prevents such holder from obtaining a writ of
mandamus to compel the levying of taxes to pay the principal of and interest on the District Bond in a State court. It
is not certain whether the Amendment would affect the right of a federal court to direct the levy of a tax to satisfy a

9
contractual obligation. Other effective remedies are available to the holder of the District Bond in the event of a
payment default with respect to the District Bond. For example, such holder can seek a writ of mandamus to compel
the District to use any legally available moneys to pay the debt service on the District Bond; and if such writ of
mandamus is issued and public officials fail to comply with such writ, then such public officials may be held in
contempt of court. In addition, pursuant to Section 175 of the Constitution, all public officials who are guilty of
willful neglect of duty may be removed from office.

Additional Risks

The ability of the District to timely complete the District Project may be adversely affected by various
factors including: (a) estimating variations, (b) design and engineering variations, (c) changes to the scope,
scheduling or phasing of the District Project, (d) delays in contract awards, obtaining permits, approvals or review,
(e) material and/or labor shortages, (f) unforeseen site conditions, adverse weather conditions, natural disasters or
other casualty events, (g) contractor defaults, (h) labor disputes and work stoppages, (i) unanticipated levels of
inflation, (j) environment issues, (k) litigation, (l) tariffs or other taxes imposed by state or federal authorities, as
well as trade disputes among United States trading partners, and (m) bidding conditions through the District's
procurement process.

DESCRIPTION OF THE SERIES 2018 BONDS

General Description

The Series 2018 Bonds are issuable under the Indenture as fully registered bonds. When issued, the Series
2018 Bonds will be registered in the name of and held by Cede & Co., as nominee for DTC. Purchases of beneficial
interests from DTC in the Series 2018 Bonds will be made in book-entry-only form (without certificates) in the
denomination of $5,000 or any integral multiple thereof. See “DESCRIPTION OF THE SERIES 2018 BONDS -
Book-Entry-Only System” herein.

The Series 2018 Bonds will mature in the amounts and on the dates, and bear interest at the rates per
annum, set forth on the inside cover page of this Official Statement. Interest on the Series 2018 Bonds shall be
payable on April 1 and October 1 of each year, commencing April 1, 2019 (each, an “Interest Payment Date”).
Interest will be calculated on the basis of a 360-day year consisting of 12 thirty-day months.

Each Series 2018 Bond will be dated the date of delivery thereof. If a Series 2018 Bond is authenticated on
or prior to April 1, 2019, it shall bear interest from the initial date of delivery thereof. Each Series 2018 Bond
authenticated after April 1, 2019, shall bear interest from the most recent Interest Payment Date to which interest has
been paid as of the date of authentication of such Series 2018 Bond unless such Series 2018 Bond is authenticated
after the fifteenth day of the calendar month preceding an Interest Payment Date (the “Record Date”) and on or prior
to the next following Interest Payment Date, in which event the Series 2018 Bond will bear interest from such next
succeeding Interest Payment Date.

The principal of the Series 2018 Bonds will be payable upon maturity at the corporate trust office of the
Trustee in Jackson, Mississippi, and interest on the Series 2018 Bonds will be paid by check of the Trustee dated the
due date and mailed on each Interest Payment Date to the Registered Owners of record as of the close of business on
the most recent Record Date or, at the written election of the Registered Owner of $1,000,000 or more in aggregate
principal amount of Series 2018 Bonds delivered to the Trustee at least one Business Day prior to the Record Date
for which such election will be effective, by wire transfer to such Registered Owner on or before each Interest
Payment Date or by deposit into the account of such Registered Owner if such account is maintained by the Trustee.

So long as DTC or its nominee is the Registered Owner of the Series 2018 Bonds, payments of the
principal of, premium, if any, and interest on the Series 2018 Bonds will be made directly by the Trustee by wire
transfer of funds to Cede & Co., as nominee for DTC. Disbursement of such payments to Direct Participants will be
the sole responsibility of DTC, and the ultimate disbursement of such payments to the Beneficial Owners of the
Series 2018 Bonds will be the responsibility of the Direct Participants and the Indirect Participants.

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Book-Entry-Only System

The information provided in numbered paragraphs 1 through 11 under this caption has been provided by
DTC for use in securities offering documents. No representation is made by the Bank, the Underwriters, the District
or the Trustee as to the accuracy or adequacy of such information, or as to the absence of material adverse changes
in such information subsequent to the date hereof.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the
Series 2018 Bonds (the “Bonds”). The Bonds will be issued as fully-registered securities registered in the name of
Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative
of DTC. One fully registered bond certificate will be issued for each maturity as set forth on the inside cover page
hereof, each in the aggregate principal amount of such maturity, will be deposited with DTC.

2. 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 over 3.5 million issues of U.S. and non-U.S.
equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that
DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among
Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized
book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical
movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC 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 corporation that clear through or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). DTC has Standard & Poor’s rating of: AA+. The DTC Rules applicable to its
Participants are on file with the Securities and Exchange Commission. More information about DTC can be found
at www.dtcc.com.

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

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

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct


Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from
time to time. Beneficial Owners of Bonds may wish to take certain steps to augment transmission to them of notices
of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to

11
the security documents. For example, Beneficial Owners may wish to ascertain that the nominee holding the Bonds
for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be
provided directly to them.

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

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
the Bonds, unless authorized by a Direct Participant in accordance with DTC's Money Market Instrument ("MMI")
procedures. Under its usual procedure, DTC mails an Omnibus Proxy to Issuer 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 Bonds are credited on the Record Date identified in a listing attached to the Omnibus Proxy.

8. Principal and interest payments on the Bonds will be made by the Paying Agent 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 District or the
Paying Agent on payable date in accordance with their respective holdings shown on DTC’s records. Payments by
Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered in “street name”, and will be the
responsibility of such Participant and not of DTC, the Paying Agent, or the District, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or
such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Paying
Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

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

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

11. The information in this section concerning DTC and DTC’s book-entry system has been obtained
from sources that the Bank believes to be reliable, but the Bank takes no responsibility for the accuracy thereof.

THE BANK, THE TRUSTEE, THE DISTRICT AND THE UNDERWRITERS CANNOT AND DO
NOT GIVE ANY ASSURANCES THAT THE DIRECT PARTICIPANTS OR THE INDIRECT
PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE SERIES 2018 BONDS
(a) PAYMENTS OF PRINCIPAL OF OR INTEREST AND PREMIUM, IF ANY, ON THE SERIES 2018
BONDS; (b) CERTIFICATES REPRESENTING AN OWNERSHIP INTEREST OR OTHER
CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2018 BONDS; OR (c)
REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE
REGISTERED OWNERS OF THE SERIES 2018 BONDS, OR THAT THEY WILL DO SO ON A TIMELY
BASIS OR THAT DTC OR DIRECT OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE
MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT “RULES” APPLICABLE
TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION AND THE
CURRENT “PROCEDURES” OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS
ARE ON FILE WITH DTC.

NEITHER THE BANK, THE DISTRICT, THE TRUSTEE NOR THE UNDERWRITERS WILL
HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO SUCH DTC PARTICIPANTS OR THE
BENEFICIAL OWNERS WITH RESPECT TO (a) THE SERIES 2018 BONDS; (b) THE ACCURACY OF
ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (c) THE PAYMENT BY ANY

12
DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE
PRINCIPAL AMOUNT OF OR INTEREST OR PREMIUM, IF ANY, ON THE SERIES 2018 BONDS;
(d) THE DELIVERY BY ANY DTC PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER
WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN
TO BONDHOLDERS; (e) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT
IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2018 BONDS; OR (f) ANY
CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER.

So long as Cede & Co. is the registered holder of the Series 2018 Bonds as nominee of DTC, references
herein to the Holders or holders or registered owners of the Series 2018 Bonds means Cede & Co. and not the
Beneficial Owners of the Series 2018 Bonds.

Redemption

If the District directs the Bank to redeem the Series 2018 Bonds pursuant to the provisions of the District
Resolution, the Bank has agreed under the Indenture to accept redemption and to redeem the Series 2018 Bonds in
accordance with the Indenture.

Optional Redemption. The Series 2018 Bonds (or any portions thereof in integral multiples of $5,000
each) which mature on or after October 1, 2029 are subject to optional redemption prior to their stated date of
maturity in whole or in part, in principal amounts and maturities as selected by the Bank on any date on or after
October 1, 2028 at par, plus accrued interest to the date of redemption thereof. Selection of the Series 2018 Bonds
to be redeemed within a maturity will be made by lot by the Trustee.

Notice of Redemption. Notice of the call for any redemption, identifying the Series 2018 Bonds to be
redeemed (which may be a conditional notice of redemption), will be given by the Trustee at least 30 days but not
more than 45 days prior to the date fixed for redemption by mailing a copy of the redemption notice by registered or
certified mail to the Registered Owner of each Series 2018 Bond to be redeemed at the address shown on the
registration records of the Bank. Failure to mail such notice to any particular owner of Series 2018 Bonds, or any
defect in the notice mailed to any such owner of Series 2018 Bonds, will not affect the validity of the call for the
redemption of any other Series 2018 Bonds.

Redemption Payments. The Trustee is authorized and directed under the Indenture to apply funds
deposited with the Trustee by the Bank in an amount sufficient to pay the Redemption Price of the Series 2018
Bonds or portions thereof called, together with accrued interest thereon to the redemption date. If proper notice of
redemption by mailing has been given as provided in the Indenture and sufficient funds for redemption shall be on
deposit with the Trustee as aforesaid, interest on the Series 2018 Bonds or portions thereof thus called shall no
longer accrue after the date fixed for redemption. No payment shall be made by the Trustee upon any Series 2018
Bonds or portion thereof called for redemption until such Series 2018 Bonds or portion thereof shall have been
delivered for payment or cancellation or the Trustee shall have received the items required by the Indenture with
respect to any mutilated, lost, stolen or destroyed Series 2018 Bonds.

13
APPLICATION OF THE PROCEEDS OF THE SERIES 2018 BONDS

Estimated Sources of Funds

Par Amount $65,000,000.00


Net Original Issue Premium 6,459,685.35
Total Sources of Funds $71,459,685.35
Estimated Uses of Funds
For deposit to the Purchase Account for
the purchase of the District Bond $70,416,858.90
For deposit in the Bond Issuance
346,250.00
Expense Account for payment of the
Costs of Issuance1
Underwriters’ Discount 482,116.72
Municipal Bond Insurance Policy
premium paid to BAM directly by the
Underwriters 214,459.73
Total Uses of Funds $71,459,685.35

__________________
1
Includes, among other expenses, rating agency fees, and municipal advisor and legal fees and expenses. Payment
of such fees and expenses is contingent upon the issuance of the Series 2018 Bonds.

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DEBT SERVICE REQUIREMENTS FOR THE SERIES 2018 BONDS

The following table sets forth the principal and interest requirements on the Series 2018 Bonds:

Fiscal Year Total Debt Service


Ending on the
June 30 Principal Interest1 Series 2018 Bonds

2019 $ 0.00 $1,078,361.39 $1,078,361.39


2020 1,960,000.00 3,142,850.00 5,102,850.00
2021 2,050,000.00 3,052,400.00 5,102,400.00
2012 2,155,000.00 2,947,275.00 5,102,275.00
2023 2,265,000.00 2,836,775.00 5,101,775.00
2024 2,380,000.00 2,720,650.00 5,100,650.00
2025 2,500,000.00 2,598,650.00 5,098,650.00
2026 2,630,000.00 2,470,400.00 5,100,400.00
2027 2,765,000.00 2,335,525.00 5,100,525.00
2028 2,905,000.00 2,193,775.00 5,098,775.00
2029 3,055,000.00 2,044,775.00 5,099,775.00
2030 3,215,000.00 1,888,025.00 5,103,025.00
2031 3,375,000.00 1,723,275.00 5,098,275.00
2032 3,550,000.00 1,550,150.00 5,100,150.00
2033 3,735,000.00 1,368,025.00 5,103,025.00
2034 3,925,000.00 1,176,525.00 5,101,525.00
2035 4,105,000.00 996,300.00 5,101,300.00
2036 4,270,000.00 828,800.00 5,098,800.00
2037 4,475,000.00 625,931.25 5,100,931.25
2038 4,715,000.00 384,693.75 5,099,693.75
2039 4,970,000.00 130,462.50 5,100,462.50

TOTAL $65,000,000.00 $38,093,623.89 $103,093,623.89


__________________________________

1
Calculated based on interest rates set forth on the inside cover page hereof.

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15
THE MISSISSIPPI DEVELOPMENT BANK

General

The Bank was created in 1986 and is organized and existing under and by virtue of the Bank Act as a
separate body corporate and politic of the State for the public purposes set forth in the Bank Act. The Bank is an
independent public body created solely to accomplish the purposes of the State as contained in the Bank Act and has
no taxing power.

The purpose of the Bank is to foster and promote, in accordance with the Bank Act, the provision of
adequate markets and facilities for the borrowing of funds for public purposes and purposes of (a) any county,
municipality, utility district, regional solid waste authority, county cooperative service district or political
subdivision of the State, (b) the State, or any agency thereof, (c) the institutions of higher learning of the State, (d)
any education building corporation established for institutions of higher learning, or (e) any other governmental unit
created under State law, including the District.

THE FULL FAITH AND CREDIT AND TAXING POWER OF THE STATE ARE NOT PLEDGED
TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON ANY OF THE
SERIES 2018 BONDS, AND THE SERIES 2018 BONDS ARE NOT A DEBT, LIABILITY, LOAN OF THE
CREDIT, MORAL OBLIGATION OR PLEDGE OF THE FULL FAITH AND CREDIT AND TAXING
POWER OF THE STATE. THE BANK DOES NOT HAVE TAXING POWERS.

Under the Bank Act, the Bank is granted the power to borrow money and issue its bonds in such principal
amounts as it shall deem necessary to provide funds to accomplish a public purpose or purposes of the State
provided for under the Bank Act, including the purchasing of securities of local governmental units (as defined in
the Bank Act) and the making of loans to such local governmental units.

Organization and Membership of the Bank

The Bank is governed by a nine (9) member Board of Directors (the “Board of Directors”). The members
of the Board of Directors are elected by the members of the Mississippi Business Finance Corporation (the
“MBFC”) at the time and place fixed by the MBFC’s by-laws. Appointments are for terms of one year. Members
of the Board of Directors serve until they are replaced or re-appointed. The members of the Board of Directors as of
the date of this Official Statement are as follows:

NAME OCCUPATION TERM

Carolyn Boteler Owner, TempStaff August 1, 2018-July 31, 2019

Jabari Edwards Owner J5 GBL Construction Co. August 1, 2018-July 31, 2019

William L. Freeman, Jr. Retired Bank President August 1, 2018-July 31, 2019

Bobby James Operations Manager, Atmos Energy August 1, 2018-July 31, 2019

William Griffin Owner, Griffin & Griffin Exploration, LLC August 1, 2018-July 31, 2019

Gary Harkins Real Estate Developer August 1, 2018-July 31, 2019

Joel Horton Retired Bank President August 1, 2018-July 31, 2019

William D. Sones Bank Chairman August 1, 2018-July 31, 2019

Mark Wiggins Retired Business Owner August 1, 2018-July 31, 2019

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The operations of the Bank are administered by E.F. “Buddy” Mitcham, Executive Director. Mr. Mitcham
is a graduate of Mississippi State University with a degree in Business Administration.

Prior Bonds of Bank

The purpose of the Bank is to foster and promote, in accordance with the Bank Act, the provision of
adequate markets and facilities for the borrowing of funds for public purposes by any Local Governmental Units.
As of November 1, 2018, the Bank has previously issued bonds for various purposes totaling in principal
approximately $8,447,377,402.00. Of such amount, approximately $3,028,361,897.30 was outstanding as of
November 1, 2018.

The Bank expects to issue additional special obligation bonds in the future for other purposes authorized
under the Bank Act.

The faith, credit and taxing power of the State and the Bank are not pledged to the payment of the principal
of, redemption premium, if any, and interest on any of the bonds issued or planned for issuance by the Bank and all
such bonds are not a debt, liability, loan of the credit or pledge of the faith and credit of the State or the Bank.

AUTHORIZATION OF SERIES 2018 BONDS


General
The Bank has determined to purchase the District Bond from the proceeds received upon the issuance of
the Series 2018 Bonds. Upon the execution by the District of the District Bond Purchase Agreement with the Bank
prior to or as of the date of the approval of the sale of the Series 2018 Bonds, the District will be obligated to sell the
District Bond to the Bank in accordance with the requirements of the Act and in accordance with the District Bond
Purchase Agreement.
The Bank Act provides that the District Bond purchased by the Bank, upon delivery to the Bank, must be
accompanied by all documentation required by the Board of Directors of the Bank, including the approving opinions
of Bond Counsel. The Bank will be prepared to cause the purchase price of the District Bond to be paid to the
District promptly after the receipt of such proceeds by the Bank. Under the Indenture, any purchase of the District
Bond is subject to the receipt by the Trustee of certain documents and opinions as described in the Indenture.

FUNDS AND ACCOUNTS

Creation of Funds and Accounts

The Indenture establishes the following special Funds and Accounts to be held by the Trustee:

General Fund - comprised of the following:

(a) General Account

(b) Redemption Account

(c) Purchase Account

(d) Bond Issuance Expense Account

Deposit of Net Proceeds of the Series 2018 Bonds and Other Receipts

The Trustee will deposit the net proceeds from the sale of the Series 2018 Bonds as follows:

(a) To the Bond Issuance Expense Account, the amount of $346,250.00 (which does not include the
Underwriters’ discount of $482,116.72 or the Municipal Bond Insurance Policy premium paid to BAM directly by
the Underwriters of $214,459.73) to pay the Costs of Issuance of the Series 2018 Bonds and the District Bond; and

(b) To the Purchase Account of the General Fund, the sum of $70,416,858.90 to be used to purchase
the District Bond and to be used by the District to pay the costs of the District Project.

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The Trustee will deposit District Bond Payments and other receipts (except the proceeds of the Series 2018
Bonds, interest earnings on any amount in the Rebate Fund and moneys received by the Bank from the sale of the
District Bond) into the General Account of the General Fund based on the amount due under the District Bond.

OPERATION OF FUNDS AND ACCOUNTS

General Fund

General Account. The Trustee will make the following payments from the General Account on the
specified dates and, if there are not sufficient funds to make all the payments required, with the following order of
priority:

(a) On or before each Interest Payment Date, to the Registered Owners such amount (including
Investment Securities held by the Trustee maturing or callable on or before the applicable Interest Payment Date) as
shall be necessary to pay the principal and interest coming due on the Series 2018 Bonds on such Interest Payment
Date;
(b) At such times as shall be necessary, to pay Program Expenses;
(c) On or before thirty (30) days after each anniversary of the issuance of the Series 2018 Bonds, the
amounts, if any, to be transferred to the Rebate Fund as provided in Section 6.09 of the Indenture and the Tax
Certificate; and
(d) After making such payments in paragraphs (a) through (c) above, the Trustee will make a
determination of the amounts reasonably expected to be received in the form of District Bond Payments in the
succeeding twelve (12) months and shall transfer all moneys in the General Account which, together with such
expected receipts for the succeeding twelve (12) months are in excess of the amounts needed to pay principal and
interest on the Series 2018 Bonds within the immediately succeeding twelve month period to the District at the
request of the District with the prior written approval of the Bank.

Redemption Account

The Trustee will deposit in the Redemption Account all monies received upon the sale or redemption prior
to maturity of the District Bond or otherwise received under the Indenture and will disburse the funds in the
Redemption Account to redeem Series 2018 Bonds of such maturity or maturities as directed by an Authorized
Officer if such Series 2018 Bonds are then subject to redemption.

Purchase Account

Upon submission of duly authorized written requisitions of an Authorized Officer of the Bank stating that
all requirements for purchase under the Act, the Indenture and the established policies of the Bank have been or will
be met, the Trustee will disburse the amounts held in the Purchase Account for the purchase of the District Bond.
Upon purchase of the District Bond, the District will provide for the deposit of such funds in the 2018 Construction
Fund of the District established under the District Resolution, which fund will be used by the District to finance the
District Project.

Any amounts remaining in the Purchase Account after the purchase of the District Bond shall be transferred
to the General Account.

Bond Issuance Expense Account

Upon the Trustee’s receipt of acceptable invoices and the written authorization of the Superintendent of
Schools or the Chief Financial Officer of the District and the Executive Director of the Bank, the Trustee will
disburse the amounts held in the Bond Issuance Expense Account for the payment or reimbursement of the costs
related to the authorization, sale, validation, issuance and/or delivery of the Series 2018 Bonds and the District
Bond, which items of expense shall include, but not be limited to, printing costs, costs of reproducing documents,
filing and recording fees, initial fees and charges of the Trustee, legal fees and charges, professional consultants’
fees, costs of credit ratings, fees and charges for execution, transportation and safekeeping of the Series 2018 Bonds,
credit enhancements or liquidity facility fees, fees and expenses of the Underwriters, and other costs, charges and

18
fees in connection with the foregoing. On the date which is 60 days after the date of issuance of the Series 2018
Bonds, any amounts remaining in the Bond Issuance Expense Account will be transferred to the General Account.

Rebate Fund

The Trustee will establish and maintain, so long as any Series 2018 Bonds are outstanding and are subject
to a requirement that arbitrage profits be rebated to the United States of America, a separate fund to be known as the
“Rebate Fund.” The Trustee shall make information regarding the Series 2018 Bonds and investments thereunder
available to the Bank and shall make deposits and disbursements from the Rebate Fund in accordance with the Tax
Certificate received from the Bank pursuant to Sections 5.09 and 8.02 of the Indenture, shall invest the Rebate Fund
as directed by the Bank and shall deposit income from such investments immediately upon receipt thereof in the
Rebate Fund. Anything in the Indenture to the contrary notwithstanding, the provisions of Section 6.09(a) of the
Indenture may be superseded or amended by an amended Tax Certificate accompanied by an Opinion of Bond
Counsel addressed to the Trustee to the effect that the provisions of the amended Tax Certificate will not adversely
affect the exclusion from gross income for federal income tax purposes of the interest on the Series 2018 Bonds.

Not more than sixty (60) days after five years following the date of delivery of the Series 2018 Bonds, and
at intervals of every five years thereafter, upon written request of the Bank in accordance with the Tax Certificate,
the Trustee will pay to the United States of America one hundred percent (100%) of the amount required to be paid
to the United State of America as of such payment date provided that direction from the Bank for transfer of such
amount to the Rebate Fund has been previously received by the Trustee pursuant to the Indenture, and further
provided that funds were available in the General Account to fund one hundred percent (100%) of the amount
required to be on deposit in the Rebate Fund as of such payment date. Each payment to the United State of America
will be accompanied by a statement of the Bank summarizing the determination of the amount of such payment,
together with copies of any reports originally filed with the Internal Revenue Service with respect to the Series 2018
Bonds.

With respect to the Rebate Fund, the Bank may direct the Trustee to proceed other than as set forth in the
Indenture and described above by delivering to the Trustee a new Tax Certificate accompanied by an Opinion of
Bond Counsel to the effect that compliance with such memorandum will not adversely affect the excludability from
gross income for federal income tax purposes of the interest on the Series 2018 Bonds.

Moneys to be Held in Trust

All moneys required to be deposited with or paid to the Trustee for the account of any Fund or Account
established under any provision of the Indenture will be held by the Trustee in trust and applied in accordance with
the provisions of the Indenture, except for moneys held pursuant to any Rebate Fund and any Accounts created
thereunder and will, while held by the Trustee, constitute part of the Trust Estate and be subject to the security
interest created under the Indenture and will not be subject to any lien or attachment by any creditor of the Bank.

Amounts Remaining in Funds or Accounts

Any amounts remaining in any Fund or Account after full payment of the Series 2018 Bonds and the fees,
charges (including any required rebate to the United States of America), Program Expenses and expenses of the
Trustee and all other amounts due and owing under the Indenture will be distributed to the District, except for any
moneys owing to the Bank, which will be paid to such party, and except as otherwise provided in the Indenture.

Investment of Funds

Any moneys held as part of any Fund or Account created under or pursuant to Article VI of the Indenture
and the Rebate Fund shall be invested or reinvested by the Trustee as continuously as reasonably possible in such
Investment Securities as may be directed by the District. All such investments shall at all times be a part of the Fund
or Account in which the moneys used to acquire such investments had been deposited; and, except as provided in
Article VI of the Indenture, all income and profits on such investments, other than from moneys on deposit in the
Rebate Fund or any Account created thereunder, shall be deposited as received in the General Account of the
General Fund for the Funds and Accounts for the Series 2018 Bonds. The Trustee may make any and all such
investments through its bond department or through the bond department of any financial institution which is an

19
affiliate of the Trustee and may trade with itself or any of its affiliates in doing so. Moneys in separate Funds and
Accounts for the Series 2018 Bonds may not be commingled for the purpose of investment or deposit. Any
investment losses shall be charged to the Fund or Account in which moneys used to purchase such investment had
been deposited. For so long as the Trustee is in compliance with the provisions of Section 8.01 of the Indenture, the
Trustee shall not be liable for any investment losses. Moneys in any Fund or Account shall be invested in
Investment Securities with a maturity date, or a redemption date, which shall coincide as nearly as practicable with
times at which moneys in such Funds or Accounts will be required for the purposes thereof. The Trustee shall sell
and reduce to cash a sufficient amount of such Investments in the respective Fund or Account whenever the cash
balance therein is insufficient to pay the amounts contemplated to be paid therefrom at the time those amounts are to
be paid. All investment income from the assets held in any Fund or Account, except for the Rebate Fund and any
Accounts created thereunder, will be added to the General Account of the General Fund.

The Bank (a) has certified in the Indenture to the owners of the Series 2018 Bonds, from time to time
Outstanding, that moneys on deposit in any Fund or Account in connection with the Series 2018 Bonds, whether or
not such moneys were derived from the proceeds of the sale of the Series 2018 Bonds or from any other sources, are
not intended to be used in a manner which will cause the interest on the Series 2018 Bonds to lose the excludability
from gross income for federal income tax purposes; and (b) has covenanted in the Indenture with the owners of the
Series 2018 Bonds, from time to time Outstanding, that, so long as any of the Series 2018 Bonds remain
Outstanding, moneys on deposit in any Fund or Account established in connection with the Series 2018 Bonds,
whether or not such moneys were derived from the proceeds of the sale of the Series 2018 Bonds or from any other
source, will not be used in any manner which will cause the interest on the Series 2018 Bonds to become subject to
federal income taxation.

THE INDENTURE

The following is a summary of certain provisions of the Indenture. This summary does not purport to be
comprehensive or definitive. All references herein to the Indenture are qualified in their entirety by reference to
such document, a copy of which may be obtained upon written request to the Bank. Capitalized terms used and not
defined herein shall have the meanings ascribed to them in APPENDIX E hereto and the Indenture.

Provisions for Issuance of Refunding Bonds

(a) All or any part of one or more series of Refunding Bonds may be issued under the Indenture,
authenticated and delivered upon original issuance to refund all or any part of the Outstanding Bonds. Refunding
Bonds shall be issued in a principal amount sufficient, together with other monies available therefor, to accomplish
such refunding and to make such deposits required by the provisions of the Act, the Indenture and by the
Supplemental Indenture authorizing said Refunding Bonds.

(b) Refunding Bonds may be authenticated and delivered only upon receipt by the Trustee (in addition
to the receipt by the Trustee of the documents required by Section 2.04 of the Indenture) of:

(i) Irrevocable instructions to the Trustee, satisfactory to it, to give due notice of redemption
of all the Series 2018 Bonds to be refunded on the redemption date specified in such instructions;

(ii) Irrevocable instructions to the Trustee, satisfactory to it, to give due notice provided for
in Section 4.05 of the Indenture to the owners of the Series 2018 Bonds being refunded (which may be a
conditional notice of redemption); and

(iii) Either (A) monies in an amount sufficient to effect timely payment at the Redemption
Price or principal payment amount of the Series 2018 Bonds to be refunded or paid, respectively, together
with accrued interest on such Series 2018 Bonds to the redemption or maturity date and all necessary and
appropriate fees and expenses of the Trustee, which monies shall be held by the Trustee or an escrow agent
approved by the Bank in a separate account irrevocably in trust for and assigned to the respective owners of
the Series 2018 Bonds to be refunded or paid, or (B) Governmental Obligations in such principal amounts,
of such maturities, bearing such interest, and otherwise having such terms and qualifications, as shall be
necessary to comply with the provisions of Article IX of the Indenture which Governmental Obligations
shall be held in trust and used only as provided in said Article.

20
Mutilated, Lost, Stolen or Destroyed Bonds

If any Bond is mutilated, lost, stolen or destroyed, the Bank shall execute and the Trustee shall authenticate
a new Bond or Bonds of the same maturity and denomination, as that mutilated, lost, stolen or destroyed; provided
that in the case of any mutilated Bond, it shall first be surrendered to the Trustee, and in the case of any lost, stolen
or destroyed Bond, there shall be first furnished to the Trustee evidence of such loss, theft or destruction satisfactory
to the Trustee, together with security and/or indemnity satisfactory to the Trustee. In the event any such Bond shall
have matured, instead of issuing and authenticating a duplicate Bond, the Trustee may pay the same without
surrender thereof; provided, however, that in the case of a lost, stolen or destroyed Bond, there shall be first
furnished to the Trustee evidence of such loss, theft or destruction satisfactory to the Trustee together with security
and/or indemnity satisfactory to the Trustee. The Trustee may charge the owner of such Bond its reasonable fees
and expenses in connection with replacing any Bonds mutilated, lost, stolen or destroyed. Any Bond issued as
described in this paragraph shall be deemed part of the original series of the Bonds in respect of which it was issued
and a contractual obligation of the Bank replacing the obligation evidenced by such mutilated, lost, stolen or
destroyed Bond.

Registration, Transfer and Exchange of Bonds; Persons Treated as Owners

The Bank agrees to cause records for registration and for the transfer of the Bonds to be kept by the Trustee
at its Principal Office, and the Trustee is constituted and appointed the bond registrar of the Bank for the Bonds. At
reasonable times and under reasonable regulations established by the Trustee, said records may be inspected and
prepared by the Bank or by Beneficial Owners (or a designated representative thereof) of 5% or more in aggregate
principal amount of the Bonds then Outstanding.

Upon surrender for transfer of any Bond at the Principal Office of the Trustee, duly endorsed by, or
accompanied by a written instrument or instruments of transfer in a form satisfactory to the Trustee and duly
executed by the Registered Owner or his attorney duly authorized in writing, the Bank shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same maturity
for a like aggregate principal amount. The Bonds may be transferred or exchanged without cost to the Bondholders
except for any tax or governmental charge required to be paid with respect to the transfer or exchange. The
execution by the Bank of any Bond of any denomination shall constitute full and due authorization of such
denomination and the Trustee shall thereby be authorized to authenticate and deliver such Bond.

The Trustee shall not be required (a) to register, transfer or exchange any Bond during a period of 15 days
next preceding mailing of a notice of redemption of any Bonds, or (b) to register, transfer or exchange any Bonds
selected, called or being called for redemption in whole or in part after mailing notice of such call.

The person in whose name a registered Bond shall be registered shall be deemed and regarded as the
absolute owner thereof for all purposes, and payment of principal, premium, if any, and interest thereon, shall be
made only to or upon the order of the Registered Owner thereof or his legal representative, but such registration may
be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.

All Bonds delivered upon any transfer or exchange shall be valid obligations of the Bank, evidencing the
same debt as the Bonds surrendered, shall be secured by the Indenture and shall be entitled to all of the security and
benefits of the Indenture to the same extent as the Bonds surrendered.

Nonpresentment of Bonds

In the event any Bond shall not be presented for payment when the principal thereof comes due, either at
maturity, or otherwise, if funds sufficient to pay such Bond shall have been made available to the Trustee for the
benefit of the Registered Owner thereof, all liability of the Bank to the owner thereof for the payment of such Bond
shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Trustee to
hold such funds for four years for the benefit of the Registered Owner of such Bond, without liability for interest
thereon to such owner, who shall thereafter be restricted exclusively to such funds, for any claim of whatever nature
on his part under the Indenture or on, or with respect to, said Bond.

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Any money so deposited with and held by the Trustee not so applied to the payment of Bonds within four
years after the date on which the same shall become due shall be repaid by the Trustee to the Bank, and thereafter
the Bondholders shall be entitled to look only to the Bank for payment, and then only to the extent of the amount so
repaid, and the Bank shall not be liable for any interest thereon to the Bondholders and shall not be regarded as a
trustee of such money.

Other Obligations Payable from Revenues

The Bank shall grant no liens or encumbrances on or security interests in the Trust Estate (other than those
created by the Indenture), and, except for the Bonds, shall issue no bonds or other evidences of indebtedness payable
from the Trust Estate.

Limitations on Obligations of Bank

The Series 2018 Bonds, together with interest thereon, shall be limited obligations of the Bank payable
solely from the Revenues and shall be a valid claim of the respective owners thereof only against the Funds and
Accounts, other than the Rebate Fund and any Accounts created thereunder, established under the Indenture and the
District Bond acquired by the Trustee, all of which are assigned and pledged under the Indenture for the equal and
ratable payment of the Series 2018 Bonds issued pursuant to the Indenture and shall be used for no other purpose
than the payment of the Series 2018 Bonds issued pursuant to the Indenture, except as may be otherwise expressly
authorized in the Indenture. The Series 2018 Bonds do not constitute a debt or liability or moral obligation of the
State or of any political subdivision thereof under the constitution of the State or a pledge of the faith and credit or
taxing power of the State or any political subdivision thereof (except for the District), but shall be payable solely
from the Revenues and funds pledged therefor in accordance with the Indenture, including, without limitation, the
avails of the full faith and credit of the District derived or to be derived from District Bond payments made in
respect of the District Bond pursuant to the District Resolution. The issuance of the Series 2018 Bonds under the
provisions of the Act does not directly, indirectly or contingently, obligate the State or any political subdivision
thereof (except for the District) to levy any form of taxation for the payment thereof or to make any appropriation
for their payment and such Series 2018 Bonds and the interest payable thereon do not now and shall never constitute
a debt of the State or any political subdivision thereof (except for the District) within the meaning of the constitution
of the State or the statutes of the State and do not now and shall never constitute a charge against the credit or taxing
power of the State or any political subdivision thereof (except for the District); provided, however, that the District
Bond is secured by the full faith and credit of the District. Neither the State nor any agent, attorney, member or
employee of the State or of the Bank, shall in any event be liable for the payment of the principal of, and premium,
if any, or interest on the Series 2018 Bonds or damages, if any, for the nonperformance of any pledge, mortgage,
obligation or agreement of any kind whatsoever which may be undertaken by the Bank. No breach by the Bank of
any such pledge, mortgage, obligation or agreement may impose any liability, pecuniary or otherwise, upon the
State or any of the State's or the Bank's agents, members, attorneys, and employees or any charge upon the general
credit of the State or a charge against the taxing power of the State or any political subdivision thereof (except for
the District).

In the Bank Act, the State has pledged and agreed with the holders of any Series 2018 Bonds that the State
will not limit or alter the rights hereby vested in the Bank to fulfill the terms of any agreements made with the said
Bondholders or in any way impair the rights and remedies of such holders until such Series 2018 Bonds, together
with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of such holders of Series 2018 Bonds are fully met and
discharged.

Payment of Debt Service

The Bank covenants and agrees under the Indenture that it will promptly pay the principal of and interest
on every Bond issued under the Indenture at the place, on the dates and in the manner provided in the Indenture and
in said Bonds according to the true intent and meaning thereof, provided that the principal and interest are payable
by the Bank solely from the Revenues and any other funds or assets constituting the Trust Estate pledged to the
Trustee as security by the Bank to the extent of that pledge.

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Performance of Covenants

The Bank covenants and agrees that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in the Indenture and every Bond executed, authenticated and
delivered under the Indenture and in all of its proceedings pertaining thereto. The Bank covenants and agrees under
the Indenture that it is duly authorized under the constitution and laws of the State, including particularly the Act, to
issue the Bonds authorized and to execute the Indenture and to pledge the Revenues and all other property pledged
in the manner and to the extent set forth in the Indenture; that all action on its part for the issuance of the Bonds and
the execution and delivery of the Indenture has been duly and effectively taken, and that the Bonds in the possession
of the owners thereof are and will be valid and enforceable limited obligations of the Bank according to the terms
thereof and of the Indenture.

Discharge of Indenture

Except as provided herein below, if payment or provision for payment is made to the Trustee of the
principal of, premium, if any, and interest due and to become due on the Bonds at the times and in the manner
stipulated therein, and there is paid or caused to be paid to the Trustee all sums of money due and to become due
according to the provisions of the Indenture, and all other amounts due under the Indenture have been paid in full,
then the Indenture and the Trust Estate and rights granted under the Indenture shall cease, terminate and be void,
whereupon the Trustee shall cancel and discharge the lien of the Indenture and execute and deliver to the Bank such
instruments in writing as shall be requisite to cancel and discharge the lien of the Indenture, and release, assign and
deliver unto the Bank any and all estate, right, title and interest in and to any and all rights assigned or pledged to the
Trustee under the Indenture or otherwise subject to the lien of the Indenture, except moneys or securities held by the
Trustee for the payment of the principal of, premium, if any, and interest on the Bonds.

Any Bond shall be deemed to be paid within the meaning of the Indenture when (a) payment of the
principal of such Bond, premium, if any, and interest thereon to the due date thereof (whether such due date be by
reason of maturity or upon redemption as provided in the Indenture or otherwise), either (i) shall have been made or
caused to have been made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably
depositing with the Trustee or other financial institution (which must meet the requirements of Section 11.07 of the
Indenture) which provides services as escrow agent for the Bank (for purposes hereof, an “Escrow Agent”), in trust
and exclusively for such payment, (A) moneys sufficient to make such payment or (B) Governmental Obligations
maturing as to principal and interest in such amounts and at such times, without consideration of any reinvestment
thereof, as will insure the availability of sufficient moneys to make such payment, or (C) a combination of such
moneys and Governmental Obligations, and (b) all necessary and proper fees and expenses of the Trustee pertaining
to the Bonds, including the amount, if any, required to be rebated to the United States of America in accordance with
the Tax Certificate and Section 6.09 of the Indenture.

Notwithstanding the foregoing, in the case of Bonds which by their terms may be redeemed prior to their
stated maturity, no deposit under the immediately preceding paragraph shall be deemed a payment of such Bonds as
aforesaid until the Bank shall have given the Trustee, in a form satisfactory to the Trustee, irrevocable instructions:

(x) stating the date when the principal of each such Bond is to be paid, whether at maturity or on a
redemption date (which shall be any redemption date permitted by the Indenture);

(y) to call for redemption pursuant to the Indenture any Bonds to be redeemed prior to maturity pursuant to
(x) of this paragraph; and

(z) to mail, as soon as practicable, in the manner prescribed by Article IV of the Indenture, a notice to the
owners of such Bonds satisfying the requirements thereof.

Any monies so deposited with the Trustee as provided above may at the direction of the Bank also be
invested and reinvested in Governmental Obligations maturing in the amounts and at the times as hereinbefore set
forth, and all income from all Governmental Obligations in the hands of the Trustee which is not required for the
payment of the Bonds and interest thereon with respect to which such monies shall have been so deposited, shall be
deposited into the applicable General Account, as and when collected for use and application as are other monies
deposited into such General Account.

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Notwithstanding any provision of the Indenture to the contrary, all moneys or Governmental Obligations
set aside and held in trust pursuant to the Indenture for the payment of Bonds (including interest thereon but
excluding any amounts, if any, set aside for rebate to the United States of America in accordance with the Tax
Certificate and the Indenture) shall be applied to and used solely for the payment of the particular Bonds (including
interest thereon) with respect to which such moneys or obligations have been set aside in trust.

Upon the deposit with the Trustee or Escrow Agent, in trust, at or before maturity, of money or
Governmental Obligations in the necessary amount to pay or redeem all Outstanding Bonds as aforesaid, the
Indenture, to the extent it relates to such Bonds, may be discharged in accordance with the provisions of the
Indenture; and the limited liability of the Bank in respect of such Bonds shall continue provided that the owners
thereof shall thereafter be entitled to payment only out of the moneys or Governmental Obligations deposited with
the Trustee or Escrow Agent as aforesaid.

Defaults; Events of Default

If any of the following events occurs, it is defined as and declared to be and to constitute an “Event of
Default” under the Indenture:

(a) Default in the due and punctual payment of any interest on any Bond; or

(b) Default in the due and punctual payment of the principal or redemption premium of any Bond
whether at the stated maturity thereof or on any date fixed for redemption; or

(c) Failure of the Bank to remit to the Trustee within the time limits prescribed in the Indenture any
moneys which are required by the Indenture to be so remitted; or

(d) Default in the performance or observance of any other of the covenants, agreements or conditions
on the part of the Bank contained in the Indenture or in the Bonds and failure to remedy the same within the time
provided in, and after notice thereof pursuant to, Section 10.10 of the Indenture; or

(e) Any warranty, representation or other statement by or on behalf of the Bank contained in the
Indenture or in any instrument furnished in compliance with or in reference to the Indenture is false or misleading,
when made, in any material respect, and failure to remedy the same within the time provided in, and after notice
thereof pursuant to, Section 10.10 of the Indenture; or

(f) A petition is filed against the Bank under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction whether now or hereafter in effect
and is not dismissed within sixty (60) days after such filing; or

(g) The Bank files a petition in voluntary bankruptcy or seeks relief under any provisions of any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution or liquidation law of any
jurisdiction whether now or hereafter in effect, or consents to the filing of any petition against it under such law; or

(h) The Bank is generally not paying its debts as such debts become due, or becomes insolvent or
bankrupt, or makes an assignment for the benefit of creditors, or a liquidator or trustee of the Bank or any of its
property is appointed by court order or takes possession of such property and such order remains in effect or such
possession continues for more than sixty (60) days; or

(i) Default in the due and punctual payment of any principal of, premium, if any and interest on the
District Bond; or

(j) There is a default under the District Bond and/or the District Resolution.

Remedies; Rights of Bondholders

Upon the occurrence of an Event of Default, the Trustee shall notify the owners of all Bonds then
Outstanding of such Event of Default by registered or certified mail, and will have the following rights and
remedies:

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(a) The Trustee may pursue any available remedy at law or in equity or by statute to enforce the
payment of the principal of, premium, if any, and interest on the Bonds then Outstanding, including enforcement of
any rights of the Bank or the Trustee under the District Bond.

(b) The Trustee may, by action or suit in equity, require the Bank to account as if it were the trustee of
an express trust for the holders of the Bonds and may take such action with respect to the District Bond as the
Trustee deems necessary or appropriate and in the best interest of the Bondholders, subject to the terms of the
District Bond.

(c) Upon the filing of a suit or other commencement of judicial proceedings to enforce any rights of
the Trustee and of the Bondholders under the Indenture, the Trustee will be entitled, as a matter of right, to the
appointment of a receiver or receivers of the Trust Estate and of the Revenues, issues, earnings, income, products
and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer.

Upon the occurrence of an Event of Default, (i) if requested so to do by the holders of twenty-five percent
(25%) or more in aggregate principal amount of all Bonds then Outstanding and if secured and/or indemnified as
provided in Section 11.01(k) of the Indenture, or (ii) if secured and/or indemnified as provided in Section 11.01(k)
of the Indenture, the Trustee shall be obligated to exercise such one or more of the rights, remedies and powers
conferred by Indenture as the Trustee, being advised by Counsel, shall deem most expedient in the interests of the
Bondholders.

No right or remedy conferred upon or reserved to the Trustee (or to the Bondholders) by the terms of the
Indenture is intended to be exclusive of any other right or remedy, but each and every such right or remedy shall be
cumulative and shall be in addition to any other right or remedy given to Trustee or to the Bondholders under the
Indenture or now or hereafter existing at law or in equity or by statute. The assertion or employment of any right or
remedy shall not prevent the concurrent or subsequent assertion or employment of any other right or remedy.

No delay or omission to exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or shall be construed to be a waiver of any such Event of Default or acquiescence therein, and
every such right or remedy may be exercised from time to time and as often as may be deemed expedient.

No waiver of any Event of Default hereunder, whether by the Trustee or by the Bondholders, shall extend
to or shall affect any subsequent Event of Default or shall impair any rights or remedies consequent thereon.

Rights of Bondholders to Direct Proceedings

Anything in the Indenture to the contrary notwithstanding, the Beneficial Owners of a majority in aggregate
principal amount of Bonds Outstanding shall have the right, at any time during the continuance of an Event of
Default, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the time, method
and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions
of the Indenture, or for the appointment of a receiver or any other proceedings under the Indenture; provided that
such direction shall not be otherwise than in accordance with the provisions of law and of the Indenture.

Application of Moneys

All moneys received by the Trustee pursuant to any right or remedy given or action taken under the
provisions of the Indenture (including moneys received by virtue of action taken under provisions of the District
Bond), shall, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys
and payment of the expenses, liabilities and advances incurred or made by the Trustee and any other moneys owed
to the Trustee under the Indenture, be deposited in the General Account and all moneys in such Account shall be
applied as follows:

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(a) Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be
applied:

FIRST - To the payment of any amount owed the United States of America under the Tax
Certificate;

SECOND - To the payment to the persons entitled thereto of all installments of interest then due
on the Bonds, including interest on any past due principal of any Bond at the rate borne by such Bond, in the order
of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full
any particular installment, then to such payment ratably, according to the amounts due on such installments, to the
persons entitled thereto, without any discrimination or privilege;

THIRD - To the payment to the persons entitled thereto of the unpaid principal of any of the
Bonds that shall have become due either at maturity or pursuant to a call for redemption (other than Bonds called for
redemption for the payment of which other moneys are held pursuant to the provisions of the Indenture), in the order
of their due dates, and, if the amount available shall not be sufficient to pay in full the principal of Bonds due on any
particular date, together with such interest, then to such payment ratably, according to the amount of principal due
on such date, to the persons entitled thereto without any discrimination or privilege; and

FOURTH - To be held for the payment to the persons entitled thereto as the same shall become
due of the principal of and interest on the Bonds that may then become due either at maturity or upon call for
redemption prior to maturity and, if the amount available shall not be sufficient to pay in full the principal of and
interest on Bonds due on any particular date, such payment shall be made ratably according to the amount of
principal and interest due on such date to the persons entitled thereto without any discrimination or privilege.

(b) If the principal of all the Bonds shall have become due or shall have been declared due and
payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the
Bonds, without preference or priority of principal over interest or of interest over principal, or of any installment of
interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts
due respectively for principal and interest, to the persons entitled thereto without any discrimination or privilege.

Whenever moneys are to be applied as set forth above, such moneys shall be applied at such times, and
from time to time, as the Trustee shall determine, having due regard for the amount of such moneys available for
application and the likelihood of additional moneys becoming available for such application in the future.
Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless
the Trustee shall deem another date more suitable) upon which such application is to be made, and upon such date
interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such
notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and
shall not be required to make payment of principal to the owner of any Bond until such Bond shall be presented to
the Trustee for appropriate endorsement or for cancellation if fully paid.

Whenever all principal of and interest on all Bonds have been paid under the provisions of the Indenture
and all expenses and charges of the Trustee have been paid and all other amounts due under the Indenture have been
paid in full, any balance remaining in the General Account shall be paid as provided in Article VI of the Indenture.

Remedies Vested in the Trustee

All rights of action (including the right to file proof of claims) under the Indenture or under any of the
Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any
trial or other proceeding related thereto and any such suit or proceeding instituted by the Trustee shall be brought in
its name as Trustee without the necessity of joining as plaintiffs or defendants any owners of the Bonds, and any
recovery of judgment shall be for the equal and ratable benefit of the owners of all the Outstanding Bonds.

Rights and Remedies of Bondholders

No owner of any Bond shall have any right to institute any suit, action or proceeding at law or in equity for
the enforcement of the Indenture or for the execution of any trust of the Indenture or for the appointment of a

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receiver or any other remedy under the Indenture, unless (a) a Default has occurred, (b) such Default shall have
become an Event of Default and the Beneficial Owners of not less than 25% in aggregate principal amount of Bonds
Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to
proceed to exercise the remedies granted under the Indenture or to institute such action, suit or proceeding in its own
name, (c) such Beneficial Owners of Bonds have offered to the Trustee security and/or indemnity as provided in the
Indenture, and (d) the Trustee has refused or for 60 days after receipt of such request and offer of security and/or
indemnification has failed to exercise the remedies granted under the Indenture or to institute such action, suit or
proceeding in its own name, and such request and offer of security and/or indemnity are declared under the
Indenture in every case at the option of Trustee to be conditions precedent to the execution of the powers and trusts
of the Indenture, and to any action or cause of action for the enforcement of the Indenture, or for the appointment of
a receiver or for any other remedy under the Indenture; it being understood and intended that no one or more owners
of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture
by its, his, her or their action or to enforce any right under the Indenture except in the manner provided in the
Indenture, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided
in the Indenture and for the equal and ratable benefit of the owners of all Bonds Outstanding. However, nothing
contained in the Indenture shall affect or impair the right of any Bondholder to enforce the payment of the principal
of, premium, if any, and interest on any Bond at and after the maturity thereof, or the limited obligation of the Bank
to pay the principal of, premium, if any, and interest on each of the Bonds issued under the Indenture to the
respective owners thereof at the time and place, from the source and in the manner expressed in the Bonds.

Termination of Proceedings

In case the Trustee or any owner of any Bonds shall have proceeded to enforce any right under the
Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely, then and in every such case the Bank, the
Trustee and the Bondholders shall be restored to their former positions and rights under the Indenture, respectively,
and with regard to the property subject to the Indenture, and all rights, remedies and powers of the Trustee and the
owners of the Bonds shall continue as if no such proceedings had been taken.

Waivers of Events of Default

The Trustee may, at its discretion, waive any Event of Default under the Indenture and its consequences,
and shall do so upon the written request of the Beneficial Owners of (a) more than 66 2/3% in aggregate principal
amount of all the Bonds then Outstanding in respect of which an Event of Default in the payment of principal or
interest exists, or (b) more than 50% in aggregate principal amount of all Bonds then Outstanding in the case of any
other Event of Default; provided, however, that there shall not be waived (x) any Event of Default in the payment of
the principal of any Outstanding Bond at the date of maturity specified therein or (y) any Event of Default in the
payment when due of the interest on any Outstanding Bond unless prior to such waiver all of the interest or all
payments of principal when due, as the case may be, with interest on overdue principal at the rate borne by such
Bond, and all expenses of the Trustee in connection with such Event of Default shall have been paid or provided for
or (z) any Event of Default for nonpayment of Program Expenses. In case of any such waiver or rescission, or in
case any proceeding taken by the Trustee on account of any such Event of Default shall have been discontinued or
abandoned or determined adversely, then and in every such case the Bank, the Trustee and the Bondholders shall be
restored to their former positions and rights under the Indenture, respectively, but no such waiver or rescission shall
extend to any subsequent or other Event of Default or impair any rights consequent thereon.

Trustee as Paying Agent and Registrar

The Trustee is designated in the Indenture and agrees to act as paying agent and registrar for and in respect
to the Bonds.

Supplemental Indenture not Requiring Consent of Bondholders

The Bank and the Trustee may, without the consent of, or notice to, any of the Bondholders, enter into an
indenture or Indenture supplemental to the Indenture for any one or more of the following purposes:

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(a) To cure any ambiguity or formal defect or omission in the Indenture which, in the opinion of Bond
Counsel, does not materially and adversely affect the interest of the owners of Outstanding Bonds and does not
require unanimous consent of the Bondholders pursuant to the Indenture;

(b) To grant to or confer upon the Trustee for the benefit of the Bondholders any additional benefits,
rights, remedies, powers or authorities that may lawfully be granted to or conferred upon the Bondholders or the
Trustee, or to make any change which, in the opinion of Bond Counsel, does not materially and adversely affect the
interest of the owners of Outstanding Bonds and does not require unanimous consent of the Bondholders pursuant to
the Indenture;

(c) To subject to the Indenture additional Revenues, properties or collateral;

(d) To modify, amend or supplement the Indenture or any indenture supplemental to the Indenture in
such a manner as to permit the qualification of the Indenture and thereof under the Trust Indenture Act of 1939 or
any similar federal statute hereafter in effect or to permit the qualification of the Bonds for sale under the securities
laws of the United States of America or of any of the states of the United States of America, and, if they so
determine, to add to the Indenture or any indenture supplemental to the Indenture such other terms, conditions and
provisions as may be permitted by said Trust Indenture Act of 1939 or similar federal statute;

(e) To evidence the appointment of a separate or co-trustee or the succession of a new Trustee under
the Indenture or the succession of a new registrar and/or paying agent; and

(f) In connection with issuance of Refunding Bonds.

Supplemental Indenture Requiring Consent of Bondholders

Exclusive of Supplemental Indentures not requiring the consent of Bondholders and subject to the terms
and provisions contained in Section 12.02 of the Indenture, and not otherwise, the owners of not less than a majority
in aggregate principal amount of the Bonds then Outstanding which are affected (exclusive of Bonds held by the
Bank), shall have the right, from time to time, anything contained in the Indenture to the contrary notwithstanding,
to consent to and approve the execution by the Bank and the Trustee of such other indenture or indentures
supplemental to the Indenture as shall be deemed necessary and desirable by the Trustee for the purpose of
modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in
the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in Section 12.02 of the
Indenture shall permit, or be construed as permitting, without the consent of the owners of all Outstanding Bonds,
(a) an extension of the maturity of the principal of or the interest or redemption date on any Bond issued under the
Indenture, or (b) a reduction in the principal amount of any Bond or change in the rate of interest or redemption
premium, or (c) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (d) a reduction in the
aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (e) the creation of
any lien securing any Bonds other than a lien ratably securing all of the Bonds at any time Outstanding under the
Indenture, or (f) any modification of the trusts, powers, rights, obligations, duties, remedies, immunities and
privileges of the Trustee without the written consent of the Trustee.

If at any time the Bank shall request the Trustee to enter into any such Supplemental Indenture for any of
the purposes set forth in Section 12.02 of the Indenture, the Trustee shall, upon being satisfactorily secured and/or
indemnified with respect to expenses, cause notice of the proposed execution of such Supplemental Indenture to be
mailed by registered or certified mail to each owner of a Bond at the address shown on the registration books
maintained by the Trustee. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and
shall state that copies thereof are on file at the Principal Office of the Trustee for inspection by all Bondholders. If,
within sixty (60) days, or such longer period as shall be prescribed by the Bank, following the mailing of such
notice, the owners of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds then
Outstanding at the time of the execution of any such Supplemental Indenture (exclusive of Bonds held by the Bank)
shall have consented to and approved the execution of such Supplemental Indenture, no owner of any Bond shall
have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Bank from
executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such

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Supplemental Indenture as permitted and provided in Section 12.02 of the Indenture, the Indenture shall be and be
deemed to be modified and amended in accordance therewith.

THE SERIES 2018 BONDS AS LEGAL INVESTMENTS

The Series 2018 Bonds are legal investments in which all public officers and public bodies of the State, its
political subdivisions, all municipalities and municipal subdivisions, all insurance companies and associations, trust
companies, savings banks and savings associations, investment companies and other persons carrying on a banking
business, all administrators, guardians, executors, trustees and other fiduciaries, and all other persons may invest.
The Series 2018 Bonds may properly and legally be deposited with and received by all public officers and bodies of
the State or any agency or political subdivisions of the State and all municipalities and public corporations for any
purpose for which the deposit of bonds or other obligations of the State is now or may hereafter be authorized by
law.

LITIGATION

There is not now pending or, to the Bank’s knowledge, threatened any litigation restraining or enjoining the
issuance, sale, execution or delivery of the Series 2018 Bonds or prohibiting the Bank from purchasing the District
Bond with the proceeds of the Series 2018 Bonds or in any way contesting or affecting the validity of the Series
2018 Bonds, any proceedings of the Bank taken with respect to the issuance or sale thereof or the pledge or
application of any moneys or security provided for the payment of the Series 2018 Bonds. The creation,
organization or existence of the Bank or the title of any of the present directors or other officers of the Bank to their
respective offices is not being contested.

There is not now pending or, to the District’s knowledge, threatened any litigation restraining or enjoining
the issuance, sale, execution or delivery of the District Bond or prohibiting the District from selling the District
Bond to the Bank or in any way contesting or affecting the validity of the District Bond, any proceedings of the
District taken with respect to the issuance or sale or the pledge or application of any moneys or security provided for
the payment of the District Bond.

TAX MATTERS

Series 2018 Bonds

In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on
the Series 2018 Bonds (including any original issue discount properly allocable to the owner of a Series 2018 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 Bank and the District with covenants designed to satisfy the requirements of
the Internal Revenue Code of 1986, as amended and supplemented (the "Code") that must be met subsequent to the
issuance of the Series 2018 Bonds. Failure to comply with such requirements could cause interest on the Series
2018 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the
Series 2018 Bonds. The Bank and the District have covenanted in the Indenture and the District Resolution,
respectively, and certain certificates to comply with such requirements. Bond Counsel has expressed no opinion
regarding other federal tax consequences arising with respect to the Series 2018 Bonds.

The accrual or receipt of interest on the Series 2018 Bonds may otherwise affect the federal income tax
liability of the owners of the Series 2018 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 2018 Bonds, particularly purchasers that are
corporations (including S corporations and foreign corporations operating branches in the United Districts 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 2018
Bonds.

29
Bond Counsel is also of the opinion that, under existing statutes, interest on the Series 2018 Bonds is
exempt from all income taxation in the State.

Series 2018 Premium Bonds

The Series 2018 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.

Series 2018 Discount Bond

The Series 2018 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.

30
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 2018 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 2018 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 2018 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 2018 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 2018 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 2018 Bonds or the market value thereof would be impacted thereby.
Purchasers of the Series 2018 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 2018 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 2018 BONDS ARE ADVISED TO CONSULT


THEIR OWN TAX ADVISORS PRIOR TO ANY PURCHASE OF THE SERIES 2018 BONDS AS TO THE
IMPACT OF THE CODE UPON THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE SERIES
2018 BONDS.

LEGAL MATTERS

Certain legal matters incident to the authorization and issuance of the Series 2018 Bonds by the Bank are
subject to the approval of Bond Counsel, whose approving opinion will be delivered concurrently with the delivery
of the Series 2018 Bonds. Certain other legal matters will be passed upon for the Underwriters by Young Law
Group, PLLC, Jackson, Mississippi and The May Law Firm, PLLC, Jackson, Mississippi, serving as co-
underwriters’ counsel, for the Bank by Balch & Bingham LLP, Jackson, Mississippi, and for the District by its in-
house counsel, JoAnne Nelson Shepherd, Jackson, Mississippi.

Bond Counsel is also serving as Bond Counsel for the District in connection with the issuance and sale of
the District Bond.

The remedies available to the Trustee, to the Bank or to the owners of the Series 2018 Bonds upon an
“event of default” under the Indenture or under the terms of the District Bond purchased by the Bank 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 specifically the Bankruptcy Code, the remedies
provided in the Indenture and under the District Bond may not be readily available or may be limited. The various
legal opinions to be delivered concurrently with the delivery of the Series 2018 Bonds will be qualified as to the
enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or
other similar laws affecting the rights of creditors generally (regardless of whether such enforceability is considered
in a proceeding in equity or at law), by general principles of equity (regardless of whether such proceeding is
considered in a proceeding in equity or at law) and by the valid exercise of the constitutional powers of the State and
the United States of America.

31
CONTINUING DISCLOSURE

The District will execute a continuing disclosure certificate (the “Disclosure Certificate”) at the time of the
closing for the Series 2018 Bonds. The Disclosure Certificate will be executed for the benefit of the beneficial
owners of the Series 2018 Bonds and the District has covenanted in the District Resolution to comply with its terms.
The Disclosure Certificate will provide that so long as the Series 2018 Bonds remain outstanding, the District will
provide the following information to the Municipal Securities Rulemaking Board, acting through its Electronic
Municipal Market Access (“EMMA”) system: (i) annually, certain financial information and operating data; and (ii)
timely notice of the occurrence of certain listed events; all as specified in the Disclosure Certificate. See
“APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT” attached hereto for a more detailed
description of the District’s undertaking.

The District has agreed to provide information and notices of certain events only as described above. The
District has not agreed to provide other information that may be relevant or material to a complete presentation of its
financial results of operations, condition or prospects or agreed to update any information that is provided, except as
described above. The Bank makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell the Series 2018 Bonds at any future date.

The District’s undertaking is enforceable in accordance with its respective terms by any Beneficial Owner
either directly or as third-party beneficiary. Any Beneficial Owner shall have the rights, for the equal benefit and
protection of all Beneficial Owners, by mandamus or other suit or proceeding at law or in equity, to enforce its
rights against the District and to compel the District to perform and carry out its duties under the undertaking;
provided that such rights shall be limited to an action to compel specific enforcement of the obligations of the
District and shall not include any rights to monetary damages.

A failure by the District to comply with the Disclosure Certificate will not constitute an Event of Default
under the Indenture or the District Bond. Nevertheless, such a failure must be reported in accordance with the Rule
and must be considered by a broker-dealer or municipal securities dealer before recommending the purchase or sale
of the Series 2018 Bonds in the secondary market. Consequently, such a failure may materially affect the
transferability, liquidity or market price of the Series 2018 Bonds.

Failures Regarding Prior Undertakings

The District previously entered into continuing disclosure undertakings with respect to bonds it has issued
or for which it is the “obligated person” within the meaning of Securities and Exchange Commission Rule15c2-
12(b)(5) (the “Rule”).

There have been numerous instances during the five years preceding the date of this Official Statement in
which the District has failed to comply with such previous undertakings entered into pursuant to the Rule. The
District failed to timely file an annual report, including audited financial statements, annual financial information
and operating data, for fiscal years 2013 through 2017, and the District did not file notices of its failures to timely
make the required filings. Some of the District’s past filings were made with respect to certain undertakings, but not
others, and some of the District’s filings were not properly attached to all outstanding CUSIP numbers of a
particular issue.

The District failed to provide notice of certain Listed Events, including ratings changes as described in this
Official Statement under the caption “RISKS TO THE OWNERS OF THE SERIES 2018 BONDS – Ratings.”

The foregoing description of instances of noncompliance by the District with its continuing disclosure
undertakings should not be construed as an acknowledgment that any such instance was material.

The District has adopted written procedures in order to ensure compliance with its continuing disclosure
undertaking under the Rule. The District also retained Digital Assurance Certification, LLC, Orlando, Florida
(“DAC”) as its dissemination agent with respect to all continuing disclosure undertakings pursuant to the Rule.
DAC provides its clients with automated filing of rating events, templates consolidating all outstanding filing
requirements that accompany reminder notices of annual or interim mandatory filings, review of all template filings

32
by professional accountants, as well as a time and date stamp record of each filing along with the unique ID from
EMMA accompanying the copy of the actual document filed. DAC also offers its clients a series of training
webinars each year that qualify for 15-20 NASBA certified CPE credits.

There have also been instances in the last five years in which the Bank failed to file certain annual financial
information as required by its prior continuing disclosure undertakings.

RATINGS

S&P Global Ratings (the “Rating Agency”) has assigned its underlying rating of “A+” to the Series 2018
Bonds. Any desired explanation of the significance of such ratings should be obtained from the Rating Agency.
Certain information and materials, including information and materials not included in this Official Statement, were
furnished by the District to the Rating Agency. Generally, the Rating Agency bases its ratings on the information
and materials so furnished and on its respective investigations, studies and assumptions.

In addition, the Rating Agency is expected to assign its rating of “AA” to the Insured Bonds with the
understanding that, upon delivery of the Series 2018 Bonds, the Insured Bonds will be insured and the Policy will be
issued by BAM. See “BOND INSURANCE”. Such rating is expected to be assigned solely as a result of the
issuance of the Policy and would reflect only the Rating Agency’s view of the claims-paying ability and financial
strength of BAM. Neither the Underwriters nor the District or the Bank have made any independent investigation of
the claims-paying ability of BAM and no representation is made that any insured rating of the Series 2018 Bonds
based upon the purchase of the Policy will remain higher than the Rating Agency’s underlying rating of the Series
2018 Bonds described above, which did not take bond insurance into account. The existence of the Policy will not,
of itself, negatively affect such underlying rating. However, any downward revision or withdrawal of any rating of
BAM may have an adverse effect on the market price or marketability of the Series 2018 Bonds.

UNDERWRITING

The Series 2018 Bonds are being purchased by the Underwriters listed on the cover page of this Official
Statement. The Underwriters have agreed, subject to certain conditions, to purchase all of the Series 2018 Bonds
from the Bank at a purchase price of $70,977,568.63, which is equal to the principal amount thereof, plus original
issue premium of $6,459,685.35, less the Underwriters’ discount of $482,116.72. The Underwriters are obligated to
purchase all the Series 2018 Bonds, if any are purchased, the obligation to make such purchases being subject to
certain terms and conditions set forth in the Bond Purchase Agreement with respect to the Series 2018 Bonds, the
approval of certain legal matters by counsel and certain other conditions.

The Underwriters may offer and sell the Series 2018 Bonds to other dealers and other purchasers at prices
lower than the public offering prices stated on the cover page hereof. The initial public offering prices may be
changed from time to time by the Underwriters.

The Underwriters and their respective affiliates are full service financial institutions engaged in various
activities, which may include sales and trading, commercial and investment banking, advisory, investment
management, investment research, principal investment, hedging, market making, brokerage and other financial and
non-financial activities and services. In the various course of their various business activities, the Underwriters and
their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments
and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers, and such investment and trading activities
may involve or relate to assets, securities and/or instruments of the Bank and District (directly, as collateral securing
other obligations or otherwise) and/or persons and entities with relationships with the Bank and the District. The
Underwriters and their respective affiliates may also communicate independent investment recommendations,
market color or trading ideas and/or publish or express independent research views in respect of such assets,
securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or
short positions in such assets, securities and instruments.

33
FINANCIAL STATEMENTS

The basic financial statements of the District for the fiscal year ended June 30, 2017 has been audited by
Bruno & Tervalon, LLP, Jackson, Mississippi, independent certified public accountants. See “APPENDIX B”
attached hereto. Bruno & Tervalon, LLP did not participate in the preparation of this Official Statement nor did it
provide its consent to the inclusion of the financial statements and has not performed any review of the financial
information since the date of their audit letter, March 21, 2018.

The District has not requested and will not obtain a consent letter from Bruno & Tervalon, LLP for the
inclusion of its audit report in this Official Statement. Bruno & Tervalon, LLP has not been engaged to perform, and
has not performed, since the date of its audit report included herein, any procedures on the financial statements
addressed in that audit report. Bruno & Tervalon, LLP also has not performed any procedures relating to this
Official Statement.

MUNICIPAL ADVISOR

The District and the Bank have retained Government Consultants, Inc., Madison, Mississippi, as
independent Municipal Advisor in connection with the sale and issuance of the Series 2018 Bonds. In such capacity
the Municipal Advisor has provided recommendations and other financial guidance to the District and the Bank with
respect to the preparation of documents, the preparation for the sale of the Series 2018 Bonds and of the time of the
sale, tax-exempt bond market conditions and other factors related to the sale of said Series 2018 Bonds. Although
the Municipal Advisor performed an active role in the drafting of this Official Statement, it has not independently
verified any of the information set forth herein.

PENSION PLAN

For the purpose of providing retirement allowances, the District is covered by the Public Employee’s
Retirement System of Mississippi (“PERS”). Contributions are made by both the employer (i.e., the District) and
the employees. Pursuant to Section 25-11-123, Mississippi Code of 1972, as amended, the Board of Trustees of
PERS is authorized to set the contribution rates for both employees and employers based on the liabilities of the
retirement system as shown by an actuarial valuation. For the year ended June 30, 2017, the plan required employee
contributions of 9.00% and employer contributions of 15.75%. On June 26, 2018, the PERS Board of Trustees
approved an increase in the employer contribution rate from 15.75 to 17.40%, effective July 1, 2019.

More information regarding PERS, including the most current information regarding the PERS unfunded
liability may be found at: www.pers.ms.gov and www.pers.ms.gov/Content/Supplemental/persfacts_figures.pdf. The
Governmental Accounting Standards Board (“GASB”) approved two new standards on June 25, 2012 that changed
the accounting and financial reporting of public employee pensions by state and local governments. Statement No.
67, Financial Reporting for Pension Plans, revised existing guidance for the financial reports of most pension plans.
Statement No. 68, Accounting and Financial Reporting for Pensions, revised and established new financial reporting
requirements for most governments, including the District, that provide their employees with pension benefits. In
November, 2013, the Governmental Accounting Standards Board (“GASB”) approved Statement 71, Pension
Transition for Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement No.
68 that is to be applied simultaneously with the provisions of Statement 68. The Provisions in Statement 67 are
effective for financial statements for the period beginning after June 15, 2013. The provisions in Statement 68 and
Statement 71 are effective for fiscal years beginning after June 15, 2014. PERS, the Department of Education and
the State of Mississippi Department of Finance and Administration have provided the amount of each contributing
employer's liability under GASB Statement 68 and Statement 71 for the Unfunded Pension Liability so that local
governmental participants, including the District, can record the liability and be in compliance with Statement 68 as
of June 30, 2015.

Contributions by the District for the 2016-17 school year amounted to $23,030,463. Contributions by
employees of the District for the 2016-17 school year amounted to $23,757,819. As of June 30, 2017, the District
reported a liability of $421,187,498 for its proportionate share of the net pension liability. See Note 9 in the
District's 2017 Audited Financial Statements included in “APPENDIX B - Financial Information Concerning the
District.

34
VALIDATION

The Series 2018 Bonds and the District Bond were validated before the Chancery Court of the First Judicial
District of Hinds County, Mississippi, as provided by Sections 31-13-1 to 31-13-11, Mississippi Code of 1972, as
amended and unqualified final decrees of such court validating the Series 2018 Bonds and the District Bond were
issued.

MISCELLANEOUS

The Bank’s offices are located at 735 Riverside Drive, Suite 300, Jackson, Mississippi 39202, telephone
(601) 355-6232.

All quotations from, and summaries and explanations of, the Act, the Indenture and the District Resolution
contained in this Official Statement do not purport to be complete, and reference is made to each such document or
instrument for full and complete statements of their provisions. In the event a reference is made to the Act, the
Indenture or the District Resolution, which does not relate directly to the purpose for which the reference is made,
then the section citation should be disregarded and the most sensible and related reference shall be considered and
applied. The attached Appendices are an integral part of this Official Statement and must be read together with all of
the foregoing statements. Copies in reasonable quantity of the Act, the Indenture, the District Resolution and the
supplemental materials furnished to the Bank by the District may be obtained upon request directed to the Bank.

Neither any advertisement of the Series 2018 Bonds nor this Official Statement is to be construed as
constituting an agreement with the purchasers of the Series 2018 Bonds. So far as any statements are made in this
Official Statement involving matters of opinion, whether or not expressly so stated, they are intended merely as such
and not as representations of fact.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

35
CERTIFICATION

This Official Statement has been duly approved, executed and delivered by the Bank and the District. The
Bank and the District will provide copies of this Official Statement to be distributed to the purchasers of the
Series 2018 Bonds.

MISSISSIPPI DEVELOPMENT BANK

By: /s/ E.F. Mitcham


Executive Director

Approved:

Jackson Public School District

By: /s/ Dr. Errick L. Greene


District Superintendent

36
APPENDIX A

INFORMATION CONCERNING THE DISTRICT


[THIS PAGE INTENTIONALLY LEFT BLANK]
General Description of the District

The Jackson Public School District, Jackson, Mississippi (the “District”) is a political subdivision of the
State constituted as a public school district and is a “local governmental unit” under the Bank Act.

The District is the second largest school district in the State, serving approximately 26,000 students with 54
schools: 7 high schools, 12 middle schools, 33 elementary schools, and 2 special schools (a Career Development
Center and the Capital City Alternative School). Students are enrolled in grades K-12 (with 25 elementary schools
offering pre-K classes). The District offers special programs for its academically and artistically talented students at
its Academic and Performing Arts Complex and at Bailey APAC Middle School. International Baccalaureate
programs exist at one elementary, one middle and one high school.

The District was recognized by AdvancED for its improvements in transportation and technology
infrastructure in April 2014, and AdvancED confirmed the District’s rating of “Accredited”. AdvancED is a non-
profit organization that conducts on-site external reviews of PreK-12 schools and school systems and was created
through a 2006 merger of the PreK-12 divisions of the North Central Association Commission on Accreditation and
School Improvement (NCA CASI) and the Southern Association of Colleges and Schools on Accreditation and
School Improvement (SACS CASI). Also in 2014, Northwest IB Middle School was recognized as one of the 50
Best Schools in the Nation, and in 2015 Power APAC was recognized by the United States Department of Education
as one of 35 “Blue Ribbon” schools in the State. In 2018, Davis Magnet IB Magnet School was renamed Barack H.
Obama Magnet Elementary School and has been named a National Blue Ribbon School by the United States
Department of Education.

In September 2017, the Mississippi Board of Education asked the Governor to declare a state of emergency
in the District and have the State place the District into district transformation (State takeover) pursuant to Section
37-17-6, Mississippi Code of 1972, as amended, due to violations of numerous accreditation standards. On October
26, 2017, the District, the City of Jackson, the Governor’s Office and the Michigan-based W.K. Kellogg Foundation
entered into a memorandum of understanding to form a 15-member advisory board, the Better Together
Commission, to help develop community-based support for transformation to higher academic standards and success
for all of the District’s students. The then-current members of the District’s Board of Trustees subsequently
resigned and a new school board was appointed by the Mayor of the City of Jackson, Mississippi (the “City”) and
approved by the Jackson City Council in November 2017.

The District developed a corrective action plan and submitted the plan to the Mississippi Department of
Education (“MDE”) early Fall of 2017 and revised in April 2018. The District has asked MDE to evaluate its
progress on the finance, professional development, nutrition and transportation standards. The District’s corrective
action plan lists 23 standards to be corrected, and the District is working to clear them. Although technically on
probation with the State Commission on School Accreditation, the District is confident with the new members of its
Board of Trustees (the “Board”), and a newly appointed Superintendent that they will clear all the standards.

Governing Body of the District

The District is governed by the Board, which consists of seven members appointed by the Mayor of the
City and approved by the Jackson City Council. The Board has responsibility for setting policies for operation of
the District and has full control of the distribution, allotment and disbursement of all revenues provided for the
District’s support and operation. In addition, the Board is responsible for organizing the schools of the District;
introducing special subjects for instruction; serving as custodian of school property; erecting, repairing and
equipping school facilities and improvements; maintaining pupil discipline; carrying out public health programs
such as vaccination requirements; regulating the use of the schools by the public; prescribing rules and regulations
for its own government and the government of the schools; maintaining and operating the schools under Board
control for the time required by law; enforcing in the schools the courses of study and the use of textbooks
prescribed by law; making orders directed to the Superintendent of Schools of the District for the issuance of pay
certificates for lawful purposes on any available funds of the District; selecting superintendents, principals and
teachers in the manner provided by law; providing and regulating athletic programs and other school activities; and
performing other duties prescribed by law. The current members of the Board are as follows:

A-1
Name Office Term Began Term Expires Profession

Dr. Jeanne Middleton President 11/28/17 09/30/2022 Education Policy & Practice
Hairston
Edward D. Sivak, Jr., Phd Vice President 11/28/17 06/30/2020 Executive VP
Barbara T. Hilliard Secretary 11/28/17 06/30/2022 Retired Educator
Letitia S. Johnson Member 11/28/17 06/30/2021 Attorney
Andrea Jones-Davis Member 11/28/17 06/30/2019 Interim Dean of Enrollment
Management
Dr. Robert Luckett Member 07/01/2018 06/30/2022 Director
Frank Figgers Member 10/01/18 06/30/2023 Public Policy Advocate

Administrative power is placed with the Superintendent of Schools. The Superintendent, Dr. Errick L.
Greene, has served in this position since October 1, 2018. Dr. Greene holds a Bachelor of Arts degree in political
science from Howard University and master’s degrees in Education Administration and Policy from Howard
University and Trinity University. He earned his Doctorate in Education Leadership from the University of
Pennsylvania. He has served in public schools in Washington, D.C., Baltimore, Detroit and Inglewood, California.
His most recent post was Chief of Schools in Tulsa, Oklahoma.

The Chief Financial Officer is Sharolyn Miller who has held this position since August 2010. Ms. Miller
served as the Executive Director of Finance for the District from November 2004 through August 2010. She holds a
Bachelor of Science, as well as, a Masters in Business Administration from Jackson State University.

Employment

The District employs approximately 4,000 individuals, including approximately 1,900 licensed employees.
The average teacher’s salary is $45,000.

Enrollment

Enrollment figures for the District for the ten most recent scholastic years are as follows:

Scholastic Year Enrollment


2017-2018 25,595
2016-2017 26,948
2015-2016 28,019
2014-2015 28,140
2013-2014 28,338
2012-2013 29,738
————————
SOURCE: Jackson Public School District.

A-2
Revenues, Expenditures and Changes in Fund Balances of the District

Revenues, expenditures, and fund balances for the District’s General Fund for fiscal year ended June 30,
2017 and for each of the preceding four fiscal years are shown below:
Revenues, Expenditures and Fund Balances
General Fund
Figures shown in thousands (000’s)
2017 2016 2015 2014 2013
Revenues
Local $ 75,840 $ 76,107 $ 76,391 $ 74,211 $ 73,584
State 126,598 129,412 123,805 122,122 120,344
Federal 1,321 310 1,520 314 1,123
Sixteenth Section Sources 1,319 1,379 1,344 -- --
Total Revenues 205,078 207,208 203,060 196,647 195,051
Expenditures
Instruction 110,672 117,465 116,123 111,757 114,686
Support services 84,710 81,016 81,069 78,380 76,256
Non-instructional 44 27 -- 26 --
Sixteenth Section 61 77 94 -- --
Debt service
Principal -- 253 492 475 692
Interest 73 72 78 120 231
Other 5 48 -- 22 30
Total Expenditures 195,566 198,958 197,858 190,780 191,894
Excess (Deficiency) of Revenues 9,512 8,250 5,203 5,867 3,156
over (under) Expenditures
Total Other Financing Sources (Uses) (5,400) (1,990) (4,377) (3,929) 5,512
Net Change in Fund Balance 4,112 6,260 826 1,938 8,668
Fund Balances
Beginning of Period 21,472 15,192 14,032 12,560 4,276
Funds Reclassification 324
Prior period adjustments (69) -- (1) (615) (358)
Increase (Decrease) in reserve 29 20 11 148 (25)
Ending of Period $ 25,545 $ 21,472 $ 15,192 $ 14,032 $ 12,560
———————
Note: Totals may not add due to rounding.

SOURCE: Audited Financial Statements

Management’s Discussion and Analysis

From fiscal years 2010 through 2017, the District's General Fund Balance averaged 6.7% of total annual
expenditures. There was an increase in the total General Fund balance from fiscal year 2012 and 2013 as a result of
a restructuring and refunding of its debt. The District has continued to increase its fund balance due to consistent
monitoring of expenditures and consistent strengthening of fiscal management practices.

The total fund balance in the General Fund was $4,276,000 as of June 30, 2012. As a result of efficient
operations in fiscal years 2013 through 2017, the fund balance increased to $25,545,000 as of June 30, 2017,
representing an increase of $21,269,000 over five years.

The total millage rate for the District remained stable at 74.99 for six fiscal years, through June 30, 2012,
and increased to 77.49 for fiscal year ending June 30, 2013, and decreased to 71.96 for fiscal year ending June 30,
2014. As of June 30, 2018, the total millage rate is 84.73. The District has operated efficiently within the available
resources. The District’s ongoing active management of its debt portfolio and it revenue and expenses have
contributed to increasing the fund balance.

A-3
General Description of the Area

The City, the county seat of the First Judicial District of Hinds County, Mississippi (the “County”), is
located in the northeastern section of the County and has a land area of approximately 110 square miles. The City
was named after General Andrew Jackson. On November 28, 1821, when legislation was passed to locate a
permanent seat of government for the State, the City became its capital.

Today, the City is the largest municipality in the State and is considered to be Mississippi’s governmental,
trade, financial, medical, educational and cultural center. It is also known as the “Distribution Center of the Deep
South” because of its strategic location at the crossroads of Dallas/Houston, Atlanta, Memphis and New Orleans.
The City is the location of the University of Mississippi Medical Center, the state’s only academic health science
center, encompassing six (6) health science schools: medicine, nursing, dentistry, health related professions,
graduate studies and pharmacy. UMMC includes four (4) specialized hospitals, including the only children’s
hospital in Mississippi, a women’s and infants’ hospital and a critical care hospital. The City is the location for
three (3) other hospital/medical centers: St. Dominic’s, Baptist Medical Center, and Merit Health Central. The
Jackson metropolitan area is home to several major industries including the Nissan automotive assembly plant in
Canton, Cal-Maine Foods (largest fresh egg provider in the United States), C-Spire Wireless (eighth largest wireless
provider in the United States), Trustmark National Bank, Ergon (refining and distribution of petroleum products)
and Irby Electrical Distributor.

The Jackson metropolitan area is home to 13 banking institutions, two of which are headquartered in the
City: First Commercial Bank and Trustmark National Bank. Agriculture commodities represent a $180 million
business in the tri-county area. Cattle is the primary commodity in Hinds County, though other commodities
important to the region are cotton, grains, poultry, and timber. Government jobs, ranging from municipal to federal,
employ approximately 40,000 residents of metropolitan Jackson. Manufacturing remains an important economic
sector with nearly 500 local manufacturers. Construction, distribution and trade, health care, retail,
telecommunications, and travel and tourism are also vital to the local economy.

The City is proud of its famed southern hospitality and quality of life. Community support is strong for the
Mississippi Symphony Orchestra, the Mississippi Opera, Ballet Mississippi, the Mississippi Museum of Art, the
Mississippi Natural Science Museum, the Mississippi Children’s Museum, the Mississippi Agriculture and Forestry
Museum, the Smith-Robertson Museum and Cultural Center, the Old Capitol Museum, New Stage Theatre and
numerous theatrical and musical performances that occur each year throughout the City. Mississippi Veterans
Memorial Stadium, with a capacity of 65,000 seats, is the home field for Jackson State University and hosts
numerous sporting events, including the Capital City Classic, Battle of the Bands and the Mississippi High School
Football Championships. The State Fairgrounds and Coliseum host the Mississippi State Fair, numerous trade
shows, agriculture and equine events, and performing concerts. The City’s tourism marketing uses the theme the
“City with Soul.” Jackson is a city famous for its music – including gospel, blues, and rhythm and blues. Jackson is
also home to the world famous Malaco Records recording studio. Many notable musicians hail from Jackson.
Highly acclaimed authors Richard Wright, Eudora Welty and Richard Ford have claimed Jackson as their home.
The Museum of Mississippi History and the Mississippi Civil Rights Museum, located on adjoining sites near the
Old Capitol Museum in downtown Jackson, opened in 2017.

The City is the permanent site in the United States for the USA International Ballet Competition, which
was hosted in the City in the summers of 1982, 1986, 1990, 1998, 2002, 2006, 2010, 2014 and 2018. The USA
International Ballet Competition is a two-week “Olympic-style” competition where up and coming ballet stars vie
for gold, silver, and bronze medals, cash awards and scholarships. Designated as the official USA Competition by a
1982 Joint Resolution of Congress, the USA International Ballet Competition is held every four years, in the
tradition of sister competitions in Varna, Bulgaria; Moscow, Russia; and Helsinki, Finland.

In January 2009, the Jackson Convention Center Complex opened in downtown Jackson. In addition to
offering the latest in conferencing capability and fiber optic technology, the Jackson Convention Center Complex
offers 330,000 square feet of exhibit and meeting space conducive for hosting large regional and national
conferences and trade shows, and entertainment events.

A-4
City Government

The City operates under the Mayor-Council form of government. The City Council (the “Council”) is
comprised of seven (7) Council members who serve part-time and are elected for four-year terms from separate
districts or wards. The Mayor, who serves full time and is elected at large for a four-year term, is the head of the
executive branch of the City’s government, with veto power over actions of the Council (subject to override). The
current Mayor and members of the Council are:

Name Occupation/Position Current Term Expires

Chokwe Antar Lumumba Mayor June 30, 2021


Ashby Foote Council Member – Ward 1 June 30, 2021
Melvin Priester, Jr. Council Member – Ward 2 June 30, 2021
Kenneth I. Stokes Council Member – Ward 3 June 30, 2021
De’Keither Stamps Council Member – Ward 4 June 30, 2021
Charles Tillman Council Member – Ward 5 June 30, 2021
Aaron Banks Council Member – Ward 6 June 30, 2021
Virgi Lindsay Council Member – Ward 7 June 30, 2021

Transportation

Two interstate highway systems intersect in the City. Interstate Highway 55 runs north and south and
connects Memphis, Tennessee, to the north and New Orleans, Louisiana, to the south. Interstate Highway 20 runs
east and west and connects Birmingham, Alabama, and Atlanta, Georgia, to the east and Dallas, Texas, to the west.
U.S. Highways 49, 51 and 80, State Highways 18 and 25 and a number of county highways provide access to all
areas of the County and the State. U.S. Highway 49 connects the City to Hattiesburg, Mississippi and the
Mississippi Gulf Coast. The Natchez Trace Parkway, a two-lane limited parkway maintained by the National Park
Service extending 444 miles from Natchez, Mississippi to Nashville Tennessee, runs through Jackson.

Rail transportation is provided by Canadian National/Illinois Central Railroad Company, which operates
two north-south lines, and Kansas City Railway Company, which operates one east-west line. Amtrak runs daily
passenger service between Chicago, Illinois, and New Orleans, Louisiana. Numerous motor freight carriers are
authorized to serve the City and offer interstate and intrastate shipping services.

Commercial air service is available at the Jackson-Medgar Wiley Evers International Airport (the
“Airport”) located approximately 10 miles east of the City and administered by the Jackson Municipal Airport
Authority (the “Authority”). It is named after the late Medgar Wiley Evers, civil rights activist and field secretary of
the Mississippi NAACP assassinated in 1962 and buried with full military honors at Arlington National Cemetery.
The Airport has a modem terminal and two 8,500-foot runways, has been designated as a general-purpose foreign
trade zone, and is a U.S. Customs Port of Entry. The airport provides excellent facilities and service to private and
corporate pilots, both transient and home-based. American Airlines, Delta Air Lines, United Airlines, Frontier
Airlines and ViaAir offer non-stop flights to Atlanta, Charlotte, Chicago, Dallas/Ft. Worth, Denver, Houston-
Hobby, Houston-Bush Intercontinental, Orlando and Washington, D.C., with connecting service available to every
major city in the United States. Air cargo carriers include United Parcel Service. The Mississippi Air Cargo
Logistics Center provides the optimal location for air cargo and logistics management for consolidation and
distribution. Trucking cargo is provided through BAX Global. The Airport has undergone a $15 million air cargo
expansion program, which offers 450,000 square feet of aircraft parking, 60,000 square feet of warehousing
distribution facilities and 125,000 square feet of warehouse space. Also, improvements to the facilities include a new
covered garage and five new jetways installed in 2011. A smaller airport, Hawkins Field, is located near the City’s
downtown and provides fixed-base operations for private and corporate pilots and is also administrated by the
Airport Authority.

The nearest port, the Port of Vicksburg (the “Port”), is located 44 miles west of the City on the Mississippi
River in Warren County, Mississippi and is ranked 11th among U.S. inland ports based on trip ton miles. The Port,
which has a channel depth of 12 feet and a width of 300 feet, is a U.S. Customs Port of Entry and a designated
general-purpose foreign trade zone. The Port maintains a 150-foot crane and two 15-foot overhead cranes for all
weather loading and unloading. More than 3,000,000 tons of cargo pass through the Port each year.

A-5
Intercity bus service is provided by Greyhound, which provides more than 40 inbound and outbound buses
daily. Citywide bus service, which includes 13 fixed routes and demand response handlift services, is provided by
the City through its management company, JATRAN. Several vehicles for hire service providers are located in the
metropolitan area, which supply the citizens with quality taxi, limousine and shuttle services. The City opened the
renovated Union Station in 2004, which is a multi-modal transportation center for Amtrak, Greyhound and JATRAN
and taxicab services.

Population

The Jackson Metropolitan Statistical Area (the “MSA”) is comprised of Copiah, Hinds, Madison, Rankin,
Simpson and Yazoo Counties. The population annual estimates for the City, County, MSA and State are as follows:

Year City County MSA State


2017 166,965 239,497 578,715 2,984,100
2016 169,148 241,818 579,558 2,985,415
2015 170,918 243,665 578,766 2,985,297
2014 172,152 245,136 578,559 2,988,578
2013 173,021 246,127 577,229 2,987,721
2012 174,854 247,881 576,440 2,982,963
————————
SOURCE: U.S. Census Bureau, August, 2018

Per Capita Income

The City, County, MSA, State and national annual per capita income estimates are as follows:

Year County MSA State U.S.


2016 $38,801 $42,306 $35,484 $49,246
2015 38,617 41,936 34,757 48,451
2014 37,657 41,102 34,213 46,494
2013 36,221 39,945 33,327 44,493
2012 36,448 39,375 32,920 44,282
————————
SOURCE: United States Bureau of Economic Analysis, November, 2017

Retail Sales of the City

Set forth below is the total annual retail sales, number of taxpayers and gross sales tax for the years 2012
through 2017 for the City:

Year Total Retail Sales No. of Taxpayers Total Gross Sales Tax

2017 $2,705,206,665 5,073 $174,512,038


2016 2,755,034,794 5,155 177,649,290
2015 2,802,435,689 5,160 181,074,618
2014 2,814,704,825 5,116 181,729,049
2013 2,845,672,204 5,181 181,195,355
2012 2,517,707,293 4,867 173,783,971
————————
SOURCE: Mississippi Department of Revenue, Annual Report for the respective fiscal years.

A-6
Unemployment Statistics

Set forth below is the monthly unemployment rate and annual average for the years 2013 through 2018 for
the County and the State:
County Unemployment

2013 2014 2015 2016 2017 2018


January 9.7% 8.7% 6.9% 6.1% 5.5% 4.2%
February 8.6 7.7 6.0 5.3 4.6 4.2
March 8.4 7.7 5.8 5.4 4.7 4.2
April 7.8 6.6 5.4 4.9 4.3 4.1
May 8.7 7.7 6.2 5.7 5.2 5.0
June 9.4 8.1 6.8 6.4 5.9 5.6
July 9.1 8.1 6.7 6.1 5.7 5.2
August 8.1 6.9 5.5 5.2 4.8 4.5
September 8.2 6.8 5.8 5.3 4.6 -
October 8.2 6.5 5.7 5.2 4.3 -
November 7.6 6.1 5.5 4.7 4.1 -
December 7.6 6.2 5.9 5.0 4.1 -
Annual Average 8.5 7.3 6.0 5.4 4.8 -
————————
SOURCE: Mississippi Department of Employment Security, Labor Market Information, Unemployment Rates, August 2018.

State Unemployment

2013 2014 2015 2016 2017 2018


January 10.0% 8.9% 7.5% 6.6% 6.1% 4.6%
February 8.9 7.9 6.5 5.8 5.1 4.5
March 8.4 7.8 6.3 5.7 5.1 4.3
April 7.9 6.8 5.8 5.3 4.6 4.2
May 8.8 7.8 6.7 6.0 5.4 5.1
June 9.5 8.4 7.2 6.8 6.1 5.7
July 9.1 8.3 7.0 6.5 5.8 5.3
August 8.3 7.3 6.0 5.6 5.0 4.7
September 8.1 7.0 6.0 5.5 4.7 -
October 8.2 6.8 5.9 5.4 4.4 -
November 7.7 6.5 5.9 5.1 4.3 -
December 7.7 6.7 6.3 5.4 4.4 -
Annual Average 8.5 7.5 6.4 5.8 5.1 -
————————
SOURCE: Mississippi Department of Employment Security, Labor Market Information, Unemployment Rates, August 2018.

A-7
Banking Institutions in the City

The following is a list of banking institutions located in the City, their headquarters location and total
assets, reported by FDIC as of June 30, 2017. Trustmark National Bank and First Commercial Bank have
established their headquarters in the City.

Institution Headquarters Location Total Assets(1)


Wells Fargo Bank, National Association Sioux Falls, SD $ 1,675,077,000
Regions Bank Birmingham, AL 123,635,085
BancorpSouth Bank Tupelo, MS 14,848,975
Trustmark National Bank Jackson, MS 13,907,101
BankPlus Belzoni, MS 2,732,433
State Bank & Trust Company Greenwood, MS 1,086,260
BankFirst Financial Services Columbus, MS 944,927
Community Bank of Mississippi Forest, MS 837,970
Liberty Bank and Trust Company New Orleans, LA 594,531
First Commercial Bank Jackson, MS 365,902
FSNB, N.A. Lawton, OK 400,674
Merchants and Planters Bank Raymond, MS 88,231
OmniBank Bay Springs, MS 47,226
————————
(1) Figures
shown in thousands (000's).
SOURCE: FDIC, August 2018.

Banking Profile

The following is the FDIC State Banking Profile for the largest Deposit Markets for the State, based on
deposits in 2017.

State Banking Profile

Largest Deposit
Markets (from 2017 Institutions Deposits
Summary of Deposits) in Market ($ millions) Asset Distribution Institutions
Memphis, TN-MS-AR 56 $29,954 < $100 million 11 (15.1%)
Jackson, MS 28 13,713 $100 to $250 million 25 (34.2%)
Gulfport-Biloxi- 15 5,566 $250 million to $1 billion 27 (37.0%)
Pascagoula, MS
Hattiesburg, MS 17 2,898 $1 billion to $10 billion 6 (8.2%)
> $10 billion 4 (5.5%)
————————
SOURCE: FDIC, State of Mississippi Banking Profile, 2018 First Quarter Report.

A-8
Construction Permits of the City

Commercial Construction Permits Residential Construction Permits


(1)
Fiscal Year Number Commercial Value Number Residential Value
2017 1 $ 1,094,385 2 $ 650,500
2016 16 72,356,727 15 3,889,500
2015 25 115,486,233 21 3,748,767
2014 8 14,430,000 12 3,311,623
2013 13 54,637,190 41 7,069,581
2012 7 2,751,044 43 17,837,100
————————
(1)
Fiscal year ended September 30.
SOURCE: Office of the Director of Administration of the City, September 2017.

Employment Statistics of the County, MSA and State

Employment Statistics of the County

2013 2014 2015 2016 2017


Residence Based Employment
Civilian Labor Force 110,750 108,130 109,220 110,110 110,770
Unemployed 9,380 7,850 6,580 5,990 5,340
Employed 101,370 100,280 102,640 104,120 105,430
Establishment Based Employment
Manufacturing 3,440 3,520 3,620 3,730 4,030
Nonmanufacturing 126,710 126,140 127,080 127,420 127,130
Natural Resources and Mining 270 290 320 260 250
Construction 3,780 3,990 3,670 3,490 3,500
Trade, Transp. & Utilities 18,440 18,360 18,130 18,690 18,650
Information 2,100 2,070 1,620 1,810 2,090
Financial Activities 7,050 6,950 6,920 6,900 6,910
Professional & Business Services 15,310 14,960 15,630 15,920 15,850
Education & Health Services 24,660 24,850 25,790 26,080 26,480
Leisure and Hospitality 10,090 10,110 10,330 10,360 10,470
Other Services 6,850 6,630 6,750 6,710 6,650
Government 38,160 37,930 37,920 37,200 36,280
Public Education 14,300 13,600 13,730 13,860 13,270
————————
SOURCE: Mississippi Employment Security Commission, Labor Market Information Department, Labor Force Report, May 2, 2018.

A-9
Employment Statistics of the MSA

2013 2014 2015 2016 2017


Residence Based Employment
Civilian Labor Force 263,610 260,100 265,240 270,040 271,780
Unemployed 19,070 16,350 14,170 13,280 11,830
Employed 244,540 243,750 251,070 256,760 259,950
Establishment Based Employment
Manufacturing 17,200 17,780 18,810 19,640 20,200
Nonmanufacturing 249,350 252,670 256,220 259,100 259,880
Natural Resources and Mining 1,000 1,090 1,500 1,250 1,180
Construction 10,180 10,840 10,310 10,300 10,260
Trade, Transportation & Utilities 49,520 51,440 51,600 52,790 53,270
Information 4,760 5,220 4,430 4,070 3,820
Financial Activities 15,260 15,080 15,460 15,770 15,640
Professional & Business Services 32,330 32,250 33,640 34,550 34,350
Education & Health Services 40,380 40,870 42,270 43,400 44,300
Leisure and Hospitality 23,880 24,060 24,980 25,490 26,450
Other Services 13,400 13,460 13,660 13,770 13,810
Government 58,640 58,360 58,370 57,710 56,800
Government Education 23,160 22,380 22,500 22,740 21,810
————————
SOURCE: Mississippi Employment Security Commission, Labor Market Information Department, Labor Force Report May 2, 2018.

Employment Statistics of the State

2013 2014 2015 2016 2017


Residence Based Employment
Civilian Labor Force 1,272,500 1,248,100 1,263,900 1,279,000 1,280,000
Unemployed 108,700 94,000 81,100 74,500 64,900
Employed 1,163,800 1,154,100 1,182,800 1,204,500 1,215,100
Establishment Based Employment
Manufacturing 136,800 139,600 141,800 143,200 144,000
Nonmanufacturing 974,300 981,400 991,800 1,003,200 1,008,100
Natural Resources and Mining 9,100 9,200 8,000 6,900 6,900
Construction 51,100 49,200 46,000 44,400 43,300
Wholesale Trade 34,100 34,100 34,300 34,300 34,900
Retail Trade 133,600 135,900 138,200 140,800 140,400
Transportation & Warehousing 48,900 50,600 52,800 55,100 56,300
Information 12,800 13,100 12,700 12,200 11,600
Financial Activities 32,300 31,900 32,100 32,500 32,600
Real Estate, Rental & Leasing 11,500 11,600 11,600 11,600 11,700
Professional & Business Services 98,900 101,400 105,800 107,800 108,200
Education & Health Services 11,800 11,600 11,800 11,800 12,200
Health Care & Social Assistance 122,100 123,500 126,200 128,500 132,000
Arts, Entertainment & Recreation 9,700 9,500 9,300 9,300 9,600
Accommodation & Food Services 114,300 116,400 119,800 123,700 125,500
Other Services 38,800 39,000 39,800 40,200 40,300
Government 245,300 244,400 243,400 244,100 242,600
Government Education 106,800 106,300 105,900 106,800 105,500
————————
SOURCE: Mississippi Employment Security Commission, Labor Market Information Department, Labor Force Report May 2, 2018.

A-10
Principal Employers

The following is a partial listing of the principal employers in the City, their products or services and their
approximate number of employees in 2017:

% of Total City
Employer Product/Service Employees Rank Employment
State of Mississippi State Government 31,556 1 17.13%
University of Mississippi Medical Center Higher Education 8,000 2 4.34
United States Government Federal Government 5,500 3 2.98
Jackson Public School District Public Education 4,814 4 2.61
Baptist Health Systems Healthcare Services 2,875 5 1.56
St. Dominic Health Services Healthcare Services 2,600 6 1.41
City of Jackson, Mississippi City Government 2,323 7 1.26
Jackson State University Higher Education 1,500 8 0.81
AT&T Local Exchange Service, Internet
Access, Intrastate, Long Distance 1,300 9 0.71
Central Mississippi Medical Center Healthcare Services 1,200 10 0.65
61,668 33.47%%
——————————
SOURCE: City of Jackson Comprehensive Annual Financial Report for Year Ended September 30, 2017.

TAX INFORMATION

Although the District is fiscally independent under State law, Section 37-57-1 and Section 37-59-23,
Mississippi Code of 1972, as amended (together, the “School Act”) requires the City to annually levy taxes for the
District’s benefit according to the budget request of the Board. Within certain limits on annual increases in the
District’s budget, the City must levy a tax sufficient to provide the funds requested by the District. (See “OTHER
FINANCIAL INFORMATION; BUDGET AND SOURCES OF FUNDING - School District Funding – Local
Sources - District Maintenance Levy” herein.) The tax levied to pay debt service on the District Bond is a
mandatory, special, unlimited tax.

Assessed Valuation of Property in the District

Personal
Assessment Year(1) Real Property Property Public Utilities Total

2018 $ 787,521,608 $ 284,379,867 $ 143,715,843 $ 1,215,617,318


2017 782,580,303 290,701,752 136,835,230 1,210,117,285
2016 782,737,116 285,857,935 136,880,282 1,205,475,333
2015 767,113,668 291,653,153 134,265,709 1,193,032,530
2014 778,225,640 290,253,306 130,345,237 1,198,824,185
————————
(1)
The total assessed valuation is approved in September during the fiscal year of the District and represents the value of real
property, personal property and public utility property for the calendar year indicated on which taxes are assessed for the
following fiscal year’s budget. For example, the real property taxes for assessment year 2017 were collected starting in January
2018 for the 2017-2018 fiscal year budget of the District.
SOURCE: Office of the Hinds County Tax Assessor and Office of the City Administrator.

A-11
Assessed Valuation of Property in the City

Assessment Personal
Year(1) Real Property Property Public Utilities Total

2018 $ 802,527,332 $ 287,657,854 $ 143,015,365 $ 1,233,200,551


2017 796,225,430 294,093,325 136,180,831 1,226,499,586
2016 796,481,086 289,535,347 136,280,514 1,222,296,947
2015 780,885,736 294,191,074 133,711,644 1,208,788,454
2014 791,229,956 292,651,562 129,809,648 1,213,691,166
————————
(1) The total assessed valuation is approved in September preceding the fiscal year of the City and represents the value of real

property, personal property and public utility property for the calendar year indicated on which taxes are assessed for the
following fiscal year’s budget. For example, the taxes for assessment year 2017 were collected starting in January 2018 for the
2017-2018 fiscal year budgets of the City.
SOURCE: Office of the Director of the Administration of the City.

Assessed Valuation of Property in the County

Personal
Assessment Year(1) Real Property Property Public Utilities Total

2018 $1,212,935,054 $ 470,399,631 $ 247,907,175 $ 1,931,241,860


2017 1,197,249,942 471,099,716 242,190,462 1,910,540,120
2016 1,191,921,792 465,427,258 236,766,301 1,894,115,351
2015 1,166,145,165 463,361,515 234,647,082 1,864,153,762
2014 1,173,260,938 455,321,640 230,149,500 1,858,731,185
————————
(1)The total assessed valuation is approved in September preceding the fiscal year of the County and represents the value of real
property, personal property and public utility property for the calendar year indicated on which taxes are assessed for the
following fiscal year’s budget. For example, the taxes for assessment year 2017 were collected starting in January 2018 for the
2017-2018 fiscal year budgets of the County.
SOURCE: Office of the Hinds County Tax Assessor.

Pursuant to Article 4 Section 112, Mississippi Constitution and Section 27-35-4, Mississippi Code of 1972,
assessed valuations of property are based upon the following classifications and assessment ratios:

• Real and personal property (excluding single-family, owner-occupied residential


real property and motor vehicles): 15% of true value;

• Single-family, owner-occupied residential real property: 10% of true value;

• Motor vehicles and public utility property: 30% of true value.

The 1986 Session of the Mississippi Legislature adopted House Concurrent Resolution No. 41, pursuant to
which an amendment was proposed to Mississippi Constitution of 1890 (the “Amendment”). The Amendment
provided, inter alia, that the assessment ratio of any one class of property shall not be more than three times the
assessment ratio of any other class of property.

The Amendment set forth five (5) classes of property and the assessment ratios, which would be applicable
thereto upon adoption of the Amendment. The assessment ratios set forth in the Amendment are identical to those
established by Section 27-35-4, Mississippi Code of 1972, as it existed prior to the Amendment, except that the
assessment ratio for single-family, owner-occupied residential real property under the Amendment is set at 10% of
true value as opposed to 15% of true value under existing law.

A-12
Procedure for Property Assessments

Real and personal property valuations for City and County property, other than motor vehicles and property
owned by public utilities, are determined by the County Tax Assessor. All taxable real property situated in the
County is assessed each year and taxes thereon paid for the ensuing year. Assessment rolls of such property subject
to taxation are prepared by the County Tax Assessor and are delivered to the Board of Supervisors of the County on
the first Monday in July. Thereafter, the assessments are equalized by the Board of Supervisors and notice is given
to the taxpayers that the Board of Supervisors will meet to hear objections to the assessment. After objections are
heard, the Board of Supervisors adjusts the rolls and submits them to the State Tax Commission, which examines
the rolls on receipt. The State Tax Commission may then accept the rolls or, if it finds a roll incorrect in any
particular, return the rolls to the Board of Supervisors to be corrected in accordance with the recommendations of
the State Tax Commission. If the Board of Supervisors has any objections to the order of the State Tax
Commission, it may arrange a hearing before the Commission. Otherwise, the assessment roll is finalized and
submitted to the County Tax Collector for collection. The assessed value of motor vehicles is determined by an
assessment schedule prepared each year by the State Tax Commission. With minor exceptions, the property of
public utilities is assessed each year by the State Tax Commission. The tax levied to pay debt service on the District
Bond is a mandatory, special, unlimited tax.

Procedure for Tax Collections

The City Council of the City, acting for and on behalf of the District, is required by the provisions of the
School Act, the District Bond and the District Resolution to levy annually a special tax upon all taxable property
within the District sufficient to provide for the District’s school purposes and for the payment of the principal of,
premium, if any, and the interest on the District Bond. If any taxpayer neglects or refuses to pay his taxes on the due
date thereof, the unpaid taxes will bear interest at the rate of one percent per month or fractional part thereof from
the delinquent date to the date of payment of such taxes. When enforcement officers take action to collect
delinquent taxes, other fees, penalties and costs may accrue. Both real property and personal property are subject to
being sold at public sale for nonpayment of taxes.

Ad valorem taxes on personal property are payable at the same time and in the same manner as on real
property. Section 27-41-15, Mississippi Code of 1972, as amended, provides that upon failure of a taxpayer to make
timely payment, the tax collector of each county is authorized to sell any personal property liable for unpaid taxes at
the courthouse door of such county, unless the property is too cumbersome to be removed. Five days’ notice of the
sale in an advertisement posted in three public places in such county, one of which must be the courthouse of such
county, is required. If the sale is for delinquent municipal taxes, the advertisements must follow any special
ordinance adopted by the municipality regarding personal property sales. Interest, fees, costs and expenses of sale
are recoverable in addition to the delinquent taxes. If sufficient personal property cannot be found, the tax collector
may make a list of debts due such taxpayer from other persons and sell such debts. The tax collector is further
directed to distrain and sell sufficient other properties of such taxpayer to pay the delinquent taxes. Debts sold may
be redeemed within six months from the sale in the same manner as redemption of land from tax sales.

Section 27-41-55, Mississippi Code of 1972, as amended, provides that after the fifth day of August in each
year, the tax collector for each county shall advertise and sell all land in such county on which all taxes due and in
arrears have not been paid as well as all land liable for other matured taxes. The sale is held at the door of the
courthouse of such county on the last Monday of August following said advertisement. The owner, or any person
interested in the land sold for taxes, may redeem the land at any time within two years after the date of sale by
paying all taxes, costs, interest and damages due to the county’s chancery clerk. A valid tax sale will mature two
years after the date of sale unless the land is redeemed and title will vest in the purchaser on such date.

At the option of the tax collector, advertisement for the sale of such county lands may be made after the
fifteenth day of February in each year with the sale of such lands to be held on the first Monday of April following
said advertisement. All provisions which relate to the tax sale held in August of each year shall apply to the tax sale
if held in April.

County and municipal taxes assessed upon lands or personal property are entitled to preference over all
judgments, executions, encumbrances or liens, however created.

A-13
Property Tax Rates

Property Tax Rates


Direct and Overlapping Governments
City, County and District

Overlapping Rates
City of Jackson County District
Debt Total Debt Service Debt Total Total Direct &
Fiscal Operating Service City & Operating Operating Service School Special Overlapping
Year Millage Millage Millage Debt Millage Millage Millage Millage Districts Rates
2018 48.56 12.71 63.03 41.58 65.91 18.82 84.73 1.76 191.10
2017 56.19 3.08 61.03 38.83 65.91 18.68 84.59 1.76 186.21
2016 53.28 2.98 56.26 38.33 65.91 16.76 82.67 1.77 179.03
2015 48.90 7.56 56.46 38.33 65.91 16.53 82.44 1.57 178.80
2014 56.77 5.30 62.07 38.33 64.79 7.17 71.96 1.49 173.85
2013 53.50 3.04 56.54 38.33 62.58 14.91 77.49 1.49 173.85
2012 53.43 3.20 56.63 38.33 62.66 12.33 74.99 1.40 171.35
2011 53.56 3.07 56.63 44.13 62.58 12.41 74.99 1.40 177.15
2010 50.09 6.63 56.72 39.12 68.91 6.08 74.99 1.31 172.14
2009 51.25 5.47 56.72 39.12 68.91 6.08 74.99 1.31 172.14
2008 52.28 4.47 56.75 39.12 68.91 6.08 74.99 1.28 172.14
2007 47.23 9.52 56.75 39.12 68.91 6.08 74.99 1.28 172.14
2006 45.23 9.52 54.75 39.12 68.91 6.79 75.70 1.28 170.85
2005 45.23 9.52 54.75 39.12 68.91 6.79 75.70 1.28 170.85

————————
SOURCE: City of Jackson Comprehensive Annual Financial Report for the Year Ended September 30, 2017

The City’s property owners pay property taxes for the County, the City and the District totaling $191.10 per
$1,000 of assessed value. There is no local income tax in the City.

City’s Property Tax Levies and Collections


(amounts expressed in thousands)

Collected within the


Fiscal Year of the Levy Total Collections to Date
FY Ended Total Tax Percentage Collections in Percentage
Sept. 30(1) Levy for FY(2) Amount of Levy Subsequent Years Amount of Levy
2017 $ 64,507 $ 62,170 96.4% $ 1,006 $ 63,176 97.9%
2016 61,601 59,548 96.7 1,229 60,777 98.7
2015 59,436 59,314 99.8 528 59,842 100.7
2014 69,499 66,623 95.9 1,458 68,081 98.0
2013 69,069 61,147 88.5 1,106 62,253 90.1
2012 67,138 60,734 90.5 1,533 62,267 92.7
2011 - - - - - -
2010 61,942 59,321 95.8 972 60,293 97.3
2009 61,363 59,602 97.1 376 59,978 97.7
2008 55,175 53,501 97.0 212 53,713 97.4
2007 55,147 54,276 98.4 306 54,582 99.0
2006 52,019 50,928 97.9 996 51,924 99.8
2005 53,925 52,750 97.8 270 53,020 98.3
————————
(1) The data was not available from Hinds County in 2011.
(2) The total tax levy does not include automobile ad valorem taxes.

SOURCE: City of Jackson Comprehensive Annual Financial Report for the Year Ended September 30, 2017.

A-14
City’s Tax Levy Per $1,000 Valuation
(in mills)

2012 2013 2014 2015 2016 2017 2018

City General Fund 45.68 46.61 49.77 42.42 47.39 50.94 48.56
City Parks & Recreation Fund 2.00 2.00 2.00 2.00 2.00 2.00 2.00
City Debt Service Fund 3.20 3.04 5.30 7.56 2.98 3.83 6.61
City Disability & Relief Fund 5.75 4.89 5.00 4.48 3.89 4.46 4.10
Jackson/Hinds Library System 1.40 1.49 1.49 1.57 1.77 1.80 1.76
Jackson Public School District 74.99 77.49 71.96 82.44 82.67 84.81 84.77
Total For Combined
City Purposes Levy(1) 133.02 135.52 135.52 140.47 140.70 147.84 147.77
————————
(1)
Totals do not include County tax millage amounts.
SOURCE: City of Jackson Comprehensive Annual Financial Report for the Years Ended September 30, 2012 - 2017

District Ad Valorem Tax Collections

Collections as
FY Ending June 30 Total Tax Levy Amount Collected(1) Percent of Levy

2017-2018 $ 94,043,603 $ 95,810,039 101.88%


2016-2017 93,726,740 95,052,143 101.41%
2015-2016 91,416,649 92,465,330 101.15%
2014-2015 91,261,521 92,011,087 100.82%
2013-2014 79,965,030 80,859,473 101.12%
2012-2013 88,897,985 88,544,055 99.60%
————————
(1)
Amounts collected in a year include amounts received from prior years’ uncollected amounts on tax sales. 2017-2018
unaudited
SOURCE: Jackson Public School District.

City Ad Valorem Tax Collections

Collections as
FY Ending Sept. 30 Total Tax Levy Amount Collected(1) Percent of Levy

2017 $64,507,614 $63,267,216 98.0%


2016 61,600,980 60,777,570 98.6%
2015 59,436,000 59,842,000 100.6%
2014 69,499,257 68,080,736 97.9%
2013 59,987,791 59,126,535 98.6%
2012 59,853,150 60,119,653 100.4%
————————
(1)
Does not include school taxes and automobile taxes. Includes delinquent tax collections.
SOURCE: Office of the Director of Administration of the City.

Reappraisal of Property and Limitation on Ad Valorem Levies

Senate Bill No. 2672, General Laws of Mississippi, Regular Session 1980, codified in part as Sections 27-
35-49 and 27-35-50, Mississippi Code of 1972 (the “Reappraisal Act”), provides that all real and personal property
in the State shall be appraised at true value and assessed in proportion to true value. To ensure that property taxes
do not increase dramatically as the counties complete reappraisals, the Reappraisal Act provides for the limit on
increase in tax revenues discussed below.

A-15
The statute limits ad valorem tax levies by a city subsequent to October 1, 1980, to a rate which will result
in an increase in total receipts of not greater than 10% over the previous year’s receipts, excluding revenue from ad
valorem taxes on any newly constructed properties, any existing properties added to the tax rolls or any properties
previously exempt which were not assessed in the next preceding year. This limitation does not apply to levies for
the payment of the principal of and the interest on general obligation bonds issued by a city or to certain other
specified levies. The limitation may be increased only if the proposed increase is approved by a majority of those
voting in an election held on such question.

On August 20, 1980, the Mississippi Supreme Court rendered its decision in State Tax Commission v.
Fondren, 387 So. 2d 712, affirming the decree of the Chancery Court of the First Judicial District of Hinds County,
Mississippi, wherein the State Tax Commission was enjoined from accepting and approving assessment rolls from
any county in the State for the tax year 1983 unless the State Tax Commission equalized the assessment rolls of all
of the counties. Due to the intervening passage of the Reappraisal Act, the Supreme Court reversed that part of the
lower court’s decree ordering the assessment of property at true value (although it must still be appraised at true
value), holding instead that assessed value may be expressed as a percentage of true value. Pursuant to the Supreme
Court modification of the Chancellor’s decree, on November 15, 1980, the State Tax Commission filed a master
plan to assist counties in determining true value. On February 7, 1983, the Chancery Court granted an extension
until July 1, 1984, of its previous deadline past which the State Tax Commission could not accept and approve tax
rolls from counties which had not yet reappraised. The County has completed a number of reappraisals since 1984.
The last reappraisal was done in July 2016 and will next be reappraised in 2020.

Homestead Exemption

The Mississippi Homestead Exemption Law of 1946 reduces the local tax burden on qualified homesteads
and provides substitute revenues from other sources of taxation on the State level as a reimbursement to the local
taxing units for such tax loss. Provisions of the homestead exemption law determine qualification, define ownership
and limit the amount of property that may come within the exemption. The exemption is not applicable to taxes
levied for the payment of the District Bond, except as hereinafter noted.

Those homeowners who qualify for the homestead exemption and who have reached the age of 65 years on
or before January 1 of the year for which the exemption is claimed, service-connected, totally disabled American
veterans who were honorably discharged from military service, and those qualified as disabled under the federal
Social Security Act are exempt from any and all ad valorem taxes on qualified homesteads not in excess of $7,500
of assessed value. The tax loss resulting to local taxing units from qualified homestead exemptions is reimbursed by
the State Tax Commission. Beginning with the 1984, supplemental ad valorem tax roll and for each roll thereafter,
no taxing unit shall be reimbursed an amount in excess of 106% of the total net reimbursement made to such taxing
unit in the next preceding year.

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Principal Property Taxpayers

The following is a listing of the principal property taxpayers in the City.

Percentage of Total Taxable


Taxpayer Taxable Assessed Value (1) Rank Assessed Value
Entergy $ 145,523 1 14.16%
Bell South 25,477 2 2.48%
Midcontinent Express Pipeline 21,671 3 2.11%
Gulf South Pipeline Co 21,102 4 2.05%
Atmos Energy 14,254 5 1.39%
Texas Eastern Transmission Co 13,952 6 1.36%
Entergy Services, Inc 13,708 7 1.33%
Illinois Central Railroad 9,068 8 0.88%
AT & T Services 6,202 9 0.60%
Jackson HMA Inc. LLC 5,957 10 0.58%
————————
(1) amounts expressed in thousands
SOURCE: City of Jackson Comprehensive Annual Financial Report for the Year Ended September 30, 2017.

THE DISTRICT’S DEBT INFORMATION

Legal Debt Limit Statement(1)

15% Limit 20% Limit


Authorized Debt Limit $182,342,597 $243,123,464
(Last Completed Assessment for Taxation - $1,215,617,318)
Present Debt Subject to Debt Limits 115,565,000 115,565,000
Less this Offering 65,000,000 65,000,000
Margin for Further Debt Under Debt Limits After
Issuance of the District Bond $ 1,777,597 $ 62,558,464
————————
(1)
As of October 1, 2018
SOURCE: Jackson Public School District.

Statutory Debt Limits

School districts in the State are subject to a general statutory prohibition against issuing bonds in an amount
which, when added to all of the then outstanding bonded indebtedness of such district, results in the imposition on
any of the property in the district of more than 15% of the assessed value of the taxable property within such district,
according to the then last completed assessment for taxation.

Such general limitation of indebtedness may be exceeded by a school district in the following instances:

(a) If the total number of pupils enrolled at any one time during the school year shall have increased
by at least 20% or an average of 350 or more annually within the preceding five years, such district may issue bonds
in an amount which, when added to all of its then outstanding bonded indebtedness, results in the imposition on any
of the property in such district of an indebtedness for school purposes of up to 25% of the assessed value of the
taxable property within such district, according to the then last completed assessment for taxation.

(b) If the total number of pupils enrolled at any one time during the school year shall have increased
by at least 10% within the preceding five years, such district may issue bonds in an amount which, when added to all
of its then outstanding bonded indebtedness, results in the imposition on any of the property in such district of an
indebtedness for school purposes of up to 20% of the assessed value of the taxable property within such district,
according to the then last completed assessment for taxation.

A-17
(c) In the event or circumstances set forth below, a school district may issue bonds for the purpose of
constructing, reconstructing, repairing, equipping, remodeling or enlarging school buildings and related facilities, in
an amount which, when added to all of its then outstanding bonded indebtedness, results in the imposition on any of
the property in such district of an indebtedness for such school purposes of up to 20% of the assessed value of the
taxable property within such district, according to the then last completed assessment for taxation:

(i) in the event of the damage to or destruction of any school building or school buildings, or
related facilities of such district by fire, windstorm, flood or other providential and unforeseeable cause; or

(ii) in the event that such district has lost its accreditation and the constructing,
reconstructing, repairing, equipping, remodeling or enlarging of such school buildings and related facilities
is necessary for the restoration of such accreditation.

General Obligation Debt of the District. The obligations described below are general obligation debt obligations
secured by the full faith, credit and special tax of the District under the authority of Sections 37-59-1, et seq.,
Mississippi Code of 1972, as amended and supplemented from time to time, and are subject to the fifteen percent
(15%) debt limit. The City Council (the “City Council”) of the City acts as the levying authority for the District.
The City Council, acting for and on behalf of the District, annually levies a special tax upon all the taxable property
in the District, which shall be sufficient to provide for the payment of the principal of and the interest on any general
obligation debt obligations, including the Series 2018 Bonds, issued under the provisions of Section 37-59-1, et seq.

Outstanding General Obligation Debt


(as of October 1, 2018)

Issue Issue Date Original Principal Amount Outstanding


Amount
General Obligation Bonds, Series 2012A 01/15/13 $ 21,065,000 $ 17,225,000
Special Obligation Bonds, Series 2015A1 11/10/15 104,990,000 98,340,000

Limited-Tax Obligation Debt of the District. The obligations described below are secured by a levy of not
exceed 3-mills on all taxable property within the District under the authority of Sections 37-59-101, et seq.,
Mississippi Code of 1972, as amended and supplemented from time to time, which debt is exempt from the debt
limit imposed by Section 37-59-5, Mississippi Code of 1972, as amended and supplemented from time to time.

Outstanding Limited-Tax Obligation Debt


(as of October 1, 2018)

Issue Issue Original Amount Outstanding


Date Principal
Amount
Limited-Tax Refunding Notes, Series 2012B 01/15/13 $15,100,000 $ 13,750,000
Special Obligation Bonds, Series 2015B 11/10/15 13,080,000 11,410,000
(Limited-Tax Refunding Notes) 2
Limited-Tax Note, Series 2017 09/21/17 2,500,000 2,320,000

1
The Refunding Bonds, Series 2015A refunded the (a) outstanding Series 2006 State Aid Capital
Improvement Refunding Bonds, (b) certain maturities of the Series 2007 General Obligation Bonds, (c) certain
maturities of the Series 2008 General Obligation Bonds and (d) certain maturities of the Series 2008 Mississippi
Development Bank Special Obligation Bonds
2
The Refunding Bonds, Series 2015B refunded the outstanding Series 2005 Limited-Tax Refunding Notes.

A-18
Other Long-Term Indebtedness
(as of October 1, 2018)

Issue Issue Original Amount Outstanding


Date Principal
Amount
Capital Lease Obligation (Buses) 06/13/11 $ 1,238,460 $ 521,852
Trustmark
Transportation and Food Service 09/19/13 3,999,791 2,701,623
Equipment
Trust Certificates, Series 2015 08/14/15 15,400,000 15,400,0003
(Qualified School Construction Bond)

Direct and Overlapping Debt Ratios

2017-18
Assessed G.O. Bonded % Applicable Amt. Applicable
Jurisdiction Valuation* Debt** to the District to the District

District $1,215,617,318 $143,225,000*** 100.00% $143,225,000


City of Jackson 1,233,200,551 120,832,000 98.57 119,104,102
Hinds County 1,931,241,860 85,939,000 62.94 54,090,007

* Assessed valuations net of homestead exemption


** Does not include the District Bond
*** Includes Limited-Tax Notes

Annual Debt Service Requirements (General Obligation Bonds)*

Fiscal
Year Debt Service for Debt Service for
ending Series 2012A Series 2015A Total Debt
June 30 Bonds Bonds Service

2018 $ 1,375,750 $ 9,311,250 $ 10,687,000

2019 2,231,250 14,077,000 16,308,250

2020 2,232,750 12,739,000 14,971,750

2021 2,230,750 12,755,000 14,985,750

2022 2,230,250 12,774,500 15,004,750

2023 2,231,000 12,791,250 15,022,250

2024 2,227,750 12,809,250 15,037,000

2025 2,230,500 12,822,250 15,052,750

2026 2,228,750 12,844,250 15,073,000

2027 2,232,500 12,793,500 15,026,000


2028 2,231,250 10,127,250 12,358,500

TOTAL $ 23,682,500 $135,844,500 $159,527,000

* Does not include the District Bond.


————————
SOURCE: Jackson Public School District.

3
Payments are deposited annually into a sinking fund held by a trustee bank and will be used to pay the
principal at maturity. The amount on deposit as of June 15, 2018 was approximately $3,849,000.

A-19
Annual Debt Service Requirements (Limited-Tax Obligation Notes)

Fiscal
Year Debt Service for Debt Service for Debt Service for
ending Series 2012B Series 2015B Series 2017 Total Debt
June 30 Notes Notes Notes Service

2018 $ 1,218,797 $ 3,052,518 $ 20,854 $ 4,292,169

2019 1,221,734 3,044,297 235,671 4,501,702

2020 1,194,016 3,076,788 236,455 4,507,258

2021 1,190,719 3,075,000 242,066 4,507,785

2022 4,203,938 247,446 4,451,384

2023 4,200,641 252,595 4,453,236

2024 4,204,844 257,513 4,462,357

2025 262,200 262,200

2026 266,656 266,656

2027 275,824 275,824

2028 279,702 279,702

2029 288,292 288,292

TOTAL $17,434,688 $12,248,602 $2,865,275 $32,548,565

OTHER FINANCIAL INFORMATION; BUDGET AND SOURCES OF FUNDING

Budgetary Process

The District’s budgetary process is prescribed by Sections 37-61-9 to 37-61-21, Mississippi Code of 1972,
as amended. Submission of a budget on forms prescribed by the State Auditor is a prerequisite to the distribution of
school funds. On or before August 15 of each year, the school board of each school district within the State, with
the assistance of the superintendent of schools, must prepare and file with the levying authority for the school
district at least two copies of a budget of estimated expenditures for the support, maintenance and operation of the
public schools of the school district for the coming fiscal year (commencing July 1). In addition, on or before
August 15 of each year, each school board, with the assistance of the superintendent of schools of each district, shall
prepare and file with the State Department of Education such budgetary information as the trustees of the State
Board of Education may require.

Prior to the adoption of a budget, the school board must hold at least one public hearing to provide the
public with an opportunity to comment on the budget. The public hearing must be held at least one week prior to the
adoption of the budget, with advance notice. After final adoption of the budget, the budget must be published in a
newspaper having general circulation in the school district.

The expenditure of school funds is limited to the budgeted amount, unless revised in the statutorily-
prescribed manner. When the need arises, budgets may be revised upon the approval by the school district’s board
of trustees. The superintendent of each school district is to maintain a set of books subject to reasonable inspection
by any citizen. These books will be arranged according to the same headings contained in the approved budget, and
will reflect a running total of all liabilities incurred during the fiscal year under each budget item.

Statutory Provisions Concerning Audits for School Districts

The State Auditor is directed by statute to prescribe and formulate for use by all school districts of the State
adequate accounting systems and other essential financial records that shall be uniform for all districts. It is
mandatory that the boards of trustees/education of all school districts install, utilize and follow said uniform system
of accounts in keeping the financial records of such school district.

A-20
School District Funding

There are three general categories of funding sources for public schools in Mississippi: State, local and
federal.

State Funding

Mississippi Accountability and Adequate Education Program

Effective July 1, 2002, the Mississippi Accountability and Adequate Education Program Act of 1997
(MAEP) replaced the Minimum Education Program (MEP) as the primary method of State funding for public school
districts. The MAEP provides a total overhaul of the funding formula for public education in Mississippi.

Under the MAEP, funds are distributed to each school district based upon a formula multiplying average
daily attendance by the base student cost as established by the State Legislature. This yields the total base program
cost for each school district. The base student dollar cost figure is established each year at current operation funding
levels necessary for the programs of a school district to meet at least Level III of the accreditation system established
by the trustees of the State Board of Education, regardless of the school district’s geographic location.

Additional funding is provided to the total base program cost using factors applicable to the percentage of
children “at-risk,” supplemental grant funds based on average daily attendance and add-on program costs such as
transportation costs, vocational or technical education, special education, gifted education, alternative school and
extended school year programs.

The MAEP is financed jointly by local school district contributions and by the State. The formula for
determining the cost of the MAEP and the local contribution is set forth in the statutes authorizing the MAEP.

State Public Schools Building Fund

The State also provides limited funding assistance to school districts for capital construction projects. A
grant program was established in 1953 that has provided substantial assistance to local school districts. The
program, formerly administered by the Education Finance Commission, is presently administered by the trustees of
the State Board of Education and is known as the State Public Schools Building Fund (the “Building Fund”). The
Building Fund is funded primarily through a fixed amount of annual funding from sales tax revenues of the State.
The Building Fund is authorized to issue state bonds to produce funds that are redistributed to local districts based
upon a formula allowing for credits for a certain dollar amount for each student for each year. A local district is
allowed to borrow against those credits in order to provide funding assistance for the facilities needed. However, a
school district is not obligated to repay any portion of its allocation or any portion of the underlying bonded
indebtedness of the Building Fund.

State Public Schools Sales Tax Diversion

During the 1992 legislative session, the State enacted a law that, among other things, increased the sales tax
in the state from six percent, to seven percent with the bulk of the increased sales tax revenues to be used for the
benefit of the State’s public schools. In particular, the sales tax law created the Education Enhancement Fund
(EEF), through which approximately Sixteen Million Dollars ($16,000,000) of sales tax revenues will be distributed
to State school districts on an average daily attendance-based formula. These funds may be used to pay the costs of
capital improvements or transportation equipment purchases or to pay debt service on debt issued to pay for these
purposes. Section 37-61-33, Mississippi Code of 1972, as amended, allows the pledge of the EEF funds as security
for long-term obligations issued by a school district. Any of the EEF funds not required to pay principal of and
interest on the school district’s obligations may be used by the school district for any lawful purposes. The sales tax
law also establishes other funds to distribute additional monies to school districts for transportation, instructional
supplies and ad valorem tax reduction.

A-21
Local Sources

The second source of funding of public schools in Mississippi is from local sources, primarily consisting of
ad valorem tax revenues. The various types of local funding revenues may be categorized as follows:

District Maintenance Levy

All school districts in Mississippi are authorized to require the levy of an ad valorem tax to provide
necessary local funding for operations. This is the primary source for a district’s local sources revenues. Beginning
with Fiscal Year 1998, the operational levy of all school districts, excluding any debt service or other special debt
levies, is limited to 55 mills. Any school district that exceeded that levy as of July 1, 1997, however, was allowed
an increase of up to three mills between July 1, 1997, and June 30, 2002. Such increases are subject to the normal
increase limitations imposed on school districts of not more than four percent, in the discretion of the school
district’s board of trustees/education, or seven percent, subject to a public referendum, if a proper petition is filed
requesting such referendum. The District’s millage rate is permitted to exceed 55 mills based upon the
grandfathered provision of the law.

Local Contribution to MAEP

A portion of the State’s MAEP is funded from local contributions from the local ad valorem tax levy. The
calculation of the local contribution is set by the statute authorizing the MAEP.

Federal Sources

Federal funds have been granted to local school districts in Mississippi, primarily under entitlement
programs designed to assist the economically disadvantaged and to assist in implementing desegregation programs
as well as other special purpose programs. For the year ending June 30, 2017, federal sources provided $51,333,197
to the District.

Financial Statements

The last year for which the District’s audited financial statements are available is the year ended June 30,
2017, a copy of which is included in Appendix B to this Official Statement. In addition, Appendix B includes the
District’s budgets for fiscal years 2017-18 and 2018-19.

Financial records of Mississippi school districts are maintained on a modified accrual basis. The local
education agency is also required to employ the double-entry system for recording and control of accounting
transactions.

A-22
APPENDIX B

FINANCIAL INFORMATION CONCERNING THE DISTRICT


[THIS PAGE INTENTIONALLY LEFT BLANK]
ORDER APPROVING EXPENDITURE BUDGET FOR FISCAL YEAR
2018-2019
1120 DISTRICT MAINTENANCE
ORIGINAL
After full and due consideration, and upon motion duly made, seconded, and for good cause shown, all present voting
“aye”, it is ordered that the budget for the fiscal year 2018-2019 which budget is attached hereto and made a part hereof,
be and the same are hereby approved.

APPROVED PROPOSED
BUDGET BUDGET
2017-2018 2018-2019

REVENUES

1120 AD VALOREM TAXES-LOCAL $ 72,696,426.00 $ 72,696,426.00

1210 REVENUE IN LIEU OF TAXES $ 0.00 $ 0.00

1300 TUITION $ 250,000.00 $ 200,000.00

1500 EARNINGS ON INVESTMENTS $ 40,000.00 $ 50,000.00

1900 OTHER REVENUE-LOCAL $ 618,000.00 $ 503,000.00

3100 UNRESTRICTED GRANTS IN AID $ 104,430,203.35 $ 99,417,132.27

3200 RESTRICTED GRANTS IN AID $ 700,000.00 $ 700,000.00

3800 REVENUE IN LIEU OF TAXES $ 750,000.00 $ 750,000.00

4100 UNRESTRICTED FED GRANTS IN AID $ 1,900,000.00 $ 0.00

4400 RESTRICTED FEDERAL GRANTS IN AID $ 10,000.00 $ 10,000.00

6200 PROCEEDS OF LOANS $ 20,000,000.00 $ 20,000,000.00

6400 INSURANCE LOSS RECOVERIES $ 15,000.00 $ 40,000.00

6500 SALE OF TRANSPORTATION EQUIPMENT $ 50,000.00 $ 50,000.00

6600 SALE OF OTHER PROPERTY $ 0.00 $ 800,000.00

6710 INDIRECT COSTS $ 460,000.00 $ 450,000.00

6720 OPERATING TRANSFERS IN $ 4,600,000.00 $ 2,050,000.00

TOTAL REVENUE BUDGET $ 206,519,629.35 $ 197,716,558.27


EXPENDITURES

1000 INSTRUCTIONAL $ 94,477,470.49 $ 87,836,819.28

100 SALARIES $ 66,644,209.17 $ 64,861,721.63


200 EMPLOYEE BENEFITS $ 22,874,084.18 $ 18,952,088.91
300 PURCHASED PROF & TECH SRVCS $ 980,507.68 $ 791,337.04
400 PURCHASED PROPERTY SERVICES $ 25,080.10 $ 26,341.64
500 OTHER PURCHASED SERVICES $ 178,327.40 $ 172,282.28
600 SUPPLIES $ 3,556,334.04 $ 2,846,103.43
700 PROPERTY $ 152,722.92 $ 110,939.35
800 OTHER OBJECTS $ 66,205.00 $ 76,005.00

2100 SUPPORT SERVICES-STUDENT $ 7,471,413.92 $ 6,876,848.48

100 SALARIES $ 4,820,295.08 $ 4,932,870.82


200 EMPLOYEE BENEFITS $ 2,415,636.49 $ 1,593,096.11
300 PURCHASED PROF & TECH SRVCS $ 126,293.51 $ 241,292.71
400 PURCHASED PROPERTY SERVICES $ 318.00 $ 318.00
500 OTHER PURCHASED SERVICES $ 82,192.00 $ 82,192.00
600 SUPPLIES $ 25,382.84 $ 25,782.84
700 PROPERTY $ 0.00 $ 0.00
800 OTHER OBJECTS $ 1,296.00 $ 1,296.00

2200 SUPPORT SERVICES-INSTRUCTION $ 5,245,366.21 $ 5,364,076.24

100 SALARIES $ 3,556,288.27 $ 3,738,538.75


200 EMPLOYEE BENEFITS $ 1,124,551.14 $ 1,185,544.56
300 PURCHASED PROF & TECH SRVCS $ 88,974.17 $ 220,520.80
400 PURCHASED PROPERTY SERVICES $ 5,287.70 $ 5,558.60
500 OTHER PURCHASED SERVICES $ 41,829.26 $ 14,173.65
600 SUPPLIES $ 411,918.55 $ 191,714.78
700 PROPERTY $ 16,517.12 $ 7,845.10
800 OTHER OBJECTS $ 0.00 $ 180.00

2300 SUPPORT SERVICES-GENERAL ADMIN $ 4,156,269.38 $ 4,242,652.37

100 SALARIES $ 1,783,812.12 $ 1,896,199.36


200 EMPLOYEE BENEFITS $ 553,214.97 $ 566,153.28
300 PURCHASED PROF & TECH SRVCS $ 574,121.92 $ 589,362.49
400 PURCHASED PROPERTY SERVICES $ 22,445.50 $ 16,359.50
500 OTHER PURCHASED SERVICES $ 268,655.69 $ 259,001.69
600 SUPPLIES $ 114,837.11 $ 136,690.55
700 PROPERTY $ 0.00 $ 0.00
800 OTHER OBJECTS $ 839,182.07 $ 778,885.50

2400 SUPPORT SERVICES-SCHOOL ADMIN $ 14,189,817.31 $ 14,507,660.15

100 SALARIES $ 10,403,484.16 $ 10,861,344.32


200 EMPLOYEE BENEFITS $ 3,685,304.53 $ 3,556,270.40
300 PURCHASED PROF & TECH SRVCS $ 0.00 $ 0.00
400 PURCHASED PROPERTY SERVICES $ 303.57 $ 0.00
500 OTHER PURCHASED SERVICES $ 41,366.45 $ 35,702.00
600 SUPPLIES $ 40,065.17 $ 39,151.00
700 PROPERTY $ 4,967.00 $ 5,534.00
800 OTHER OBJECTS $ 14,326.43 $ 9,658.43

2500 SUPPORT SERVICES-BUSINESS $ 2,697,598.67 $ 2,693,303.80

100 SALARIES $ 1,634,497.84 $ 1,624,550.90


200 EMPLOYEE BENEFITS $ 645,342.89 $ 585,947.48
300 PURCHASED PROF & TECH SRVCS $ 102,900.25 $ 104,150.25
400 PURCHASED PROPERTY SERVICES $ 166,744.26 $ 241,993.22
500 OTHER PURCHASED SERVICES $ -215,347.49 $ -215,397.49
600 SUPPLIES $ 169,666.44 $ 343,686.44
700 PROPERTY $ 599.00 $ 599.00
800 OTHER OBJECTS $ 7,774.00 $ 7,774.00
2600 OPER/MAINTENANCE PLANT SRVCS $ 28,992,774.97 $ 28,526,485.75

100 SALARIES $ 9,346,040.59 $ 9,571,065.82


200 EMPLOYEE BENEFITS $ 4,291,658.92 $ 4,081,940.36
300 PURCHASED PROF & TECH SRVCS $ 1,433,638.04 $ 1,445,303.04
400 PURCHASED PROPERTY SERVICES $ 11,043,723.39 $ 10,580,146.54
500 OTHER PURCHASED SERVICES $ 1,527,839.29 $ 1,527,839.29
600 SUPPLIES $ 1,268,374.74 $ 1,113,690.70
700 PROPERTY $ 47,200.00 $ 182,200.00
800 OTHER OBJECTS $ 34,300.00 $ 24,300.00

2700 STUDENT TRANSPORTATION $ 10,216,098.25 $ 9,395,710.82

100 SALARIES $ 4,848,140.31 $ 5,048,140.31


200 EMPLOYEE BENEFITS $ 2,787,757.02 $ 2,275,811.59
300 PURCHASED PROF & TECH SRVCS $ 94,000.00 $ 96,458.00
400 PURCHASED PROPERTY SERVICES $ 316,800.00 $ 205,900.00
500 OTHER PURCHASED SERVICES $ 11,870.92 $ 11,870.92
600 SUPPLIES $ 2,156,730.00 $ 1,756,730.00
700 PROPERTY $ 0.00 $ 0.00
800 OTHER OBJECTS $ 800.00 $ 800.00

2800 SUPPORT SERVICES-CENTRAL $ 6,085,062.99 $ 5,917,679.84

100 SALARIES $ 1,880,335.67 $ 1,963,286.40


200 EMPLOYEE BENEFITS $ 641,052.56 $ 592,749.81
300 PURCHASED PROF & TECH SRVCS $ 2,350,377.93 $ 2,647,431.77
400 PURCHASED PROPERTY SERVICES $ 226,379.00 $ 240,679.00
500 OTHER PURCHASED SERVICES $ 29,493.56 $ 36,993.56
600 SUPPLIES $ 95,151.80 $ 95,151.80
700 PROPERTY $ 845,885.27 $ 325,000.00
800 OTHER OBJECTS $ 16,387.20 $ 16,387.50

5600 BUILDING IMPROVEMENTS SERVICES $ 500,000.00 $ 500,000.00

400 PURCHASED PROPERTY SERVICES $ 500,000.00 $ 500,000.00

6100 PRINCIPAL ON DEBT $ 21,915,321.54 $ 21,915,321.54

300 PURCHASED PROF & TECH SRVCS $ 700.00 $ 700.00


800 OTHER OBJECTS $ 21,914,621.54 $ 21,914,621.54

7100 OPERATING TRANSFERS OUT $ 10,754,436.80 $ 9,940,000.00

900 OTHER USES OF FUNDS $ 10,754,436.80 $ 9,940,000.00

TOTAL EXPENDITURE BUDGET $ 206,519,629.35 $ 197,716,558.27

Explanation of Original Budget Submittal:


________________________________________________________________________________
This budget is being submitted as the new allocation for the 2018-2019 school year.

I, the undersigned Assistant Secretary of the Board of Trustees of the Jackson Public School District, do hereby certify
that the above and foregoing is a true and correct copy of the resolution of the Board of Trustees of said District adopted
on the 27th day of June 2018.

Given under my hand this the 27th day of June 2018.

___________________________________

Assistant Secretary, Board of Trustees


[THIS PAGE INTENTIONALLY LEFT BLANK]
The following document was not prepared by the Office of the State Auditor, but was
prepared by and submitted to the Office of the State Auditor by a private CPA firm. The
document was placed on this web page as it was submitted. The Office of the State
Auditor assumes no responsibility for its content or for any errors located in the
document. Any questions of accuracy or authenticity concerning this document should
be submitted to the CPA firm that prepared the document. The name and address of the
CPA firm appears in the document.
JACKSON PUBLIC SCHOOL DISTRICT

Audited Financial Statements


For the Year Ended June 30,2017
JACKSON PUBLIC SCHOOL DISTRICT

TABLE OF CONTENTS

PAGE
INDEPENDENT AUDlTORS' REPORT 2

MANAGEMENT'S DISCUSSION AND ANALYSIS }

BASIC FINANCIAL STATEMENTS


Government-wide Financial Statements:
Exhibit A - Statement of Net Position 17
Exhibit B - Statement of Activities 18
Governmental Funds Financial Statements:
Exhibit C - Balance Sheet - Governmental Funds 19
Exhibit C-1 - Reconciliation of-the Governmental Funds Balance Sheet to the
Statement of Net Position 20
Exhibit D - Statement of Revenues, Expenditures and Changes in Fund
Balances 21
Exhibit 0-1 - Reconciliation of the Governmental Funds Statement of
Revenues, Expenditures and Changes in Fund Balances
to the Statement of Activities 22
Fiduciary Funds Financial Statements:
Exhibit E - Statement of Fiduciary Net Position 23
Exhibit F - Statement of Changes in Fiduciary Net Position 24
Notes to the Financial Statements 26
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule - General Fund 57
Budgetary Comparison Schedule - ERA Part B Fund 58
Schedule of School District's Proportionate Share of the Net Pension Liability 59
Schedule of School District Contributions 60

Notes to the Required Supplementary Information 61


SUPPLEMENTARY INFORMATION
Schedule I - Schedule of Expenditures of Federal Awards 64
Notes to the Supplementary Information
Schedule 11 - Schedule of Instructional, Administrative and Other
Expenditures - Governmental Funds 66
JACKSON PUBLIC SCHOOL DISTRICT
TABLE OF CONTEN S, CONTINUED

PAGE

OTHER INFORMA nON


Schedule III - Statement of Revenues, Expenditures and Changes in Fund
Balances - General Fund, Last Four Years 68
Schedule IV - Statement of Revenues, Expenditures and Changes in
Fund Balances - All Governmental Funds, Last Four
Years 69

Independent Auditors' Report on Internal Control Over


Financial Reporting and on Compliance and Other Matters Based
on an Audit of Financial Statements Perfotmed in Accordance with
Government Auditing Standards 71

Independent Auditors' Report on Compliance for Each Major


Federal Program and on Internal Control Over Compliance Required by
Uniform Guidance 73

Independent Auditors' Report on Compliance with State


Laws and Regulations 76

SUMMARY SCHEUDLE OF FlNDINGS AND QUESTIONED COSTS:

Section I - Summary of the Independent Auditors' Results 80

Section II - Financial Statement Findings 81

Section III - Federal Award Findings and Questioned Costs 81

SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS 82


INDEPENDENT AUDITORS' REPORT
runo " ~'Ll'erv .. Jfj
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Menl/l"1
V 'tllt I f;

II .)

IND EPENDENT AUDITORS ' REPORT I" I 1

Superintendent and School Board


Jackson Public School District

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information of the Jackson Public School District (the
School District) as of and for the year ended June 30, 2017, and the related notes to the financial
statements, which collectively comprise the School District's basic financial statements as listed
in the table of contents.

Ma.nagement's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.

Auditors' Responsibility

OUf responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to fmaneial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that
we plan and perfonn the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.

An audit involves perfolming procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors' judgment,
including the assessment ofthe risks of material misstatement of the fmancial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers intemal control
relevant to the entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on thi! effectiveness of the entity's intemal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.

2 "11 I'! r" i"H! ' ~111) 1 I ,I"' .' ,1"1 iL.l: 1
j I II iJ'. , '\V[~I' II
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I '
{!j Ul , /l i l.l:1UL f/:..;;" I I I d l ;U
INDEPENDENT AUDlTORS' REPORT
CONTINUED

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective fll1ancial position of the goverrunental activities, each major fund. and the aggregate
remaining fund information of the School District, as of June 30,2017, and the respective changes
in financial position thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison infonnation, the Schedule of the
School District's Proportionate Share of the Net Pension Liability, and the Schedule of School
District Contributions on pages 6-15, 57. 58, 59 and 60, respectively, be presented to supplement
the basic financial statements. Such information, although not a part of the basic fmancial
statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the
Required Supplementary Information in accordance with auditing standards generally accepted in
the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the infonnation for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any assurance
on the infonnation because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.,

Other Information

Our audit was conducted for the purpose of fonning opinions on the fmandal statements that
collectively comprise the School District's basic financial statements. The accompanying Schedule
of Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards, the Schedule of Instructional, Administrative and Other Expenditures for Governmental
Funds, and the other information section, which includes the Statement of Revenues, Expenditures
and Changes in Fund Balances-General Fund, Last Four Years and the Statement of Revenues,
Expenditures and Changes in Fund Balances-All Governmental Funds, Last Four Years are
presented for purposes of additional analysis and are not a required part of the basic financial
statements.

3
lNDF.PE DE T AUDITORS' REPORT
CONTINUED

The accompanying Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code
of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, and the Schedule of Instructional, Administrative and
Other Expenditures for Governmental Funds are the responsibility of management and were
derived from and relate directly to the underlying accounting and other records used to prepare the
basic financial statements. Such infonnation has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the financial statements or to the financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the accompanying supplementary information mentioned above
is fairly stated in all material respects in relation to the basic financial statements as a whole.

The other information section, which includes the Statement of Revenues, Expenditures and
Changes in Fund Balances-General Fund, Last Four Years and the Statement of Revenues,
Expenditures and Changes in Fund Balances-All Governm ental Funds, La'st Four Years has not
been SUbjected to the auditing procedures applied in the audit ofthe basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated March
21,2018, on our consideration ofthe School District's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the Jackson Public School District's internal
control over financial reporting or on compliance. That report is an integral part of an audit
perfonned in accordance with Government Auditing Standards in considering the School District's
internal control over fmancial reporting and compliance.

£> ..~ P"Iu~o.I..-.u.f


BRUNO & rlRVALON LLP
CERTIFIED PUBLIC ACCOUNT ANT
Jackson, Mississippi

March 21,2018

4
MANAGEMENT'S DISCUSSION AND ANALYSIS

5
.JACKSO~ PUBLIC SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANAL YSIS
FOR THE YEAR ENDED JUNE 30, 2017

The following discussion and analysis of Jackson Public School District's financial performance
provides an overview of the School District's fmancial activities for the year ended June 30, 2017.
The intent ofthis discussion and analysis is to look at the School District's performance as a whole.
Readers are encouraged to review the financial statements and the notes to the financial statements
to enhance their understanding of the School District's financial perfonnance.

FINANCIAL HIGHLIGHTS

• Total net position for 2017 decreased $3,904,117, including a prior period adjustment of
$1,221,366, which represents a 1.53% decrease from fiscal year 2016 . Total net position
for 2016 increased $8,165,711, including a prior period adjustment of ($801,369), which
represents a 3 % increase from fiscal year 2015.

• General revenues amounted to $228,416,381 and $229,559,132, or 78% and 79% of all
revenues for fiscal years 2017 and 2016, respectively. Program specific revenues in the
fonn of charges for services and grants and contributions accounted for $64,714,422, or
22% of total revenues for 2017, and $61 ,639,440, or 21 % of total revenues for 2016.

• The School District had $298,256,286 and $282,231,492 in expenses for fiscal years 2017
and 2016; only $64,714,422 for 2017 and $61,639,440 for 2016 of these expenses were
offset by program specific charges for services, grants and contributions. General revenues
of $228,416,381 for 2017 were not adequate to provide for these programs. General
revenues of$229,559,132 for 2016 were adequate to provide for these programs.

• Among major funds, the General Fund had $205,078,474 in revenues and $195,566,454 in
expenditures for 2017, and $207,208,339 in revenues and $198,958,125 in expenditures in
2016. The General Fund's fund balance increased by $4,073,083 from 2016 to 2017,
including a prior period adjustment of ($68,660) and an increase in inventory of $29,458,
and increased by $6,279,918 from 2015 to 2016, including an increase in inventory of
$19,505.

• Capital assets, net of accumulated depreciation, increased by $1,228,277 for 2017 and
increased by $2,893,595 for 2016. The increase for 2017 was due primarily to the ongoing
construction of Northwest Middle School as well as the purchase of various items of mobile
equipment and furniture and equipment.

• Long~tenn debt, excluding bond premium, decreased by $13,604,376 for 2017 and
increased by $1,297,714 for 2016. This decrease for 2017 was due primarily to principal
payments on outstanding 10ng-tenn debt. The liability for compensated absences
decreased by $17,197 for 2017 and decreased by $114,907 for 2016

6
JACKSO~ PUBLIC SCHOOL DISTRlCT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

OVERVIEW OF THE FINANCIAL STATEl\IENTS

This discussion and analysis serves as an introduction to the School District's basic financial
statements, which include government-wide financial statements, fund financial statements, and
notes to the financial statements. This report also contains required supplementary information,
supplementary information, and other infonnation.

Government-wide Financial Statements

The Statement ofN et Position presents information on all the School District's nonfiduciary assets,
deferred outflows, liabilities, and deferred inflows, with the differences between them reported as
"net position." Over time, increases or decreases in the School District's net position may serve as
a useful indicator of whether its financial position is improving or deteriorating.

The Statement of Activities presents infonnation showing how the School District's net position
changed during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods.

The govenunent-wide financial statements outline functions of the School District that are
principally supported by propelty taxes and intergovernmental revenues (governmental activities).
The governmental activities of the School District include instruction, support services, non-
instructional, sixteenth section, pension expense, and interest on long-term liabilities.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The School District uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements. All of the funds of
the School District can be di vided into two categories: governmental funds and fiduciary funds.

Governmental funds - Most of the School District's general activities are reported in its
governmental funds. Governmental funds are used to account for essentially the same
functions reported as govemmental activities in the govenunent-wide financial statements.
However, governmental funds are accounted for using the modi tied accrual basis of
accounting and the flow of cutrent financial resources measurement focus. The approach
focuses on near-term inflows and outflows of spendable resources, as well as balances of
spendable resources available at year end. The governmental fund statements provide a
detailed view of the School District's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the govenmlent-wide
financial statements, it is useful to compare the infonnation presented for governmental
funds with similar information presented for governmental activities in the government-
wide financial statements. By doing so, the reader may gain a better understanding of the

7
JACKSON PUBLIC SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

long-term impact of the School District's near-term financing decisions. The govermnentat
funds Balance Sheet is reconciled to the Statement of Net Position, and the governmental
funds Statement of Revenues, Expenditures, and Changes in Fund Balances is reconciled
to the Statement of Activities to facilitate this comparison between governmental funds
and governmental activities.

The School District maintains individual governmental funds in accordance with the
Financial Accounting Manual for Mississippi Public School Districts. Information is
presented separately in the governmental funds Balance Sheet and in the governmental
funds Statement of Revenues, Expenditures, and Changes in Fund Balances for all major
funds. All non-major funds are combined and presented in these reports as other
governmental funds.

Fiduciary funds - Fiduciary funds are used to account for resources held for the benefit
of parties outside the School District. Fiduciary funds are not reflected in the government-
wide financial statements because resources of those funds are not available to support the
School District's own programs. These funds are reported using the accrual basis of
accounting. The school District is responsible for ensuring that the assets reported in these
funds are used for their intended purpose.

Reconciliation of Government-wide and Fund Financial Statements

The fmancial statements include two schedules that reconcile the amounts reported on the
governmental funds financial statements (modified accrual basis of accounting) with government-
wide financial statements (accrual basis of accounting). The following summarizes the major
differences between the two statements:

Capital assets used in govermnental activities are not reported on governmental funds
financial statements.

Capital outlay spending results in capital assets on govenunent-wide financial statements


but is reported as expenditures on the governmental funds financial statements.

Bond and note proceeds result in liabilities on goverrunent-wide financial statements but
are recorded as other financing sources on the governmental funds financial statements.

A net pension liability results in a liability on the government-wide financial statements


but is not reported on governmental funds financial statements.

Ce11ain other outflows represent either increases or decreases in liabilities on the


government-wide financial statements, but are reported as expenditures on the
governmental funds financial statements.

8
JACKSON PUBLIC SCHOOL DISTRICT
MANAGEl\IENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

Notes to the financial statements

The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes to the financial
statements can be found immediately following the basic financial statements.

Required Supplementary Information

In addition to the basic financial statements and accompanying notes, this report also presents
budgetary comparison schedules, Schedule of the School District's Proportionate Share of the Net
Pension Liability, and Schedule of School District Contributions as required supplementary
information. The School District adopts an annual operating budget for all governmental funds. A
budgetary comparison schedule has been provided for the General Fund and each additional major
special revenue fund as required by the Governmental Accounting Standards Board.

Supplementary Information

Additionally, a Schedule of Expenditures of Federal Awards as required by Title 2 U.S. Code of


Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards and a Schedule of Instructional, Administrative and Other
Expenditures for governmental funds can be found in this report.

Other Information

Although not a required part of the basic financial statements, the Statement of Revenues,
Expenditures and Changes in Fund Balances-General Fund, Last Four Years and the Statement
of Revenues, Expenditures and Changes in Fund Balances-All Governmental Funds, Last Four
Years, is presented for purposes of additional analysis as required by the Mississippi Department
of Education.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Net position

Net position may serve over time as a useful indicator of the School District's financial position.
Liabilities and deferred intlows of resources exceeded assets and deferred outflows of resources
by $259,462,939 as of June 30, 2017.

The School District's financial position is a product of several financial transactions including the
net result of activities, the acquisition and payment Of debt, the acquisition and disposal of capital
assets and the depreciation of capital assets.

9
JACKSO~ PUBLIC SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

Table 1 presents a summary of the School District's net position at June 30, 2017 and June 30,
2016.
Table 1

Condensed Statement of Net Position


Percentage
June 30,2017 June 30, 2016 Change
ClUTent assets $ 71,087,117 $ 60,048,602 18.38 %
Restricted asse ts 7,088,207 11,456,253 (38.13) %
Capital assets, net 196,565,656 195,337,379 0.63 %
Total assets 274,740980 266,842,234 2.96 0/0

Deferred outfio,,"s of resources 102,504,611 85,649,721 19.68 %

CtllTent liabilities 17,156,958 17,516,605 (2.05) %


Long-tenn debt outstanding 193,761,347 209,417 ,144 (7.48) %
Net pension liability 421,187,498 364,433,367 15 .57 %
Total liabilities 632,105,803 591,367,116 6.89 0/0

Deferred inflo,~s of resources 4,602,727 16,683,661 (72.41) %

Net position:
N et investment in capital assets 55,566,719 48 , 153,202 15.40 %
Restricted 24,104,562 19,761,667 21.98 %
Ume stric ted (339,134,220) (323,473,691) (4.84) %
Total net position $ (259,462,939) $ (255.558,822) (1.53) %

Additional information on unrestricted net position:

In connection with the application of standards on accounting and financial reporting for
pensions, management presents the following additional information:

Total unrestricted net position (deficit) $ (3 39,13 4,22 0)


Less unrestricted deficit in net position resulting from recognition of the
net pension liability, including the deferred outflows and deferred inflows
related to pensions 339.720,436
Unrestricted net position, exclusive of the net pension liability effect $ 586 ,21 6

The following are significant CUlTent year transactions that have had an impact on the Statement
af Net Position:

• Increase in net capital assets in the amount of$I,228,277.


• The principal retirement of $13,587, 179 of long-tenn debt.
• Recognition of the net pension liability in the amount of$42I,187,498 .

10
JACKSO~ PUBLIC SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

Changes in net position

The School District's total revenues for the fiscal years ended June 30, 2017 and June 30, 2016
were $293,130,803 and $291,198,572, respectively. The total cost of all programs and services
was $298,256,286 for 2017 and $282,231,492 for 2016.

Table 2 presents a summary of the changes in net position for the fiscal years ended June 30, 2017
and June 30, 2016.
Table 2
Changes in Net Position

Year Ended Year Ended Percentage


June 30, 2017 June 30, 2016 Cbange
Revenues:
Program revenues:
Charges for services $ 11,067,324 $ 8,055,238 37.39 %
Operating grants and contributions 53,647,098 53,492,930 0.29 %
Capital Grants and Contributions 91,272 (100.00) %
General revenues:
Property taxes 95,357,603 92,465,330 3.13 %
Grants and contributions not restricted 130,520,922 134,304,454 (2.82) %
Investment earnings 61,018 18,961 221.81 %
Sixteenth section sources 1,319,315 1,378,780 (4.31) %
Odler 1,157,523 1,391,607 (16.82) %
Total revenues 293,130,803 291,198 2572 0.66 %

Expenses:
Ins lruction 121,613,307 127,378,865 (4.53) %
Support services 100,966,010 94,536,686 6.80 %
Non-instructional 18,781,969 19,284,119 (2.60) %
Sixteenth section 61,371 77,224 (20.53) %
Pension expense 49,172,977 32,083,182 53.27 %
Interest on long-term liabilities 7,660 1652 8,871,416 (13.65) %
Total expenses 298,256,286 282,231,492 5.68 %
Increase (Decrease) in net position (5,125,483) 8,967,080 (157.16) %
Net Position, July 1, as previously reported (255,558,822) (263,724,533) 3.10 %
Prior Period Adjustment 1,221,366 {801,369) 252.41 %
Net Position, July 1, as restated ~25",33 7 ,456) {264,525,902) 3.85 %
Net Position, June 30 $ {259,462,939) $ (255,558,822) (1.53) %

11
JACKSO~ PUBLIC SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

Governmental activities

The following table presents the cost of six major School District functional activities: instruction,
support services, non-instructional, sixteenth section, pension expense, and interest on long-term
liabilities. The table also shows each functional activity's net cost (tot~l cost less charges for
services generated by the activities and intergovernmental aid provided for specific programs).
The net cost presents the financial burden that was placed on the State and School District's
taxpayers by each of these functions. The net cost presents the financial burden that was placed on
the State and School District's taxpayers by each of these functions.

Table 3
Net Cost of Governmental Activities

Total E.xpenses Percentage


2017 2016 Change
Instruction $ 121,613,307 $ 127,378,865 (4.53) %
Supp Ott services 100,966,010 94,536,686 6.80 %
Non-insttuctional 18,781,969 19,284,119 (2.60) %
Sixteenth section 61,37L 77,124 (20.53) %
Pension Expense 49,172,977 32,083,182 53.27 %
In teres ton long-tenn [jab ilities 7,660,652 8,871,416 (13.65) %
Total expenses $ 298,256,286 $ 282,231,492 5.68 0/0

Net (E.xpense) Rewnue Percentage


2017 2016 Change
Instruction $ (102,805,969) $ (l09,068,576) (5.74) %
Support s e rvices (76,038,015) (72,689,438) 4.61 %
Non-ins tru c tional 2,197,120 2,197,784 (0.03) %
Sixteenth sect ion (61 ,371) (77.224) (20.53) %
Pension Expense (49,172,977) (32,083,182) 53.27 %
Interest on long-term liabilities (7,660.652) ~8,871.416) (13 .65) %
Total net (expense) re\enue $ (233,541,864) $ (220.S92,052} 5.87 %

• Net cost of governmental activities ($233,541,864 for 2017 and $220.592,052 for 2016)
was financed by general revenue, which is primarily made up of property taxes
($95,357,603 for 2017 and $92,465,330 for 2016) and state and federal revenues
($130,520,922 for 20 17 and $134,304,454 for 2016). In addition, there was $1,319,315
and $1,378,780 in Sixteenth Section sources for 2017 and 2016, respectively.

• Investment earnings amounted to $61,018 for 2017 and $18,961 for 2016.

12
JACKSO~ PUBLIC SCHOOL DISTRICT
MANAGEl\IENT'S DISCUSSION AND ANAL YSIS
FOR THE YEAR ENDED JUNE 30, 2017

FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS

As noted earlier, the School District uses fund accounting to ensure and demonstrate compliance
with finance-related legal requirements.

Governmental funds. The focus of the School District's governmental funds is to provide
infonnation on CUlTent inHows, outHows and balances of spendable resources. Such infonnation
is useful in assessing the School District's financing requirements. In particular, unassigned fund
balance may serve as a useful measure of the School District's net resources available for spending
at the end of the fiscal year.

The financial perfonnance of the School District as a whole is reHected in its governmental funds.
As the School District completed the year, its govemmental funds reported a combined fund
balance of $62,895,485, an increase of $6,876,763, which includes a prior period adjustment of
($175,040) and a net decrease in inventory of $9,841. $18,608,266, or 30% of the fund balance is
unassigned, which represents the residual classification for the General Fund's fund balance that
has not been assigned to other funds and that has not been restricted, committed, or assigned to
specific purposes within the general fund. The remaining fund balance of$44,287,219, or 70% is
either nonspendable, restricted, committed or assigned to indicate that it is not available for
spending except only for the purposes to which it is restricted, committed or assigned.

The General Fund is the principal operating fund of the School District. The increase in fund
balance in the General Fund for the fiscal year was $4,073,083, which includes a prior period
adjustment of ($68,660) and an increase in inventory of $29,458. The fund balance of Other
Governmental Funds showed a decrease in the amount of$865,724, which includes a prior period
adjustment of($I03,140) and a decrease in inventory of $39,299. The increase (decrease) in the
fund balances for the other major funds were as follows:
as follows:

Mlljor Fund Increase (Decrease)


EHA Part B Fund no increase or decrease
Stann Damage Spring 2013 Fund $ 3,669,404

BUDGETARY HIGHLIGHTS

During the year, the School District revised the annual operating budget. Budget revisions were
made to address and COlTect the original budgets to reflect more accurately the sources and uses of
funding for the School District. Budget revisions during the year were routine in nature and were
insignificant when compared to total revenues and expenditures of the School District.

A schedule showing the original and final budget amounts compared to the School District's actual
financial activity for the General Fund and major special revenue funds is provided in this report
as required supplementary infonnation.

13
JACKSO~ PUBLIC SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2017

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets. As ofJune 30, 2017, the School District's total capital assets were $325,478,220,
including land, construction in progress, school buildings, improvements other than buildings,
buses, other school vehicles, furniture and equipment, and leased property under capital1eases.
This amount represents a gross increase of $1,615,588 from 2016, due primarily to the ongoing
construction of the Northwest Middle School and the purchase of various items of mobile
equipment and furniture and equipment. Total accumulated depreciation as of June 30, 2017, was
$128,912,564, and total depreciation expense for the year was $5,925,650, resulting in total net
capital assets of $196,565,656.

Table 4
Capital Assets, Net of Accumulated Depreciation
Percentage
June 30, 2017 June 30, 2016 Change

Land $ 6,780,059 $ 6,780,059 %


Construction in Progress 15.537,237 10,453,857 48.63 %
Buildings 152,732,820 156,677,348 (2.52) %
Improvements other than buUdings 15,873,771 16,620,904 (4.50) %
Mobile equipment 1,742,608 771,775 125.79 %
Furniture and equipment 1,286,393 921,252 39.64 %
Leased property under capital leases 2,612,768 3,112,184 (16.05) %
Total $ 196,565,656 $ 195,337,379 0.63 %

Additional information on the School District's capital assets can be found in Note 5 included in
this report.

Debt Administration. At June 30, 2017, the School District had $193,761,347 in outstanding
long-tenn debt, of which $14,429,887 is due within one year and bond premium of$21,261,899.
During the fiscal year, the School District made principal payments totaling $13,587,179 on
outstanding long-tenn debt. The liability for compensated absences decreased $17,197 from the
prior year.

14
JACKSO~PUBLIC SCHOOL DISTRICT
l\'1ANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30,2017

Table 5
Outstanding Long-Term Debt
Percentage
June 30, 2017 June 30, 2016 Change

General obligation bonds payable $ 23,510,000 $ 31,830,000 (26.14) %


Special obligation bonds payable 113,935,000 118,070,000 (3.50) %
Three mill notes payable 14,355,000 14,960,000 (4.04) %
Obligations under capital leases 3,223,475 3,750,654 (14.06) %
Qualified school construction bonds payable 15,400,000 15,400,000 %
Compensated absences payable 2,075,973 2,093,170 (0.82) %
Bond Premium 21,261,899 23,313,320 (8.80) %
Total 1..- 193,761,347 $ 209,417,144 (7,48) %
Additional information on the School District's long-term debt can be found in Note 6 included in
this report.

CURRENT ISS UES

The Jackson Public School District is financially stable. The School District is proud of its
community support of the public schools.

The School District has committed itself to financial excellence for many years. The School
Dishict's system of financial planning, budgeting, and internal financial controls is well regarded .
The School District plans to continue its sound fiscal management to meet the challenges of the
future.

The School District actively pursues grant funding to supplement the local, state, and federal
revenues.

CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT

If you have any questions about this report or need additional financial information, contact the
Superintendent's Office of the Jackson Public School District, P.O. Box 2338, Jackson, MS
39225-2338.

15
FINANCIAL ST ATEMENTS

16
JACKSO;-.i PUBLIC SCHOOL DISTRICT
State men! of Net Position Exhibit A
JWle 30, 2017
Goverrune ntal
Activities
Assets
Cash and cash equi valents $ 51,893,398
Due from other govellUnents 16,972,004
Other receivables, net 687,878
Inventories 1,533,837
Restricted assets 7,088,207
Capital assets, non-depreciable:
Land 6,780,059
Construction in progress 15,537,237
Capital assets, net ofaccw11ulated depreciation:
Buildings 152,732,820
Improvements other than buildings 15,873,771
Mobile equipment 1,742,608
Furniture and equipment 1,286,393
Leased property under capital leases 2.611.768
Total Assets 274,740.980

Deferred Outflows of Resources


Deferred outflow from advance refunding of debt 16,434,822
Deferred outflow related to pensions 86.069.789
Total Deferred Outflows of Resources 102.504.611

Lia bilitie s
Accounts payable and accrued liabilities 15,233,109
Unearned revenue 46,730
Interest payable on long-term I iabi I i ties 1,877,119
Long-term liabilitieg, due within one year:
Capital related liabilities 11,708,588
Non-capital related liabilities 2.721,299
Long-term liabilities, due beyond one year:
Capital related liabilities 127,206,137
Capital related bond premi WTIS 21,261,899
Non-capital related liabi I ities 30,863,424
Net pension liability 421 1 187,498
Total Liabilities 632,105,803

Deferred Inflows of Resource s


Deferred inflow related to pensions 4,602,727
Total Deferred Intlowg of Resources 4.602,727

Ne t Position
Net investment in capital assets 55,566,719
Restricted for:
Expendable:
School-based activities 10,377,972
Debt service 11,454,946
Capital improvements 142,630
Forestry improvements 39,830
Unemployment benefits 1,790,907
Non-expendable:
Sixteenth section 298,277
Unrestricted (339.134,220)
Total Net Position (Deficit) $ p59,462!939~

The notes to the financial statements are an integral part of this statement.

17
JACKSO:-'; PUBLIC SCHOOL DISTRICf
Statement of Acth'ities Exhibit B
For the Year Ended June 30, 2017
Net (Expense)
Revenue and
Changes in Net
Program Revenues Position
Operating Capital
Charges tOr Grants and Grants and GOvemmenta I
.
FW1ctionsiProl!JQ1Th Expenses Services C olltributions C ontnb~l[ions Acti\ities

Govemmental Activities:
Instnlction $ 121,613,307 $ 1,493,&74 $ 17,313,464 $ $ (102,805,969)
Support sen.ices 100,966,0 I 0 8.639,576 16,288.419 (76,03R,015)
Non-instructional 18,78[.969 933.874 20,045.215 2,197,120
Sixteerlth section 61,371 (61.371)
Pension expense 49,172,977 (49,172,977)
Inlerest on 10 rlg- term Ii.'\b ilities 7,660.652 (7,660.652 )
Totul Governmental Activities $ 298.256,286 $ 11,067.324 $ 53.647.098 S (233.541,864 )

General ReVel1l1es:
Taxes:
General plilvose levies 73,308,935
Debt purpose levies 22.048,668
Unrestlicted grants and cOlltnbutions:
State 129,209,647
Federal U 11,275
Unrestricted in\estmenl earnings 61,018
Slxteenth section sources 1,3)9,315
Other 1.157,523
Total General Revenues 228.416.381

Change in Net Position (5,125.483 )

Net Position - Beginning, as pre\;oLlsly reported (255,558,822)


Prior Period Adj~lStrnents 1,221,366

Net Position (Deficit) - Beginning. as restated (254.337,456 )

Net Position (Deficit) - Ending $ (259,461.939)

1l1e notes to the financial statements are an integral part of this statement.

18
J.KJ\SO:-i PL:BLlC SCHOOL DISTRICT
_ ~ _ GO\lemlTll'nlllll'-uml\ _ ._
Balance Sheet Exhibit C
June 30, 2017
Major Funds
Storm Damagl: Othl!r Tocal
Gcn~ral EHA Part B Spring 2013 Governmental Governmental
Fund Fund FWld Fund~ Funds
Assets
Cash and cash e~luivalcnt~ S 18.188,973 $ -413 $ l).62~,91() $ 28.599.922 $ 56..:J14.218
Cash with tiscal agents 2.567,387 2.567.387
Due from other governl11el1L~ 5,390,672 3,3&8,099 6,1-40,209 1.t.918,980
Other receivables, net b87,lm 687.878
Due from other fWl(ls 11,062.K+4 90.19-1- 11.153.038
In\'entories 1.05·1.11-10 478.9!)7 l.53.3.R37
Towl assels $ 36.3115.2U7 3.3g8.5 1:! S 9.1'12-1-.'> 10 $ 37.K76.70? $ 87.:175.338
Liabilities and Fund Biliances
Liabilities:
Ac(;ouots payahlc and al:l:rued liabilities $ 10,75-1,2H-I $ 408.554 $ 3,149 $ 4,067,12:! $ 15,:m,lll9
Due to other Rinds 86.133 2,979.95M 6.033,923 9.10U.OI-l
L'na~<lilablc revenue - federal prol,rrallls 4(].730 ·Hi.730
Towl Liabilities I n.8-10.-l17 3,JRR.5 I:! 3.1-19 10.1-17.775 24.379.853
fund Balances:
l'Ionspendablc:
Inventory 1,05-1,8-10 478.997 1,533.837
Permanent fund principul 298.277 2l)X,277
Re stlicted:
Debt servict 13.332,065 13,332,065
Capi tal proj C(;\s 2,885,495 2,885,495
Forestry improvement purpOStS 39,830 39,830
Grant acrivitics 8.8-1~,135 8,8-1-1.135
UnclllplQ)"ment benetits 1,790,907 1.790,907
Assigned:
Facility repairs and improvemems 9,6:!1,76I 59,228 9,680,989
Capital rest:rve ~.919.673 4,919.673
Activity Ii.mds/athletics 962,1)) 1 962,011
Vnasslgned 18.608.266 18.608,266
Tlltal FWld Balances ")".54-1 ,790 9,621.7fll 27.72l!.934 62.895.485
Total Liuhilities Dnd Fund BulUllce~ $ 6JS5.:!07 $ 3.3, l!.512 $ lJ.b:!·1.9 J() :s J7P6.709 S 87.275.338

The notes to dlt! financial statements are an integral part of this statell1C!nt

19
JACKSO~ PUBLIC SCHOOL DISTRICT
- . ~
C OVl! ntJlll.' IIt:ll ""mls .
~ - - ~. - -
ReconeUiatioll of the Governmental FWlds Balance Sheet to the Stntement of ~et Position Exhibit C-I
June 30,2017

Total fund balances for governmental funds $ 61.895,485

Amowlt.s reported lor gove~ntal act! vltles In tile statement at Net t'oslUon are
different because:

I. Capital assets used in governmental activities are not financial resources and
therefore are not reportl:!d in tlle funds:
Land $ 6,780,059
Con.~truction in progress 15,537,237
Buildings 232,633,673
Improvements other than buildings .38.182,187
Mobile equipment 12.542,970
Furniture and equipment 1~,563,R43
Leased property under capital leases 5,238,251
Accumulated depreciation (128 ,912.564) 196,565,656

2. Some liabilities, induding net pension obligations, are not due and payable in
the current period and. therefore, are not reported in the funds:
Net pension liability (421.187,498)

Deferred outflows and intlows of reSOlHces related to peMions are applicable


to funu'e periods and, tllerefore. are not reported in the funds:
Deferred outflows of resource~ rel:tteri tn nen~inn.~ 86,069,789
Deferred inflows of resources related to pensions (4.601.727) (.339,720,436)

3. Long-tem1liabilities and related accrued interest are not due and payable in tlle
current period and therefore are not reported in the funds:
General obligation bonds (23,510,000)
Special obligation bonds ( 113,935,000)
Other bonds payable {I 5,400,000)
Notes payable (14,355,000 )
Capital lease obligatioM (3,22.3,475)
Compen.sated absences (2,075,97.3 )
Unamortized charges 16,434,822
Unamortized premiw-ns (21,261,899)
Accrued interest payable (1.877,119) (179.203,644)

:'Iiet Position (Deficit) or f,tovemmental acthities $ (259,462.939)

The notes to the financial statements are an integral part of this statement.

20
JACKSON PUBLIC SCHOOL DISTRICT
Govornmental Funds
- - -- - -. - - - --- . ~--------

Statement of Revenues, Expondltures and Changes il1 Fu nd Balances exhibit D


For the Year fOnded June 30, 2D17
Major Funds
Storm Damage Other Total
General EHA Part B Spring 2013 Governmental Govammental
Fund Fund Fund Funds Funds
Revenues:
Local sources $ 75,840,472 $ 6,970 $ - $ 23,156,450 $ 99,003,892
State sources 126,597,679 6,237,144 132,834,823
Federal sources 1,321,OOB 6,752,560 43,259,629 51,333,197
Sixteenth section sources 1,319,315 1,319,315
Total Revenues 205,078,474 6,759 ,530 72,653,223 2B4.491,227

expenditures:
instruction 110,672,255 3,328,627 17,529,963 131,530,645
Support seNces B4,710,391 3,231.827 4.927,356 14.633,713 107,503.261
Noninstructional seNces 44.379 19,567,525 19.611,904
Sikteenth section 61,371 61,371
Facilities acquisition and construction 5.063,380 5,083,360
Debt seNce:
Principal 13,587.179 13,587,179
Intarasl 73,058 B,096,065 B,169,123
Other 5,000 15,510 20,510
Total E~pendltures 195.566.454 6,560 ,454 4,927, 356 7B,513,335 285, 567,599

E~cess (Deficiency) of Revanues


o-.er (under) Expenditures 9,512,020 199.076 (4.927.356) (5,860,112) (1 ,076,372)

Other FInancIng Sources (Uaes):


Insurance recovery 39,516 B,600,000 8,639,576
Payments held by escrow agent 1,2B2,259 1,282,259
Paym8l1t to QSCB debt escrow agent (1,282,259) (1,282,259)
Sale of transportation equipment 26,400 26,400
Sale of other property 10,400 10,400
Operating transfers In 1,093,743 4,813,053 5,906,796
Operating transfers out (4,736.B35) (199,076) (968,B65) (5,906,796)
Other financin9 uses !538. 36O l (536.360)
Total Other Financing Souroes (Uses) 15.399.735) (199,076) 8,600.000 5, 136.B27 8.136.016

Net Change in Fund Balances 4,112,265 3.672,644 (723,285) 7,061,644

Flrld Balances:
July 1, 2016, as preliously reported 21,471. 707 5,952,357 28,594,656 56,018,722
Prior period adjustments (68,660) (3,240) (103,140) (175.040)
July 1. 2016, as restated 21.403,047 5,949,117 28,491,518 55,843.682

Increase (Decrease) In in-.entory 29,458 (39,299) (9.841)

June 30, 2017 $ 25,544,790 $ • $ 9.621,761 $ 27,728.934 S 62.B95,465

The ootes to the financial statements are an integral part of this statement.

21
JACKSON PUBLIC SCHOOL DISTRICT
-- - --
Governmental Funds
Reconciliation of the Governmental Funds Statement of Revenues, Exhibit 0·1
Expenditures and Changes in Fund Balances to the Statement of Activities
For the Year Ended June 30, 2017

Net change In fund balances· total governmental funds 7,061,644

Amounts reported for gowrnmental advi~es in Itle statement of activities are


different because:
1. Governmental funds report capital outlay as expenditures. However, in the
statement of activities, Itle cost of capital assets is allocated over their estimated
useful lives as depreciation expense. In the current period, these amounts are:

Capital outlay $ 6,168,304


DepreCiation expense (5.925.650) 242,654

2. In the statement of activities, only the gain/loss on the sale of assets is reported,
while in the governmental funds, the proceeds from the sale increases financial
resources. Thus, the change in Net Position differs from the change in fund
balance by the cost of the assets sold. (410,783)

3. The issuance of Iong·term debt provides current financial resources to


governmental funds, while the repayment of the principal of long-term debt
consumes the current financial resources of gO'v'9rnmentaI funds. Neiltler
transaction, however, has any effect on Net Position. Also, governmental funds
report the effect of premiums, discounts and the difference between the
carrying value of refunded debt and the acquisition cost of refunded debt when
debt is first issued. These amounts are deferred and amortized in the statement
of activities:
Payments of debt principal 13,587,179
Accrued interest payable 153,353 13,740,532

4. Some items reported in Ille statement of activities relating to the implementation


of GASS 68 are not reported in the governmental funds. These activities
include:

Recording of pension expense for the current period (49,172,977)


Recording of contributions made subsequent to the measurement date 23,030,463 (26,142,514)

5. Some items reported in the statement of acUvlUes do not provide or require the
use of current financial resources and therefore are not reported as
revenuesfexpenditures in governmental funds. These activities inClude:
Change in compensated absences 17,197
Change in inventory (9,841 )
Amortization of deferred charges, premiums and discounts 375,628 3B2,964

Change in Net Position (Deficit) of governmental activities (5,125,483)


The notes to the financial statements are an integral part of this statement

22
JACKSON PUBLIC SCHOOL DISTRICT
Fiduciary Funds
----_ . . - ------- --- - - ---- - - - - --- - - -
Statement of Fiduciary Net Position Exhibit E
June 30, 2017

Private-Purpose Agency
Trust Funds Funds
Assets
Cash and cash equivalents $ 70,093 2,937,134
Other receiVc3bles, net 1,105,468
Total Assets 70,093 $ 4,042,602

liabilities
Accounts payable and accrued liabilities $ 1,775,149
Due to other funds 2,053,024
Due to student clubs 214,429
Total Uabilities $ 4,042,602

Net Position
Reser.ed for endowments
Held in trust 70,093

Total Net Position $ 70,093

The notes to the financial statements are an integral part of this statement.

23
JACKSON PUBLIC SCHOOL DISTRICT
Fiduciary Funds
_. - --- ._----- - -- - - - -- - ---

Statement of Changes In Fiduciary Net Position exhibit F


For the Year Ended June 30, 2017

Private-Purpose
Trust Funds
Additions
Interest on in>..estments $ 3
Contributions and donations from private sources 56,517
Total Additions 56,520

Deductions
Educational media services 42,960
Total Deductions 42,960
Change in Net Position 13,560

Net Position
July 1, 2016 56,533

June 30, 2017 $ 70,093

The notes to the financial statements are an integral part of this statement.

24
NOTES TO THE FINANCIAL STATEMENTS

25
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1 - Summary of Significant Accounting Policies

The accompanying financial statements of the School District have been prepared in conformity
with generally accepted accounting principles (GAAP) as prescribed by the Governmental
Accounting Standards Soard (GASS). GASS is the accepted standard-setting body for
govemmental accounting and financial repol1ing principles. The most significant of the School
District's accounting policies are described below,

A. Financial Reporting Entity

As defined by accounting principles generally accepted in the United States of America,


the School District is considered an "other stand-alone government." The School District
is a related organization of, but not a component unit of, the City of Jackson since the
governing authority of the city selects a majority of the School District's board but does
not have financial accountability for the School District.

For financial reporting purposes, the School District has included all funds and
organizations. The School District has also considered all potential component units for
which it is financially accountable and other organizations for which the nature and
significance of their relationship with the School District are such that exclusion would
cause the School District's financial statements to be misleading or incomplete. The
Governmental Accounting Standards Board has set forth criteria to be considered in
detel1l1ining financial accountability. These criteria include appointing a voting majority
of an organization's governing body and (I) the ability of the School District to impose its
will on that organization or (2) the potential for the organization to provide specific benetits
to or impose speei fie financial burdens ()n the School District.

B. Government-wide and Fund Financial Statements

Government-wide Financial Statements - The Statement of Net Position and the Statement
of Activities report infonnation on all of the non-tiduciary activities of the School District.
For the most part, the effect of inter-fund activity has been removed from these statements.
Governmental activities, which nonnally are supported by tax and intergovernmental
revenues, are reported separately from business type activities, which rely to a significant
extent on fees and charges for support.

The Statement of Net Position presents the School District's non-flduciary assets, deferred
outflows, liabilities, and deferred inflows with the difference reported as net position. Net
position is reported in three categories:

1. Net investment in capital assets consists of capital assets, net of accumulated


depreciation, and reduced by outstanding balances of bonds, notes and other debt
attributable to the acquisi tion, construction or improvement of those assets.

2. Restricted net position results when constraints placed on net position use are either
externally imposed or imposed by law through constitutional provisions or enabling
legislation.

26
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1 - Summary of Significant Accounting Policies, Continued

B. Government-wide and Fund Financial Statements

3. Unrestricted net position consists of net position not meeting the definition of the two
(2) preceding categories. Unrestricted net position often has constraints on resources
imposed by management which can be removed or modifted.

The Statement of Activities demonstrates the degree to which the direct expenses of a given
function. or segment, are offset by program revenues. Direct expenses are those clearly
identifiable with a specific function. Program revenues include 1) charges to customers or
appJ icants who purchase, use, or directly benefit from goods, services, or privileges
provided by u given function and 2) grants, contributions and interest restricted to meeting
the operational or capital requirements of a particular function. Property taxes and other
items not included among program revenues are reported instead as general revenues.

Fund Financial Statements - Separate financial statements are provided for govenunental
and fiduciary funds, even though the latter are excluded from the government-wide
financial statements. Major individual governmental funds are reported in separate
columns in the fund financial statements. All remaining governmental funds are
aggregated and reported as other governmental funds.

The School District reports the following major governmental funds:

General Fund - This is the School District's primary operating fund. The general fund is
used to account for and repolt all financial resources not accounted for and reported in
another fund.

EHA Part B Fund - This is a special revenue fund that accounts for federal revenues
received and expenditures incurred related to the School District's Special Education
program.

Storm Damage Spring 2013 Fund - This is a capital projects fund that accounts for funds
received from insurance recoveries related to storm damage to various school facilities and
the expenditures incurred for the repair of these facilities.

All other governmental funds not meeting the criteria established for major funds are
presented in the other governmental column of the fund financial statements.

The School District also reports fiduciary funds which focus on net position and changes
in net position. The School District's ftduciary funds include the following:

RN Fortenberry Scholarship Fund - This fund serves as a private-purpose trust fund used
to report a trust arrangement, other than those properly reported elsewhere, in which
scholarships are provided to students of the School District.
27
JACKSO;\l PUBLIC SCHOOL DISTRlCT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1- Summary of Significant Accounting Policies, Continued

B. Government-wide and Fund Financial Statements

Lake Memorial Library Fund - This fund serves as a pri vate-purpose trust fund used to repolt
a trust arrangement, other than those properly reported elsewhere, in which the principal and
income benetit individuals, private organizations or other govenunents.

Payroll Clearing Fund - This fund is used as a clealing fund for payroll type transactions.

Student Club Funds - These various funds account for the monies raised through school club
activities and fund raisers and club related expenditures approved by the individual clubs.

Accounts Payable Clealing Fund - This fund is used as a clearing fund for accounts payable
type transactions.

Additionally, the School District reports the following fund types:

GOVERNMENTAL FUNDS

Special Revenue Funds - Special Revenue Funds are used to account for and report the
proceeds of specific revenue sources that are restricted or committed to expenditure for
specified purposes other than debt service or capital projects.

Capital Projects Funds - Capital Projects Funds are used to account for and report financial
resources that are restricted, committed, or assigned to expenditure for capital outlays,
including the acquisition or construction of capital facilities and other capital assets.

Debt Service Funds - Debt Service Funds are used to account for and report financial
resources that are restricted, committed, or assigned to expenditure for principal and interest.

Pennanent Funds - Pennanent Funds are used to account for and report resources that are
restricted to the exlent that only earnings, and not the principal, may be used for purposes that
support the School District's programs.

FIDUCIARY FUNDS

Private-purpo e Trust Funds - Private-purpose trust funds are used to report all trust
arrangements, other than those properly reported elsewhere, in which the principal and income
benefit individuals, private organizations or other govemments.

28
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Notc 1 - Summary of Significant Accounting Policies, Continued

B. GovernmenH\'ide and Fund Financial Statements, Continued

Agency Funds - Agency Funds are used to report resources held by the School District in a
purely custodial capacity (assets equal liabilities) and do not involve measurement of results
of operations.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

In the govemmenHvide Statement of Net Position and Statement of Activities, governmental


acti vities are presented using the economic resources measurement focus and the accrual basis
of accounting, as are the Fiduciary Fund financial statements. Revenues are recorded when
eamed, and expenses are recorded when a liability is incurred or economic asset used,
regardless of the timing of the related cash flows. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accmal basis of accounting. Revenues are recognized
as soon as they are both measurable and available. Measurable means knowing or being able
to reasonably estimate the amount. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current
period. For this purpose, the government considers revenues to be available if they are
collected within 60 days after year end. Expenditures (including capital outlay) are recorded
when the related fund liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and judgments, are
recorded only when payment is due.

Federal grants and assistance awards made on the basis of entitlement periods are recorded as
receivables and revenues when entitlement occurs. Federal reimbursement type grants are
recorded as revenues when the related expenditures are recognized. Use of grant resources is
conditioned upon compliance with tenns of the grant agreements and applicable federal
regUlations, which include subjecting grants to financial and compliance audits.

Property taxes, intergovernmental revenues (shared revenues, grants and reimbursements


from other governments) and interest associated with the current fiscal period are all
considered to be susceptible to accrual.

Ad valorem property taxes are levied by the governing authority of the City (J ackson) on
behalf of the School District based upon an order adopted by the School Board of the
School District requesting an ad valorem tax effort in dollars. Since the taxes are not levied
and collected by the School District, the revenues to be generated by the annual levies are
not recognized until the taxes are actually collected by the tax levying authority.

29
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1 - Summary of Significant Accounting Policies, Continued

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation,


Continued

Capital asset acquisitions are rep0\1ed as expenditures in govenunental funds. Proceeds of


generallong-tenn debt and acquisitions under capital leases are reported as other financing
sources.

Under the tenns of grant agreements, the School District funds certain programs by a
combination of specific cost-reimbursement grants and general revenues. Thus, when
program expenses are incurred, there is both restricted ano unrestricted net position
available to finance the program. It is the School District's policy to first apply cost-
reimbursement grant resources to such programs and then general revenues.

The effect of inter-fund activity has been eliminated from the government-wide statements.

Revenues from the Mississippi Adequate Education Program are appropriated on a fiscal
year basis and are recorded at the time the revenues are received from the State of
Mississippi.

The accOlmt classifications used in the financial statements confonn to the broad
classifications recommended in Governmental A ccolInting. Auditing. and Financial
Reporting, issued in 2012 by the Government Finance Officers Association and are
consistent with the broad classitications recommended in Financial Accounting for Local
and State School Systems, 2014, issued by the U.S. Department of Education.

D. Encumbrances

An encumbrance system is not maintained to account for commitments resulting from


approved purchase orders, work orders and contracts.

E. Assets, liabilities, deferred outflows/inflows, and net position/fund balances

1. Cash, Cash equivalents and Investments

Cash and cash equivalents

The School District's cash and cash equivalents are considered to be cash on hand,
demand deposits, and short-tenn investments with original maturities of three (3)
months or less from the date of acquisition. The School District deposits excess funds
in the financial institutions selected by the School Board. State statutes specify how
these depositories are to be selected.

30
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1 - Summary of Significant Accounting Policies, Continued

E. Assets, liabilities, deferred outflows/inflows, and net position/fund balances

Investments

The School District can invest its excess funds, as pennitted by Section 29-3-113,
Miss. Code Ann. (1972), in interest-bearing deposits or other obligations of the types
described in Section27-105-33, Miss. Code Ann. (1972), or in any other type
investment in which any other agency, instrumentality or subdivision of the State of
Mississippi may invest, except that 100% of said funds are authorized to be so
invested.

For accounting purposes, certificates of deposit are class ifled as investments if they
have an original maturity greater than three months when acquired.

Investments for the School District are reported at fair market value.

2. Receivables and payables

Activities between funds that are representative of lendinglborrowing arrangements


outstanding at the end of the fiscal year are referred to as either "due to/from other
funds" (i .e., the current portion of inter-fund loans) or "advances to/from other funds"
(i.e. the non-current portion of inter-fund loans). All other outstanding balances
between funds are reported as "due to/from other funds."

Advances between funds, as reported in the fund financial statements, are offset by a
fund balance reserve account in applicable governmental funds to indicate that they
are not available for appropriation and are not expendable available financial
resources.

3. Due from Other Governments

Due from other governments represents amounts due £l'om the State of Mississippi
and various grants and reimbursements from other governments.

4. Inventories and Prepaid Items

Donated commodities are received from the USDA and are valued at USDA cost.
Other inventories are valued at cost (calculated on the first-in, first-out basis). The
costs of governmental fund type inventories are reported as expenditures when
purchased.

31
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1- Summarl of Significant Accounting Policies, Continued

E. Assets, liabilities, deferred outflows/inflow's, and net position/fund balances, Continued

Prepaid items, such as prepaid insurance, are not reported for governmental fund types
since the costs of such items are accounted for as expenditures in the period of
acquisition.

5. RestIicted Assets

Certain resources set aside for repayment of debt are classified as restricted assets on
the Statement of Net Position because their use is limited by applicable debt statutes,
e.g. Qualified School Construction Bond (QSCE) sinking funds. Also, the
nonexpendable portion of the Permanent Fund, if applicable, is classified as restricted
assets because the 16 1h Section Principal fund is not available for use by the School
District except as provided for under state statute for loans from this fund. In addition,
unspent proceeds from the issuance of long-tenn debt reported as cash and cash
equivalents in a Capital Projects Fund is classified as restricted assets because the funds
are to be spent for specific purposes outlined in resolutions approved by the board,
bond documentation, etc.

6. Capital Assets

Capital assets include land, improvements to land, easements, water rights, timber
rights, buildings, building improvements, vehicles, machinery, equipment, works of art
and historical treasures, infrastructure, and all other tangible or intangible assets that
are used in operations and that have initial useful lives extending beyond a single
reporting period. Capital assets are reported in the applicable governmental or business
type activities columns in the govemment-wide Statement of Net Position. Capital
assets are recorded at historical cost or estimated historical cost based on appraisals or
deflated current replacement cost. Donated capital assets are recorded at estimated fair
market value at the date of donation. The costs of nonnal maintenance and repair that
do not add to the value of the asset or materially extend asset lives are not capitalized.
Capital assets are defmed by the School District as assets with an initial, individual cost
in excess of the thresholds in the table below.

Capital acquisition and construction are reflected as expenditures in the Governmental


Fund statements and the related assets are reported as capital assets in the governmental
acti vities column in the government-wide financial statements.

32
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 1 - Summary of Significant Accounting Policies, Continued

E. Assets, liabilities, deferred outflows/inflows, and net position/fund balances, Continued

Depreciation is calculated on the straight-line basis for all assets, except land.

The following schedule details the capitalization thresholds:

Capitalization Estimated
Policy Useful Life

Land $ -0- -0-


Buildings 50,000 40 years
Building improvements 25,000 20 years
Improvements other than buildings 25,000 20 years
Mobile equipment 5,000 5-10 years
Furniture and equipment 5,000 3-7 years
Leased property under capital leases * *
(*) The threshold amount will correspond with the amounts for the asset classifications, as
listed. See Note 5 for details.

7. Deferred outflows/inflows ofresources

In addition to assets, the Statement of Financial Position will sometimes report a


separate section for deferred outflows of resources. This separate financial statement
element, defen-ed outflows of resources, represents a consumption of net position that
applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The School District has incurred deferred outflows
which are presented as a deferred outflow from advance refunding of debt and a
deferred outflow related to pensions. See Note l6 for further details. .

In addition to liabilities, the Statement of Financi.al posi.tion will sometimes report a


separate section for defen'ed inflows of resources. This separate fmancial statement
element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources
(revenlle) until that time. The School District has incurred a deferred inflow which is
presented as a deferred inflow related to pensions. See Note 16 for further details.

33
JACKSO;\/ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 1- Summary of Significant Accounting Policies, Continued

E. Assets, liabilities, deferred outflows/inflows, and net position/fund balances, Continued

,8. Compensated Absences

Employees of the School District accumulate sick leave at a minimum amount as


required by State law. A greater amount may be provided by School District policy
provided that it does not exceed the provisions for leave as provided in Sections 25~3~
93 and 25-3-95. Some employees are allowed personal leave and/or vacation leave in
accordance with School District policy. The School District pays for unused leave for
employees as required by Section 37-7-307(5), Miss . Code Ann. (1972).

The liability for these compensated absences is recorded as a long-term liability in the
government-wide statements. The current portion of this liability is estimated based
on historical trends. In the fund financial statements, goverrunental funds report the
liability for compensated absences from expendable available financial resources only
if the payable has matured, for example, an employee retires.

9. Long-tenn Liabilities and Bond Discounts/Premiums

In the govemment-wide financial statements, outstanding debt is reported as liabilities.


Bond discounts or premiums and the difference between reacquisition price and the net
carrying vallIe of refunded debt are capitalized and amortized over the terms of the
respective bonds using a method that approximates the effective interest method .

The governmental fund financial statements recognize the proceeds of debt and
premiums as other financing sources of the current period. Issuance costs are reported
as expenditures. See Note 6 for details.

10. Pensions

For purposes of measuring the net pension liability, defelTed outflows of resources and
deferred inflows of resources related to pensions, and pension expense, infonnation
about the fiduciary net position of the Public Employees' Retirement System (PERS)
and additions to/deductions from PERS' fiduciary net position have been determined
all the same basis as they are reported by PERS. For this purpose, the benefit payments
(including refunds of employee contributions) are recognized when due and payable in
accordance with the benetit terms . Investments are reported at fair value.

34
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1 - Summary of Significant Accounting Policies, Continued

E. Assets, liabilities, deferred outflows/inflows, and net position/fund balances, Continued

11. Fund Balances

Fund balance for govenunental funds is reported in classifications that comprise a


hierarchy based primarily on the extent to which the government is bound to honor
constraints on the specific purposes for which amounts in those funds can be spent.

Govemmental fund bnlance is classitied as nonspendable, restricted, committed,


assigned or unassigned. Following are descriptions of fund classifications used by the
School District:

Nonspendablefimd balance includes items thnt cannot be spent. This includes activity
that is not in a spendnble form (inventories, prepaid amounts, long-tenn portion of
loans/notes receivable, or property held for resale unless the proceeds are restricted,
committed, or assil"tned) and activity that is legally or contractually required to remain
intact, sLlch as a principal balance in a pennanent fund.

Resrrictedfillld balance includes amounts that have constraints placed upon the use of
the resources either by an extemal party or imposed by law through a constitutional
provision or enabling legislation.

Committed fund balance includes amounts that can be used only for the specifiC
purposes pursuant to constraints imposed by a fonnal action of the School Board, the
School District's highest level of decision-making authority. This formal action is a
resolution approved by the School Board. Currently there are no committed fund
balances for this School District.

Assigned jimd bnlclllce includes amounts that are constrained by the School District's
intent to be used for a specific purpose but are neither restricted nor committed. For
govemmental funds, other than the general fund, this is the residual amount within the
fund that is not restricted or committed. Assignments of fund balance are created by
the Superintendent and the Chief Financial Officer pursuant to authorization
established by the School Disttict's approved fund balance policy.

35
.JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 1 - Summary of Significant Accounting Policies, Continued

E. Assets, liabilities, deferred outflows/inflows, and net position/fund balances, Continued

11. Fund Balances, Continued

When an expenditure/expense is incurred for purposes for which both restricted and
unrestricted (committed, assigned, or unassigned) resources are available, it is the School
Disttict's general policy to use restricted resources first. When expenditures/expenses are
incurred for purpo es for which unrestricted (committed, assigned, and unassigned)
resources are available, and amounts in any of these unrestricted cla, sifLcatlons could be
used, it is the School District's general policy to spend committed resources first, followed
by assigned amounts, and then unassigned amounts.

It is the goal of the School District to achieve and maintain an unassigned fund balance in
the general fund at fiscal year-end of not less than 7% of general revenues. If the
unassigned fund balance at fiscal year~end falls below the goal, the School District shall
develop a restoration plan to achieve and maintain the minimum fund balance.

Note 2 - Cash and Cash Equivalents and Cash with Fiscal Agents, and Investments

The School District follows the practice of aggregating the cash assets of various funds to
maximize cash management efficiency and retums. Restrictions on deposits and
investments are imposed by statutes as follows:

Deposits. The School Board must advertise and accept bids for depositories no less than
once every three years as required by Section 37-7-333, Miss. Code Ann. (1972). The
collateral pledged for the School District's deposits in financial institutions is held in the
name of the State Treasurer under a program established by the Mississippi State
Legislature and is governed by Section 27-105-5, Miss. Code Ann. (1972). Under this
program, the entity's funds are protected through a collateral pool administered by the State
Treasurer. Financial institutions holding deposits of public funds must pledge securities as
collateral against those deposits. In tIle event of failure of a financial institution, securities
pledged by that institution would be liquidated by the State Treasurer to replace the public
deposits not covered by the Federal Deposit Insurance Corporation (FDIC).

Investments. Section 29-3-113 and 37-59-43, Miss. Code Atm. (1972), authorizes the
School Board to invest excess funds in the types of investments authorized by Section 27-
10S-33(d) and (e), Miss. Code Ann. (1972). This section pennits the following types of
investments: (a) certificates of deposit or interest bearing accounts with qualified state
depositories; (b) direct United States Treasury obligations; (c) United States Government
agency, United States Government instrumentality or United States Government sponsored
enterprise obligations, not to exceed fifty percent of all monies invested with maturities of
thirty d ays or longer; (d) direct security repurchase agreements and reverse direct security
repurchase agreements of any federal book entry of only those securities enumerated in (b)
and (c) above;

36
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 2 - Cash and Cash Equivalents and Cash with Fiscal Agents, and Investments,
Continued

(e) direct obligations issued by the United States of America that are deemed to include
securities of, or other interests in, any open-end or closed-end management type investment
company or investment trust approved by the State Treasurer and the Executive Director of the
Department of Finance and Administration, not to exceed twenty percent of invested excess
funds. Investment income on bond funds (Capital Projects), bond sinking funds (Debt Service
Funds) and sixteenth section principal funds (Pennanent Funds) must be credited to those
fimds. Investment income of $100 or more of any fund must be credited to that fund.
Investment income of less than $100 can be credited to the General Fund.

Cash and Cash Equivalents

The carrying amount of the school District's deposits with financial institutions reported in the
governmental funds and fiduciary funds was $56,414,218 and $3,007,227, respectively. The
carrying amount of deposits reported in the government-wide financial statements included
cash and cash equivalents of $51,893,398 and a portion ofrestricted assets in the amount of
$4,520,820 (see Note 4).

Custodial Credit Risk - Deposits. Custodial credit risk is defined as the risk that, in the event
of the failure of a financial institution, the School District will not be able to recover deposits
or collateral securities that are in the possession of an outside party. The School District does
not have a depOSit policy for custodial credit risk. In the event of failure of a financial
institution, securities pledged by that institution would be liquidated by the State Treasurer to
replace the public deposits not covered by the FDIC. Deposits above FDIC coverage are
collateralized by the pledging financial institution's trust department or agent in the name of
the Mississippi State Treasurer on behalf of the School District. As of June 30, 2017, none of
the School District's bank balance of$62,677,876 was exposed to custodial credit risk.

Cash with Fiscal Agents

The caITying amount of School District's cash with fiscal agents held by financial institutions
was $2,567,387.

37
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 3 - Inter-fund Receivables, Payables and Transfers

The following is a summary of inter-fund transactions and balances:

A. Due FromlTo Other Funds

Receivable Fund Payable FLU1d Amount


General Fund EHA Part B Fund $ 2,979,958
Other governmental funds 6,029,862
Fiduciary funds 2,053,024
Other governmental funds General Fund 86,133
Other govermnental funds 4,061
Total $ 1l,J 53,038

The inter-fund loans were made mainly to cover the initial payments of reimbursable
expenditures of federal programs and to eliminate deficit cash balances. In addition, inter-fund
loans were made to record indirect costs from vatious federal program funds due to the General
Fund. Also, inter-fund loans were made to record funds due the General Fund from various
agency funds.

B. Inter-fund Transfers

Transfers Out Transfers [n Amount


General Fund Other governmental funds $ 4,738,835
EHA Part B Fund General Fund 199,076
Other govemmental funds General Fund 894,667
Other governmental funds 74,218
Total $ 5,906,796

Operating transfers were primarily for the following: the funding of daily operations and routine
activities offunds other than School District Maintenance, indirect cost transfers, transfers to cover
vocational and special education expenditures, transfer to cover unemployment costs, and other
routine operating transfers.

Note 4 - Restricted Assets

The restricted assets represent the cash balance totaling $298,277 of the Sixteenth Section
Principal Fund (Permanent Fund) which is legally restricted and may not be used for purposes that
support the district's programs. In addition, the restricted assets represent the cash with fiscal
agent balance totaling $2,567,387 of the QSCB Bond Retirement Fund. Also, the restricted assets
represent the cash balance of the QSCB Northwest Middle School Capital Projects Fund totaling
$3,627,636 and the School Bond Series 2008 Capital Projects Fund totaling $594,907 resulting
from unspent proceeds at tiscal year end. Total restricted assets reported on the Statement of Net
Position are $7,088,207.

38
JACKSO;\i PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 5 - Capital Assets

The following is a summary of changes in capital assets for govcmmental activities:

Balance Balance
71112016 Increases Decreases Adjustments 6/3012017
Governmental Activities;
Non-deQ!:eciable cal1!tal assets:
Land $ 6,780,059 $ -S - $ - $ 6,780,059
Construction-in-progress 10,453,857 5,083,380 15,537,237
Total non-depreciable capital assets 17,233,916 5,083,380 22,317,296

De(1reciable caQital assets :


Buildings 232,743,622 109,949 232,633,673
Improvements other than buildings 38,182,IB7 38,182,187
~bbile equipment 15,394,175 535,820 3,381,525 (5,500) 12,542,970
Fumiture and equipment 15,070,481 549,104 1,061,242 5,500 14,563,843
Leased property under capital leases 5,238.251 5.238,251
Total depreciable capital assets 306,628,716 1.084,924 4.552,716 303,160,924

Less accumulateu de!!rec1atlon for:


Buildings 76,066,274 3,959,017 87,959 (36,479) 79,900,853
rnprovements other than buildings 21,561,283 747,133 22,308,416
Ivbbile equipment 14,622,400 64,393 3,044,048 (842,383) 10,800,362
Fumiture and equipment 14,149,229 655,691 1,009,926 (517,544) 13,277,450
Leased property under capital lea ses 2,126,067 499,416 2,625,483
Total accumulated depreciation 128,525,253 5,925,650 4,141 ,933 (1,396,406) 128,912,564
Total depreciable capital assets, net 178,103,463 (4,840,726) 410,783 1,396,406 174,248,360

GOl(emmental activities capital assets, net $ 195,337,379 $ 242,654 $ 410,783 $ 1.396,406 $ 196,565,656

Depreciation expense was charged to the following governmental functions:

Governmental activities Amount


Instmction $ 4,079,457
Support services 1,626,774
Non-instructional 219,419

Total depreciation expense - Governmental activities $ 5,925,650

The capital assets above include significant amounts which have been valued at estimated
historical cost. TI1e estimated historical cost was based 011 replacement cost mUltiplied by the
consumer price index implicit price detlator for the year of acquisition.

An adjustment was needed to move a capital asset previously reported as mobile equipment to
furniture and equipment. Also, adjustments were needed to correct prior year accumulated
depreciation for buildings, mobile equipment, and furniture and equipment.

39
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 5 - Capital Assets, Continued

The details of construction-in-progress are as follows :

Spent to
June 30, Remaining
2017 Commitment
Governmental Activities:
Northwest Middle School $ 15,537,237 $_ _..:....
97.:....;7-'..:
.5:....;:6-=-
3
Total construction in progress $ 15,537,237 $~~~ 97_7.... ,5_6_3

Construction projects included in governmental activities are funded with proceeds of qualifled
school construction bonds and other bond proceeds.

Note 6 - Long-term Liabilities

The following is a summary of changes 10 long-tenn liabilities and other obligations for
governmental activities:

Am':lll!ltsdue
Balance Balance witlmone
7/1/2016 Add~ions Reductions 6/3012017 year
A General obligrrtion bonds payable S 31 ,830,000 $ .S 8,320,000 S 23,510,000 $ 6,185,000
B. Special obligation bonds payable 118,070,000 4,135,000 113,935,000 6,885,000
C. Three mtliootes payable 14,960,000 605,000 14,355,000 605,000
D. ObligatDIlS urder cap~alleases 3,750,654 527,179 3,223,475 551,088
E. Qualified schoolconstructi.m bond~ 15,400,000 15,400,000
F. COll~el1sated absences payable 2.093,170 17,197 2,075,973 103,799

Subtotal 186,1 03.824 13,604,376 172,499,448 14.429,887

Add: Bond premium 23,3 13,320 2,051,421 11,261,899


Total 209,417,14~ S . S 15,655,797 5 193,761,347 S 14,429,887

40
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 6 - Long-term Liabilities, Continued

A. General obligation bonds payable

General obligation bonds are direct obligations and pledge the full faith and credit of the
School District. General obligation bonds currently outstanding are as follows:

Maturity AmoWlt
Description Interest Rale Issue Date Date Amolmt Issued Outstanding

1. General obligation
Series 2008 4.0%-5.25% 7/23/2008 4/112018 $ 114,000,000 $ 5,795,000
2. General obligation
Series 2012-A 5.00% 1115/2013 4/1/2028 21,065,000 17,715,000
Totnl S 135,065,000 $ 23,510,000

The following is a schedule by years of the total payments due on this debt:

1. General obligation bonds issued on July 23, 2008:

Year Ending
June 30 Principal Interest Total

2018 $ 5,795,000 $ 304,238 $ 6,099,238


Total $ 5,795,000 $ 304,238 $ 6,099,238

This debt will be retired from the General Obligation Bond Series 2008 Debt Service Fund.

41
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 6 - Long-term LiabiUties, Continued

2. General obligation bonds issued on January 15, 2013:

Year Ending
June 30 Princi~al lJlterest Total
2018 $ 490,000 $ 885,750 $ 1,375,750
2019 1,3 70,000 861,250 2,231,250
2020 1,440,000 792,750 2,232,750
202\ 1,510,000 720,750 2,230,750
2022 \,585,000 645,250 2,230,250
2023 - 2027 9,195,000 1,955,500 11,150,500
2028 2.125,000 106.250 2,231.250
Total $ 17,715,000 $ 5,967,500 $ 23,682,500

This debt will be retired from the General Obligation Series 20 12A Refunding Debt Service
Fund.

Total general obligation bond payments for all issues:

Year Ending
June 30 Principal Interest Total

2018 $ 6,285,000 $ 1,189,988 $ 7,474,988


2019 1,370,000 861,250 2,231,250
2020 1,440,000 792,750 2,232,750
2021 1,510,000 720,750 2,230,750
2022 1,585,000 645,250 2.230,250
2023 - 2027 9.195,000 1,955,500 11,150,500
2028 2,125,000 106,250 2,231,250
Total $ 23,510,000 $ 6,271,738 $ 29,781,738

The amount of bonded indebtedness that can be incurred by the School District is limited
by Sections 37-59-5 and 37-59-7, Miss. Code Ann. (1972). Total outstanding bonded
indebtedness during a year can be no greater than 15% ofthe assessed value of the taxable
property within such district, according to the then last completed assessment for taxation,
unless certain conditions, as set forth in Section 37-59-7, Miss. Code Ann . (1972) have
been met. As of June 30, 2017, the amount of outstanding bonded indebtedness was equal
to 2% of property assessments as of October t, 20 J 6.

42
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 6 - Long-term Liabilities, Continued

B. Special obligation bonds payable

Special obligation bonds currently outstanding are as follows :

Manrrity Amount
DescriQtion Interest Rate Issue Date Date AnlOlU1t Issued Outstandin!!
1, Special obligation bonds,
Series 2015A 5,00% 11110/2015 4ill2028 S 104,990,000 $ 102,525,000
2, Special obligation bonds,
Series 2015B 0.58%-5,0% 11/1Oi2015 10,' 112020 13,080,000 11,41 0,000
Total $ 118,070,000 $ 113,935,000

The following is a schedule by years of tile total payments due on this debt:

1. Special obllgation bonds, Series 20 1SA issued on November 10, 2015 :

Year Ending
lLu1e 30 Princil2al Interest Total
2018 $ 4,185,000 $ 5,126,250 $ 9,311,250
2019 9,160,000 4,917,000 14,077,000
2020 8,280,000 4,459,000 12,739,000
2021 8,710,000 4,045,000 12,755,000
2022 9,165,000 3,609,500 12,774,500
2023 - 2027 53,380,000 10,680,500 64,060,500
2028 9,645,000 482,250 10,127,250
Total $ 102.525,000 $ 33.319,500 $ 135.8-1.4,500

This debt will be retired from the General Obligation Bonds Series 20 15A Refunding Debt Service
Fund.

2. Special obligation bonds, Series 20 15B issued on November 10, 2015:

Year Ending
June 30 PrinciQal Interest Total
2018 $ 2,700,000 $ 352,518$ 3,052,518
2019 2,805,000 239,297 3,044,297
2020 2,905,000 171,787 3,076,787
2011 3,000,000 75,000 3,075,000
Total $ 11,410,000 $ 838,602 $ 12,248,602

This debt will be retired from the General Obligation Bonds Series 20 15B Refunding Debt Service
Fund.
43
JACh:SO." PUBLIC SCHOOL DlSTRlCT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 6 - Long-term Liabilities, Continued

B, Special obligation bonds payable, Continued

Total special obligation bonds payments for all issues :

Year Ending
June 30 Principal Interest Total

2018 $ 6,885,000 $ 5,478,768 $ 12,363,768


2019 11,965,000 5,156,297 17,121,297
2020 11,185,000 4,630,787 15,815,787
2021 11,710,000 4,120,000 15,830,000
2022 9,165,000 3,609,500 12,774,500
2023 - 2027 53,380,000 10,680,500 64,060,500
2028 9,645,000 482,250 10,127,250
Tolal $ 113,935,000 $ 34,158,102 $ 148,093,102

C. Three mill notes payable

Debt currently outstanding is as follows:

Interest Issue Maturity Amount Amount


Description Rate Date Date Issued Outstanding

Limited lax notes refunding,


Series 20128 4.37% 1/15/2013 10/1/2023 $ 15,100.000 $ 14.355,000
Total $ 15,100,000 $ 14,355,000

The follo\ving is a schedule by years of the total payments due on this debt:

Year Ending
June 30 Principal Interest Total
2018 $ 605,000 $ 613,797 $ 1,218,797
2019 635,000 586,734 1,221,734
2020 635,000 559,016 1,194,016
2021 660,000 530,719 1,190,719
2022 3,770,000 433,937 4,203,937
2023 - 2024 8.050,000 355,484 8,405,484
Total $ 14,355,000 $ 3,079,687 $ 17,434,687

This debt will be retired from the Three Mill Series 20128 Refunding Debt Service Fund.

44
JACKSO~ PUBLIC SCHOOL DISTRlCT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 6 - Long-term Liabilities, Continued

D, Obligations under capital leases

The School District has entered into lease agreements, which qualify as capital leases for
ac~ounting purposes, for the acquisition of the following:

1. Buses llt a cost of S 1,238,460.


1. Transportation equipment and food service equipment at a cost of53,999,791.

Interest Maturity Amount Amount


Description Rate Issue Date Date Issued Outstanding

1. Buses 4.99% 6/13/2011 8/31/2020 $ 1,238,460 $ 521,852


2. Transportation/food service eqiupmen! 4.37% 9/19/2013 10/10/2023 3,999,791 2,701,623
Total $ 5,238,251 $ 3,223,475

The following is a schedule by years of the total payments due on this debt:

Interest and
Year Ending Maintenance
June 30 Principal Charges Total

2018 $ 551,088 $ 137,843 $ 688,931


2019 576,089 112,842 688,931
2020 602,232 86,699 688,931
2021 527,369 59,362 586,731
2022 401,154 38,095 439,249
2023 - 2024 565,543 25,408 590,951
Total $ 3,223,475 $ 460,249 $ 3,683,724

The capital lease for the buses will be retired from the EEF Buildings and Buses Fund
(Special Revenue Fund) and the capital lease for the transportation/food service equipment
will be retired from the Lunchroom Fund and EEF Buildings and Buses Fund (Special
Revenue Funds).

45
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 6 - Long-term Liabilities~ Continued

E. Qualified school construction bonds payable

As more fully explained in Note 14, debt has been issued by the school District that
qualifies as Qualified School Construction bonds. Debt currently outstanding is as follows:

Interest Maturity Amount Amount


Description Rate Issue Date Date Issued Outstanding
QSC8 , Series 2015 0. 15% 8/14/2015 6/1512027 $ 15,400,000 $ 15,400,000
Total $ 15,400,000 $ 15,400,000

The following is a schedule by years of the total payments due on this debt:

Year Ending
June 30 PrinciQal Interest Total
2018 $ -$ 23,100 $ 23,100
2019 23,100 23,100
2020 23,100 23,100
2021 23,100 23,100
2022 23,100 23,100
2023 - 2027 15,400.000 115,500 15,515,500
Total .$ 15,400.000 $ 231,000 $ 15,631,000

This debt will be retired from the QSCB Series 2015 Debt Service Fund.

F. Compensated absences payable

As more fully explained in Note I(E)(S), compensated absences payable is adjusted on an


annual basis as required by Section 37-7-307(5), Miss . Code Ann. (1972). Compensated
absences will be paid from the fund from which the employees' salaries were paid.

Note 7 - Prior Year Defeasance of Debt

In prior years, the Jackson Public School District defeased certain general obligation and
other bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all
future debt service payments on the old bonds. Accordingly, the tnIst account assets and
liabilities for the defeased bonds are not included in the School District's financial
statements. On hme 30, 2017, $77,375,000 of bonds outstanding are defeased.

46
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 8 - Short-Term Financing

During the fiscal year ended June 30,2017, the School District participated in the following short-
tenn financings for the purpose of supplementing the School District's resources until tax proceeds
become available:

A. Bank-financed short-tenn debt.

The School District issued a revenue anticipation note payable to Trustmark National Bank,
and the proceeds from such issuance are accounted for as a current liability in the General
fund of the School District. Once the cash flow was available, the School District made a
payment consisting of principal and interest to the trustee.

All transactions related to participation in this program are accounted for as part of the
School District's General Fund.

B. Changes in short-tenn debt activity recorded in the govemmental activities during flscal
year 2017 are as follows:

Balance
Description 7/1/2016 Additions Reductions 6/30/2017

Tax Anticipation Note, 0.93% ....:$_ _ _ _ _$:....-....;:2:..;.o:...;;.OO


_o~.0,;...0_
0_$.:....._....;:2....;:0.:....:.O_OO....:.O
,;...O....;:
O_$~_ __

Total $ $ 20,000,000 $ 20,000,000 $

Note 9 - Defined Benefit Pension Plan

General Information about the Pension Plan

Plan Descriptioll. The School District contributes to the Public Employees' Retirement System of
Mississippi (PERS), a cost-sharing multiple-employer defined benefit pension plan. PERS
provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits
[0 plan members and beneficiaries. Plan provisions and the Board of Trustees' authority to
detennine contribution rates are established by Miss. Code Ann. Section 25-11-1 et seq., (1972, as
amended) and may be amended only by the Mississippi Legislature. PERS issues a publicly
available financial report that incl udes financial statements and required supplementary
infonnatiol1. That report may be obtained by writing to Public Employees' Retirement System of
Mississippi, PERS Building, 429 Mississippi Street, Jackson, MS 39201 or by calling (601) 359-
3589 or 1-800-444-PERS.

Benc./its prodded. Membership in PERS is a condition of employment granted upon hiring for
qualifying employees and officials of the State of Mississippi, state universities, community and
junior colleges, and teachers and employees of the public school districts. For those persons
employed by political subdivisions and instrumentalities of the State of Mississippi, membership
is contingent upon approval of the entity's participation in PERS by the PERS' Board of Trustees.

47
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 9 - Defined Benefit Pension Plan, Continued

General Information about the Pension Plan, Continued

If approved, membership for the entity's employees is a condition of employment and eligibility
is granted to those \vho qualify upon hiring. Participating members who are vested and retire at
or after age 60 or those who retire regardless of age with at least 30 years of creditable service (25
years of creditable service for employees who became members ofPERS before July 1,2011) are
entitled, upon application, to an annual retirement allowance payable monthly for life in an amount
equal to 2.0 percent of their average compensation for each year of creditable service up to and
including 30 years (25 years for those who became members of PERS before July 1,2011), plus
2.5 percent for each additional year of creditable service with an actuarial reduction in the benefit
for each year of creditable service below 30 years or the number of years in age that the member
is below 65, whichever is less. Average compensation is the average of the employee's earnings
dllling the four highest compensated years of creditable service. Benefits vest upon completion of
eight years of membership service (four years of membership service for those who became
members ofPERS before July 1,2007). PERS also provides certain death and disability benefits.
A Cost-of-Living Adjustment (COLA) payment is made to eligible retirees and beneficiaries. The
COLA is equal to 3.0 percent of the annual retirement allowance for each full fIscal year of
retirement up to the year in which the retired member reaches age 60 (55 for those who became
members of PERS before July I, 2011), with 3.0 percent compounded for each fiscal year
thereafter. Plan provisions are established and may be amended only by the State of Mississippi
Legislature.

Contributions. PERS members are required to contribute 9.00% of their annual covered salary,
and the School District is required to contribute at an actuarially detennined rate. The employer's
rate as of June 30, 2017 wus 15.75% of annual covered payroll. Plan provisions and the Board of
Trustees' authority to detenninc contribution rates are established by Section 25-11-1 of the
Mississippi Code of 1972, as amended, and may be amended only by the Mississippi Legislature.
The School District's contributions to PERS for the tiscal years ending June 30, 2017, 2016 and
2015 were $23,030,463, $23,757,819 and $23,197,754, respectively, which equaled the required
contributions for each year.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions

At June 30, 2017, the School District reported a liability of $421,187,498 for its proportionate
share of the net pension liability. The net pension liability was measured as of June 30, 2016, and
the total pension liability used to calculate the net pension liability was detennined by an actuarial
valuation as of that date. The School District's proportion of the net pension liability was based
on a projection ofthe School District's long-term share of contribution to the pension plan relati ve
to projected contributions of all participating entities, actuarially detennined. The School
District's proportionate share used to calculate the June 30, 2017 net pension liability was
2.357943 percent, which was based on a measurement date ofJune 30, 2016. This was an increase
of 0.000376 percent from its proportionate share used to calculate the June 30, 2016 net pension
liability, which was based on a measurement date of June 30, 2015.

48
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 9 - Defined Benefit Pension Plan, Continued

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions, Continued

For the year ended June 30, 2017, the School District recognized pension expense of $49, 172,977.
At June 30, 2017 the School District reported defelTed outflows of resources and deferred inflows
of resources relatt!d to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual
experience $ 11,722,179 $
Net di fference between projected and actual
earnings on pension plan investments 28,949,684
Changes of assumptions 19,852,525
Changes in proportion and differences
between School District contributions and
proportionate share of contributions 2,514,938 1,119,229
School District contributions subsequent to the
measurement date 23,030,463 3,483,498
Totul $ 86,069,789 $ 4,602,727

$23,030,463 reported as defelTed outflows of resources related to pensions resulting from school
district contlibutions subsequent to the measurement date will be recognized as a reduction to the
net pension liability in the year ended June 30,2018. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:

Year ended
June 30, Amount
1018 $ 18,762,003
2019 16,610,808
2020 14,743,136
2011 8,320,652

Actuarial assumptions. The total pension liability in the June 30, 2016 actuarial valuation was
detctmined using the following actuarial assumptions, applied to all periods included in the
meas uremen t:

Intlation 3.00 percent


Salary increases 3.75·19.00 percent, including inflation
Investment rate of rehlm 7.75 percent, net of pension plan investment
expense, induding inflation

49
JACKSON PUBLIC SCHOOL DISTRICT
Notcs to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 9 - Defined Benefit Pension Plan, Continued

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions, Continued

Mortality rates were based on the RP-2014 Healthy Annuitant Blue Collar Table Projected with
Scale BB to 2016, \vith males rates set forward one year.

The actuarial assllmptions used in the June 30, 2016 valuation were based on the results of an
actuarial experience study for the period July 1,2010 to June 30, 2014. The experience report is
dated May4, 2015.

The long-tenn expected rate of retum on pension plan investments was detennined using a log-
nonnal distribution analysis in which best-estimate ranges of expected future real rates of return
(expected nominal returns, net of pension plan investment expense and the assumed rate of
inflation) are developed for each major asset class. These ranges are combined to produce the
long-term expected rate ofretum by weighting the expected future real rates of'retum by the target
asset allocation percentage and by adding expected inflation. The target asset allocation and best
estimates of aritlunetic real rates of return for each major asset class are summarized in the
following table:

Target Long-Tenn Expected


Asset Class Allocation Real Rate of Return
U.S. Broad 34% 5.20%
Intemutional Equity 19 5.00
Emerging Markets Equity 8 5.45
Fixed Income 20 0.25
Real Assets 10 4.00
Private Equity 8 6.15
Cash (0.50)
Total 100%

Discount rate . The discount rate used to measure the total pension liability was 7.75 percent, a
decrease of 0.25 percentage points since the prior measurement date. The projection of cash flows
used to detennine the discount rate assumed that plan member contributions will be made at the
current contribution rate and that employer contributions will be made at rates equal to the
difference between actuarially detennined contribution rates and the member rate. Based on those
assumptions, the pension plan's fiduciary net position was projected to be available to make all
projected future benefit payments of current plan. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods ofprojected benefit payments to detennine
the total pension liability.

50
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 20t7

Note 9 - Defined Benefit Pension Plan, Continued

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions, Continued

SCllSitidfy of the School District's proportionate share oFthe /lef pellsiol! liability to changes ill
the discount rate. The fonowing presents the School District's proportionate share of the net
pension liability calculated using the discount rate of 7.75 percent, as well as what the School
District's proportionate share of the net pension liability would be if it were calculated using a
discount rate that is I-percentage-point lower (6.75 percent) or l-percentage-point higher (8.75
percent) than the current rate:
Current
1% Decrease Discount 1% Increase
(6 .75%) Rate (7.75%) (8.75%)
District's proportionate share of
the net pension liability $ 540,056,804 $ 421.187,498 $ 322,564.504

Pension plal1./idllciary lIet position. Detailed infonnation about the pension plan's fiduciary net
position is available in the separately issued PERS financial report.

Note 10 - Sixteenth Section Lands

Sixteenth Section school lands, or lands granted in lieu thereof, constitute property held in trust
for the benefit of the public schools. The School Board, under the general supervision ofthe Office
of the Secretary of State, has control and jurisdiction of said school trust lands and of all funds
mising ii'om any disposition thereof. It is the duty of the school board to manage the school trust
lands and all funds arising therefrom as trust property. Accordingly, the board shall assure that
adequate compensation is received for all uses of the trust lands, except for uses by the public
schools. The following are the future rental payments to be made to the School District for the use
of school trust lands. These future rental payments are from existing leases and do not anticipate
renewals or new leases.

Year Ending
June 30 Amount
2018 $ 1,259,092
2019 1,259,092
2020 898,252
2021 863,452
2022 835,237
2023 -- 2027 4,027,605
2028 - 2032 2,938,110
2033 - 2037 2,398,705
2038 - 2042 829,827
Thereafter 348,450
Total $ 15,657,822

51
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 11 - Prior Period Adjustments

A summary ofsigniticant Net Position/Fund Balance adjustments is as follows:

Exhibit B - Statement of Activities

Explanation Amount

1. To record prior year revenues and expenditures and correct $ (175,040)


account balances in various funds at the governmental fund level
2. To correct prior year accumulated depreciation of buildings,
mobile equipment and furniture and equipment 1,396,406
Total $ 1,221,366

Exhibit D - Statement of Revenues. Expenditures and Chan ges in Funt! Balances

Fund Exp[anation Amount

General Fund To record prior year expenses $


related to MeOPS (71,900)
To record prior year transfer of funds 3,240
Storm Damage Spring2013 Fund To record prior year transfer offunds (3,240)
Other goverlUnenta[ funds To record prior year revenues and
expenditures and correct account
balances in various funds (103,140)
Total $ ([75,040)

Note 12 - Contingencies

Federal Grants - The School District has received federal grants for specific purposes that are
subject to audit by the grantor agencies, Entitlements to these resources are generally conditional
upon compliance with the tenns and conditions of the grant agreements and applicable federal
regulations, including the expenditure of resources for allowable purposes. Any disallowances
resulting from thc grantor audit may become a liability of the School District.

Litigation - The School District is party to legal proceedings, many of which occur in the nonnal
course of governmental operations. It is not possible at the present time to estimate the outcome
or liability, if any, of the School District with respect to the various proceedings, However, the
School District's legal counsel believes that ultimate liability resulting from these lawsuits will not
have a material adverse effect on the financial condition of the School District.

52
JACKSON PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 13 - Risk Management

The school District is exposed to various risks of loss related to torts; theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The School
District carries commercial insurance for these risks. Settled claims resulting from these insured
risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

Note 14 - Qualified School Construction Bonds

Section 1521 of the American Recovery and Reinvestment Act (ARRA) of 2009 provides for a
source of capital at no or at nominal interest rates for costs incurred by certain public schools in
cOlmection with the construction, rehabilitation or repair of a public school facility or for the
acquisition of land where a school will be built. Investors receive federal income tax credits at
prescribed tax credit rates in lieu of interest, which essentially allows state and local goverru11ents
to borrow without incurring interest costs. While Qualitled School Constnlction Bonds (QSCBs)
are intended to be interest free to a borrower, the ARRA legislation allows a lender to charge
supplemental interest, and such supplemental interest is the responsibility of the School District.

When the stated interest rate on the QSCB results in interest payments that exceed the
supplemental interest payments discussed in the preceding paragraph, the School District may
apply for a direct cash subsidy payment from the U.S , Treasury which is intended to reduce the
stated interest rate to a nominal percentage. These subsidy payments do not include the amount
of any supplemental interest paid on a QSCB. For the year ended June 30, 2017, the subsidy
payments amounted to SO.

The School District makes equal annual payments into a sinking fund which is used to pay off the
bonds at tem1ination. The current maturity limit of tax credit bonds is 17 years, per the U.S.
Treasury Department. Under this program, ten percent of the proceeds must be subject to a binding
commitment to be spent within six months ofissLlance and 100% must be spent within three years.
Up to two percent of bond proceeds can be used to pay costs of issuance. The amount on deposit
at June 30,2017 was S2 ,567,387. The amount accumulated in the sinking fund at the end of the
17-year period is expected to be sufficient to retire the debt. The following schedule reports the
annual deposits to be made to the sinking fund by the School District.

Year Ending
June 30 Amount
2018 $ 1,283,000
2019 1,283.000
2020 1,283,000
2021 1,283,000
2022 1,283,000
2023 - 2027 6,419,000
Total $ 12,834,000

53
JACKSO;\j PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30, 2017

Note 15 - Insurance loss recoveries

The School District received $8,639,576 in insurance loss recoveries during the 2016-2017 fiscal
year related primarily to stonn damage and various other damages to properties. In the
govemment-wide Statement of Activities, the insurance loss recoveries were reported as charges
for services and were allocated to the support services expense function. Govemment entities are
required to evaluate prominent events or changes in circumstances affecting capital assets to
detennine whether impainnent of a capital asset has occurred. Such events or changes in
circumstances that may be indicative of impainnent include evidence of physical damage,
enactment or approval of laws or regulations or other changes in enviromnental factors,
technological changes or evidence of obsolescence, changes in the manner or duration of use of a
capital asset, and construction stoppage. Capital assets based on the restoration cost approach for
the various buildings damaged were deemed not impaired at June 30, 2017.

Note 16 - Effect of Deferred Amounts on Net Position

The net investment in capital assets net position amount of $55,566,719 includes the effect of
deferring the recognition of expenditures resulting from a deferred outflow from advance
refunding of School District debt and deferred bond premiums. The $16,434,822 balance of the
deferred outflow of resources from advance refunding of debt at June 30, 2017 will be recognized
as an expense and decrease the net investment in capital assets net position over the next 11 years.
The $21,261,899 balance of the deferred bond premiums at June 30, 2017, will be recognized as a
decrease in an expense and increase the net investment in capital assets net position over the next
11 years.
The unrestricted net position amount of ($339,134,220) includes the effect of deferred
inflows/outflows of resources related to pensions. A portion of the defen-ed outflow of resources
related to pensions in the amount of $23,030,463 resulting from the School District contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability
in the year ended June 30, 2018. The $63,039,326 balance of the deferred outflow of resources
related to pensions at June 30, 2017 will be recognized as pension expense and will decrease the
unrestricted net position amount over the next 4 years. The $4,602,727 balance of the defen-ed
inflow of resources related to pensions at June 30, 2017 will be recognized as a reduction of
pension expense and will increase the unrestlicted net position amount over the next 3 years.

Note 17 - Subsequent Events

Events that occur after the Statement of Net Position date but before the financial statements are
available to be issued must be evaluated for recognition or disclosure. The effects of subsequent
events that provide evidence about conditions that existed at the Statement of Net Position date
are recognized in the accompanying financial statements. Subsequent events which provide
evidence about conditions that existed after the Statement of Net Position date require disclosure
in the accompanying notes. Management of the School District evaluated the activity of the
district through March 21,2018, and determined that the following subsequent events had occurred
which required disclosure in the notes to the financial statements:

54
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Financial Statements, Continued
For Year Ended June 30,2017

Note 17 - Subsequent Events, Continued

Subsequent to June 30, 2017, On September 14, 2017 the State Board of Education asked the
Governor to declare a state of emergency which would authorized the Mississippi Department of
Education to officially takeover all the operation of the district. However, the Govemor through
an agreement with the City of Jackson's Mayor decided to adopt an improvement plan called the
"Better Together" with W.K. Kellogg Foundation and Mississippi Economic Council. On March
21. 2018 the Jackson Public School District recei ved from Standard and Poors Global ratings an
upgrade 011 their Mississippi Development Bank Limited Tax Debt from an A to A+.

55
REQUIRED SUPPLEMENTARY [NFORl\lATIO~

56
JACKSON PUBLlC SCHOOL DISTRICT
~ _~ _ _. RequIred SUPple~taryJnfo!'J1il1lon ._ _ . . __ _ . __ ~
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2011
Variances
POSltilo!! {~atilo!!l
Bu~eted Amounts Actual Original Final
Original Final (GAAP Basis) to Final 10 Actual
Revenues:
Loca! sources $ 74,376 ,926 $ 75.109.776 $ 75,840,472 $ 732850 $ 730,696
Slate sources 124,698.940 124.698,940 126,597,679 1.898.739
Federal sources 580.000 580,000 1.321 .008 741,008
Sixteenth section sources 1.380. 100 1.380.100 1.319.315 (60.185)
Tolal Re-.enues 201 .035.966 201,761).816 205.0·7IH1'1 732.850 3.309.658

Expenditures:
Instruction 115,872.903 115.882.282 110.672,255 (9.379) 5,210,027
Support ser.;c es 78.433,784 79,492,476 84.710,391 [ 1.058.692) (5,217,915)
Noninstructionalser'o1ces 66.914 52.049 44.379 14,865 7.670
Sixleenlh section 154.100 174.100 61.371 (20,000) 112,729
Facihties acquiSition and construction 4.501,000 4,806,224 [305,224) 4,806,224
Debt ser'o1ce:
Principal 21,702.700 21.634,959 67,741 21,634,959
Inlerest 161.000 93,058 73,058 67 ,942 20,000
Other 78.n2 35,615 5,000 43.157 30.615
Tolal Expendilures 220.971 .173 222,170.763 195.566.454 (1 .199.590) 26.604.309

Excess (Deficiency) of Re\o!!nues


o~r [under) Expenditures --.J 19. 935.207) (20.4 0 1.947 l 9.512.020 (456,740) 29,913,967

Other Financing Sources (Uses):


Bonds and notes issued 20,000.000 20.000.000 (20,000.000)
Insurance recolo!!ry 25,000 25.000 39,576 14,576
Paymenllo QSCB debt escrow agent (1,282,259) (1,282,259)
Sale of transporlation equipment 26.400 26,400
Opera~ng transfers in 8.418,586 16.559.969 1,093.743 8,141.383 (15,466,226)
Operating transfers out (13,271 .987) ( 20.684,370) [4.738,835) (7.412.383) 15,945,535
Other financing uses (535.4 17 l (538.360) 1535.4171 (2. 943 l
Total Other Financing Sources (Uses) 15.171 .599 15.365.182 (5,399.735) 193,583 (20,764.917 l

Net Change in Fund Balances (4.763.608) (5.036.765) 4.112.285 (273,157) 9.149.050

Fund Balances:
July 1, 2016, as pre",ously reported 21,358,839 21,358,839 21,471.707 112,868
Prior period adjustments 149.292 149.292 (68.660) (217,952)
July 1. 2016, as restated 21.508.131 21,508,131 21.403.047 (105,084)

Increase (Decrease) in inlo!!ntory 29,458 29,458

June 30. 2017 $ 16.744,523 $ 16.471.366 $ 25 . 54~ .790 $_....J..273.157l S 9.073.42~

The noles to the required supplementary informaUon are an integral part of this schedule.

57
JACKSON PUBLIC SCHOOL DISTRICT
. ___ _ _ ~equired Supplementary Information __ _ __ _ __
Budgetary Comparison Schedule
EHA Part B Fund
For the Year Ended June 30, 2017
Variances
PosiU\e (Nagall\e)
Budgeted Aroounts Actual Original Final
<Xisinal Final (GAAP Basis) to Final to Actual
Revenues:
Local sources $ $ $ 6,970 $ $ 6,970
Federal sources 6,831,839 6,831,839 6,752_560 (79,279)
Total Re\enues 6,831,839 6.831,839 6,759,530 (72,309)

EKpendllures:
Instruction 4,154,652 3,924,103 3,328,627 230,549 595,476
Support ser.ices 4,229,023 4,454,562 3,231,827 (225,539) 1.222,735
Total Expenditures 8,383,675 8,378,665 6,560,454 5,010 1,818,211

Excess (Deficiency) of Re\enues


o'.€r (under) Expendilures ( 1.551,836) (1,546,826) 199,076 5.010 1,745,902

Other Financing Sources (Uses):


Operating transfers out (252,374) (252,374) (199,076) 53,298
Total other Financing Sources (Uses) (252,374) (252,374) 11 99,076) 53.298

Net Change in Fund Balances (1 ,804,210) (1.799,200) 5,010 1,799,200

Fund Balances:
July 1, 2016

June 30, 2017 $ (1.804,210) $ (1,799,200) $ $ 5,010 $ 1,799.200

The notes to the required supplementary informaUon are an Integral part of this schedule.

58
JACKSON PUBLIC SCHOOL DISTRICT
Required Supplementary Informillion
Scl1edule of Ihe School District's Proportionate Share of the Net Pension Liability
PERS
Last 10 Fiscal Years'

2017 2016 2015


School District's proportion of the net pension liability (asset) $ 421,187,498 364,433,367 280,432,367

School District's proportionate share of the net pension liability 2,357943% 2,357567% 2,310335%
(asset)

School District's covered payroll 150,843,295 147,287,327 141,109,054

School District's proportionate share of the net pension liability


(assel) as a percentage of Its covered
payroll 279,22% 247.43% 198,73%

Plan fiduciary net position as a percentage of the total


pension liability 57% 62% 67%

• The amounts presented for each fiscal year were determined as of the measurement date of
6/30 of the year prior to the fiscal year presented ,

This schedule is presented to illustrate the requirement to sl10w information for 10 years. However,
GASB 68 was implemented in FYE 6/30/15, and, until a full 10-year trend is compiled, the School District
has only presented information for the years in which information is available.

The notes to the required supplementary information are an integral part of this schedule.

59
Jackson PubUc School District
RI' uin.'d Su lelTK'ntarv Infomlation
Schedule of School District Contribution~
PERS
LasllO Fiscal Years

2017 2016 2015


Contractually required contribution $ 23,030,463 23,757,819 23,197,754

Contribution.; in relation to the contractually


required contribution 23,030,463 23,757,819 23,197,754

Contribution deficiency (excess) $

School District's covered payroll '''6,225,162 150.8·0,295 147.287,327

Contributions as a percentage of covered payroll 15.75% 15.75% 15.75%

Tllis schedule is presented to illustrate the requirement to show infonnation for \0 years. However,
GASB 68 was implemented in FYE 6/30/15, and, until a fulll0-year trend is compiled, the School
District has only presellted information for the years in which information is available.

The notes to the required supplementary information are an integral part of this schedule.

60
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Required Supplementary Infonnation
For the Year Ended June 30, 2017

Budgetary omparison Schedule

(1) Basis of Presentation

The Budgetary Comparison Schedule presents the original legally adopted budget, the final
legally adopted budget, the actual data on the GAAP basis, variances between the original
budget and the final budget, and variances between the tinal budget and the actual data.

(2) Budget Amendments and Revisions

The budget is adopted by the school board and filed \."ith the taxing authority. Amendments
can be made on the approval of the school board. By statute, final budget revisions must
be approved on or before October 15. A budgetary comparison is presented for the General
Fund and each major Special Revenue Fund consistent with accounting principles
generally accepted in the United States of America.

Pension Schedules

(1) Changes of assumptions

The expectation of retired life mortality was changed to the RP-2014 Healthy
Annuitant Blue Collar Table projected to 2016 using Scale BB rather than the RP-2000
Mortality Table, \.vhich was used prior to 2015.

The expectation of disabled mortality was changed to the RP·2014 Disabled Retiree Table,
rather than the RP-2000 Disabled MOltality Table, which was used prior to 2015.

Withdrawal rates, pre-retirement mortality rates, disability rates and service retirement
rates were also adjusted to more closely reflect actual e:tperience.

Assumed rates of salary increase were adjusted to more closely reflect actual and
anticipated experience.

The price inflation and investment rate of return assumptions were changed from
3.50% to 3.00% and 8.00% to 7.75%, respectively.

The assumed rate of interest credited to employee contributions was changed from
3.50% to 2.00%.

61
JACKSO~ PUBLIC SCHOOL DISTRICT
Notes to the Required Supplementary Infonnation
For the Year Ended June 30,2017

(2) Changes in benefit provisions

Effective July 1,2016. the interest rate on employee contributions shall be calculated based
011 the money market rate as published by the Wall Street Joumal on December 31 of each
preceding year with a minimum rate of one percent and a maximum rate of five percent.

62
SUPPLEMENT ARY INFORMATION

63
JACKSON PUBLIC SCHOOL DISTRICT
_ _ _ _ _ _ __ _ . Supple~n.!!lry Information __ ._ _ _._
Schedule of Expenditures of Federal Awards Schedule I
For the Year Ended June 30, 2017
Catalog of
Federal
Federal Grantorl Domestic
Pass-through Grantorl Assistance Federal
Program lille No. Expenditures

U.S. Department of Agriculture


Passed-through Mississippi Department of Education:
Child nutrition cluster:
School breakfast program 10.553 $ 4,953,938
National school lunch program 10.555 14,602,267
Summer Food Service Program for Children 10.559 294,377
School Fruits & Vegetables 10.582 641.583
Total Child Nutrition Cluster 20,492,165
Total passed-through MissiSSippi Department of Education 20.492.165
Total U.S. Department of Agriculture 20,492.165
U,S. Department of Defense
Direct Program:
Reserve Officers' Training Corps 12.xxx 849,153
Total U.S. Department of Defense 849.153
federal Communications Commission
Administered through the Universal Service Administrative Company:
The schools and libraries program of the universal service fund 32.xxx 1.091 ,878
Total Federal Communications CommiSSion 1,091,878
U.S. Department of Education
Passed-through Mississippi Department of Education:
Adult Education - Basic Grants to States 84 .002 375,749
Vocational Education - Basic Grants to States 84.048 298,553
Rehabilitation Service 84.126 9.633
Education for Homeless Children and Youth 84.196 157,872
Twenty - first Century Community Learning Centers 84.287 195,660
English language acquisition grants 85.365 53,628
I rT1>rovi ng Teachers Quality grant 84.367 1,096.958
Subtotal 2,188,053
litle I Cluster:
lille I Grants to Local Educational Agencies 84.010 17,563,637
litle VI - State Assessment grants to local educational agencies 84.369 759,783
Totallitle I Cluster 18.323.420
Special education cluster:
Special education - grants to states 84.027 6,752,560
Special education - preschool grants 84.173 129,932
Total special education cluster 6.882.492
Total passed-through Mississippi Department of Education 27,393,965
Total U.S- Department of Education 27,393.965

U.S, Department of Health and Hyman Services


Passed-through Mississippi Department of Education:
Medical assistance program 93.778 219,397
Total passed-through MiSSissippi Department of Education 219,397
Total U.S Department of Health and Human Services 219,397

U.S. Department of Justice


Direct Program:
RA~ Corporation:
National Institute of Justice Research, Evaluation and Development Project Grant 16.560 ' ,286.639
Total U.S, Department of Justice 1.286.639

Total for All Federal Awards $ 51,333.197

The notes to the Supplementary Information are an integral part of this schedule.

64
JACKSON PUBLIC SCHOOL DISTRICT
NOTES TO THE SUPPLEMENTARY rNFORMATION
FOR THE YEAR ENDED JUNE 30, 2017

NOTE I. - Basis of Presentation:

The accompanying schedule of expenditures of federal awards (the "Schedule")


includes the federal award activity of Jackson Public School District under programs
of the federal government for the year ended June 30, 2017. The information in this
Schedule is presented in accordance \\lith the requirements of Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Unitonn Guidance). Because the
Schedule presents only a selected portion of the operations of the School District, it is
not intended to and does not present the financial position, changes in net assets, or
cash flows of the School District.

NOTE 2. - Summary of Signiticant Accounting Policies:

Expenditures reported on the Schedule are reported on the modi fied accrual basis of
accounting. Such expenditures are recognized following the cost principles contained
in the Unifonn Guidance, wherein certain types of expenditures are not allowable or
are limited as to reimbursement. Negative amounts shown on the Schedule represent
adjustments or credits made in the nonnal course of business to amounts reported as
expenditures in prior years.

NOTE 3. - Indirect Cost Rate :

The Jackson Public School District has not elected to use the 10-percent de minimis
indirect cost rate allowed under the Unifonn Guidance.

NOTE 4. - The pass-through entities did not assign identifying numbers to the School District

See the Independent Auditors' Report on Supplementary Information.


65
JACKSON PUBLIC SCHOOL DISTRICT
ii·",,;om
Schedule of Instructional, Administrative and Other Expenditures - Governmental Funds Schedule II
For the Yea r Ended June 30, 2017

Instruction and
Other Student
Instructional General School
Expenditures Total Expenditures Adm inistration Administration Other

Salaries and fringe benefits $ 201,637,839 $ 142,520,054 $ 8,584,397 $ 15,934,040 $ 34,599,348


Other 83,929,760 16,420,842 1,990 ,212 64,334 65.454.372

Total $ 285,567,599 156,940,896 10,574,609 15,998,374 1 00,053,720

Total number of students· 26,206

Cost per student $ 10,897 $ 6.065 $ 404 $ 610 $ 3 ,818

For purposes of this schedule, the following columnar descriptions are applicable:
Instruction and Other Student Instructional Expenditures - includes the acti-.ities dealing directly with the interaction betv.een teacher's and
students . Included here are the activities of teachers, teachers aides or classroom assistants of any type.

General Administration - includes expenditures for the following functions: Support Services - General Administration and Support Services -
Business .
School Administration - includes expenditures for the following function : Support Services - School Administration.

Other - includes all expenditure functions not included in Instruction or Administration Categories .

• includes the number of students reported on the ADA report submission for month 9 , which is the final submission br the fiscal year

See the Independent Auditors' Report on Supplementary Infonnntion.

66
OTHER INFORMATION

67
JACKSO;\ PUBLIC SCHOOL DISTRICT
.. _ __ _ __ Other !"fonnaU()."_ _ _ _. . ._ _ . _
Statement of Revc nues, Expenditures and Changes In Fund Blllances Schedule lU
General Fund
Last Four Years
UNAUDITED
2017 2016* 2015* 2014*
Re,,'enues:
Local sources 5 75,8-l0,472 S 76,107,24-1- $ 76,391,40-l $ 74,210,965
State sources 126,597,679 129,412,160 123,805,217 122,121,581
Federal sources 1,321,008 310,155 1,519,916 314,018
Sixteenth section sources 1.319.315 1,37R.780 1.343.944
Total Revenues 205.078474 207.20R,3)9 203.060,4R 1 196,646,564

Expenditures:
Instruction 110,672,255 117,464,534 116,123,384 111,756,722
Support services 84,710,391 81,016,320 81,069,230 78,379,931
Noninstructionnl services 44,379 27,460 82 26,20~
Sixteenth section 61,371 77,224 94,271
Debt service:
Principal 253,065 492,458 474.777
Interest 73,058 71,751 78,241 119,923
Other 5.000 47.771 22.158
Total Expenditw'es 195.566,45-l 198.958,125 197,857.666 190,779,719

E:<cess (Deficiency) of Revenues


over (wlder) E.xpenditures 9,512,020 8.250.214 5,202,815 5,866.845

Other Financing Sources (L'ses):


Insurance loss recovery 39.576 17,839 162,542 13,447
Payment to QZAB/QSCB debt escl'o,v agent (1,282,259) (1,283,000)
Saks of Transportation EquiPlnent 26,400
Operating transfers in 1,093,743 8,600
Operating transfers out (4,738,835 ) 3,485,806 687,134 1,518,360
Other Financing uses (538,360) (4,210,446) (5,235 1565) {5,460.686}
Total Other Finnncing Sow'ces (Uses) (5,399,735) (I ,989,801} (4,377.289) p ,928 ,879)
Net Change in Fund Balances 4,112,285 6.260,413 825 ,526 1,937,966
Fund Balances:
Beginning of period, as previou.c;ly reported 21,471,707 15,191,789 14,031,932 12,560.397
FW1ds Reclassification 32~,223
Prior period adjustments {68 1660) {969) (614 ,7R3)
Beginni ng of period. as restated 21.403.047 15.191,789 14,355,186 11.945 1614
Increase (Decrease) in reserve for inventory 29,458 19,505 11,077 148,352
End of Period S 25.544,790 $ 2 \.4 71,707 $ 15.191.789 $ 14,031.932

·SOURCE - PRIOR YEAR AUDIT REPORTS


See the Independent Auditors' Report on Supplementary lnfomlation.

68
HC~O:\ Pt.:BLlC SOIOOL DISTRICT
__ _ _ Olher Inronnaflon _
Statement or Revenues, £'xpcnditurcs nnd Chanl,Ccs In Fund Bnlllllccs Schedule 1\'
All GO\'enunc ntlll Funds
Last Four Ye III'S
UNAUDITED

2017 2016· 201S· 201-4·


Revenues:
Local sour~cs $ 1)9.00J.HCJ2 $ ~6,193,71() $ 95.40S.797 $ 85.317.586
State sources 132.83·1,823 137,0488,022 133,007.521 1JO.606.389
F~d~rul sources 51.333.197 50,4HO,9~6 50,647,538 49.992.-481
Si.~teel1lh sl:ction sOLln:t!s 1.319.315 1.3 78. 7~O 1.3-43 ,9-4-4 1.275,399
Total Revclllll!s ~s4A') 1.127 :!H5,5-11,458 2 ti 11,4 117 .800 267.1 q I.H55

E.xpc ndlturcs:
Instrut.:tion 13 I.S 30.8-15 138.3-13,1 b 1 136.46-1.355 133,110.-116
SllPPOrt services 107,503.21'17 101.701.159 105.77<).118 101,784,037
NoninSlrll(;\ional scr\'ic~s 19.611.90-4 20.021,064 19.430.96-1 20,242,253
Si~tecnU1 section 61.371 77,21-4 9-1,271 11!!.9-19
FuciliLies ucquisition Dnd construction 5.()S3.380 8.307.586 1.966.83-1
D.!bt servh:e:
Princip.d 13.587.179 7.357.379 13.054.904 5.074.952
Interest 8. 169.123 7.%7,936 9,541,965 6.592.635
Other 20.510 I. 557.fll 7 13.7M) 40.518
Total Expcmlitllres 285.567.599 2SS.333.126 2~/).346.221 266.963.760

Excess (Deficiency) orRc~~nlll:s


owr (lulu~r) Exrenditurc~ ( 1.()76.372) lOS.3)2 ($.938.4211 228.095

Other Financing Sources (Uses):


Bonds and notes issu~d 150400,000
Capitill lellses issued 3.999,7') I
InslU'ullce loss r~c~wcry 8,639.S76 5.657.11-1 76~ . 714 13,447
Rcfluluing bond, isslI':u II S.070.000
Payn...:nts held byest.:rC\w agent 1.282.259 1.:!83.U(J0
Pr~lT1jLlrn.~ all. bonds and rel\Uluing bonds issu~d 17.907.()~9
PUYln!nt hl rellu1ded bond escrow agent ( 134.665.718)
Puyn...:nt tll QZAB. QSCB debt e~crow agent ( 1.2S2.25~) ( 1.283,(00)
Sale l)f lTunspnrtllliun cquiplrent :!6AOO
Sale of other propt!rty 10.400 8.600
Operating transf~rs in 5,906,796 10,998.901 6.026,1~6 7,181,677
Op~mling Iransfers out (5.906.796) (10.998.9()1 ) (6.02/i.146) (7,181.677)
Other financing uses (538.360)
Total Olh.:r Financing SOIU'CCS (eses) 8.138.016 22.3680445 777.324 4.013.238
Extraordinary iterns 9,:!5l!.9H
Net Chnngc in FW1d Bll1anccs 7.061 .6-1.4 :!2.576.777 (5,161.097) 13.S00.:!77

Fum.! Balances:
Bt!gi Iming of peri au, as previously n:port~d 56.018.712 33.836.335 39.056,202 25.86H,061
Prior period aujustl1~nlS 1175.040) 1500.19")) (65.0420) 1421.5(8)
Beginning ol'pcriod. us restated 55.H43.682 33.336.14' :ll!.990.7l!2 25.446.5-D
Incr.:ase (Decrease) in rt!servt! tiJr inventory (9J~41 ) I05.S0:! 6.650 109.3~'

End of Perind S 62.895.485 $ 56.nIS.n2 $ 33 .836.335 $ 39.056.211:!

·SOURCE - PRIOR YEAR AUDIT REPORTS

Sel! tht! Indcrend.:nt AudilDrs' Report all Surplcmentary Inlimrotion.

69
REPORTS ON INTERl'iAL CONTROL AND COMPLIANCE

70
.. .,
I;'t-
'

/ \ tl , f)/~

t I il I

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL


OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT
OF FrNANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GO V£RN A;fEN T AUDfTlNG STA NDARDS

Superintendent and School Board


Jackson Public School District

We have audited, in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
governmental activities, each major fund, and the aggregate remaining fund information of the
School District, as of and for the year ended June 30, 2017, and the related notes to financial
statements, which collectively comprise of the School District's basic financial statements, and
have issued ollr report thereon dated March 21, 2018.

Intcrnal Control 0 CI' Finunclnl Reporting

In planning and perfonning our audit of the financial statements, we considered the School
District's internal control over financial reporting (internal control) to detennine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the School District's internal control. Accordingly, we do not express an opinion on the
effectiveness of the School District's internal control. A deficiency in internal control exists when
the design or operation of a control does not allow management or employees, in the nonnal course
of perfonning their assigned functions, to prevent, or detect and correct, misstatements on a timely
basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control,
such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with
governance.

Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.

71 909 N PRESID EIIT STRE E-I


J f-IL! I),::; ,WEMJE
,j,i\n:Sr)hJ MS :",1)202
11- '
16011 7 j ~ m(Ii, f-A." ,'." 1 7 1-1-1) In'l
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
OVER FINANClAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDlT
OF FINANClAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
CONTINUED

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that


is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the School District's financial statements
are free from material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements, noncompliance with which could have a
direct and material effect on the determination offinancial statement amounts. However, providing
an opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of noncompliance
or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal conh'ol and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with GO\'ernmenl Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.

gt~~Te.cv~ U..P
BRUNO & TERVALON LLP
CERTIFIED PUBLIC ACCOUNT ANTS
Jackson, Mississippi

March 21, 2018

72
'; 1o:. I'hc j Ii" ..PI>
'I Va! J I ", PA
1):::111\ \' J.,I 1~~ Pt~.
C i~ i 1 11 ~· , r.::lI l dl c ,l\CC,:.H WI1.cl i ,Is
JOS8!J '\ [, h" II CPA
::-.:;O ( It'" iL 01 no .::11 .. .:....
C ~ll I 11 ".: P UllIJ:: ACC.{)~jJit(-.nll s

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE!"I" B

FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL


CONTROL OVER COMPLIANC E REQUIR ED BY . HE UNI FORM GUIDANCE

Report on Compliance for Each Major Federal Program

We have audited the School District compliance with the types of compliance described in the
OMB Complia/lce Sllpplemellt that could have a direct and material effect011 each of the School
District's major federal programs for the year ended June 30, 2017. The School District's major
federal programs are identified in the summary of independent auditors' results section of the
accompanying summary schedule of findings and questioned costs.

I\lanllgement's Responsibilitv

Management is responsible for compliance with federal statutes, regulations and tenns and
conditions of its federal awards applicable to its federal programs.

Auditors Responsibility

Our responsibility is to express an opinion on compliance for each of the School District's major
federal program based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and the audit
requirements of Title 2 U.S. ode of Federal Regulations Part 200, Uniform Administrative
ReqUirements, Cost Principles, and Audit Requirements/or Federal AWClrds (Unifonn Guidance).
Those standards and the Uniform Guidance require that we plan and perfonn the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above could have a direct and material effect 011 a major federal program occurred. An
audit includes examining, on a test basis, evidence about the School District's compliance with
those requirements and perfonning such other procedures as we considered necessary in the
circumstances.

We believe that 01.11' audit provides a reasonable basis for OLir opinion on compliance for each major
program. However, our audit does not provide a legal detetmination of the School District's
compliance.

73
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INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL
CONTROL OV ER COMPUA CE REQUIRED BY THE UNIFORM GULDANCE
CONTINUED

Opinion on Eaeh Major Federal Program

In our opinion, the School District complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended June 30, 2017.

Report on Internal Control Over Compliance

Management of the School District is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above. In
planning and perf0n11ing our audit of compliance, we considered the School District's internal
control over compliance with the types of requirements that could have a direct and material effect
on each major federal program to detennine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major federal
program and to test and report on internal control over compliance in accordance with the Uniform
Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, we do not express an opinion on the effectiveness of the School
District's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the nonnal course of perfonning
their assigned functions, to prevent, or' detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material 'weakness ill internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, stich that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.

74
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL
CONTROL OVER COMPLIANC E REQUIR ED BY THE UNI FORM GUIDANC E
CONTINUED

Our consideration ofintemal control over compliance was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in intemal control
over compliance that might be material weaknesses or significant deficiencies. We did not identify
any deficiencies in intemal control over compliance that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of intemal control over compliance and the results of that testing based on the
requirements of the Unifonn Guidance. Accordingly, this report is not suitable for any other
purpose .

.&t~ ~ TQ.C"u ~ L.tF'


BRUNO & TERVALON LLP
CERTIFIED PUBLIC ACCOUNTANTS
Jackson, Mississippi

March 21,2018

75
INDEPENDENT AUDITORS' REPORT ON COl\lPLIANCE WITH STATE LAWS AND
REGULATIONS

76
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INDEPENDENT AUDITOR'S REPORT


ON COMPLIANCE WITH STATE LAWS AND REGULATIONS

Superintendent and School Board


Jackson Public School District

We have audited the financial statements of the govel1unental activities, each major fund, and the
aggregate remaining fund infonnation of the School District as of and for the year ended June 30,
2017, which collectively comprise of the School Distdct's basic financial statements and have
issued our report thereon dated March 21, 2018. We conducted our audit in accordance with
auditing standards generally accepted in the United States of America and the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States.

Section 3 7-9-18(3)(a), Miss. Code Ann. (1972), states in part, "the auditor shall test to ensure that
the School District is complying with the requirements of Section 37-61-33(3)(a)(iii), Miss. Code
Ann. (1972), relating to classroom supply funds." As required by the state legal compliance audit
pro&'Tam prescribed by the Office of the State Auditor, we have also performed procedures to test
compliance with certain other state laws and regulations. However, providing an opinion on
compliance with all state laws and regulations was not an objective of our audit and, accordingly,
we do not express such an opinion.

The results of our procedures performed to test compliance with the requirements of Section 37-
61-33(3)(a)(iii), Miss. Code Ann. (1972), disclosed no instances of noncompliance.

Section 37-9-18(3 )(b), Miss. Code Ann. (1972), states in part, "the auditor shall test to insure
correct and appropriate coding at the function level. The audit must include a report showing the
correct and appropriate functional level expenditure codes in expenditures by the School District."

The results of our procedures perfonned to test compliance with the requirements of Section 37-
9-18(3 )(b), Miss. Code Ann. (1972), disclosed no instances of noncompliance related to incorrect
or inappropriate functional level expenditure coding.

.1:298 E[ '(sw~ f' IELDS AV EN UE


77
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INDEPENDENT AUDITOR'S REPORT
ON COMPLIANC E WITH STATE LAWS AND REGULATIONS
CONTINUED

As required by the state legal compliance audit program prescribed by the Office of the State
Auditor, we have also perfonned procedures to test compliance with certain other state laws and
regulations. However, providing an opinion on compliance with all state laws and regulations was
not an objective of our audit and, accordingly, we do not express such an opinion.

The results of procedures perfonned to test compliance with certain other state laws and
regulations and our audit of the financial statements did not disclose any instances of
noncompliance with other state laws and regulations.

This report is intended solely for the infonnation and use of the school board and management.
entities with accreditation overview. and federal awarding agencies, the Office ofthe State Auditor
and pass-through entities and is not intended to be and should not be used by anyone other than
these specified parties. However, this report is a matter of public record and its distribution is not
limited.

gr-~ ~Ter~~ uP
BRUNO & TERVALON LLP
CERTIFIED PUBLIC ACCOUNTANTS
Jackson, Mississippi

March 21, 2018

78
SCHEDULE OF FINDINGS AND QUESTIONED COSTS

79
JACKSON PUBLIC SCHOOL DISTRICT
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2017

Section I: Summary of Auditor's Results

Financial Statements:
1. Type of auditor's report issued: Unmodified

2. Internal control over financial reporting:


a. Material weaknesses identified? No
b. Significant deficiencies identified? None reported

3. Noncompliance material to financial statements noted? No

Federal Awards:
4. Internal control over major programs:
a. Material 'vveaknesses identified? No
b. Significant deficiencies identified? None reported

5. Type of auditor's report issued on compliance for major programs: Unmodified

6. Any audit findings disclosed that are required to be reported in No


accordance with 2 CFR 200.516(a)7

7. Identification of major programs:


CFDA Numbers Name of Federal Prowm or Cluster
12.XXX Reserve Officers' Training Corps
84.010; 84.369 Title I Cluster
84.367 Improving Teachers Quality grant
16.560 National Institute ofJ ustice Research, Evaluation
and Development Project Grant
8. Dollar threshold used to distinguish between type A and type B
programs: $1,539,996
9. Auditee qualified as low-risk auditee Yes ~ No

80
JACKSO~ PUBLIC SCHOOL DISTRICT
Schedule of Findi ngs and Questioned Costs, Continued
For the Year Ended June 30, 2017

Section II: financial Statement Findings

The results of our tests did not disclose any findings related to the financial statements that are
required to be reported under Gm'ernmelll Auditing Standards.

Section III: Federal Award Findings and Questioned Costs

The results of our tests did not disclose any findings and questioned costs related to the federal
awards.

81
Jackson Public School District
Jackson Public Schools Post Office Box 2338
Jackson, MS 39225-2338
Chief fln.nelal Officer Dr. Frederick MUlTSY - Interim Superintendent
Sharolyn Miller, Chief Financial Officer
662 South President Street
P.O. 80x 2118
Jackson, MS 39225·2338 Summary Schedule of Prior Year Audit Findings
Phone 601·973·8543
Facsimile 601·973·8568
www.jackson.kI2.m •.us
As required by 2 CFR 200.511 (b). the Jackson Public School District has
prepared and hereby submits the following Summary Schedule of Prior
Year Audit Findings as of June 30, 2017,

Finding

2016-001 Corrected

82
APPENDIX C

INFORMATION CONCERNING THE DISTRICT RESOLUTION AND THE DISTRICT BOND


[THIS PAGE INTENTIONALLY LEFT BLANK]
THE DISTRICT BOND AND THE DISTRICT RESOLUTION

General; Authorization and Purposes for Issuance

In order to provide moneys for the Project, there has been authorized in accordance with the Act, the
Jackson Public District General Obligation Bond, Series 2018 (Capital Improvements Project), in the aggregate
principal amount of $65,000,000 (the “District Bond”), pursuant to a resolution of the Board of Trustees of the
District (the “Governing Body”) adopted on October 16, 2018 (the “District Resolution”).

Security

The District Bond will be a general obligation of the District. The District has covenanted to levy a special
ad valorem tax upon all of the taxable property within the District which will be adequate and sufficient, after
allowance has been made for the expenses of collection and delinquencies in the payment of taxes, to produce sums
required for the payment of the principal of, premium, if any, and the interest on the District Bond and any
additional obligations of the District under the Indenture. Said special ad valorem tax shall be extended upon the
tax rolls and collected in the same manner and at the same time as other taxes of the District are collected, and the
rate of tax which shall be so extended shall be sufficient in each year fully to produce the sums required as aforesaid,
without limitation as to time, rate or amount. The avails of said tax are irrevocably pledged for the payment of the
principal of, premium, if any, and interest on the District Bond as the same shall mature and accrue. The District
Bond will never constitute an obligation of the State or any political subdivision of the State other than the District,
and neither the full faith and credit nor taxing power of the State or any political subdivision thereof, other than the
District, is pledged to the payment of such principal of, premium, if any, and interest on the District Bond.

Procedure

Concurrently with the issuance of the District Bond, the Bank will issue the Series 2018 Bonds, and the
proceeds of the Series 2018 Bonds will be used to purchase the District Bond in accordance with the Act and in
accordance with the terms and conditions of the Indenture and the Bond Purchase Agreement. The proceeds of the
District Bond are to be applied in accordance with the Indenture by the Trustee to provide the funds necessary for
the Project.

Payment of Principal, Premium, if any, and Interest

The District will duly and punctually pay the principal of, premium, if any, and interest on the District
Bond pledged under the Indenture at the dates and the places and in the manner set forth in the District Resolution
and Indenture. Notwithstanding any schedule of payments upon the District Bond pledged under the Indenture, the
District agrees to make payments upon such obligations and be liable therefor at such times and in such amounts
(including principal, premium, if any, and interest) so as to provide for payment of the principal of, premium, if any,
and interest on the Series 2018 Bonds Outstanding under the Indenture, at least five Business Days prior to when
such amounts are due, whether upon a scheduled Interest Payment Date for the Series 2018 Bonds, at maturity, or
upon redemption of the Series 2018 Bonds.

Redemption of the District Bond

The District shall only be permitted to redeem the District Bond pursuant to the District Resolution to the
extent and in the manner required to redeem the Series 2018 Bonds pursuant to the provisions of the Indenture.

C-1
Flow of Funds

Bond Fund. The District will establish and maintain in its name with a qualified depository a Series 2018
Bond Fund (the “Bond Fund”) for the payment of the principal of, premium, if any, and interest on the District
Bond, and the payment of Agent’s fees in connection therewith. There will be deposited into the Bond Fund as and
when received:

(a) The avails of any of the ad valorem taxes levied and collected pursuant to the District Resolution;

(b) Any income received from the investment of monies in the Bond Fund; and

(c) Any other funds available to the District which may be lawfully used for payment of the principal
of, premium, if any, and interest on the District Bond or for other obligations of the District which may be due under
the Indenture, and which the Governing Body, in its discretion, may direct to be deposited into the Bond Fund.

As long as any principal of, premium, if any, and interest on the District Bond or the Series 2018 Bonds
remain outstanding and/or other obligations of the District remain outstanding under the District Resolution or under
the Indenture, the District is authorized and directed under the District Resolution to withdraw from the Bond Fund
sufficient monies to make the payments necessary (the “District Bond Payments”) to pay (i) the principal of,
premium, if any, and interest coming due on the Series 2018 Bonds, and (ii) any additional payments necessary and
required as obligations of the District under the Indenture, including, but not limited to Program Expenses (as such
term is defined in the Indenture), and to transfer same to the account of the Paying Agent in time to reach the
Paying Agent at least five days prior to the date on which said interest, principal or premium, if any, on the
Series 2018 Bonds shall become due, or in such time as may be required for any other payments regarding the
Series 2018 Bonds shall become due. The Paying Agent shall transfer all District Bond Payments received to the
Trustee who shall deposit such District Bond Payments in the General Account of the General Fund of the Indenture
(as such terms are defined in the Indenture), or such other fund or account as the Trustee is so directed in the
Indenture.

Construction Fund. The principal proceeds, including any premium, received upon the sale of the District
Bond shall be deposited with a qualified depository in a special fund, created under the District Resolution, in the
name of the District and designated the "2018 Construction Fund" (the "Construction Fund"). Such proceeds shall
be used, to the extent permitted by law, (a) for the Project; (b) to reimburse the District for any expenses incurred by
the District in connection with the Project allowed by the Code; (c) to pay architectural, engineering, fiscal, paying
agent, printing, accounting, construction manager, financial advisory, feasibility consultant, legal expenses and
development expenses incurred in connection with the Project, the District Bond and the Series 2018 Bonds; and (d)
to pay costs related to any suits and proceedings in connection with the Project, including any costs of settlement
thereof. Any income received from investment of monies in the Construction Fund shall be deposited in the
Construction Fund and shall be used for the costs of the Project. Any amounts which remain in the Construction
Fund after the completion of the Project shall be transferred to the Bond Fund and used as permitted under the Code
and State law.

C-2
APPENDIX D

FORM OF OPINION OF BOND COUNSEL


[THIS PAGE INTENTIONALLY LEFT BLANK]
UPON THE DELIVERY OF THE SERIES 2018 BONDS, BUTLER SNOW LLP PROPOSES TO DELIVER
AN OPINION IN SUBSTANTIALLY THE FOLLOWING FORM:

Mississippi Development Bank


Jackson, Mississippi

Re: $65,000,000 Mississippi Development Bank Special Obligation Bonds, Series 2018 (Jackson Public School
District General Obligation Bond Project) (the "Series 2018 Bonds")

Ladies and Gentlemen:

We have acted as Bond Counsel in connection with the issuance by the Mississippi Development Bank (the
"Issuer") of the above described Series 2018 Bonds, pursuant to an Indenture of Trust (the "Indenture"), dated as of
November 1, 2018, by and between the Issuer and Trustmark National Bank, Jackson, Mississippi, as trustee (the
"Trustee"). We have examined the law and a certified transcript of proceedings of the Issuer relative to the
authorization, issuance and sale of the Series 2018 Bonds and such other papers as we deem necessary to render the
opinions contained herein, including the Issuer’s tax representations and covenants made in the Indenture and its tax
certificates, representations and covenants and the tax representations and covenants of the Jackson Public School
District, (the "District") made in a resolution (the "District Bond Resolution") adopted by the Board of Trustees of
the District on October 16, 2018 and its tax certificates (collectively, the "Tax Representations and Covenants").

The Series 2018 Bonds are being issued under the authority of Sections 31-25-1 et seq., Mississippi Code
of 1972, as amended and supplemented from time to time (the "Issuer's Act"), and Sections 37-59-1 et seq.,
Mississippi Code of 1972, as amended and supplemented from time to time (the "District's Bond Act" and together
with the Issuer's Act, the "Act"), and a resolution of the Board of Directors of the Issuer adopted on October 3, 2018
and the District Bond Resolution (together, the "Resolution").

The Series 2018 Bonds are being issued for the purpose of providing funds to finance the costs of various
capital improvements within the District, as more particularly described in the District Bond Resolution, and to pay
the costs incident to the sale, issuance, and delivery of the Series 2018 Bonds and the 2018 District Bond (as
described in the District Bond Resolution).

As to questions of fact material to our opinion, we have relied upon representations of the District and the
Issuer, certified proceedings and other certifications of the District and the Issuer and other public officials furnished
to us, and certifications furnished to us by or on behalf of the District and the Issuer regarding certain federal tax
matters in connection with the issuance of the Series 2018 Bonds and the use of the proceeds thereof, without
undertaking to verify the same by independent investigation. In all such examinations, we have assumed the
genuineness of all signatures, the authenticity of all documents presented to us as originals, and the conformity to
original documents of all copies submitted to us as certified, conformed, or photographic copies. As to certificates,
we have assumed the same to be properly given and to be accurate.

We have relied upon the certified transcript of proceedings and other certificates of public officials,
including the Tax Representations and Covenants, and have not undertaken to verify any facts by independent
investigation.

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

(a) Such proceedings and proofs show lawful authority for the sale and issuance of the Series 2018
Bonds by the Issuer pursuant to the Constitution and laws of the State of Mississippi (the "State"), including the Act
and the provisions of the Resolution.

(b) The Series 2018 Bonds are legal, valid and binding limited obligations of the Issuer enforceable in
accordance with the terms thereof. The Series 2018 Bonds are payable from and secured only by the certain
payments and funds to be received by the Issuer and the Trustee and pledged to the Series 2018 Bonds under the
Indenture.
D-1
(c) The Indenture is a valid and binding agreement of the Issuer enforceable in accordance with its
terms. The Indenture creates the valid pledge that it purports to create in the Funds and Accounts and the 2018
District Bond (as such terms are defined in the Indenture), including the investments and proceeds thereof
(excepting therefrom the "Rebate Fund" as defined in the Indenture) and all other funds, accounts and moneys
pledged (to the extent of that pledge), subject to the application thereof to the purposes and on the conditions
permitted by the Indenture.

(d) Under existing statutes, regulations, rulings and court decisions, subject to the assumption stated below,
interest on the Series 2018 Bonds is excludable from gross income for federal income tax purposes. Furthermore,
interest on the Series 2018 Bonds is not a specific preference item for purposes of the federal alternative minimum
tax. We express no opinion regarding other federal tax consequences resulting from the ownership of, receipt or
accrual of interest on, or disposition of the Series 2018 Bonds. In rendering the opinion contained in this paragraph
(d), we have assumed continuing compliance with the requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), that must be met after the issuance of the Series 2018 Bonds in order that interest on the
Series 2018 Bonds not be includable in gross income for federal income tax purposes. The failure to meet such
requirements may cause interest on the Series 2018 Bonds to be includable in gross income for federal income tax
purposes retroactive to the date of issuance of the Series 2018 Bonds. The District and the Issuer have covenanted
to comply with or to require compliance with the requirements of the Code in order to maintain the excludability of
interest on the Series 2018 Bonds from gross income for federal income tax purposes. Owners of the Series 2018
Bonds should consult their own tax advisors as to the applicability and effect on their federal income taxes or any
other collateral federal income tax consequences.
(e) Under and pursuant to the Act, the Series 2018 Bonds and interest thereon are exempt from all income
taxes imposed by the State.
It is to be understood that the rights of the holders of the Series 2018 Bonds and the enforceability of the
Indenture and the Series 2018 Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights heretofore or hereinafter enacted and that their enforcement may be subject to
the exercise of judicial discretion in accordance with general principles of equity.

In this opinion letter, issued in our capacity as Bond Counsel, we are opining only upon those matters set
forth herein, and we are not passing upon the accuracy, adequacy or completeness of the Issuer's Official Statement
or other statements made in connection with any offer or sale of the Series 2018 Bonds or upon any federal or state
tax consequences arising from the receipt or accrual of interest on or the ownership or disposition of the Series 2018
Bonds, except those specifically addressed herein, or upon any federal or state law with respect to the sale or
distribution of the Series 2018 Bonds.

In rendering this opinion letter, we have acted as Bond Counsel for the sole purpose of rendering an
opinion with respect to the legality and validity of the Series 2018 Bonds under the laws of the State and with
respect to the excludability of the interest on the Series 2018 Bonds from federal and State income taxation.

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. It should be noted
that material changes regarding matters of fact and applicable law may hereafter occur. We expressly disclaim any
undertaking or responsibility to review, revise, update or supplement this opinion letter subsequent to its date for any
reason or to advise you of any change in the law, whether by reason of legislative or regulatory action, by judicial
decision or otherwise, or of any change of facts or circumstances or of any facts or circumstances that may hereafter
come to our attention or for any other reason.

Very truly yours,

BUTLER SNOW LLP

D-2
APPENDIX E

DEFINITIONS
[THIS PAGE INTENTIONALLY LEFT BLANK]
DEFINITIONS

In addition to terms defined elsewhere in this Official Statement, the following words and terms shall have
the following meanings, unless the context or use in this Official Statement otherwise requires. Words of the
masculine gender should be deemed and constructed to include correlative words of the female and neuter gender.
Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Indenture and the
District Resolution, as the case may be.

Accounts

“Accounts” means the accounts created pursuant to Article VI of the Indenture.

Act

“Act” means together the Bank Act and the District Bond Act.

Authorized Officer

“Authorized Officer” means the President, Vice President, Executive Director, Secretary or Assistant
Secretary of the Bank or such other person or persons who are duly authorized to act on behalf of the Bank and the
Superintendent of Schools or the Chief Financial Officer of the District or such other person or persons who are duly
authorized to act on behalf of the District.

Bank

“Bank” means the Mississippi Development Bank, a body corporate and politic exercising essential public
functions, or any successor to its functions organized under the Bank Act.

Bank Act

“Bank Act” means the provisions of Sections 31-25-1 et seq., Mississippi Code of 1972, as amended or
supplemented from time to time.

Bankruptcy Code

“Bankruptcy Code” means 11 U.S.C. Sections 100 et seq., as amended or supplemented from time to time.

Beneficial Owner

“Beneficial Owner” means, whenever used with respect to a Bond, the person in whose name such Bond is
recorded as the beneficial owner of such Bond by a DTC Participant on the records of such DTC Participant, or such
person’s subrogee.

Bond Counsel

“Bond Counsel” means an attorney or firm of attorneys approved by the District and the Bank nationally
recognized in the area of municipal law and matters relating to the exclusion of interest on state and local
government bonds from gross income under federal tax law, including particularly compliance with Section 148(f)
of the Code. Butler Snow LLP, Ridgeland, Mississippi, is serving as Bond Counsel in connection with the sale and
issuance of the Series 2018 Bonds.

Bond Issuance Expense Account

“Bond Issuance Expense Account” means the account by that name created by Section 6.02 of the
Indenture.

E-1
Bond Purchase Agreement

“Bond Purchase Agreement” means the Bond Purchase Agreement, dated November 15, 2018, by and
among the Underwriters, the Bank and the District in connection with the issuance and sale of the Series 2018
Bonds.

Bond Register

“Bond Register” means the registration records of the Bank kept by the Trustee to evidence the registration
and transfer of the Bonds.

Bondholder

“Bondholder” or “holder of Bonds” or “owner of Bonds” or any similar term means the Registered Owner
of any Bond.

Bonds

“Bonds” means the Series 2018 Bonds and any Refunding Bonds issued pursuant to the Indenture.

Business Day

“Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) any other day on which banking
institutions in New York, New York or Jackson, Mississippi, are authorized or required not to be open for the
transaction of regular banking business or (d) a day on which the New York Stock Exchange is closed.

Code

“Code” or “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and all
applicable Regulations promulgated thereunder.

Costs of Issuance

“Costs of Issuance” means items of expense payable or reimbursable, directly or indirectly, by the Bank
and related to the authorization, sale, validation, issuance and/or delivery of the Series 2018 Bonds and the District
Bond, which items of expense shall include, but not be limited to, printing costs, costs of reproducing documents,
filing and recording fees, initial fees and charges of the Trustee, legal fees and charges, professional consultants’
fees, costs of credit ratings, fees and charges for execution, transportation and safekeeping of the Series 2018 Bonds,
credit enhancements or liquidity facility fees, fees and expenses of the Underwriters, and other costs, charges and
fees in connection with the foregoing.

Counsel

“Counsel” means an attorney or firm of attorneys duly admitted to practice law before the highest court of
any state.

Default

“Default” means an event or condition the occurrence of which, with the lapse of time or the giving of
notice or both, would become an Event of Default under the Indenture.

District

“District” means the Jackson Public School District, Jackson, Mississippi, a Local Governmental Unit
under the Bank Act.

E-2
District Bond

“District Bond” means the $65,000,000 General Obligation Bond, Series 2018 (Capital Improvements
Project) issued by the District pursuant to the District Resolution and registered to the Trustee as assignee of the
Bank pursuant to the Indenture.

District Bond Act

“District Bond Act” means Section 37-59-1 et seq., Mississippi Code of 1972, as amended and
supplemented from time to time.

District Bond Payment

“District Bond Payment” means the amounts paid or required to be paid, from time to time, for principal,
premium, if any, and interest on the District Bond.

District Bond Purchase Agreement

“District Bond Purchase Agreement” means that certain District Bond Purchase Agreement, dated
November 15, 2018 by and between the District and the Bank in connection with the issuance and sale of the
District Bond.

District Project

“District Project” shall mean purchasing, erecting, repairing, equipping, remodeling and enlarging school
buildings and related facilities, and purchasing land therefor; establishing and equipping school athletic fields and
necessary facilities connected therewith, and purchasing land therefor, and providing necessary water, light, heating,
air conditioning and sewerage facilities for school buildings and purchasing land therefor, all for the purpose of
extending the useful life of many District owned facilities, eliminating overcrowding and potentially dangerous
conditions, and improving, repairing and upgrading school safety, including, but not limited to, the following
generally described projects: (a) making various site improvements, constructing, erecting, repairing, equipping,
remodeling and enlarging school buildings, science labs, libraries, performing arts facilities, classrooms, restrooms,
school athletic fields and related facilities, constructing a new baseball/softball complex and a JROTC building, (b)
making other building additions, repairs, renovations and remodeling and providing and upgrading necessary water,
light, heating, air conditioning and sewerage facilities for school buildings and related facilities throughout the
District, and (c) paying the costs of issuance of the Series 2018 Bonds and the District Bond.

District Resolution

“District Resolution” means that certain resolution adopted by the Board of Trustees of the District on
October 16, 2018 in connection with the issuance of the District Bond.

DTC

“DTC” means The Depository Trust Company, New York, New York.

DTC Participants

“DTC Participants” shall have the meaning ascribed thereto in the Indenture.

DTC’s Blanket Letter of Representations

“DTC’s Blanket Letter of Representations” means the Blanket Letter of Representations, dated January 9,
1997, between the Bank and DTC.

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Event of Default

“Event of Default” means any occurrence or event specified in the Indenture.

Fiscal Year

“Fiscal Year” means when used with respect to the Bank, the Bank’s fiscal year being the twelve (12)
month period from July 1 through the following June 30 or such other fiscal year as may be established by the Bank
and when used with respect to the District, the District’s fiscal year being the twelve (12) month period from July 1
through the following June 30 or such other fiscal year as may be established by the District.

Funds

“Funds” means the funds created pursuant to Article VI of the Indenture (except for the Rebate Fund).

General Account

“General Account” means the account by that name created by Section 6.02 of the Indenture.

General Fund

“General Fund” means the fund by that name created by Section 6.02 of the Indenture.

Governing Body

“Governing Body” means the Board of Trustees of the District.

Governmental Obligations

“Governmental Obligations” means to the extent permitted by State law (a) direct obligations of the United
States of America; (b) obligations guaranteed as to principal and interest by the United States of America or any
federal agency whose obligations are backed by the full faith and credit of the United States of America, including
but not limited to: Department of Housing and Urban Development, Export-Import Bank, Farmers Home
Administration (or successor thereto), Federal Financing Bank, Federal Housing Administration, Maritime
Administration, Small Business Administration, which obligations include but are not limited to certificates or
receipts representing direct ownership of future interest or principal payments on obligations described in clause (a)
or in this clause (b) and which are held by a custodian in safekeeping on behalf of the holders of such receipts; and
(c) obligations of any state of the United States of America or any political subdivision thereof, the full payment of
principal of, premium, if any, and interest on which (i) is fully and unconditionally guaranteed or insured by the
United States of America, or (ii) is provided for by an irrevocable deposit of the securities described in clause (i) to
the extent such investments are permitted by State law.

Indenture

“Indenture” means the Indenture of Trust dated November 1, 2018, and all supplements and amendments
hereto entered into pursuant to Article XII of the Indenture.

Interest Payment Date

“Interest Payment Date” means any date on which interest is payable on the Bonds, and for the Series 2018
Bonds, means April 1 and October 1 of each year, commencing April 1, 2019.

Investment Securities

“Investment Securities” means any of the following to the extent such investments are permitted by State
law: (a) obligations of the State, any municipality of the State or the United States of America rated at least “A” by
S&P or Moody’s; (b) obligations the principal and interest of which are fully guaranteed by the State or the United

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States of America; (c) obligations of any corporation wholly owned by the United States of America; (d) obligations
of any corporation sponsored by the United States of America which are or may become eligible as collateral for
advances to member banks as determined by the Board of Governors of the Federal Reserve System; (e) obligations
of insurance firms or other corporations whose investments are rated “AA” or better by recognized rating
companies; (f) certificates of deposit or time deposits of qualified depositories of the State as approved by the State
Depository Commission, secured in such manner, if any, as the Bank shall determine; (g) contracts for the purchase
and sale of obligations of the type specified in items (a) through (e) above; (h) repurchase agreements secured by
obligations specified in items (a) through (e) above; or (i) money market funds, rated “AAm” or “AAm-G” or better
by S&P, the assets of which are required to be invested in obligations specified in items (a) through (f) above.

Local Governmental Unit

“Local Governmental Unit” means (a) any county, municipality, utility district, regional solid waste
authority, county cooperative service district or political subdivision of the State, (b) the State or any agency thereof,
(c) the institutions of higher learning of the State, (d) any education building corporation established for institutions
of higher learning, or (e) any other governmental unit created under state law, such as the District. The District is a
Local Governmental Unit under the Bank Act.

Moody’s

“Moody’s” means Moody’s Investors Service, Inc., a Delaware corporation, its successors and assigns, and,
if such corporation shall for any reason no longer perform the functions of a securities rating agency, “Moody’s”
shall be deemed to refer to any other nationally recognized securities rating agency designated by the District (with
the approval of the Bank), with written notice to the Trustee.

Opinion of Bond Counsel

“Opinion of Bond Counsel” means an opinion by a nationally recognized firm experienced in matters
relating to the tax exemption for interest payable on obligations of states and their instrumentalities and political
subdivisions under federal law, and which is acceptable to the Bank and the Trustee.

Opinion of Counsel

“Opinion of Counsel” means a written opinion of Counsel addressed to the Trustee, for the benefit of the
owners of the Bonds, who may (except as otherwise expressly provided in the Indenture) be Counsel to the Bank or
Counsel to the owners of the Bonds and who is acceptable to the Trustee.

Outstanding

“Outstanding” or “Bonds Outstanding” means all Bonds which have been authenticated and delivered by
the Trustee under the Indenture, including Bonds held by the Bank, except:

(a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to
maturity;

(b) Bonds deemed paid under the Indenture; and

(c) Bonds in lieu of which other Bonds have been authenticated under the Indenture.

Paying Agent

“Paying Agent” means Trustmark National Bank, a national banking association organized and existing
under the laws of the United States of America, or any successor thereto, acting as the Paying Agent under the
District Resolution.

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Principal Payment Date

“Principal Payment Date” means the maturity date.

Program

“Program” means the program for purchasing Securities of Local Governmental Units by the Bank
pursuant to the Bank Act.

Program Expenses

“Program Expenses” means all of the fees and expenses of the Trustee relating to the Series 2018 Bonds or
the District Bond and costs of determining the amount rebatable, if any, to the United States of America under the
Indenture, all to the extent properly allocable to the Program and approved in writing by the Bank.

Project

“Project” means providing financing for (a) the purchase of the District Bond, and (b) paying Costs of
Issuance for the District Bond and the Series 2018 Bonds.

Purchase Account

“Purchase Account” means the account by that name created by Section 6.02 of the Indenture.

Rebate Fund

“Rebate Fund” means the fund by that name created by Section 6.02 of the Indenture.

Record Date

“Record Date” means, with respect to any Interest Payment Date, the fifteenth day of the calendar month
next preceding such Interest Payment Date.

Redemption Account

“Redemption Account” means the account by that name created by Section 6.02 of the Indenture.

Redemption Price

“Redemption Price” means, with respect to any Bond, the principal amount thereof, plus the applicable
premium, if any, and accrued interest payable upon redemption prior to maturity.

Refunding Bonds

“Refunding Bonds” means bonds issued pursuant to Section 2.05 of the Indenture and any Supplemental
Indenture.

Registered Owner

“Registered Owner” means the person or persons in whose name any Bond shall be registered on the Bond
Register.

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Regulations

“Regulations” shall mean any of the regulations promulgated from time to time under the Code by the
United States Department of Treasury.

Revenues

“Revenues” shall mean the Funds and Accounts (except for the Rebate Fund) and all income, revenues and
profits of the Funds and Accounts (except for the Rebate Fund) referred to in the granting clauses hereof including,
without limitation, all District Bond Payments and any additional amounts paid to the Trustee under the District
Resolution or from any other source whatsoever.

S&P

“S&P” means S & P Global Ratings, a New York corporation, its successors and assigns, and, if dissolved
or liquidated or if it no longer performs the functions of a securities rating agency, “S&P” shall be deemed to refer
to any other nationally recognized securities rating agency designated by the District (with the approval of the
Bank), with written notice to the Trustee.

Securities

“Securities” means bonds, notes or other evidences of indebtedness issued by a Local Governmental Unit
pursuant to the Bank Act including the District Bond.

Series 2018 Bonds

“Series 2018 Bonds” means the $65,000,000 Mississippi Development Bank Special Obligation Bonds,
Series 2018 (Jackson Public School District General Obligation Bond Project) issued pursuant to the Indenture.

State

“State” means the State of Mississippi.

Supplemental Indenture

“Supplemental Indenture” means an Indenture supplemental to or amendatory of the Indenture, executed by


the Bank and the Trustee in accordance with Article XII of the Indenture.

Tax Certificate

“Tax Certificate” means the Tax Certificate, dated as of November 29, 2018, delivered by the Bank and the
District upon the issuance of the Series 2018 Bonds.

Trust Estate

“Trust Estate” means the property, rights, and amounts pledged and assigned to the Trustee as security for
the Bonds, pursuant to the granting clauses of the Indenture.

Trustee

“Trustee” means the state banking corporation or national banking association with corporate trust powers
qualified to act as Trustee under the Indenture which may be designated (originally or as a successor) as Trustee for
the owners of the Bonds issued and secured under the terms of the Indenture, and which shall initially be Trustmark
National Bank, Jackson, Mississippi.

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Underwriter

“Underwriter” means Siebert, Cisneros, Shank & Co., L.L.C., Washington, D.C. as senior managing
underwriter of the 2018 Bank Bonds, and Crews & Associates, Inc., Duncan-Williams, Inc. and Stephens Inc., as co-
managing underwriters of the 2018 Bank Bonds.

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APPENDIX F

FORM OF CONTINUING DISCLOSURE AGREEMENT

$65,000,000
MISSISSIPPI DEVELOPMENT BANK
SPECIAL OBLIGATION BONDS, SERIES 2018
(JACKSON PUBLIC SCHOOL DISTRICT
GENERAL OBLIGATION BOND PROJECT)

CONTINUING DISCLOSURE AGREEMENT

WHEREAS, the Mississippi Development Bank (the “Bank”) has heretofore authorized the issuance of its
$65,000,000 Special Obligation Bonds, Series 2018 (Jackson Public School District General Obligation Bond
Project), which are described in the Official Statement dated November 15, 2018 (the "Official Statement"), for the
benefit of the Jackson Public School District, Jackson, Mississippi (the “District”); and

WHEREAS, the Bank has sold the Bonds to Siebert, Cisneros, Shank & Co., L.L.C., New York, New York
as senior managing underwriter, and Crews & Associates, Inc., Duncan-Williams, Inc. and Stephens Inc., as co-
managing underwriters (collectively, the “Underwriters”), pursuant to the terms and conditions of an Indenture of
Trust (the “Indenture”), dated November 1, 2018, between the Bank and Trustmark National Bank, Jackson,
Mississippi, as trustee (the “Trustee”) and the Bond Purchase Agreement dated November 15, 2018 (the "Purchase
Agreement"); and

WHEREAS, the District is executing and delivering this Continuing Disclosure Agreement (this
“Agreement”) for the benefit of the holders of the Bonds outlining the District's undertaking to provide certain
continuing disclosure information as required by Securities and Exchange Commission Rule 15c2-12(b)(5); and

WHEREAS, in order to assist the underwriter of the Bonds in complying with the Rule, this Agreement is
to be made, executed and delivered in connection with the issuance of the Bonds, all for the benefit of the Beneficial
Owners of the Bonds, as they may be from time to time.

NOW, THEREFORE, THE DISTRICT HEREBY REPRESENTS, COVENANTS AND AGREES AS


FOLLOWS:

Section 1. Definitions. In addition to the terms defined above and in the Official Statement, the following
capitalized terms shall have the meanings ascribed thereto:

"Annual Report" means the District’s annual report as more particularly described in Section 4 of this
Certificate.

“Audited Financial Statements” means the District’s annual financial statements, which are currently
prepared in accordance with generally accepted accounting principles (GAAP) for governmental units as prescribed
by the Governmental Accounting Standards Board (GASB) and which have been audited by a firm of certified
public accountants as shall be then required or permitted by the laws of the State.

“Beneficial Owner” means any person who (a) has the power, directly or indirectly, to vote or consent with
respect to, or dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories
or other intermediaries) or (b) is treated as the owner of any Bond for federal income tax purposes.

“Dissemination Agent” shall mean Digital Assurance Certification, LLC, Orlando, Florida, or any
successor Dissemination Agent designated in writing by the District and which has filed with the District a written
acceptance of such designation.

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“EMMA” means the Electronic Municipal Market Access system found at https://emma.msrb.org, created
by the MSRB, which is the electronic format for filing disclosures pursuant to the Rule.

“Fiscal Year” means the fiscal year of the District which begins July 1 in any year and ends June 30 of the
following calendar year.

"MSRB" means the Municipal Securities Rulemaking Board.

"Obligated Person" shall mean the District.

“Participating Underwriter” shall mean the Underwriter and any of the original underwriters of the Bonds
required to comply with the Rule in connection with the offering of the Bonds.

"Rule" shall mean Rule 15c2-12(b)(5) under the Securities Exchange Act of 1934, as amended through the
date of this Undertaking.

"State" shall mean the State of Mississippi.

"Undertaking" shall mean this Agreement of the District.

Section 2. General. Nothing in this Undertaking shall prevent the Obligated Person from disseminating
any information in addition to that required by said Undertaking. If the Obligated Person disseminates any such
additional information, the Obligated Person shall have no obligation to update such information or include it in any
future materials disseminated.

Section 3. Provision of Annual Reports.

(a) The District hereby undertakes to deliver or cause the Dissemination Agent to deliver, no
later than the following June 30 after the end of each fiscal year (the “Report Date”), commencing with the
fiscal year ending June 30, 2018, an Annual Report which is consistent with the requirements of Section 4
of this Agreement and the manner required by the Rule. The Annual Report may be submitted as a single
document or as separate documents comprising a package and may cross-reference other information as
provided in Section 4 of this Agreement; provided that the Audited Financial Statements may be submitted
separately from the balance of the Annual Report.

(b) If the District is unable to provide the Annual Report by the date required in subsection
(a), the District shall send a notice to the MSRB in substantially the form attached hereto as EXHIBIT A.

Section 4. Content of Annual Report. The District's Annual Report shall contain or incorporate by
reference the following:

(a) Audited Financial Statements, if available, and, if unavailable, unaudited financial


information, if available, or the District’s budget for such fiscal year will be provided as part of the Annual
Report and the Audited Financial Statements will be provided when and if available.

(b) A copy of the District’s budget for its then current fiscal year.

(c) An update of the type of information contained in EXHIBIT B of this Disclosure


Agreement.

Section 5. Reporting of Certain Events. The District will post to EMMA, in a timely manner not in
excess of ten business days after the occurrence of the event, notice of any of the following events regarding the
Bonds:

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(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 enhancement reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(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 security, or other material events affecting the tax status of the security;
(7) modifications to rights of security holders, if material;
(8) bond calls, if material, and tender offers;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the securities, if material;
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar event of the obligated person;
(13) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale
of all or substantially all of the assets of the obligated person, other than in the ordinary course of business,
the entry, in 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;
(14) appointment of a successor or additional trustee or a change in the name of a trustee, if material;

Section 6. Remedies and Limitations. This Undertaking is enforceable in accordance with its respective
terms by any Beneficial Owner either directly or as third-party beneficiary. Any Beneficial Owner shall have the
rights, for the equal benefit and protection of all Beneficial Owners, by mandamus or other suit or proceeding at law
or in equity, to enforce its rights against the District and to compel the District to perform and carry out its duties
under this Undertaking; provided that such rights shall be limited to an action to compel specific enforcement of the
obligations of the District and shall not include any rights to monetary damages.

The District has agreed to provide information and notices of material events only as described above. The
District has not agreed to provide other information that may be relevant or material to a complete presentation of its
financial results of operations, condition or prospects or agreed to update any information that is provided, except as
described above. The District makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell Bonds at any future date. The District disclaims any contractual or tort
liability for damages resulting, in whole or in part, from any breach of its Undertaking or from any statement made
pursuant to its Undertaking.

Section 7. Amendments. This Undertaking may be amended, changed or modified pursuant to a


written instrument signed by the Obligated Person, without the consent of any of the Beneficial Owners, (i) to
comply with the provisions of the Rule, as amended from time to time, to the extent any such amendments are
applicable to the Obligated Person or the Bonds, (ii) to cure any ambiguity, remedy any omission, or cure or correct
any defect or inconsistent provision in this Undertaking, (iii) in connection with a change in circumstances arising
from a change in the law or from a change in the identity, nature, or status of the Obligated Person, or (iv) if the
Obligated Person obtains the opinion of nationally recognized bond counsel that any such amendment will not have
a material adverse effect on the interest of the Beneficial Owners; provided, that any such amendment, change or
modification shall comply with the provisions of the Rule as amended to the date of such amendment, change or
modification. In the event of any amendments of a provision of this Undertaking, the District shall describe such
amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the
amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of
financial information or operating data being presented by the District. In addition, if the amendment relates to the
accounting principles to be followed in preparing financial statements, notice of such change shall be given in the
same manner as for a listed event under Section 3(b).

Section 8. Termination. The Obligated Person's obligation under this Continuing Disclosure Agreement
shall terminate upon legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination
occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the manner as for
a Listed Event under Section 3(b).

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Section 9. Dissemination Agent. The District may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Agreement, and may discharge any such
Dissemination Agent, with or without appointing a successor Dissemination Agent.

The District has engaged the Dissemination Agent to assist it in disseminating information hereunder. The
District shall send the information required by Sections 4 and 5 hereof and event notices required by this Agreement
to the Dissemination Agent. Unless otherwise agreed to, the Dissemination Agent shall, as soon as practicable but
not later than five (5) days after receipt of such information, forward the same to (i) the MSRB and the State
Repository, if any, as described herein, and (ii) any beneficial holder of the Bonds who requests such information in
writing to the Dissemination Agent or the District. The Dissemination Agent shall have no duty to review the
materials described in this paragraph prior to disseminating such materials.

The District may discharge the Dissemination Agent or any successor Dissemination Agent, but in such
event, shall take steps necessary to appoint a successor Dissemination Agent who shall be responsible for
undertaking all responsibilities of dissemination hereunder.

Section 10. Beneficiaries. This Agreement shall inure solely to the benefit of the District, the
Dissemination Agent, the Beneficial Owners and holders from time to time of the Bonds and shall create no rights in
any other person or entity.

Dated: November 29, 2018

JACKSON PUBLIC SCHOOL DISTRICT

By: ____________________________________
President, Board of Trustees

ATTEST:

By: Secretary, Board of Trustees

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EXHIBIT A

FORM OF NOTICE OF FAILURE TO FILE

NOTICE OF FAILURE TO FILE


FINANCIAL INFORMATION

Name of Issuer: Mississippi Development Bank

Name of Obligated Person: Jackson Public School District, Jackson, Mississippi

Name of Bond Issue: Mississippi Development Bank Special Obligation Bonds, Series 2018 (Jackson
Public School District General Obligation Bond Project)

NOTICE IS HEREBY GIVEN that the annual financial information, including unaudited and audited financials, for
the fiscal year ending June 30, __________ was not available as of the date of this notice. The Obligated Person
will file the information as soon as it is available.

___________ , 20___

JACKSON PUBLIC SCHOOL DISTRICT


JACKSON, MISSISSIPPI

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EXHIBIT B

Name of Issuer: Mississippi Development Bank

Name of Obligated Person: Jackson Public School District, Jackson, Mississippi

Name of Bond Issue: Mississippi Development Bank Special Obligation Bonds, Series 2018 (Jackson
Public School District General Obligation Bond Project)

Current Members of the Governing Body of the District

Name Term Expires:

TAX INFORMATION

Assessed Valuation of the District

Assessment Year Real Property Personal Property Public Utility Total


Property

Property Tax Rates of the District, City and County

Overlapping Rates
City of Jackson County School District
Debt
Service
& Total Direct
Debt Total Operating Debt Total &
Fiscal Operating Service City Debt Operating Service School Special Overlapping
Year Millage Millage Millage Millage Millage Millage Millage Districts Rates
____
____
____
____
____

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District Ad Valorem Tax Collections

Collections as
FY Ending June 30 Total Tax Levy Amount Collected Percent of Levy

____
____
____
____
____

DEBT INFORMATION

General Obligation Bonds

Name of Issue Date of Issue Outstanding Principal Balance

Limited-Tax Notes

Name of Issue Date of Issue Outstanding Principal Balance

Other Long-Term Obligations

Name of Issue Date of Issue Outstanding Principal Balance

Direct and Overlapping Debt Ratios

20__-__
Assessed G.O. Bonded % Applicable Amt. Applicable
Jurisdiction Valuation* Debt to the District to the District

District $______ $__________** 100.00% $_______


City of Jackson ______
Hinds County ______

* Assessed valuations net of homestead exemption


** Includes Limited-Tax Notes

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[THIS PAGE INTENTIONALLY LEFT BLANK]
APPENDIX G

SPECIMEN MUNICIPAL BOND INSURANCE POLICY


[THIS PAGE INTENTIONALLY LEFT BLANK]
MUNICIPAL BOND
INSURANCE POLICY

ISSUER: [NAME OF ISSUER] Policy No: _____

MEMBER: [NAME OF MEMBER]

BONDS: $__________ in aggregate principal Effective Date: _________


amount of [NAME OF TRANSACTION]
[and maturing on]
Risk Premium: $__________
Member Surplus Contribution: $ _________
Total Insurance Payment: $_________

BUILD AMERICA MUTUAL ASSURANCE COMPANY (“BAM”), for consideration received, hereby UNCONDITIONALLY
AND IRREVOCABLY agrees to pay to the trustee (the “Trustee”) or paying agent (the “Paying Agent”) for the Bonds named above (as set
forth in the documentation providing for the issuance and securing of the Bonds), for the benefit of the Owners or, at the election of BAM,
directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and
interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the first Business Day following the
Business Day on which BAM shall have received Notice of Nonpayment, BAM will disburse (but without duplication in the case of duplicate
claims for the same Nonpayment) to or for the benefit of each Owner of the Bonds, the face amount of principal of and interest on the Bonds
that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by BAM, in a form reasonably
satisfactory to it, of (a) evidence of the Owner’s right to receive payment of such principal or interest then Due for Payment and (b) evidence,
including any appropriate instruments of assignment, that all of the Owner’s rights with respect to payment of such principal or interest that is
Due for Payment shall thereupon vest in BAM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received
prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of
Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of the preceding sentence,
and BAM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, any of whom may submit an amended Notice of
Nonpayment. Upon disbursement under this Policy in respect of a Bond and to the extent of such payment, BAM shall become the owner of
such Bond, any appurtenant coupon to such Bond and right to receipt of payment of principal of or interest on such Bond and shall be fully
subrogated to the rights of the Owner, including the Owner’s right to receive payments under such Bond. Payment by BAM either to the
Trustee or Paying Agent for the benefit of the Owners, or directly to the Owners, on account of any Nonpayment shall discharge the
obligation of BAM under this Policy with respect to said Nonpayment.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all
purposes of this Policy. “Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the
State of New York or the Insurer’s Fiscal Agent (as defined herein) are authorized or required by law or executive order to remain closed.
“Due for Payment” means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the
same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by
reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless BAM
shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of
acceleration) and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. “Nonpayment” means, in respect
of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment
in full of all principal and interest that is Due for Payment on such Bond. “Nonpayment” shall also include, in respect of a Bond, any payment
made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such
Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction.
“Notice” means delivery to BAM of a notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or
other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by an Owner, the Trustee or the Paying Agent, which notice
shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and (e) the date such
claimed amount becomes or became Due for Payment. “Owner” means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is
entitled under the terms of such Bond to payment thereof, except that “Owner” shall not include the Issuer, the Member or any other person or entity
whose direct or indirect obligation constitutes the underlying security for the Bonds.

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BAM may appoint a fiscal agent (the “Insurer’s Fiscal Agent”) for purposes of this Policy by giving written notice to the Trustee, the
Paying Agent, the Member and the Issuer specifying the name and notice address of the Insurer’s Fiscal Agent. From and after the date of receipt of
such notice by the Trustee, the Paying Agent, the Member or the Issuer (a) copies of all notices required to be delivered to BAM pursuant to this
Policy shall be simultaneously delivered to the Insurer’s Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all
payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer’s Fiscal Agent on behalf of BAM. The
Insurer’s Fiscal Agent is the agent of BAM only, and the Insurer’s Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner
for any act of the Insurer’s Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this
Policy.

To the fullest extent permitted by applicable law, BAM agrees not to assert, and hereby waives, only for the benefit of each Owner, all
rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by
subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment of its obligations under
this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked.

This Policy sets forth in full the undertaking of BAM and shall not be modified, altered or affected by any other agreement or instrument,
including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, any premium paid in respect of
this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity.
THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE
NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL LIABILITY FOR ASSESSMENT.

In witness whereof, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Policy to be executed on its behalf by its
Authorized Officer.

BUILD AMERICA MUTUAL ASSURANCE COMPANY

By: _______________________________________
Authorized Officer

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Notices (Unless Otherwise Specified by BAM)

Email:
claims@buildamerica.com
Address:
1 World Financial Center, 27th floor
200 Liberty Street
New York, New York 10281
Telecopy:
212-962-1524 (attention: Claims)

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MISSISSIPPI DEVELOPMENT BANK • SPECIAL OBLIGATION BONDS, SERIES 2018 (JACKSON PUBLIC SCHOOL DISTRICT GENERAL OBLIGATION BOND PROJECT)