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Indian River County, Florida
<br />Notes To Financial Statements
<br />Year Ended September 30, 2010
<br />NOTE 13 - LONG-TERM LIABILITIES - Continued
<br />B. Primary Government - Continued
<br />Water and Sewer Revenue Refunding Bonds, Series 2009
<br />Purpose - The Series 2009 bonds were issued to refund and redeem on September 11, 2009,
<br />$28,270,000 of the County's outstanding Water and Sewer Revenue Bonds, Series 1993A. The
<br />refunding excluded debt service payments due September 1, 2010 and 2011. See Water and Sewer
<br />Revenue Bonds, Series 1993A.
<br />The aggregate difference in debt service between the Series 1993A ($80,434,415) and Series 2009
<br />($78,755,772) is $1,678,643. The net economic gain was $1,368,427, which lowered average annual
<br />debt service by $126,000.
<br />Pledge of Revenues — The revenue bonds are collateralized, for the remaining term of the bonds, by a
<br />pledge of all net revenues derived from the operation of the system, certain surcharges, and special
<br />assessments.
<br />The interest payments of $1,331,610 represent approximately ten percent of net revenues ($12,755,643)
<br />of the utility system. The total principal and interest remaining to be paid on the bonds is $37,240,500.
<br />Rate Covenant — Net revenues shall be sufficient to pay 100% of the reserve account requirement and
<br />120% of the current year's principal and interest payment.
<br />Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following:
<br />Description
<br />Water and Sewer
<br />Revenue Refunding Bonds,
<br />Series 2009
<br />Less: Current Portion of bonds
<br />Add: Unamortized Bond Premium
<br />Long -Term Portion of bonds
<br />Outstanding at
<br />Interest Rates September 30,
<br />and Date Maturi Issue 2010
<br />4-5%
<br />3/1 and 9/1 2024 $ 26,370,000 $ 26,370,000
<br />2,432,986
<br />28.802.986
<br />Outstanding In -Substance Defeased Debt - The proceeds from the refunding were invested in federal
<br />securities and were placed in an escrow account with Bank of New York/Mellon. All of the defeased
<br />bonds ($28,270,000) were called on September 1, 2009 at 101% of the outstanding principal amount.
<br />Optional Redemption - The Series 2009 bonds maturing on or prior to September 1, 2019, are not
<br />subject to redemption prior to their respective dates of maturity. The Series 2009 bonds stated to mature
<br />after September 1, 2019, are subject to redemption at the option of the County in whole or, from time to
<br />time, in part on September 1, 2019, at the redemption price of the principal amount to be redeemed,
<br />plus accrued interest to the date of redemption.
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