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Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Debt Administration - Long-term debt At the end of the current fiscal year, the County had total bonded debt outstanding of $113.0 million. Of this amount, $44.5 million is debt backed by the full faith and credit of the government. The revenue bonds represent bonds secured solely by specified revenue sources. Indian River County's Outstanding Debt General Obligation and Revenue Bonds (In Millions) The County received an increase in all of their bond ratings with the recalibration of the bond rating system. The County's General Obligation underlying rating from Standard & Poor's is "AAA" and "AA" on the Revenue Bonds. Standard & Poor's rating is required on all issues. A second rating from Fitch or Moody's is also required. Additional information on the County's long-term debt can be found in Note 13 on pages 74-85 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES In response to declining property values, sales tax and various other County revenues, the Board's departments, Constitutional Officers, and outside agencies were asked to trim their budgets substantially from the previous year. Many cost savings initiatives have been proposed in order to account for the revenue reductions. Some of these include management reorganizations, staffing reductions, operating expense decreases, contract renegotiations, minimal reductions of services and programs, and reduced non-profit funding. In summary, staff has undertaken a critical review of all functions to streamline operations as much as possible without impacting service levels. The tax roll in the General Fund decreased by 10.4% due to continued falling real estate values. The total proposed budget is a decrease of $258,855,120 or 27.9%. 13 Governmental Business -type Activities Activities Total General Obligation Debt: 2010 2009 2010 2009 2010 2009 General Obligation, Series 2001 $ 5.2$ 6.0 $ - $ - $ 5.2$ 6.0 General Obligation Ref., Series 2003 - 1.2 - - - 1.2 Limited General Oblig., Series 2006 39.3 42.1 - - 39.3 42.1 Revenue Bonds: Spring Training Facility, Series 2001 12.3 12.9 - - 12.3 12.9 Recreational Revenue Ref., Series 2003 - - 3.1 3.7 3.1 3.7 Water and Sewer Ref. Rev., Series 1993A - - 1.6 3.0 1.6 3.0 Water and Sewer Ref. Rev., Series 2005 - - 22.7 24.1 22.7 24.1 Water and Sewer Ref. Rev., Series 2009 - - 28.8 29.0 28.8 29.0 Total $ 56.8$ 62.2 $ 56.2$ 59.8 $ 113.0$ 122.0 The County received an increase in all of their bond ratings with the recalibration of the bond rating system. The County's General Obligation underlying rating from Standard & Poor's is "AAA" and "AA" on the Revenue Bonds. Standard & Poor's rating is required on all issues. A second rating from Fitch or Moody's is also required. Additional information on the County's long-term debt can be found in Note 13 on pages 74-85 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES In response to declining property values, sales tax and various other County revenues, the Board's departments, Constitutional Officers, and outside agencies were asked to trim their budgets substantially from the previous year. Many cost savings initiatives have been proposed in order to account for the revenue reductions. Some of these include management reorganizations, staffing reductions, operating expense decreases, contract renegotiations, minimal reductions of services and programs, and reduced non-profit funding. In summary, staff has undertaken a critical review of all functions to streamline operations as much as possible without impacting service levels. The tax roll in the General Fund decreased by 10.4% due to continued falling real estate values. The total proposed budget is a decrease of $258,855,120 or 27.9%. 13