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Indian River County, Florida
<br />Notes To Financial Statements
<br />Year Ended September 30, 2013
<br />NOTE 13 - LONG-TERM LIABILITIES - Continued
<br />B. Primary Government - Continued
<br />Recreational (Golf Course) Revenue Refunding Bonds, Series 2003
<br />Purpose - On October 15, 2003, the Series 2003 bonds were issued to redeem $6,735,000 of the
<br />County's outstanding Recreational Revenue Bonds, Series 1993. The Series 2003 bonds are being
<br />issued by the County to provide funds, together with $583,790, to retire all of the outstanding 1993
<br />Series bonds and to pay for all bond issuance costs. The previous bonds were issued to build a County -
<br />owned golf course.
<br />The Board elected to redeem 100% of the outstanding bonds in the amount of $1,565,000, at par, on
<br />September 30, 2013 in addition to the regularly scheduled payment of $555,000, which was due and
<br />payable on September 1, 2013.
<br />At the time of the early call, $417,500 of debt service reserve was released from restricted cash to
<br />operating cash. In addition, $13,886 of the unamortized bond discount and $82,645 of unamortized net
<br />economic gain was charged to bond amortization expense.
<br />Water and Sewer Revenue Refunding Bonds, Series 2005
<br />Purpose - The Series 2005 bonds were issued to defease $31,680,000 of the County's outstanding
<br />Water and Sewer Revenue Bonds, Series 1996. These bonds were issued by the County to provide
<br />funds, together with $5,000,000, to retire 95 percent of the 1996 Series and to pay for all bond issuance
<br />costs. The September 1, 2005 and 2006 principal installments were not subject to early call and
<br />consequently paid at their respective maturity dates. The 1996 bonds were issued to acquire an existing
<br />water and sewer facility, as well as for capital improvements to the existing system.
<br />The aggregate difference in debt service between the Series 1996 ($40,585,193) and Series 2005
<br />($39,619,193) is $966,000. The net economic gain, which included shortening the term of the bonds by
<br />four years and lowering average annual debt service by $242,000, was $2,944,661 and is amortized
<br />over the life of the bonds. The unamortized balance of the deferred amount on the refunding at
<br />September 30, 2013 is $1,514,801 and is reflected as a deferred outflow of resources on the Statement
<br />of Net Position.
<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 />Annual principal and interest payments of $2,407,150 represent approximately eighteen percent of net
<br />revenues of $13,741,700 of the utility system. The total principal and interest remaining to be paid on
<br />the bonds is $21,640,750.
<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.
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