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Relevant Financial Policies In accordance with Section 218.415, Florida Statutes, the County adopted an investment policy, which guides the investment of County surplus funds. This policy establishes investment objectives, maturity and liquidity requirements, portfolio composition, risk and diversification requirements, and authorized investments. The primary objectives of investment activities are to preserve capital and maintain sufficient liquidity to meet anticipated cash flow needs. The secondary objective is to obtain competitive returns on the investment of County surplus funds. During fiscal year 2013, County investments had yields ranging from 0.11% to 2.50%. The overall annual yield of the portfolio as of September 30, 2013 was 0.31%. On September 23, 2008, the County established the OPEB (Other Post -Employment Benefits) Trust. An OPEB investment policy was approved by the Board of County Commissioners on February 3, 2009 and revised on April 6, 2010. The objective was to establish an advisory committee and to provide short- term and long-term investment guidelines. This policy also outlines the same criteria as noted in the County's investment policy, as well as including performance measures. The change in net position for the OPEB Trust for the fiscal year was $2.2 million. In addition, interest, dividend and mark -to -market adjustments resulted in net investment income of $926,404. The OPEB Trust annual yield was 8.58%. Standard and Poor's Rating Services (S&P) revised its outlook from AA stable to AA+ on the 2006 Limited General Obligation Bonds in August 2013. S&P awarded the one notch increase due to the County's strong financial position with a long history of positive operations, proactive financial management policies and practices, and low debt burden. In December 2012, the 2005 and 2009 water and sewer systems debt issues were also reviewed by S&P who reaffirmed the AA stable rating. S&P considered both systems to have ample capacity to accommodate additional growth, low debt and low additional capital needs. In fiscal year 2013, the Board of County Commissioners approved the general fund to partially pay down $2,275,000 of the Series 2001 Spring Training Facility Revenue Bonds. The early call of these bonds provides approximately $380,000 in additional half -cent sales tax revenue available each year as well as a reduction in annual interest expenses. The County's goal is to maintain an overall fund balance equal to 30% of the annual budget in all of its taxing funds, which provides a three month cushion for operating expenses. The three month reserve is necessary due to the timing of property tax levies in the State of Florida. Although the fiscal year begins in October, property tax monies are not typically received until mid to late December, which would require the County to operate in a deficit position for the first two months of the fiscal year without this reserve. Reserve funds are needed in order to allow the County to respond to events without facing serious financial burdens. County policy is to maintain fund balance levels and prohibit the use of fund balance to fund recurring expenses. Information on the County's fund balance policy can be found in County Note 19. In summary, Indian River County completed the year financially strong and well positioned. In a time of a strained world-wide economy and low investment returns, the County stood committed to manage funds and services for its citizens. v