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Indian River County, Florida <br />Notes To Financial\Statements <br />Year Ended September 30, 2014 <br />NOTE 13 - LONG-TERM LIABILITIES - Continued <br />B. Primary Government - Continued <br />Water and Sewer Revenue Refunding Bonds, Series 2005 - Continued <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 ($31,680,000) were called on September 1, 2006 at 102% of the outstanding principal amount. <br />Optional Redemption - The Series 2005 bonds maturing after September 1, 2015, are subject to <br />redemption by the County on or after September 1, 2015, in whole or in part, at par, plus accrued <br />interest to date of redemption. <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, which were consequently <br />paid at their respective maturity date. <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, which lowered average annual debt service by <br />$126,000, was $1,368,427 and is amortized over the life of the bonds. The unamortized balance of the <br />deferred amount on the refunding at September 30, 2014 is $900,881 and is reflected as a deferred <br />outflow of resources on the Statement 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 />The principal and interest payments of $2,881,800 represent approximately twenty one percent of net <br />revenues of $13,924,642 of the utility system. The total principal and interest remaining to be paid on <br />the bonds is $27,333,500. <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 />84 <br />