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Board of County Commissioners Page 2of5 March 27, 2013 NOW- Limited General Obligation Bonds, Series 2006 In the State of Florida, local governments are not authorized to issue General Obligation Bonds without specific approval of the voters. On November 2, 2004, the voters of Indian River County approved a referendum authorizing the sale of limited general obligation bond sin an amount not to exceed $50 million, structured in a manner that at the time of issuance, the millage rate required to fund the debt service on such bonds would not exceed '/2 mill. Subsequently, the County issued the Series 2006 bonds in the aggregate principal amount of $48,600,000 with a final maturity fifteen years from the issuance date (2021). These bonds were issued for the purpose of acquiring lands to protect water resources, environmentally significant lands, historic sites and/or agricultural lands within the County. The bonds are callable at the option of the County on July 1, 2016 at 100% of the principal amount outstanding. The average interest rate on the bonds was 4.22% (True Interest Cost). At the time of issuance, the bonds were rated "AAA" by Standard & Poor's and Fitch Ratings, based upon the rating of the bond insurer. Standard & Poor's and Fitch Ratings assigned underlying ratings of "AA-" and "AK, respectively due to the limitation of 1/2 mill to support the annual debt service. In 2011, Fitch Ratings downgraded this issue to "A-" due to concerns that if the County taxroll continued to decrease, the '/2 mill limit may not be sufficient to service the bonds. It was noted that this downgrade was no reflection on the financial health of the County. In fact, the Unlimited General Obligation Bonds, Series 2001, which were still outstanding, received a rating of "AAA" which is the highest credit rating available. Standard & Poor's currently has a "AK rating on this issue. The County currently levies a tax rate of 0.3799 mills to support the annual debt service for these bonds (approximately $4.6 million). It should be noted that the bonds still had a coverage ratio of 1.36x, and the taxroll would have to fall by an additional 26% for the 'h mill limit to be a factor. These bonds will reach final maturity in 2021. Spring Training Facility Revenue Bonds, Series 2001 The Spring Training Facility Revenue Bonds, Series 2001, were issued for the purpose of acquiring and making improvements to Dodgertown (now known as the Vero Beach Sports Village). This series was issued in the principal amount of$16,810,000 at an average interest rate of 4.87% (True Interest Cost). The bonds are secured by three revenue sources; "State Payments" of $500,000 annually, the fourth cent of the Tourist Development Tax, and up to 86% of the Half-Cent Sales Tax. Unlike general obligation bonds, they are not backed by the full faith and credit of the County. The bonds reach final maturity in 2031. However, the pledge of the Half-Cent Sales Tax and the fourth cent of the Tourist Development Tax are released in 2021. Only the "State Payments" are pledged for the final ten years. Please see a breakdown of the pledged revenues used to support the current debt service of approximately $1.2 million in the table below. F:\Budget\Jason\agenda 201213\Debt Issues Outstanding - Report to BCC.doc 204