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Indian River County, Florida
<br /> Notes To Financial Statements
<br /> Year Ended September 30, 2015
<br /> NOTE 12 -LONG-TERM LIABILITIES - Continued
<br /> B. Primary Government- Continued
<br /> Water and Sewer Revenue Refunding Note Series 2015
<br /> Purpose - On August 18, 2015, the County voted to early call all of the outstanding Water and Sewer
<br /> Revenue Refunding 2005 Bonds. The County paid down 50% of the debt ($7,100,000) with cash and
<br /> refinanced the remaining 50% ($7,105,000) with a 7 year note. The total amount borrowed included
<br /> the cost of issuance and accrued interest totaling $66,000, for a grand total of$7,171,000.
<br /> The aggregate difference in debt service between the Series 2005 bonds ($18,866,875) and the Series
<br /> 2015 note ($7,653,356), cash contribution and September 1, 2016 principal and interest payment
<br /> ($9,162,642) is $2,050,877. The net economic gain was $583,991; which included the refinancing,
<br /> accrued interest, and cash contribution. This lowered the annual debt service by $1.2 million. The net
<br /> economic gain is amortized over the 7 year life of the note. The unamortized balance of the deferred
<br /> amount on the refunding at September 30, 2015 is $577,038 and is reflected as a deferred outflow of
<br /> resources on the Statement of Net Position.
<br /> Pledge of Revenues — The note is collateralized, for the remaining term of the note, by a pledge of all
<br /> net revenues derived from the operation of the system, certain surcharges, and special assessments.
<br /> Annual principal and interest payments of$2,430,867 included principal and interest on the 2005 Water
<br /> and Sewer Bonds and interest only on the 2015 note. This amount represents approximately seventeen
<br /> percent of net revenues of$14,016,407 of the utility system. The total principal and interest remaining
<br /> to be paid on the 2015 note is $7,653,356. Refer to Schedule 14 in the statistical section for further
<br /> detail.
<br /> Rate Covenant — Net revenues shall be sufficient to pay 1.00% of reserve and 120% of current year
<br /> principal and interest requirements.
<br /> Maturity and Interest Rate - Interest payments are made semiannually beginning September 1, 2016
<br /> through September 1, 2022. Annual principal payments begin September 1, 2016 and end September 1,
<br /> 2022. The interest rate is fixed at 1.65%. Note may be paid early without any prepayment penalty.
<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 1.993A ($80,434,41.5) and Series 2009
<br /> ($78,755,772) is $1,678,643. The net economic gain, which lowered average annual debt service by
<br /> $1.26,000, 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, 2015 is $809,653 and is reflected as a deferred
<br /> outflow of resources on the Statement of Net Position.
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