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Indian River County, Florida
<br />Notes To Financial Statements
<br />Year Ended September 30, 2016
<br />NOTE 10 - 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 2005 Water and
<br />Sewer Revenue Refunding 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, 2016 is $493,611 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 $1,092,636 represent approximately eight percent of net
<br />revenues of $13,258,661 of the utility system. The total principal and interest remaining to be paid on
<br />the 2015 note is $6,560,720. Refer to Schedule 14 in the statistical section for further detail.
<br />Rate Covenant — Net revenues shall be sufficient to pay 100% 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 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, 2016 is $718,424 and is reflected as a deferred
<br />outflow of resources on the Statement of Net Position.
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