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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2020 <br />NOTE 10 - LONG-TERM LIABILITIES - Continued <br />B. Primary Government - Continued <br />Water and Sewer Revenue Refunding Note, Series 2015 - Continued <br />The total amount borrowed included the cost of issuance and accrued interest totaling <br />$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 <br />the Series 2015 note ($7,653,356), cash contribution and September 1, 2016 principal and <br />interest payment ($9,162,642) was $2,050,877. The net economic gain was $583,991; which <br />included the refinancing, accrued interest, and cash contribution. This lowered the annual <br />debt service by $1.2 million. The net economic gain is amortized over the 7 year life of the <br />note. The unamortized balance of the deferred amount on the refunding at September 30, <br />2020 is $159,902 and is reflected as a deferred outflow of resources on the Statement of <br />Net Position. <br />Pledge of Revenues - The note is collateralized, for the remaining term of the note, by a <br />pledge of all net revenues derived from the operation of the system, certain surcharges, <br />and special assessments. Annual principal and interest payments of $1,094,371 represent <br />approximately eight percent of net revenues of $13,106,552 of the utility system. The total <br />principal and interest remaining to be paid on the 2015 note is $2,184,899. Refer to <br />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 <br />year principal and interest requirements. <br />Maturity and Interest Rate - Interest payments are made semiannually beginning September <br />1, 2016 through September 1, 2022. Annual principal payments begin September 1, 2016 <br />and end September 1, 2022. The interest rate is fixed at 1.65%. Note may be paid early <br />without any prepayment penalty. <br />C. Compensated Absences <br />For the governmental activities compensated absences liability, the General Fund normally <br />liquidates 74 percent, and the Transportation and Emergency Services District funds <br />normally liquidate 6 percent and 17 percent, respectively. The remaining 3 percent is <br />liquidated by other governmental and internal service funds. <br />81 <br />