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Indian River County , Florida <br /> Notes To Financial Statements <br /> Year Ended September 30 , 2007 <br /> NOTE 12 - LONG-TERM LIABILITIES - Continued <br /> A. Primary Government - Continued <br /> Water and Sewer Revenue Refunding Bonds , Series 2005 <br /> Purpose - The Series 2005 Bonds were issued to legally defease $ 31 , 680 , 000 of the County ' s <br /> outstanding Water and Sewer Revenue Bonds , Series 1996 . These bonds were issued by the County to <br /> provide funds , together with $ 5 , 000 , 000 , to retire 95 percent of the 1996 Series and to pay for all bond <br /> issuance costs . The September 1 , 2005 and 2006 principal installments were not subject to early call <br /> and consequently paid at their respective maturity dates . <br /> The aggregate difference in debt service between the Series 1996 ($ 40 , 585 , 193 ) and Series 2005 <br /> ( $ 39 , 619 , 193 ) is $ 966 , 000 . The net economic gain was $ 2 , 944 , 661 , which included shortening the term <br /> of the bonds by four years and lowering average annual debt service by $ 242 , 000 . ' <br /> Pledge of Revenues - The revenue bonds are collateralized by a pledge of all net revenues derived from <br /> the operation of the system and certain surcharges and special assessments . <br /> Bonds Issued - At September 30 , 2007 , the revenue bonds consisted of the following : <br /> Interest Outstanding at <br /> Rates and September 30 , <br /> Description Date Maturity Issue 2007 <br /> Water and Sewer 3 - 5 % <br /> Revenue Bonds , 3 / 1 and 9/ 1 2022 $ 27 , 6751000 $ 25 , 980 , 000 <br /> Series 2005 <br /> Less : Current Portion of Bonds 15310 , 000 <br /> Add : Unamortized Bond Premium 918 , 184 <br /> Long- Term Portion $ 25 . 588 , 184 <br /> Outstanding In-Substance Defeased Debt - The proceeds from the refunding have been invested in , <br /> Federal Securities and placed in an escrow account with J . P . Morgan . All of the defeased bonds <br /> ($ 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 <br /> accrued <br /> interest to date of redemption. <br /> 76 <br />