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Home My WebLink About1993-102INDIAN RIVER COUNTY, FLORIDA RESOLUTION NO. 93 - 102 WHEREAS, the Board of County Commissioners of Indian River County, Florida (the "Board" and the "County", respectively) is contemplating the issuance of Recreational Revenue Refunding Bonds, Series 1993, in an aggregate principal amount not to exceed $10,000,000 (the "Series 1993 Bonds"), under a resolution to be hereafter adopted by the County; and WHEREAS, it is necessary in connection with the marketing of the Series 1993 Bonds that the Preliminary Official Statement in connection with the Series 1993 Bonds (the "Preliminary Official Statement") be deemed "final" pursuant to Rule 15c2-12 of the Securities and Exchange Commission. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, that: SECTION 1. The Preliminary Official Statement attached hereto is hereby deemed "final" pursuant to Rule 15c2-12 of the Securities and Exchange Commission, except for "permitted omissions" as permitted under said rule. Nothing contained herein shall prohibit any insertions, deletions or changes in the Preliminary Official Statement deemed necessary and/or desirable by the County Administrator. SECTION 2. This Resolution shall take effect immediately upon its adoption. The foregoing resolution was offered by Commissioner Adams who moved for its adoption. The motion was seconded by Commissioner Ij pin and, upon being put to a vote, the vote was as follows: Chairman Richard N. Bird Age Vice Chairman John W. Tippin Afire Commissioner Fran B. Adams Aye Commissioner Carolyn K. Eggert Aye Commissioner Kenneth R. Macht Aye The Chairman thereupon declared the Resolution duly passed and adopted this —� day of j4e , 1993. (SEAL) Attest• Jeffrey K ,Bartonn, Clerk APPROVED AS'TO FORM AND LEGAL SUFFICIENCY Vd10 i �A, Charles P. Vitunac /" bounty Attorney BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA By: Richard N. Bird, Chairman 4�' e. E a Isd « `rR n g, 5 � � A J� y � O a c c « � g da16 « N E m y O C C O N v � 3 o M N r C t d E o m C N W to c v+ w c Sloo N C M d z rii « 1O d H Q " CO w d C W y � m E W `o AO C U O 026 E Ep c (a v E � « m t; a a o a — 3 w = m N N N C wo 'd tdt O = m 2.2 E c � U O V N I c c m o F c u N o F- E! r c� rr�t r m 3 O C O w L d � � _ c u) 'a B v c E_g 1 ( i PRELIMINARY OFFICIAL STATEMENT DATED JUNE •l, 199'3 NEW ISSUE Ratings: Moody's: _ Standard & Poor's: _ (AMBAC Insured) See "RATINGS" herein In the opinion of Bond Counsel, assuming continuing compliance by the County with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended, interest on the Series 1993 Bonds is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under existing statutes, regulations and judicial decisions; although it should be noted that in the case of corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. Furthermore, in the opinion of Bond Counsel, the Series 1993 Bonds and the income therefrom are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, banks and savings associations. See'TAX EXEMPTION" herein for further information. Dated: June 1, 1993 $9,700,000* INDIAN RIVER COUNTY, FLORIDA Recreational Revenue Refunding Bonds, Series 1993 Due: September 1, as shown below Indian River County, Florida (the "Issuer" or the "County") is issuing its Recreational Revenue Refunding Bonds, Series 1993 (the "Series 1993 Bonds"), in fully registered form in denominations of $5,000 principal amount or any integral multiple thereof. Interest on the Series 1993 Bonds is payable on Sepember 1, 1993, and semiannually thereafter on each March 1 and September 1, by check or draft of First Union National Bank of Florida, Jacksonville, Florida, the Bond Registrar and Paying Agent, made out and mailed to each registered owner thereof at the address as it appears on the registration books kept by the Bond Registrar on the 15th day of the month preceding the applicable interest payment date. Principal of the Series 1993 Bonds and any redemption premium will be payable upon presentation and surrender of the Series 1993 Bonds, when due, at the principal corporate trust office of the Paying Agent. The Series 1993 Bonds are subject to optional and mandatory redemption prior to maturity, as provided herein. The Series 1993 Bonds are being issued by the County to provide funds, together with other available funds, to (a) retire certain outstanding bonds of the County as described herein, (ii) make a deposit to the Reserve Account established under the Resolution, and (iii) pay certain costs incurred in connection with the issuance of the Series 1993 Bonds, all as more particularly described herein. Pursuant to Indian River County, Florida, Resolution No. adopted on as amended and supplemented (the "Resolution"), the principal of, interest on and redemption premium, if any, on the Series 1993 Bonds will be paid from and secured by a first lien upon and pledge of the Net Revenues derived from the operation of the County's Recreational Facilities, as described herein, and the Racetrack and Jai Alai Fronton Funds, and a subordinate lien upon and pledge of the Half -Cent Sales Tax, as provided in the Resolution. The lien of the holders of the Series 1993 Bonds on the Half -Cent Sales Tax is subordinate to the lien of the holders of the County's outstanding Refunding and Improvement Revenue Bonds, Series 1985, and the outstanding Refunding Revenue Bonds, Series 1992 (the "Senior Half -Cent Sales Tax Bonds") and any additional bonds issued on a parity therewith under the resolution pursuant to which the Senior Half -Cent Sales Tax Bonds were issued. The lien on and pledge of the Half -Cent Sales Tax is subject to modification as more fully described herein. The Series 1993 Bonds are special obligations of the County, and the principal of, redemption premium, if any, and interest thereon are payable solely from the revenues and funds pledged for the payment thereof as more fully described herein. The Series 1993 Bonds shall not constitute a general indebtedness of the County, the State of Florida, or any political subdivision thereof, within the meaning of any constitutional or statutory provision or limitation; and neither the County, the State of Florida nor any political subdivision thereof shall be obligated to levy or collect any ad valorem taxes for payment thereof. Payment of the principal of and interest on the Series 1993 Bonds when due will be insured by a municipal bond insurance policy to be issued by AMBAC Indemnity Corporation simultaneously with the delivery of the Series 1993 Bonds. Fur a discussion of the terms and provisions of such policy, including the limitations thereof, see "MUNICIPAL. BOND INSURANCE" herein. AIMM, MATURITIES, AMOUNTS, INTEREST RATES AND PRICES OR YIELDS- Serial Bonds Interest Price or Interest Price or Maturity Amount Rate Yield Maturity Amount Rate Yield $ - _% Tarin Bonds Due September 1, _ Yield: $ - _7. Term Bonds Uue September 1, _ Yield: (Plus Accrued Interest from June 1, 1993) This cover contains certain information for quick reference only. It is not it summary or this issue. Investon, must rend the entire Preliminary Official Statement to obtain information essential to the making of an informed investment decision. The Series 1993 Bonds are offered when, as and if issued an([ received by the Underwriter, subject to the approval of legality by Rhoads & Sinon, Boca Raton, Florida, Bond Counsel to the County. Certain legal matters will be passed upon for the County by Charles V. Vitunac, Esquire, County Attorney, and for the Underwriter by their Co -Counsel, Bryant, Miller and Olive, P.A., Tallahassee, Florida, and Jusim and Curer, P.A., Fort Lauderdale, Florida. It is expected that the Series 1993 Bonds will be available for delivery in New York, New York, in definitive form on or about ,19(J3. Dated: _, 1993 •preliminary. Sut*-ct 10 Change William R Hough & Ce. INDIAN RIVER COUNTY, FLORIDA Board of County Commissioners Richard N. Bird, Chairman John W. Tippin, Vice Chairman Fran B. Adams Carolyn K. Eggert Kenneth R. Macht Cleric of the Circuit Court and Ex•OMclo Clerk to the Board of County Commissioners Jeffrey K. Barton County Administrator James E. Chandler County Attorney Charles P. Vitunac, Esquire Director of Of ee of Management and Budget Joseph A. J. Baird Director of Sandridge Golf Course Robert J. Komarinetz Bond Counsel Rhoads & Sinon Boca Raton, Florida Financial Advisor Fishkind & Associates, Inc. Orlando, Florida Certified Public Accountant Coopers & Lybrand Orlando, Florida No dealer, broker, salesman or other person has been authorized by the County or the Underwriter to give any information or to make any representations with respect to the Series 1993 Bonds other than as contained in this Preliminary Official Statement, and if given or made such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Preliminary Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy any of the Series 1993 Bonds in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The information set forth herein has been obtained from Indian River County, Florida, and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriter. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Preliminary Official Statement nor any sale made hereunder shall, under any circumstances, create the implication that there has been no change in the matters described herein since the date hereof. IN CONNECTION WITH THE OFFERING OF THE SERIES 1993 BONDS, THE UNDERWRITER MAYOVERALLOTOR EFFECTTRANSACTIONS THATSTABILIZE OR MAINTAINTHE MARKET PRICE OF SUCH BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE SERIES 1993 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE RESOLUTION BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 1993 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 1993 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 1993 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS PRELIMINARY OFFICIAL STATEMENT. ANY REPRESENTATIONS TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. TABLE OF CONTENTS PAGE INTRODUCTION........................................................... 1 PURPOSE OF THE SERIES 1993 BONDS ........................................ 1 REFUNDING PLAN ......................................................... 2 DESCRIPTION OF THE SERIES 1993 BONDS ..................................... 2 General............................................................. 2 Optional Redemption ................................................... 2 MandatoryRedemption ................................................. 3 Notice of Redemption ................................................... 4 Registration, Transfer, and Exchange ........................................ 4 SECURITY FOR THE SERIES 1993 BONDS ...................................... 4 Pledge of Pledged Funds ................................................. 4 RateCovenant........................................................ 5 ReserveAccount....................................................... 5 Municipal Bond Insurance ................................................ 6 Additional Parity Bonds ................................................. 6 MUNICIPAL BOND INSURANCE .............................................. 6 Payment Pursuant to Municipal Bond Insurance Policy ........................... 6 AMBAC Indemnity Corporation ........................................... 7 THE SENIOR HALF -CENT SALES TAX BONDS .................................. 8 ESTIMATED SOURCES AND USES OF FUNDS ................................... 8 DEBT SERVICE SCHEDULE .................................................. 9 THE RECREATIONAL FACILITIES ............................................ 10 RACETRACK AND JAI ALAI FRONTON FUNDS .................................. 11 Taxeson Pari-Mutuel Wagering ........................................... 11 Rights of Cancellation by Voters ........................................... 12 History of Total Revenues and Distributions .................................. 13 HALF -CENT SALES TAX ..................................................... 13 HISTORICAL AND ESTIMATED REVENUES AND DEBT SERVICE COVERAGE ................................................. 16 FINANCIAL ADVISOR....................................................... 17 LITIGATION............................................................... 17 RATINGS................................................................. 17 FINANCIAL STATEMENTS ................................................... 17 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ................. 17 APPROVAL OF LEGALITY ................................................... 18 TAX EXEMPTION.......................................................... 18 Federal Income Tax Matters .............................................. 18 FloridaTax Matters .................................................... 19 Other Federal Income Tax Matters ....................................... 19 VERIFICATION OF MATHEMATICAL COMPUTATIONS ........................... 20 UNDERWRITING........................................................... 20 MISCELLANEOUS20 AUTHORIZATION OF OFFICIAL STATEMENT21 Appendix A - Indian River County, Florida General Information Appendix B - General Purpose Financial Statements and Independent Auditors' Report for the Fiscal Year ended September 30, 1992 Appendix C - The Resolution Appendix D - Specimen Municipal Bond Insurance Policy Appendix E - Proposed Form of Opinion of Bond Counsel $9,700,000 INDIAN RIVER COUNTY, FLORIDA RECREATIONAL REVENUE REFUNDING BONDS, SERIES 1993 INTRODUCTION This Preliminary Official Statement, which includes the cover page and appendices hereto, provides certain information relating to the sale by Indian River County, Florida (the "Issuer" or the "County'), of its $9,700,1100• Recreational Revenue Refunding Bonds, Series 1993 (the "Series 1993 Bonds"). The Series 1993 Bonds are being issued pursuant to Chapter 125, Florida Statutes, as amended, County Home Rule Ordinance No. 77-19, enacted August 3, 1977, as amended, and other applicable provisions of law (collectively the "Act"), and Indian River County Resolution No. 93-_, adopted , 1993, as amended and supplemented (the "Resolution"). The Series 1993 Bonds are limited obligations of Indian River County, Florida, payable by the County from and secured by a lien upon and pledge of the Pledged Funds (as described herein) including amounts on deposit in the Sinking Fund, the Bond Amortization Account and the Reserve Account established under the Resolution, all as described herein. Neither the County, the State of Florida nor any political subdivision thereof has pledged its faith or credit or taxing power to the payment or the Series 1993 Bonds. No holder of the Series 1993 Bonds shall ever have the right to compel the exercise of any ad valorem taxing power of the County or taxation in any form of any real property therein to pay the Series 1993 Bonds or the interest due thereon nor be entitled to payment of the Series 1993 Bonds from any funds of the County except as described herein. The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and are made subject to all of the detailed provisions of such documents, to which reference is directed for full and complete statements of all matters relating to the Resolution, the Series 1993 Bonds, the security for the payment of the Series 1993 Bonds and rights and obligations of the holders of the Series 1993 Bonds. Capitalized terms used but not defined herein have the same meaning as in the Resolution unless the context would indicate otherwise. A copy of the Resolution is attached hereto as Appendix C. PURPOSE OF THE SERIES 1993 BONDS The Series 1993 Bonds are being issued by the County to provide funds, together with other available funds, to (a) retire all of the Countys outstanding bonds relating to the Sandridge Golf Course and related clubhouse facilities which consist of the $2,720,000 Recreational Revenue Bonds, Series 1985 currently outstanding- in the aggregate principal amount of $2,635,000 (the "Series 1985 Bonds") and the $6,015,000 Recreational Revenue Bonds, Series 1991 currently outstanding in the aggregate principal amount of $6,015,000 (the "Series 1991 Bonds") (collectively the "Refunded Bonds"), (ii) make a deposit to the Reserve Account established under the Resolution, and (iii) pay certain costs incurred in connection with the issuance of the Series 1993 Bonds, all as more particularly described herein. "Preliminary, subject to change REFUNDING PLAN To effect the advanced refunding of the Refunded Bonds, the County will enter into an Escrow Agreement (the "Escrow Agreement") on or prior to delivery of the Series 1993 Bonds, with First Union National Bank of Florida, Jacksonville, Florida, as escrow agent (the "Escrow Agent"). Pursuant to the terms of the Escrow Agreement, the County will deposit a portion of the proceeds of the Series 1993 Bonds with the Escrow Agent. Such moneys will be applied on the date of delivery of the Series 1993 Bonds to the purchase of direct obligations of or obligations the payment of which are guaranteed by the United States of America (the "Escrow Securities"). The Escrow Securities will mature at such times and in such amounts, together with cash held by the Escrow Agent, so that the maturing principal, together with the interest income thereon, will be sufficient to pay when due the principal, interest and redemption premium, if any, on the Refunded Bonds. In the opinion of Bond Counsel, rendered in reliance upon the opinion of McGladrey & Pullen, described under "VERIFICATION OF MATHEMATICAL COMPUTATIONS" herein, upon such deposit with the Escrow Agent and purchase of the Escrow Securities, the Refunded Bonds will no longer be outstanding for purposes of the resolution under which they were issued and the pledge of and lien on the Pledged Funds created by or pursuant to said Resolution with respect to such Refunded Bonds will cease, terminate and be discharged. The cash and Escrow Securities held by the Escrow Agent, all interest or income thereon, and all proceeds from the disposition thereof will be used only to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds and will not be available for payment of the Series 1993 Bonds or any other Bonds hereafter issued. DESCRIPTION OF THE SERIES 1993 BONDS General The Series 1993 Bonds will be dated June 1, 1993, and will bear interest from such date at the rates per annum as set forth on the cover page hereof, payable on September 1, 1993, and semiannually thereafter on each March 1 and September 1 and will mature on September 1 in the years and principal amounts as set forth on the cover page hereof. The Series 1993 Bonds will be issued in fully registered form in the denominations of $5,000 principal amount or any integral multiple thereof. Principal and any redemption premium, when due, are payable upon surrender of the Series 1993 Bonds at the principal corporate trust office of First Union National Bank of Florida, Jacksonville, Florida, the Paying Agent and Bond Registrar. Interest will be payable by check or draft mailed to each Registered Owner at his address as it appears on the registration books kept by the Bond Registrar on the fifteenth day of the month preceding the applicable interest payment date. At the option of any Registered Owner of $1,000,000 or more in principal amount of the Series 1993 Bonds, interest shall be payable by domestic wire transfer pursuant to written instructions from such Registered Owner. Optional Redemption The Series 1993 Bonds stated to mature on or prior to September 1, , shall not be subject to redemption prior to their respective dates of maturity. The Series 1993 Bonds stated to mature after _, are subject to redemption at the option of the County in whole or, from time to time, in part, on _, or on any date thereafter at the respective redemption prices set forth below expressed as percentages of the principal amount to be redeemed, plus accrued interest to the date of redemption. Redemption Period Redemption Price September 1, through August 31, % September 1, through August 31, % September 1, and thereafter % If fewer than all of the Series 1993 Bonds are to be so redeemed, the County may select the maturity or maturities to be. redeemed. If fewer than all of the Series 1993 Bonds of any particular maturity are to be redeemed, the Bond Registrar will select by lot the particular Series 1993 Bonds or portions of Series 1993 Bonds of such maturity to be redeemed. The portion of any Series 1993 Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or an integral multiple of that sum. Mandatory Redemption The Series 1993 Term Bonds due are subject to mandatory redemption by lot prior to maturity in such manner as shall be determined by the Bond Registrar through amortization installments by operation of the Bond Amortization Account, in the years and amounts set forth below at a price equal to 100% of principal amount. Accrued interest is also payable on the redemption date. Principal Year Amount The Series 1993 Term Bonds due are subject to mandatory redemption by lot prior to maturity in such manner as shall be determined by the Bond Registrar through amortization installments by operation of the Bond Amortization Account, in the years and amounts set forth below at a price equal to 100% of principal amount. Accrued interest is also payable on the redemption date. Principal CL Amount The County may apply moneys in the Bond Amortization Account to the purchase of Series 1993 Bonds subject to mandatory redemption at prices not greater than par plus accrued interest and apply the principal amount of any Series 1993 Term Bonds so purchased as a credit against and in fulfillment of amortization installments required on the Series 1993 Term Bonds of the same maturity. If the County shall purchase or call for redemption in any year Series 1993 Term Bonds in excess of the amortization installment requirement for such year, such excess of Series 1993 Term Bonds so purchased or redeemed shall be credited against subsequent mandatory redemption of the Series 1993 Term Bonds of such maturity at such times and amounts as the County may direct. To the extent the County's obligation to make installments in a particular year is fullidled through such purchases, the likelihood of redemption through such installments of any Registered Owner's Series 1993 Term Bonds of the maturity so purchased will be reduced for such year. Notice of Redemption Notice of the intention to redeem the Series 1993 Bonds in whole or in part will be mailed by the Paying Agent, by first class mail, to the Registered Owners of the Series 1993 Bonds to be redeemed in whole or in part not more than 45 days and not less than 30 days prior to the date fixed for redemption, at their respective addresses as shown on the registration books, in accordance with the terms of the Resolution. Such notice is to specify the series, maturities and numbers of Series 1993 Bonds to be redeemed (including the CUSIP number); the date fixed for redemption; the redemption price or prices applicable to the Series 1993 Bonds to be redeemed; and that on the date fixed for redemption such Series 1993 Bonds will be payable at the principal corporate trust office of the Paying Agent and that after such date interest shall cease to accrue on such Series 1993 Bonds. If Registered Owners of all such Series 1993 Bonds to be redeemed file written waivers of notice with the Paying Agent, such Series 1993 Bonds may be redeemed on the redemption date without necessity of notice by mailing. Failure to mail any notice of redemption or any defect therein or in the mailing thereof will not affect the validity of any proceeding for redemption of other Series 1993 Bonds called for redemption. Registradon, Transfer, and Exchange All Series 1993 Bonds presented for transfer, exchange, redemption, or payment (if so required by the Bond Registrar) shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Registered Owner or by his duly authorized attorney. The Bond Registrar may charge the Registered Owner a sum sufficient to reimburse them for any expenses incurred in making any exchange or transfer. The Bond Registrar also may require payment from the Registered Owner or his transferee, as the case may be, of a sum sufficient to cover any tax, fee, or other governmental charge that may be imposed in relation thereto. Such charges and expenses shall be paid before any such new Series 1993 Bond shall be delivered. The Bond Registrar may treat the Registered Owner of any Series 1993 Bond as the absolute owner thereof for all purposes, and shall not be bound by any notice to the contrary. SECURITY FOR THE SERIES 1993 BONDS Pledge of Pledged Funds The principal of, redemption premium, if any, and interest on the Series 1993 Bonds will be payable from and secured by a first Gen upon and pledge of: (i) Net Revenues (which shall include all income or earnings derived from the operation of the Recreational Facilities; and any income from the investment of money in funds and accounts established in the Resolution for payment of the principal and interest on the Series 1993 Bonds and any Additional Parity Bonds issued from time to time); minus the Operating Expenses (which shall include the current expenses, paid or accrued, of operation, maintenance and repair of the Recreational Facilities without including any reserve for renewals and replacements, extraordinary repairs or any allowance for depreciation); and (G) The racetrack funds and jai alai fronton funds accruing annually to the County (collectively, the "Racetrack and Jai Alai Fronton Funds") pursuant to Chapters 550 and 551, Florida Statutes, and allocated to the County pursuant to law. The principal of, redemption premium, if any, and interest on the Series 1993 Bonds wiG additionally be payable from and secured by a subordinate Gen upon and pledge of the local government half -cent sales tax on deposit from time to time in the Local Government Half -Cent Sales Tax Clearing Trust Fund in the State Treasury of the State of Florida (the "Half -Cent Sales Tax"), allocated for and distributed monthly to the County pursuant to Chapter 218, Part VI, Florida Statutes. The lien upon and pledge of the Half -Cent Sales Tax is subordinate to the lien upon and pledge of the Half -Cent Sales Tax created for the benefit of the Senior Half - Cent Sales Tax Bonds and any additional bonds issued on a parity with the Senior Half -Cent Sales Tax Bonds pursuant to the resolution which authorized the issuance of the Senior Half -Cent Sales Tax Bonds (the "Sales Tax Resolution"). See *THE SENIOR HALF -CENT SALES TAX BONDS" herein. Also, in the event that at any time after the issuance of the Series 1993 Bonds there are no bonds outstanding under the Sales Tax Resolution and the County covenants not to thereafter issue any bonds under the Sales Tax Resolution, the principal of, redemption premium, if any, and interest on the Series 1993 Bonds shall thereafter be secured by a fast lien upon and pledge of fourteen percent (1401o) of the Half -Cent Sales Tax in lieu of the aforesaid subordinate lien upon and pledge of the Half -Cent Sales Tax and in such event the County irrevocably pledges said fourteen percent (14%) of the Half -Cent Sales Tax to the payment of the principal of, redemption premium, if any, and interest on the Series 1993 Bonds. The Net Revenues, the Racetrack and Jai Alai Fronton Funds and the Half -Cent Sales Tax are collectively referred to herein as the "Pledged Funds." The Series 1993 Bonds shall not be or constitute general or moral obligations or a pledge of the faith, credit or taxing power of the County, the State of Florida, or any political subdivision thereof, or an Indebtedness of any of them as "bonds" within the meaning of the Constitution of the State of Florida, but shall be special obligations of the County payable solely from and secured solely by a lien upon and pledge of the Pledged Funds as more fully described herein. No Registered Owner shall ever have the right to compel the exercise of the ad valorem taxing power of the County, the State of Florida or any political subdivision thereof or taxation in any form of any real property therein, to pay the principal of, redemption premium, if any, and interest.on the Series 1993 Bonds or be entitled to payment of such principal, redemption premium, if any, or Interest from any funds of the County other than Pledged Funds. Rate Covenant The County will, to the extent practicable, fix, establish, revise from time to time whenever necessary, maintain and collect such fees, rates, rentals and other charges for the use of the services of the Recreational Facilities so as to provide Net Revenues in each Fiscal Year sufficient to pay (a) 100% of all required deposits into the Reserve Account and (b) 100% of the principal and interest becoming due in such Fiscal Year on the Bonds outstanding. Reserve Account Under the Resolution, the County is required to establish a Reserve Account. The Reserve Account is required to be funded in an amount equal to the Reserve Account Requirement. The Reserve Account Requirement is defined in the Resolution as the lesser of (i) the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year or (ii) 125% of the average annual amount of principal and interest on all outstanding Bonds becoming due in the enduing Fiscal Years. The County may provide for this deposit to the Reserve Account either from the proceeds of the sale of the Bonds, from other available moneys of the County and/or by providing an insurance policy or a letter of credit meeting the quality of credit criteria required by the Resolution. Money in the Reserve Account shall be used only for the purpose of payment of maturing principal of or interest on the Bonds as the same shall become due and payable, when the other money in the Sinking Fund is insufficient therefor, and for no other purpose. Municipal Bond Insurance Payments of principal of and interest on the Series 1993 Bonds are to be insured through a policy to be issued by AMBAC Indemnity Corporation (the "Insurer") which policy will take effect upon the delivery of the Series 1993 Bonds. See "MUNICIPAL BOND INSURANCE" herein and "SPECIMEN MUNICIPAL BOND INSURANCE POLICY" attached hereto as Appendix D. Additional Parity Bonds No additional bonds on a parity with the Series 1993 Bonds ("Additional Parity Bonds") may be issued under the Resolution, except for the purpose of refunding outstanding Bonds, but no refunding may be undertaken if it shall result in an increase in the maximum amount of principal and interest on all outstanding Bonds becoming.due in any ensuing Fiscal Year. In addition, the County may issue additional bonds on a parity with the Senior Half -Cent Sales Tax Bonds as described under the caption "THE SENIOR HALF -CENT SALES TAX BONDS" herein. MUNICIPAL BOND INSURANCE The following information has been furnished by AMBAC Indemnity Corporation (the "Insurer") for use in this Official Statement. Reference is made to Appendix D for a specimen of the Insurer's policy. Payment Pursuant to Municipal Bond Insurance Policy The Insurer has made a commitment to issue a municipal bond insurance policy (the "Municipal Bond Insurance Policy") relating to the Series 1993 Bonds effective as of the date of issuance of the Series 1993 Bonds. Under the terms of the Municipal Bond Insurance Policy, the Insurer will pay to the United States Trust Com- pany of New York, in New York, New York or any successor thereto (the "Insurance Trustee") that portion of the principal of and interest on the Series 1993 Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the County (as such terms are defined in the Municipal Bond Insurance Policy). The Insurer will make such payments to the Insurance Trustee on the later of the date on which such principal and interest becomes Due for Payment or within one business day following the date on which the Insurer shall have received notice of Nonpayment from the Trustee. The insurance will extend for the term of the Series 1993 Bonds and, once issued, cannot be canceled by the Insurer. The Municipal Bond Insurance Policy will insure payment only on stated maturity dates and on manda- tory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. If the Series 1993 Bonds become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Series 1993 Bonds, the Insurer will remain obligated to pay principal of and interest on outstanding Series 1993 Bonds on the originally scheduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event of any acceleration of the principal of the Series 1993 Bonds, the insured payments will be made at such times and in such amounts as would have been made had there not been an acceleration. In the event the Trustee has notice that any payment of principal of or interest on a Series 1993 Bond which has become Due for Payment and which is made to a Bondholder by or on behalf of the County has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court of competent jurisdiction, such registered owner will be entitled to payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise available. The Municipal Bond Insurance Policy does not insure any risk other than Nonpayment, as defined in the Policy. Specifically, the Municipal Bond Insurance Policy does not cover: 1. payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity. 2. payment of any redemption, prepayment or acceleration premium. 3. nonpayment of principal or interest caused by the insolvency or negligence of any Trustee or Paying Agent, if any. If it becomes necessary to call upon the Municipal Bond Insurance Policy, payment of principal requires surrender of Series 1993 Bonds to the Insurance Trustee together with an appropriate instrument of assignment so as to permit ownership of such Series 1993 Bonds to be registered in the name of the Insurer to the extent of the payment under the Municipal Bond Insurance Policy. Payment of interest pursuant to the Municipal Bond Insurance Policy requires proof of Bondholder entitlement to interest payments and an appropriate assignment of the Bondholder's right to payment to the Insurer. Upon payment of the insurance benefits, the Insurer will become the owner of the Series 1993 Bond, appurtenant coupon, if any, or right to payment of principal or interest on such Series 1993 Bond and will be fully subrogated to the surrendering Bondholder's rights to payment. The insurance provided by the Municipal Bond Insurance Policy is not covered by the Florida Insurance Guaranty Association. AMBAC Indemnity Corporation The Insurer is a Wisconsin -domiciled stock insurance corporation regulated by the Office of the Com- missioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, and the Commonwealth of Puerto Rico, with admitted assets of approximately $1,725,000,000 (unaudited) and statutory capital of approximately $963,000,000 (unaudited) as of March 31, 1993. Statutory capi- tal consists of the Insurer's policyholders' surplus and statutory contingency reserve. The Insurer is a wholly- owned subsidiary of AMBAC Inc, a 100% publicly -held company. Moody's Investors Service and Standard & Poor's Corporation have both assigned a triple-A claims -paying ability rating to the Insurer. Copies of the Insurer's financial statements prepared in accordance with statutory accounting standards are available from the Insurer. The address of the Insurer's administrative offices and its telephone number are One State Street Plaza, 17th Floor, New York, New York, 10004 and (212) 668-0340. The Insurer has entered into pro rata reinsurance agreements under which a percentage of the insurance underwritten pursuant to certain municipal bond insurance programs of the Insurer has been and will be assumed by a number of foreign and domestic unaffiliated reinsurers. The Insurer has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by the Insurer will not affect the treatment for federal income tax purposes of interest on such obli- gation and that insurance proceeds representing maturing interest paid by the Insurer under policy provisions substantially identical to those contained in its municipal bond insurance policy shall be treated for federal income tax purposes in the same manner as if such payments were made by the issuer of the Series 1993 Bonds. The Insurer makes no representation regarding the Series 1993 Bonds or the advisability of investing in the Series 1993 Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by the Insurer and presented under the heading "MUNICIPAL BOND INSURANCE." THE SENIOR HALF -CENT SALES TAX BONDS The County issued its $7,530,000 Indian River County Refunding Revenue Bonds, Series 1992 (the "Series 1992 Bonds") on December 8, 1992, to defease $3,775,000 principal amount of its then outstanding Refunding and Improvement Revenue Bonds, Series 1985 and all of its then outstanding Capital Improvement Revenue Bonds, Series 1987. The Series 1992 Bonds were issued on a parity with the remaining outstanding $4,170,000 principal amount of its Refunding and Improvement Revenue Bonds, Series 1985 (the "Series 1985 Bonds"). The Series 1992 Bonds and the Series 1985 Bonds are hereafter collectively referred to as the "Senior Half -Cent Sales Tax Bonds." The Senior Half -Cent Sales Tax Bonds are presently outstanding in the aggregate principal amount of $11,700,000 with a final maturity date in 2005. The Senior Half -Cent Sales Tax Bonds are secured by a lien on and pledge of the Half -Cent Sales Tax which is prior and superior to the lien and pledge created by the Resolution for the security of the holders of the Series 1993 Bonds. In the Resolution, the County has covenanted not to issue additional bonds on a parity with the Senior Half -Cent Sales Tax Bonds (except for refunding bonds) unless the Half -Cent Sales Tax receipts and Racetrack and Jai Alai Fronton Funds for either the immediately preceding Fiscal Year or any twelve consecutive months of the eighteen months immediately preceding the date of sale of such additional bonds are equal to at least 135 times the maximum debt service requirement on the Senior Half -Cent Sales Tax Bonds, the Series 1993 Bonds, and Additional Parity Obligations at the time outstanding, and the additional bonds proposed to be issued. See the caption "HALF -CENT SALES TAX." ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds: Sources: Par Amount of Series 1993 Bonds $ Plus: Accrued Interest Plus: Existing Sinking Fund Moneys Plus: Excess Existing Reserve Account Less: Original Issue Discount TOTAL SOURCES Uses: Deposit to Escrow Fund $ Deposit to Sinking Fund (Accrued Interest) Underwriter's Discount Costs of Issuance (including Bond Insurance Premium) TOTAL USES DEBT SERVICE SCHEDULE September Total jPrinclgn interest Debt Service Totals: THE RECREATIONAL FACILITIES The Sandridge Golf Course is currently a 36 -hole public golf course and has related facilities located at 530073rd Street in the unincorporated north central part of Indian River County. Because the golf course is adjacent to a sand ridge that runs through central Indian River County, the golf course has more changes in elevation than the typical Florida course. The Sandridge Golf Course was one of only fifty golf facilities to receive the National Golf Foundation's Inaugural Public Golf Achievement Award for 1990. The golf course currently has 28 full time and 10 part time employees, all under the supervision of golf course professional and director Robert J. Komarinetz. Mr. Komarinetz has managed the golf course since September of 1986 and has been a professional golfer and golf course manager since 1986. The addition of 18 holes to the Sandridge Golf Course in 1992 created a complete golf complex owned and operated by the County, including a permanent 7,000 -square -foot clubhouse, a golf cart building and a maintenance building. The golf course portion was designed by Links Design, Inc., which designed the original 18 holes. The President of Links Design, Inc., is Ronald M. Garl, and he and his company have designed over 125 golf courses, 76 of which are in the State of Florida. According to the most recent annual report in "Florida Golfer," seven of Florida's top 60 golf courses were designed by Mr. Garl. Kimley-Horn and Associates, Inc. was the project engineer for the addition of 18 holes to the golf course portion. The clubhouse, golf course building and maintenance building were designed by C.E. Block, a Vero Beach -based architect. The construction of the additional 18 holes at the Sandridge Golf Course involved the following. (1) clearing, (2) lake excavation, (3) shaping of golf course features, (4) installation of irrigation system, and (5) grassing of the golf course. The additional 18 holes at the Sandridge Golf Course presents a par 72 golf course 6,250 yards in length, with a challenging, diverse golf course design. With the strategic location of hazards and bunkers, multiple tee placement, and the incorporation of wetlands and native vegetation, this additional course challenges all levels of ability. The course promotes shot value and a playable balance (appropriate mix of hole distances) and tests every club in a player's bag. Today, a more sophisticated public golfer is looking for new courses having the quality and distinction of the Sandridge Golf Course, and the additional 18 holes have added to the unique golfing experience already found at the Sandridge Golf Course. [Remainder of page intentionally left blank] 10 The following table shows the number of rounds played since each course was opened: First 18 Holes Year Number of (October 1- Seotember 301 Rounds Piaved 1986.1987 (6 months) 17,060 1987-1988 63,474 1988-1989 75,946 1989-1990 80,534 1990-1991 79,710 1991-1992 77,414 1992-1993 (6 months)(') 59,837 Second 18 holes opened 12/15/92 Green fees and carts are currently $22.50 from October through April and $12.50 from May through September for County residents. For non -County residents, green fees and carts are currently $29.00 from October through April and $18.50 from May through September. The County also periodically discounts green fees and carts for special promotions. The County has identified eight golf courses available for public play as competing with the Sandridge Golf Course. A list of those courses, theii distance from the Sandridge Golf Course and their rates is as follows: Distance from Rates 0 Course MW Sandridge Winter Summer Dodger Pines Semi -Private 4 miles $29.00 $14.00 - 18.50 Sebastian C.C. Semi -Private 5 miles 28.00 12.00 - 17.00 Indian Pines Semi -Private 10 miles 28.00 13.00 - 20.00 Vista Royale Semi -Private 10 miles 35.00 25.00 Melbourne Municipal 30 miles 23.74 23.74 Indian Hills Semi -Private 30 miles 27.00 15.00 Turtle Creek Semi -Private 40 miles 38.00 35.00 Gator Trace Semi -Private 40 miles 40.00 27.00 (1) Rates for 1993 In addition there are 10 private golf courses in Indian River County that are not available for play by the general public. RACETRACK AND JAI ALAI FRONTON FUNDS Taxes on Pari-Mutuel Wagering Chapters 500 and 551, Florida Statutes, provide for the levy, collection and distribution of taxes based upon a percentage of the total wagering through the pari-mutuel operated pools on every horse and dog track and jai alai fronton in the State and on every horse game at such tracks or frontons and, also, a 15% tax (or ten cents, if greater) on entrance gate admissions charged for such races or games. The Division of Pari-Mutuel Wagering of the Florida Department of Business Regulation (the "Division") supervises all pari-mutuel wagering throughout the State. 11 The State receives as a tax on all horse racing performances an amount equal to 3.3% of the "handle" in excess of $3011,000 for each performance per day with certain exceptions. "Handle" is defined as the aggregate of contributions to all pari-mutuel pools on races conducted by the permit holder. The State also receives (i) as a tax on dog racing, an amount equal to 7.6% of the handle in excess of $25,000 for each performance per day with certain exceptions, and (ii) as a tax on all jai alai fronton performances, an amount equal to 7.1% of the handle in excess of $25,000 for each performance per day with certain exceptions. In addition to the foregoing taxes, the State receives, as a tax, an amount equal to the "breaks" from each permit holder conducting dog racing and jai alai performances. "Breaks" represent that portion of each pari-mutuel pool which is not redistributed to the wagering public or withheld by the track. All amounts received by the State as admission tax, tax on the handle, and tax on the breaks are deposited with the State Treasurer; one-half (1/2) of that amount is credited to the Pari-Mutuel Wagering Trust Fund, and the remaining half is credited to the General Revenue Fund. All amounts received from occupational licenses from those persons connected with a racetrack, administrative fines and penalties, and other miscellaneous receipts associated with pari-mutuel activity are also credited to the Pari-Mutuel Wagering Trust Fund. All moneys deposited to the credit of the Pari-Mutuel Wagering Trust Fund shall be distributed in the following manner: (1) In each fiscal year, the sum of $29,915,500 is divided into as many equal parts as there are counties in the State of Florida (67) and one part is distributed to each County; any excess of such moneys is transferred to the General Revenue Fund. (2) If the sum available for distribution in the Pari-Mutuel Wagering Trust Fund is less than $29,915,5110, the deficiency shall be paid into the Pari-Mutuel Wagering Trust Fund from the General Revenue Fund up to the amount of the deficiency if the deficiency does not exceed the deposits of pari- mutuel tax collections to the General Revenue Fund for that particular fiscal year. (3) Distributions to the counties commence each fiscal year on or before January 5th and continue monthly for a total of four months. If on April 5th the sums distributed to the counties do not equal the maximum sum to be distributed, then the Division shall immediately transfer to the Pari- Mutuel Wagering Trust Fund from the General Revenue Fund in the manner stated above, the sums required to pay each county the sum to which it is entitled. (4) After payments to the counties have been completed as described above, all unappropriated funds in the Pari-Mutuel Wagering Trust Fund shall be deposited to the credit of the General Revenue Fund. Rights of Cancellation by Voters A permit to operate a horse track, dog track or jai alai fronton in any county is subject to cancellation by the voters of that county. Section 550.18, Florida Statutes, provides that: Upon petition of twenty percent of the qualified electors of any county wherein any racing has been licensed and conducted ... the county commissioners of such county shall provide for the submission to the electors of such county at the then next succeeding general election the question of whether any permit or permits theretofore granted shall be continued or revoked, and if a majority of the electors voting on such question in such election shall vote to cancel or recall the permit theretofore given, then the division of pari-mutuel wagering shall not thereafter grant any license on the permit so recalled. 12 Chapter 551, Florida Statutes, subjects a permit to operate a jai alai fronton to the same conditions as a permit to operate a dog or horse track. History of Total Revenues and Distributions The following table shows a ten year history (1983 - 1992) of pari-mutuel revenues and the manner in which they have been distributed: State Fiscal Year Number Total Total Ended of Racing Parl-Mutuel Total State Distribution To Each June 3 DAYS Attendance Handle Revenue To Counties County 1983 3,723 17,002,197 $1,754,139,978 $115,740,365 $29,915,500 54461500 1984 3,699 16,692,861 1,824,532,088 120,130,754 29,915,500 446,500 1985 3,675 16,543,816 1,848,080,598 123,878,295 29,915,500 446,500 1986 3,731 16,214,301 1,847,125,994 123,038,667 29,915,500 446,500 1987 3,821 16,505,736 1,954,603,904 129,449,033 29,915,500 446,500 1988 4,963 16,708,292 2,006,768,479 130,021,801 29,915,500 446,500 1989 5,170 15,719,962 1,850,283,419 118,466,567 29,915,500 446,500 1990 4,992 15,401,516 1,770,112,929 114,559,213 29,915,500 446,500 1991 4,994 14,410,934 1,712,307,521 110,510,346 29,915,500 446,500 1992 5,321 14,109,252 1,734,102,853 105,074,018 29,915,500 446,500 Sources: Comptroller of the State of Florida Florida Department of Business Regulation, Division of Pari-Mutuel Wagering HALF -CENT SALES TAX Pursuant to Chapter 212, Part I, Florida Statutes, the State of Florida is authorized to levy and collect a sales tax on, among other things, the sales price of each item or article of tangible personal property sold at retail in the State of Florida, subject to certain exceptions and dealer allowances as set forth in Chapter 212. Chapter 212 was amended in 1982 and again in 1986, to increase the sales tax from 4% to 5% and then from 5% to 6%. Chapter 218, Florida Statutes, was amended in 1982 to add Part VI thereto entitled "Participation in Half -Cent Sales Tax Proceeds." Pursuant to Chapter 218, Part VI, which became effective October 1, 1982, one-half of the net additional taxes remitted to the State of Florida pursuant to Chapter 212 by a sales tax dealer located within a county is required to be deposited in the Local Government Half -Cent Sales Tax Clearing Trust Fund in the State Treasury (the "Trust Fund") and earmarked for distribution to the governing body of that county and of each municipality within the county pursuant to a distribution formula. Such moneys are referred to in Chapter 218, Part VI, as the Local Government Half -Cent Sales Tax. The Half -Cent Sales Tax is distributed from the Trust Fund on a monthly basis to participating units of local government. To be eligible to participate in the Half -Cent Sales Tax the counties and municipalities must comply with certain requirements set forth in Section 218.63, Florida Statutes. 13 The Half -Cent Sales Tax proceeds collected within a county is distributed to the county and municipal governments by the State in accordance with the following formulas: The County's Share unincoMurated area population + 2/3 into rated area 000ulation (% of total Half -Cent = total county population + 2/3 incorporated area population Sales Tax Receipts) Municipality Share municipality oonulation (% of total Half -Cent = total county population + 2/3 incorporated area population Sales Tax Receipts) Population is the latest official state estimate of population certified prior to the beginning of the local government fiscal year. The County has complied with all of the requirements set forth in Chapter 218, Part VI, including the filing of a certificate of compliance with the State Department of Revenue, that are necessary in order for the County to receive its portion of funds from the Trust Fund during the fiscal year ending September 30, 1992. The County is obligated to take all lawful action necessary or required to remain an eligible recipient of its portion of the funds in the Trust Fund so long as any of the Series 1993 Bonds remain outstanding. Although Chapter 218, Part VI, does not impose any limitation on the number of years during which the County can receive -distributions of the Half -Cent Sales Tax from the Trust Fund, there may be future amendments to Chapter 218, Part VI, in subsequent years imposing additional requirements of eligibility for cities and counties participating in the Half -Cent Sales Tax. To be eligible to participate in the Trust Fund in future years, the County must comply with the financial reporting requirements of Section 218.23(1), Florida Statutes. Otherwise, the County loses its Trust Fund Distribution for twelve months following a "determination of non-compliance" by the State Department of Revenue. The following table shows the County's seven year history of the Half -Cent Sales Tax revenues in Indian River County: Source: State of Florida, Department of Revenue. Because distribution of the Half -Cent Sales Tax is based on the population of unincorporated areas within the County relative to the population of incorporated municipalities within the County, the County's share of the Sales Tax would be reduced if unincorporated areas of the County were to be annexed by an existing municipality within the County or if unincorporated areas of the County were to become incorporated municipalities. Under Section 165.041, Florida Statutes, a charter for incorporation of a new municipality must be adopted by a special act of the Florida legislature, after a determination that certain standards set forth in 14 Historical Distribution of the Half -Cent Sales Tax Year Half -Cent Amount Amount Ended Sales Distributed Distributed to Seat 30 Tax Collected to Munlcloalitiea Indian River County 1986 $2,770,565 $ 774,579 $1,995,986 1987 3,152,453 875,506 2,276,947 1988 4,087,973 1,351,806 2,736,167 1989 4,368,637 1,218,750 3,149,887 1990 4,265,372 1,139,277 3,126,095 1991, 4,662,312 1,331,845 3,330,467 1992 5,004,073 1,909,092 3,094,981 Source: State of Florida, Department of Revenue. Because distribution of the Half -Cent Sales Tax is based on the population of unincorporated areas within the County relative to the population of incorporated municipalities within the County, the County's share of the Sales Tax would be reduced if unincorporated areas of the County were to be annexed by an existing municipality within the County or if unincorporated areas of the County were to become incorporated municipalities. Under Section 165.041, Florida Statutes, a charter for incorporation of a new municipality must be adopted by a special act of the Florida legislature, after a determination that certain standards set forth in 14 Section 165.041, Florida Statutes, have been met. As applied to any new municipality within the County, those standards include the following; (a) The new municipality must have a total population of at least 5,000 persons; (b) The new municipality must have an average population density of at least 15 persons per acre except under certain extraordinary conditions; and (c) Any part of the new municipality's proposed boundaries must be at least two miles from the boundaries of an existing municipality within the County contiguous and amicable to separate municipal government. Under Section 171.041(3), Florida Statutes, a municipality may annex contiguous, compact, unincorporated territory by adopting an annexation ordinance. Following adoption, such ordinance must be submitted to a separate vote of the registered electors of the annexing municipality and the registered electors of the area proposed to be annexed. If there is a separate majority vote for annexation in both the annexing municipality and in the area proposed to be annexed, then the ordinance of annexation shall become effective on the effective date speed therein. If there is a majority vote against annexation in either the annexing municipality or in the area proposed to be annexed, or in both, the ordinance shall not become effective and the area proposed to be annexed shall not be the subject to an annexation ordinance by the annexing municipality for a period of two years from the date of the referendum on annexation. If more than 70% of the land in an area proposed to be annexed is owned by individuals, corporations, or legal entities which are not registered electors of such area, such area may not be annexed unless the owners of moro than 50% of the land in such area consent to such annexation. Such consent must be obtained prior to the referendum to be held on the annexation. An area proposed to be annexed must meet certain standards set forth in Section 171.043, Florida Statutes. In addition to the annexation procedures described above, under Section 171.044, Florida Statutes, the owner or owners of real property in an unincorporated area which is contiguous to a municipality, and reasonably compact, may file a petition with the governing body of such municipality requesting that such property be annexed to the municipality. Upon determination by the governing body of the municipality that the petition bears the signatures of all owners of property in the area proposed to be annexed, the governing body may adopt a ordinance to annex such property and, after publication as required by law, such ordinance shall becow effective. (Remainder of page intentionally left blank] HISTORICAL AND ESTIMATED REVENUES AND DEBT SERVICE COVERAGE (1) The following table sets forth the historical and estimated Pledged Funds of the County for the Fiscal You indicated. Audited Flsures for Fiscal Year Ended Sell. 300) Prot ls>� leas in 13n Gross Revenues(3) $1,125,389 $013,313 $1,526,621 $1,647,087 $1,557,367 $2,880,389 Cost of Operation and Maintenance<4) 943.915 243.41$ 1,438,594 1.185,312 1.213,533 2,457.11.5 Net Revenues 283,474 349,895 428,077 461,775 343,776 84634 Racetrack and Jai Alai Fronton Funds 446,500 446,500 446,500 446,500 446,500 446,500 Excess Half -Cent Slits Tax(s) 1".011 1,714.1,!' Q ,689,$52 2,13Q W 2.165.454 2nba_70(6) Total Pledged Funds 1= 2r= 2.564.439 M='2.)55.730 JJ= Maximum Annual Debt Service(7) 740,000 740,000 740,000 740,000 740,000 740,000 Ratio of Total Pledged Funds to Maximum Annual Debt Service 2.76x 339x 3.47x 4.13x 3.99x 4.51z (1) Based on County's Audited Financial Statements. (2) Based upon the County's Annual Budget for the Fiscal Year ending September 30,1993. (3) Includes Pro Shop Sales, Green Fees, Cart Rentals, Food and Beverage Sales and Other Income of the Recreational Facilities (4) Includes Salaries and Benefits and Materials and Supplies of the Recreational Facilities. (5) Half -Cent Sales Tax revenues remaining after payment of debt service on the Senior Half -Cent Sales Tax Bonds. This does not include debt service from additional senior lien bonds (if any) which may be issued under the Sales Tax Resolution. See the Caption "THE SENIOR HALF -CENT SALES TAX BONDS" herein. (6) The estimated Half -Cent Sales Tax projected for Fiscal Year 1993 is $3,450,958 obtained from the Local Government Financial Information handbook published by the Florida Department of Revenue. The maximum annual debt service requirement on the Senior Lien Half -Cent Sales Tax Bonds is $1,382,214. Therefore, the net Half -Cent Sales Tax Revenues available for the Series 1993 Bonds is $2,068,744 assuming no additional fust lien Half -Cent Sales Tax Bonds are issued in the future. (7) Estimated Maximum Annual Debt Service on the Series 1993 Bonds. 16 FINANCIAL ADVISOR Fishkind & Associates, Inc., Orlando, Florida, is serving as financial advisor to the County. The financial advisor has assisted in the preparation of the Official Statement, and in other matters relating to the planning, structuring and issuance of the Series 1993 Bonds, and has provided additional advice. Fishkind & Associates, Inc. is a financial advisory and consulting organization and is not engaged in the business of underwriting, marketing or trading of municipal securities or any other negotiable instruments. LITIGATION In the opinion of the County Attorney, no legal proceedings are pending or threatened that materially affect the County's ability to perform its obligations to the holders of the Series 1993 Bonds or that materially affect the financial condition of the Recreational Facilities. In the opinion of the County Attorney, there is no litigation or controversy of any nature now pending or, to the County's knowledge, threatened to restrain or enjoin the issuance, sale, execution or delivery of the Series 1993 Bonds or in any way contesting the validity of the Series 1993 Bonds or any proceedings of the County taken with respect to the authorization, sale or issuance of the Series 1993 Bonds or the pledge or application of any moneys provided for the payment of the Series 1993 Bonds. RATINGS Moody's Investors Service and Standard & Pooes Corporation have assigned ratings of "Aae and "AAA," respectively, to the Series 1993 Bonds, with the understanding that, upon delivery of the Series 1993 Bonds, the municipal bond insurance policy will be issued by the Insurer. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, Standard & Poor's Corporation, 25 Broadway, New York, New York 10004. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 1993 Bonds. FINANCIAL STATEMENTS The County's general purpose financial statements at September 30, 1992 and for the Fiscal Year then ended, included as Appendix B hereto, have been audited by Coopers & Lybrand, independent accountants, as set forth in their report dated January 29, 1993, which is a part of Appendix B attached hereto. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Rule 3E400.003, Rules of Government Securities, promulgated by the Florida Department of Banking and Finance, Division of Securities, under Section 517.051(1), Florida Statutes ("Rule 3E-400.003"), requires the County to disclose each and every default as to the payment of principal and interest with respect to obligations issued or guaranteed by the County after December 31, 1975. The County is not, and since December 31, 1975, has not been, in default as to principal of and interest on bonds or other debt obligations for which either ad valorem or non ad valorem revenues of the County are pledged. 17 APPROVAL OF LEGALITY Certain legal matters incident to the authorization, issuance, We, and delivery of the Series 1993 Bonds, and the treatment of the interest thereon for federal income tax purposes, are subject to the approval of Rhoads & Sinon, Boca Raton, Florida, Bond Counsel; whose approving opinion in substantially the form attached hereto as Appendix E will be printed on all of the Series 1993 Bonds. In its capacity as Bond Counsel, Rhoads & Sinon has participated in the preparation of, and has reviewed those portions of this Preliminary Official Statement contained under the captions "DESCRIPTION OF THE SERIES 1993 BONDS," "SECURITY FOR THE SERIFS 1993 BONDS," "APPROVAL OF LEGALITY,"'TAX EXEMPTION," and the "THE RESOLUTION" contained in Appendix C to this Preliminary Official Statement and the language on the cover and in the summary of this Official Statement insofar as such portions and such language summarize or describe the terms of the Series 1993 Bonds, the Resolution and the tax-exempt status of the Series 1993 Bonds. The firm has not been retained to pass upon, and will not express any opinion upon, any other information contained in this Official Statement or that may be made available to prospective purchasers of the Series 1993 Bonds. Certain legal matters will be passed upon for the County by the County Attorney, Charles P. Vitunac, Esquire, Vero Beach, Florida, and for the Underwriter by its co -counsel, Bryant, Miller and Olive, PA., Tallahassee, Florida, and Josias and Goren, Ft. Lauderdale, Florida. TAX EXEMPTION Federal Income Tax Matters On the date of delivery of the Series 1993 Bonds, Rhoads & Sinon, Boca Raton, Florida, Bond Counsel, will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, interest on the Series 1993 Bonds is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, but that in the case of corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinion summarized in the preceding paragraph is subject to the condition that the County comply with all requirements of the Internal Revenue Code of 1986, as amended, and applicable regulations promulgated with respect thereto (the "Code), that must be satisfied subsequent to the issuance of the Series 1993 Bonds in order that the interest thereon be and continue to be excluded from gross income for federal income tax purposes. The County has covenanted to comply with all such requirements, which include, i�r cilia, restrictions upon the yield at which proceeds of the Series 1993 Bonds and other money held for payment of the Series 1993 Bonds and deemed "proceeds" thereof may be invested and the requirement to calculate and rebate any arbitrage that may be generated with respect to investments attributable to the Series 1993 Bonds. Failure to comply with such requirements could cause the interest on the Series 1993 Bonds to be included in gross income retroactive to the date of issuance of the Series 1993 Bonds. Ownership of the Series 1993 Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, certain subchapter S corporations with substantial passive income and Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Series 1993 Bonds. Bond Counsel will express no opinion as to such collateral tax consequences, and prospective purchasers of the Series 1993 Bonds should consult their tax advisors. The County has covenanted, and will issue its certificate to the effect that on the basis of the facts, estimates and circumstances in existence on the date of delivery of the Series 1993 Bonds, the proceeds of the Series 1993 Bonds will not be used in a manner that would cause the Series 1993 Bonds to be or become "arbitrage bonds" In the opinion of Bond Counsel, based upon the facts, estimates and circumstances set forth 18 in said certificate, the Series 1993 Bonds are not presently "arbitrage bonds" under existing statutes, regulations and judicial decisions. No representation is made or can be made by the County or any other party associated with the issuance of the Series 1993 Bonds as to whether or not any legislation now or hereafter introduced and enacted will be applied retroactively so as to subject interest on the Series 1993 Bonds to inclusion in gross income for Federal income tax purposes or so as to otherwise affect the marketability or market value of the Series 1993 Bonds. Enactment of any legislation that subjects the interest on the Series 1993 Bonds to inclusion in gross income for federal income tax purposes or otherwise imposes taxation on the Series 1993 Bonds or the interest paid thereon may have an adverse effect on the market value or marketability of the Series 1993 Bonds. Florida Tax Matters On the date of delivery of the Series 1993 Bonds, Bond Counsel will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, the Series 1993 Bonds and the income therefrom are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on'debt obligations owned by corporations, banks and savings associations. Other Federal Income Tax Matters Interest Expense Deductions for Financial Institutions Under the Code, financial institutions are disallowed 100 percent of their interest expense deductions that are allocable, by a formula, to tax-exempt obligations acquired after August 7, 1986. An exception, which reduces the amount of the disallowance, is provided for tax-exempt obligations issued by a qualified issuer that specifically designates such obligations as "qualified tax-exempt obligations" under Section 265 of the Code. The Series 1993 Bonds have not been designated as "qualified tax-exempt obligations." Financial institutions intending to purchase Series 1993 Bonds should consult with their professional tax advisors to determine the effect of the interest expense disallowance on their federal income tax liability. Original Issue Discount In the opinion of Bond Counsel, under existing statutes, regulations and judicial decisions, the original issue discount in the selling price of those maturities of the Series 1993 Bonds being sold in the initial public offering with original issue discount is, to the extent properly allocable to each Holder of such Series 1993 Bonds, excludable from gross income for federal income tax purposes of such Holder, but may not be excludable from the calculation of "adjusted current earnings" for purposes of the alternative minimum tax imposed on corporations (as defined for federal income tax purposes). The original issue discount with respect to any maturity of the Series 1993 Bonds is the excess of the stated redemption price at maturity of such Series 1993 Bonds over the initial offering price at which a substantial amount of the Series 1993 Bonds of such maturity were sold to the public, excluding underwriters and other intermediaries, in the initial public offering. Accrued original issue discount will increase a Holder's tax basis in a Series 1993 Bond and affect the determination of taxable gain from any We or exchange of such Series 1993 Bond. Prospective purchasers of the Series 1993 Bonds being sold in the initial public offering with original issue discount should consult their tax advisors for further information concerning the manner in which the original issue discount is apportioned among successive holders and the tax consequences of purchasing, holding and selling such bonds. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the mathematical computations supporting the conclusions (i) that the principal amounts and the interest on the Escrow Securities and other funds deposited in escrow under the Escrow Agreement are adequate to provide for the payment when due of the principal, interest and redemption premium, if any, on the Refunded Bonds and (u) that the yield on the Series 1993 Bonds does not cause the Series 1993 Bonds to be "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1956, as amended, will be verified by McGladrey & Pullen, Minneapolis, Minnesota, independent certified public accountants, based upon schedules provided by William R. Hough & Co. UNDERWRITING The Series 1993 Bonds are being purchased by William R. Hough & Co. (the "Underwriter% subject to certain terms and conditions set forth in a bond purchase agreement between the County and the Underwriter, including the approval of certain legal matters by Bond Counsel and the existence of no material change in the affairs of the County from those set forth in this Official Statement. The aggregate purchase price payable by the Underwriter is S (which includes Original Issue Discount of $ and Underwriter's Discount of $ ) plus accrued interest on the Series 1993 Bonds from June 1, 1993 to the date of delivery of the Series 1993 Bonds. The Series 1993 Bonds are offered for sale to the public at the price set forth on the cover page of this Preliminary Official Statement. The Series 1993 Bonds may be offered and sold to certain dealers at prices lower than such offering prices, and such public offering prices may be changed, from time to time, by the Underwriter. MISCELLANEOUS All information contained herein has been provided by the County, except where attributed to other sources. The references, excerpts, and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference should be made to all such documents for full and complete statements of all matters of fact relating to the Series 1993 Bonds, the security for the payment of the Series 1993 Bonds, and the rights and obligations of the holders thereof. Copies of such docu- ments may be obtained from Indian River County, Florida, 1840 25th Street, Vero Beach, Florida 32960, Attention: Joseph A. J. Baird, during the period of the initial offering of the Series 1993 Bonds. [Remainder of page intentionally left blank] 20 AUTHORIZATION OF OFFICIAL STATEMENT The delivery of this Official Statement has been duly authorized by the Board of County Commissioners of the County. At the time of delivery of the Series 1993 Bonds, the Chairman of the Board of County Commissioners and the County Administrator, acting on behalf of the County, will furnish a certificate to the effect that nothing has come to their attention which would lead them to believe that the Official Statement, as of its date and as of the delivery of the Series 1993 Bonds, contains an untrue statement of a material fad or omits to state a material fad which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. INDIAN RIVER COUNTY, FLORIDA Richard N. Bud, Chairman Board of County Commissioners James E. Chandler County Administrator 21 APPENDIX A Indian River County, Florida General Information APPENDIX A GENERAL INFORMATION CONCERNING INDIAN RIVER COUNTY, FLORIDA The following information has been provided by Indian River County, Florida, and is included only for the purpose of providing general background Information. The Information has been compiled on behalf of the County, and such compilation involved oral and written communication with various of the sources Indicated. The Information is subject to change, although efforts have been made to update Information where practicable. The Series 1993 Bonds are not a general obligation of the State of Florida or any political subdivision thereof, including Indian River County, and are only payable from the sources described in the official statement. Description Indian River County (the "County") was established in 1925 by an Act of the Legislature separating it from St. Lucie County. The County encompasses approximately 497 square miles and is located in the middle of Florida on the eastern coast, approximately 135 miles north of Miami, 190 miles south of Jacksonville and 135 miles east of St. Petersburg. The County is bounded on the north by Brevard County, on the south by St. Lucie County on the west by Osceola and Okeechobee Counties and on the east by the Atlantic Ocean. The City of Vero Beach is the seat of County government and the largest city in the County. Other incorporated cities located within the County are Fellsmere, Indian River Shores, Orchid and Sebastian. There are approximately 100 miles of waterfront land in the County, including approximately 23 miles of Atlantic Ocean beaches. Government Indian River County has a five -member Board of County Commissioners (the "Commission"). Each member represents one of five districts, elected at large (County -wide) for staggered terms of four years. The Chairman and Vice -Chairman are elected by the Commission. A County Administrator is appointed by the Board and is responsible for administrative and fiscal control of the resources of the County. The following is a list of the Commissioners and the expiration of their respective terms. Name Orrce Term Expires Richard N. Bird Chairman November, 1996 John W. Tippin Vice -Chairman November, 1994 Fran B. Adams Member November, 1996 Carolyn K. Eggert Member November, 1994 Kenneth R. Macht Member November, 1996 The Commission apportions and levies County taxes and controls the expenditure of all County funds, except schools which are controlled by the School Board of Indian River County, and except for hospital funds which are controlled by an independent taxing district. The budget year of the County runs from October 1 to the following September 30. Operating revenue is raised from ad valorem taxes, real and personal property taxes, and user fees with supplements from state and federal sources. The Commission operates a county road system, water and sewer system, solid waste disposal system, and public golf course and other recreational facilities, and has power to establish, build, maintain, repair, protect and preserve these public facilities. A-1 Other elected officials serving County -wide are a Property Appraiser, Tax Collector, Supervisor of Elections, Sheriff and Clerk of the Circuit Court who is also the Clerk of the Board of County Commissioners. The 1990 Census population of the County was 90,208, an increase of 50.6% over the 1980 Census population of 59,896. Vero Beach, the largest city in the County, is the County Seat, and had a 1990 Census population of 17,350, an increase of 7.4% over the 1980 Census population of 16,176. In 1990, Indian River County ranked 31st out of 67 counties in Florida in terms of total population, representing .7% of the total state population at that time. As illustrated in the following table, the population of the County has more than tripled since 1960. It is anticipated that the growth of the County will continue for the foreseeable future. (xW Population % Annual increase 1960 25,309 11.32 1970 35,992 4.71 1980 59,896 6.64 1985 76,442 2.76 1986 80,023 4.68 1987 83,515 4.36 1988 87,512 4.79 1989 89,000 1.70 1990 90,208 135 1991 92,429 2.46 1992• 94,091 1.80 Source: U.S. Census and University of Florida, Bureau of Economic and Business Research While the population of the County has been steadily increasing, so has the median age of the resident population. The number of persons age 15-44 is the largest age category. The following table illustrates the percentage of population in the various age groups since 1960. Group IM 1974 12i}4 1224 122E 0-14 30.4% 27.3% 18.1% 15.6% 163% 15-44 33.5 33.4 37.2 40.0 34.8 45-64 22.1 21.9 24.4 22.2 21.7 65+ 13.9 17.4 20.3 25.2 27.2 • These figures were provided by the Indian River County Chamber of Commerce. A-2 Components of Population Chance 1980 Census.......................................................... 59,896 1990 Census.......................................................... 90,208 Percent Change ................................................... 50.61% Components of Change due to Natural increase ............................... 573 Components of Change due to Net Migration ................................. 29,739 Percentage of Change due to Natural Increase ................................. 1.89% Percentage of Change due to Net Migration .................................. 98.11% Source: University of Florida, Bureau of Economic and Business Research. Industry The economy of Indian River County is based upon agriculture (citrus and cattle), tourism, light manufacturing, wholesale and retail trade and commercial fishing. In the crop year 1990-1991 Indian River County had 66,116 acres of citrus which produced 21,866,000 boxes of oranges, grapefruit and specialty fruit. The County was third among all Florida Counties in total citrus production, but second in grapefruit production. Part of the citrus fruit is sold to the fresh fruit market, and there are also 21 major packing houses and one citrus juice processing plant located in the County. Approximately 71,809 acres of improved pasture and rangeland are utilized for dairy farming and beef cattle production, while approximately 22,873 acres remain as forest and woodlands. Sun Ag, Inc. has extensive citrus and agriculture interests in the County, employing approximately 750 persons at the peak of the citrus season. Their agricultural properties, including a citrus packing plant, are located west of Fellsmere in the central part of the County. Other industries include lumber and millwork plants, cabinets and millwork plants, machine shops, welding shops, sheet metal fabricators, mattress ticking, construction, architectural and ornamental iron works, stone and marble products, asphalt plant, pilot training school, welding school, television antennas, wholesale seafood, metal windows and awnings, printing, air handling systems, ready mix concrete, concrete blocks, precast concrete products, electronic components, plating and machine shop equipment, screw machine parts, aircraft parts and supplies, factory built homes, dairy products, newspaper, radio stations and temperature controls. Nine banks, eleven savings and loan associations and twenty securities brokerage offices provide financial services within the County. Tourism and Recreation The Atlantic beaches and the excellent climate in the County provide the basis for a year-round tourist industry. There are numerous hotels and motels in the County as well as retail and service establishments geared to serving the tourist trade. Forty-six miles of riverfront on the Indian River, many miles of canals and lakefront and approximately 23 miles of Atlantic Ocean beaches as well as two state parks, five county parks, and eight public and six private golf courses provide ample opportunity for outdoor recreation. The Los Angeles Dodgers baseball club trains at Dodgertown in Vero Beach. The 340 -acre complex is also home to the largest and most advanced baseball school in the world, conducted by the Dodger organization. A-3 Indian River County employment fluctuates seasonally with most unemployment occurring from July through October, the slower months in both the tourist and citrus picking seasons. Employment by sector for the calendar year ended 1991 is as follows: tee Percent of Distribution Agriculture 12.27% Manufacturing 5.02 Construction 7.40 Transportation, Communications & Utilities 2.60 Wholesale Trade 1.92 Retail Trade 22.71 Finance, Insurance & Real Estate 635 Services 34.04 Government 7.59 Other X14 Total 100.00% Source: State of Florida, Department of Labor and Employment Security. City Government Major employers in Indian River County and their approximate current level of employment are as follows: Product or Establishment Service Employment Indian River County School District School System 1,735 Indian River Memorial Hospital Medical Services 1,300 Indian River County County Government 1,240 Sun Ag., Inc. Citrus & Agriculture 800 Publix Corporation Retail Grocery 750 City of Vero Beach City Government 596 Humana Hospital Sebastian Acute Care Facility 570 Gracewood Fruit Co. Citrus 465 Grave Brothers, Inc. Citrus 450 Hale Groves Citrus 450 Dodgertown Complex Convention Center, Baseball 400 Piper Aircraft Corp. Aircraft Manufacturing 331 WalMart Retail Merchandise 330 Johns Island Residential Resort 325 Winn Dixie Retail Merchandise 280 Source: Indian River County A-4 The following table sets forth a comparison of the unemployment rate in the County compared to that in the State of Florida: Source: State of Florida, Department of Labor and Employment Security Rail transportation in the County is handled by Florida East Coast Railway while numerous freight truck lines are available to serve the County. Highways providing surface travel are Interstate 95, U.S. 1, and State Road AIA for north -south travel and State Road 60 for travel to the west while the Florida Turnpike courses south and northwest through the southwest corner of the County. The area is served by Greyhound Bus Lines for passenger and package service. Vero Beach Municipal Airport provides scheduled commuter airline service and is capable of handling most commercial aircraft, while one other airport in the County serves both charter and private aircraft. Scheduled airline service is available to County residents at the Melbourne Regional Airport (about a fifty minute drive), Orlando International Airport and Palm Beach International Airport (each about an hour and a half drive). Health Care The Indian River Hospital District, encompassing all but six square miles of the County, has a 347 -bed facility in Vero Beach. The Humana Hospital Sebastian, a private for-profit acute care facility, is located in the northern part of the County on U.S. 1. There are presently over 200 physicians serving the hospitals and area residents. The Sunshine Rehabilitation Center offers physical and speech therapy to handicapped children and adults. Educatio The educational system is administered on a County -wide basis. The School Board, elected for staggered four-year terms each, appoints a Superintendent of Schools. The County has 12 elementary schools, one middle junior high, two middle schools, one junior high and one senior high. There is one Special Education School for all grades. Enrollment for the 1990-1991 school year was 11,772 students. There are 787 administrative and teaching personnel and 608 non -instructional personnel. In addition to the public school system, there are several parochial and private schools. Indian River Community College, with its main campus located in Ft. Pierce, about 15 miles from Vero Beach, has branch campuses in Vero Beach and in Okeechobee and Martin Counties. The State -supported community college offers a general college program for the fust two years and a wide variety of technical and vocational instruction. The Mueller Center in Vero Beach has a 40 -acre campus, ten classrooms and office facilities. A•5 Annual Averages Indian River County State of Florida 1992 11.9% 7.5% 1991 9.9 7.0 1990 9.2 6.2 1989 6.4 5.6 1988 6.8 5.0 1987 8.9 5.3 Source: State of Florida, Department of Labor and Employment Security Rail transportation in the County is handled by Florida East Coast Railway while numerous freight truck lines are available to serve the County. Highways providing surface travel are Interstate 95, U.S. 1, and State Road AIA for north -south travel and State Road 60 for travel to the west while the Florida Turnpike courses south and northwest through the southwest corner of the County. The area is served by Greyhound Bus Lines for passenger and package service. Vero Beach Municipal Airport provides scheduled commuter airline service and is capable of handling most commercial aircraft, while one other airport in the County serves both charter and private aircraft. Scheduled airline service is available to County residents at the Melbourne Regional Airport (about a fifty minute drive), Orlando International Airport and Palm Beach International Airport (each about an hour and a half drive). Health Care The Indian River Hospital District, encompassing all but six square miles of the County, has a 347 -bed facility in Vero Beach. The Humana Hospital Sebastian, a private for-profit acute care facility, is located in the northern part of the County on U.S. 1. There are presently over 200 physicians serving the hospitals and area residents. The Sunshine Rehabilitation Center offers physical and speech therapy to handicapped children and adults. Educatio The educational system is administered on a County -wide basis. The School Board, elected for staggered four-year terms each, appoints a Superintendent of Schools. The County has 12 elementary schools, one middle junior high, two middle schools, one junior high and one senior high. There is one Special Education School for all grades. Enrollment for the 1990-1991 school year was 11,772 students. There are 787 administrative and teaching personnel and 608 non -instructional personnel. In addition to the public school system, there are several parochial and private schools. Indian River Community College, with its main campus located in Ft. Pierce, about 15 miles from Vero Beach, has branch campuses in Vero Beach and in Okeechobee and Martin Counties. The State -supported community college offers a general college program for the fust two years and a wide variety of technical and vocational instruction. The Mueller Center in Vero Beach has a 40 -acre campus, ten classrooms and office facilities. A•5 One daily newspaper is published in the County. There are five local radio stations. Television reception is good for the major commercial stations and cable is available to the County. Telephone service is supplied by Southern Bell. Vero Beach Electric System and Florida Power & Light Company supply electricity. LOCAL AND STATE TAXES Florida has no individual state income tax Inheritance tax is confined to the amount allowed as a credit to the State from the tax levied by the United States government. The 6% regular sales tax plus the 1% local option sales tax applies to all items except groceries and medicines. Under the Florida Homestead Exemption law, no municipal or county taxes are levied against the first $25,000 for valuation of a home occupied by its owners except for special assessments. R is a state law that all tax appraisals must be at 100% of value. The Florida corporate tax is 5.5% with an exemption and no surcharge. The Board of County Commissioners of Indian River County is limited by the Constitution of Florida to an ad valorem tax levy of 10.0 mills per $1,000 of assessed value for operating expenditures, with an additional 10.0 mills within special created municipal service taxing units. The following tables provide statistical information on the Counlys tax collection history, assessed property values, debt structure and principal taxpayers: INDIAN RIVER COUNTY, FLORIDA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS sour6e: (1) Department of Revenue, State of Florida and Indian River County Comprehensive Annual Financial Report, VOW Year 1972. A-6 Percent of Total Irk Total Assessed to Total Year Real Property Personal Property Total Assessed Estimated Estimated Ended Assessed Value Assessed Value value Actual Value Actual Valuel�t 1983. 2,984,489,960 170,588,980 3,155,078,940 3,180,523,125 992 1964 3,311,355,000 181,269450 3,492,624AS0 3,49$624,850 100.0 1985 3,534,025,949 187,757,610 3,721,782 559 3,721,782;59 100.0 1966 3,781,716,639 229,364,177 4,011,081,016 4,011,081,016 100.0 1987 3,974,458,157 259,733,289 4,234,191,446 4,276,961,057 99.0 1988 4,387,121,880 280,414,239 4,667,536,119 4,667,536,119 100.0 1989 4,570,700,260 303,141,158 4,873,941,408 4,873,841,408 100.0 1990 4,954,816,716 321,397,153 5,276,213,869 5,276,213,869 100.0 1991 5,353,680,640 347,990,177 5,701,670,817 5,782.627,693 98.6 i992 6,200.439,440 362,973,529 6,563.412,969 6.656,60SMS 98.6 sour6e: (1) Department of Revenue, State of Florida and Indian River County Comprehensive Annual Financial Report, VOW Year 1972. A-6 (1) Composite tax rates (2) Per Florida Statute 200.071, no ad valorem tax millage shall be levied against real property and tangible personal property by counties in excess of 10 mills, except for voted levies. (3) Average tax rate Source: State of Florida and Indian River County Comprehensive Annual Financial Report, Fiscal Year 1992. INDIAN RIVER COUNTY, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS INDIAN RIVER COUNTY, FLORIDA Fiscal Total Tax PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS Tax Collections 1983 (PER $1,000 OF ASSESSED VALUE) 1984 12,926,975 12,412,543 1985 LAST TEN FISCAL YEARS 14,423,407 1986 17,709,388 16,970,965 1987 22,292,164 21,146,969 Independent 27,551,218 27,041,829 County -Wide Taxing. Districts 26,916,117 Taxing Districts 32,890,687 31,471,607 1991 34,559,500 33,265,772 Total 36,316,457 34,977,492 F9scat 95.75 School 27,009,205 County - 95.69 77,376 Year Coun Board D±UT Wide 96.97 Other(11 1983 3.46325 6.24700 .90480 10.61505 3.10724 2.11452 1984 4.07764 6.67120 1.95895 12.70279 3.42355 2.34516 1985 4.46514 6.71380 1.94202 13.12096 3.49458 3.34028 1986 -4.72025 6.92780 1.77208 13.42013 3.95872 2.56083 1987 6.15344 6.92340 1.88558 14.96242 5.36896 2.56025 1988 7.21730 7.35880 2.17036 16.74646 5.55240 3.11748 1989 7.03750 759160 1.68019 16.30929 5.68680 3.08220 1990 7.14860 8.07040 2.00877 17.22777 6.08563 3.00720 1991 6.77130 8.32080 2.16825 17.26135 6.04394 3.01990 1992 6.15160 9.36170 1.91520 17.42850 4.82256 4.00770 (1) Composite tax rates (2) Per Florida Statute 200.071, no ad valorem tax millage shall be levied against real property and tangible personal property by counties in excess of 10 mills, except for voted levies. (3) Average tax rate Source: State of Florida and Indian River County Comprehensive Annual Financial Report, Fiscal Year 1992. INDIAN RIVER COUNTY, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Source: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1992. A-7 Current Fiscal Total Tax Year Tax Collections 1983 9,276,416 8,956,111 1984 12,926,975 12,412,543 1985 15,186,814 14,423,407 1986 17,709,388 16,970,965 1987 22,292,164 21,146,969 1988 27,551,218 27,041,829 1989 28,110,296 26,916,117 1990 32,890,687 31,471,607 1991 34,559,500 33,265,772 1992 36,316,457 34,977,492 Source: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1992. A-7 Percent Percent Delinquent Total or Total of Levy Tax Tax Collections ICo lected Collections Collections to Levu 96.55 10,511 8,966,622 96.66 96.02 9,258 12,421,801 96.09 94.97 26,216 14,449,623 95.15 95.83 42,828 17,013,793 96.07 94.86 27,719 21,174,688 94.99 98.15 277,384 27,319,213 99.16 95.75 93,088 27,009,205 96.08 95.69 77,376 31,548,983 95.92 96.26 245,389 33,511,161 96.97 96.31 102,452 35,079,944 96.60 Source: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1992. A-7 All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January and 1% in the month of February. The taxes paid in March are without discount. Delinquent taxes on real property bear interest of 18% per year. On or prior to June 1 following the tax year, certificates are sold for all delinquent taxes on real property. After sale, tax certificates bear interest of 18% per year or at any lower rate bid by the buyer. Application for a tax deed on any unredeemed tax certificates may be made by the certificate holder after a period of two years. Unsold certificates are held by the County. Delinquent taxes on personal property bear interest of 18% per year until the tax is satisfied either by seizure and sale of the property or by the five-year statute of limitations. The County does not accrue its portion of the County -held certificates due to the immaterial amount. (1) Total assessed value $6,563,412,969 Source: Indian River County Property Appraiser A•8 INDIAN RIVER COUNTY, FLORIDA PRINCIPAL TAXPAYERS SEP'T'EMBER 30, 1992 Percent 1991 of Total Assessed Assessed Taxoaver T= of Business V 1 1 Value Fellsmere Joint Venture Agriculture $88,512,082 1.35% Southern Bell Telephone utility 63,621,840 .97 John's Island, Inc. Land development 53,009,770 .81 Adult Communities Total Services Health care 40,297,530 .61 Florida Power & Light Electric utility 36,404,810 .55 Windsor Properties & Club Land development 29,960,450 .46 General Development Corp. Land development 23,066,329 .35 Graves Brothers Agriculture 20,170,620 .31 J.M. Berry Groves, Inc. Agriculture 19,604,122 .30 Piper Aircraft Company Aircraft manufacturing 19,526,305 .30 (1) Total assessed value $6,563,412,969 Source: Indian River County Property Appraiser A•8 APPENDIX B General Purpose Financial Statements and Independent Auditors' Report for the Fiscal Year ended September 30, 1992 U, INDIAN RIVER COUNTY, FLORIDA FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 1992 TABLE OF CONTENTS REPORT OF INDEPENDENT ACCOUNTANTS B-1 GENERAL PURPOSE FINANCIAL STATEMENTS (COMBINED STATEMENTS - OVERVIEW) Combined Balance Sheet - All Fund Types and Account Groups B-4 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Fund B-6 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Governmental Fund Types B-8 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types B-12 Combined Statement of Cash Flows - All Proprietary Fund Types B-13 Notes to Financial Statements B-15 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS Enterprise Funds: Combining Balance Sheet B-62 Combining Statement of Revenues, Expenses and Changes in Retained Earnings B-66 Combining Statement of Cash Flows B-68 Coopers oerlifW public accountants &Lybrand Report of Independent Accountants The Honorable County Commissioners and Constitutional Officers Indian River County, Florida We have audited the accompanying general-purpose financial statements and the combining and individual fund financial statements of the enterprise funds of Indian River County, Florida, as of and for the year ended September 30, 1992, as listed in the Table of Contents. These financial statements are the respon- sibility of Indian River County, Florida, management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the. amounts and disclosures in the. financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of Indian River County, Florida, at September 30, 1992, and the results of its operations and the cash flows of its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles. Also, in our opinion, the combining and individual fund financial statements of the enterprise funds referred to above present fairly, in all material respects, the financial position of each of the individual funds financial statements of Indian River County, Florida, as of September 30, 1992, and the results of operations of such funds and the cash flows of the individual proprietary funds for the year then ended in conformity with generally accepted accounting principles. Orlando, Florida January 29, 1993 B-1 ►r► p_2 GEMML-FORPOSS FIMMIAL STATBMRH'PS (CONSIM STATAUlS - WMVIM) These basic financial statements provide a summary overview of the financial position of all funds and account groups as well as the operating results of all funds. They also serve as an introduction to the more detailed statements and schedules that follow in the next subsection. B-3 INDIAN RIVER COUNTf. FLORIDA CONSINED BALANCE ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1992 GOVERNMENTAL FORD TYPES SPECIAL DEBT CAPITAL ASSETS AND OTHER DEBITS GENERAL REVENUE SERVICE PROJECTS Cash and cash equivalents $ 4,122,301 8 5,021,335 S 4,641,304 6 1,335,293 Investments 7,440,599 14,687,302 1,283,401 6,138,104 Accounts receivable - net 610,045 25,602 - - Special assessments receivable - deferred - 725,816 3,270,289 - Due from other funds 1,684,611 581856 1,946 - Due from other governments 322,159 294,627 183,972 713,992 Interest receivable 57,367 126,463 7,117 56,199 Inventories 47,548 - - - Restricted assets: Cash and cash equivalents - - - - Investments - - - - Due from other governments - - - - Impact fees receivable - - - - Special assessments receivable - - - - Advance to other funds - - - - Property, plant and equipment - - - - Accumulated depreciation - - - - Unamortized bond costs - - - - Intangible assets - - - - Deposits - - - - Amount available in debt service funds - - - - Amount to be provided for retirement of general long-term debt - - - - Total Assets and Other Debits 514.284.630 520.942.001 S 9.388.029 510.243.588 LIABILITIES. FUND EQUITY AND OTHER CREDITS Liabilities: Accounts payable $ 1,416,404 S 726,091 $ - 5 164,981 Retainage payable 1,540 107,974 - 53,703 Claims payable - - - - Arbitrage rebate payable - - - - Due to other governments 169,366 1S,707 - - Deferred compensation - - - - Other deposits held in escrow 106,432 - - 17,750 Deferred revenues 60,120 725,816 3,342,289 - Due to other funds - 11510,985 - - Payable from restricted assets - - - _ Advance from other funds - - 607,500 - Accrued compensated absence* - - - _ Capital leases - - Bonds payable - net of discounts Total liabilities 1.773,862 3,088,653 3.949,789 236.434 Fund Equity and Other Credits: Investment in general fixed assets - - - _ Contributions - - - _ Retained earnings: Reserved - - _ _ Unreserved - - - _ Fund balances: Reserved 1,525,483 - 5,438,240 10,007,154 Unreserved, undesignated 10,985,285 17,853,348 Total fund equity and other credits 12,510,768 17.853,348 5.438,240 10,007,154 Total Liabilities, Fund Equity and Other Credits 114,2&4.630 220,942.001 1 9.300.029 110.2'3.6aa B-4 B-5 The accompanying notes are an integral part of the financial statements. FIDOCIARY PROPRIETARY FUND TYPES FUND TYPES ACCOUNT GROUPS GENERAL TOTALS INTERNAL TRUST AND GENERAL LOHG-TBRM (NO3MORANDUM SS►lEIPRIii SERVICE AGENCY FIXED ASSETS DEET ONLY) S. 2,539,658 8 50,732 8 1,233,355 8 - - $ _ S 21,911,178 36,797,120 966,006 3,758,911 523,091 - - 2,211,885 1,602,039 1,630 5,569 - 3,996,105 - - 1,717,171 1,761 - - - - 1,931,910 117,318 2,812 - - 193,711 218,720 22,901 2,977 - - 667,019 111,921 161,613 13,067 - - - 3,0209,27,012121 3,027,121 - - _ - 18, 18,209,012 - _ _ 105,328 105,326 -_ 2,169,833 2,169,833 _ _ 2,329,290 2,329,290 _ _ 607,500 607,500 111,869,115 285,571 - - 70,889,638 ' 183,011,321 (17,687,961) (221,033) - - - (16,111,991) 725,595 725,595 _ _ 366,133 366,133 - - - _ 1,891 1,891 - 5,138.210 5,138,210 16,585,972 16,585,972 9127,710,383 S 1,063,170 S 1,778,062 570,889,638 A?,,021.212 528/.323.713 $ 618,598 $ 105,255 $ 222,525 S - $ - 6 3,285,851 163,217 - - 1,218,257 - - - 1,218,257 _ _ - - 125,791 125,791 7,157 - 1,071,838 - - 1,267,118 - - 1,116,050 - - 111161050 18,737 - 1,993,131 - - 2,136,353 60,086 - - - - 1,208,313 - - 236,169 - - 1,717,171 7,178,318 - - - - 7,178,318 _ _ - 607,500 189,979 29,855 - - 1,781,225 2,001,059 _ _ _ - 531,196 531,196 11,311,632 - - - 19,580,000 63,921,632 52,711,509 1,353,367 1,613,036 - 22,021,212 89,613,862 _ _ - 70,889,638 - 70,889,636 59,818,017 637,613 - - - 60,185,660 1,320,737 - - - - 1,320,737 10,797,120 2,072,160 - - - 12,869,280 _ _ _ - - 16,970,677 135,026 - - 28,973,659 71,965,871 2,709,603 135,026 70,889,636 - 191,509,851 B-5 The accompanying notes are an integral part of the financial statements. INDIAN RIVER COUNTY, FLORIDA COKSINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVSBNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND Year Ended September 30, 1992 GOVERNMENTAL Expenditures: Current: 12,432,294 SPECIAL General Government GENERAL REVENUE Revenues: $ 30,296,589 $ 9,379,127 Taxes 258,237 10,599 Licenses and permits 4,929,909 3,367,418 Intergovernmental 5,029,207 391,541 Charges for services 507,052 176,594 Fines and forfeitures - 2,262,662 Special assessments 1,377,605 1,123,089 Interest 1,095,422 484,357 Miscellaneous 43,494,021 17,195,387 Total revenues 39,708,955 19,256,198 Expenditures: Current: 12,432,294 703,763 General Government 19,726,154 7,545,775 Public Safety 217,426 Physical Environment 90,968 9,205,847 Transportation 152,612 Economic Environment 2,195,463 1,307,698 Human Services 4,715,077 413,411 Culture/Recreation Debt Service: 106,855 67,475 Principal 72,106 14,229 Interest Capital Projects 39,708,955 19,256,198 Total expenditures Excess of Revenues Over (Under) Expenditures3,785,066 (2,062,811) Other Financing Sources (Uses): 6,219,803 6,842,447 Operating transfers in (12,637,749) (203,791) Operating transfers out 29.669 - Lease purchase proceeds Total other financing sources (uses) (6,388,277) 6,638,656 Excess of Revenues and Other Sources Over (2,603,211) 4,575,845 (Under) Expenditures and Other Uses Fund Balances at Beginning of Year 15,011,826 13,954,590 Residual Fund Equity Transfer In (Out) 102,153 (677,087) Fund Balances at End of Year S 12,510,768 S 17,853,348 B-6 FUND TYPES 223,149 FIDUCIARY FUND TYPE - 80,000 - 13,142,250 EXPENDABLE (286,424) - (13,226,916) TRUST TOTALS DEBT CAPITAL (INMATE (MEMORANDUM SERVICE PROJECTS WELFARE) ONLY) $ 1,586,476 S 4,871,517 S - S 46,133,709 - - - 268,836 1,268,942 717,571 - 10,283,840 - - 129,171 5,549,919 - _ - 683,646 2,436,312 - - 4,698,974 806,522 423,591 - 3,730,507 612 - 1,580,391 6,098,864 6,012,679 129,171 72,930,122 - 13,136,057 94,427 27,366,356 - 217,426 - - 9,296,815 - - 152,612 - - 3,503,161 - - - 5,128,488 4,078,548 - - 4,252,878 1,923,101 - - 2,009,436 5,789,530 5,789,530 6.001,649 5,789,530 94,427 70,852,759 97,215 223,149 34,744 2,077,363 - 80,000 - 13,142,250 (98,952) (286,424) - (13,226,916) 29,669 (98,952) (206,424) - (54,997) (1,737) 16,725 34,744 2,022,366 5,656,699 9,415,495 100,282 44,138,692 (216,722) 574,934 - (2160722) S 5,44,38,240 S 10.007,156 SS 135,026 S 45,944,536 The accompanying notes are an integral part of the financial statements. B-7 m': Expenditures: INDIAN RIVER COUNTY, FLORIDA EXPENDITURES AND CHANGES IN FUND BALANCES - COMBINED STATEMENT OF REVENUES 912,061 General Government 19,957,832 BUDGET AND ACTUAL 231,678 Public Safety 267,711 ALL GOVERNMENTAL FUND TYPES 50,285 Physical Environment 244,107 Year Ended September 30, 1992 153,139 Transportation 154,800 152,612 GENERAL Economic Environment 2,162,652 2,195,463 (32,811) VARIANCE 5,071,351 4,715,077 356,274 FAVORABLE BEET ACTUAL (UNFAVORABLE) Revenues: $ 28,846,124 $ 30,296,589 S 1,450,465 Taxes 173,000 258,237 85,237 Licenses and permits 4,757,780 4,929,909 172,129 Intergovernmental 4,856,713 5,029,207 172,494 Charges for services 487,200 507,052 19,852 Fines and forfeitures - - - Special assessments 1,192,000 1,377,605 185,605 Interest 255,573 1,095,422 839,849 Miscellaneous 40,568,390 43,494,021 2,925,631 Total revenues (6088,277) (623,863) Excess of Revenues and Other Sources Over Other Uses Expenditures: Current: 13,344,355 12,432,294 912,061 General Government 19,957,832 19,726,154 231,678 Public Safety 267,711 217,426 50,285 Physical Environment 244,107 90,968 153,139 Transportation 154,800 152,612 2,188 Economic Environment 2,162,652 2,195,463 (32,811) Human Services 5,071,351 4,715,077 356,274 Culture/Recreation Debt Service: 106,872 106,855 17 Principal9 72,115 72,106 Interest Capital Projects 41,381,795 39,708,955 1,672,840 Total expenditures Excess of Revenues Over (Under) Expenditures (813,405) 3,785,066 4,598,471 Other Financing Sources (Uses): 6,848,851 6,219,803 (629,048) Operating transfers in (12,642,934) (12,637,749) 5,185 Operating transfers out 29,669 29,669 - Lease purchase proceeds Total other financial sources (uses) (51764,414) (6088,277) (623,863) Excess of Revenues and Other Sources Over Other Uses 81�) (2,603,211) S 3.974.608 (Under) Expenditures and Fund Balances at Beginning of Year 15,011,826 Residual Fund Equity Transfer In (Out) 102,153 S 12.10.768 Fund Balances at End of Year B-8 DEBT SERVICE VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 1,567,784 $ 1,586,476 $ 18,692 1,324,945 1,268,942 (56,003) 2,721,947 2,436,312 (285,635) 762,423 806,522 44,099 612 612 6,377099 6,098.864 (278,235) 800,610 SPECIAL REVENUE 96,847 - - VARIANCE 7,850,677 7,545,775 FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 9,203,589 $ 9079,127 6 175,538 - 10,599 10,599 2,569,452 3,367,418 797,966 457,651 391,541 (66,110) 80,760 176,594 95,834 2,628,952 2,262,662 (3660290) 1,007,050 1,123,OB9 116,039 420,217 484,357 64,140 16,367,671 17,195,387 827,716 DEBT SERVICE VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 1,567,784 $ 1,586,476 $ 18,692 1,324,945 1,268,942 (56,003) 2,721,947 2,436,312 (285,635) 762,423 806,522 44,099 612 612 6,377099 6,098.864 (278,235) 800,610 703,763 96,847 - - - 7,850,677 7,545,775 304,902 - - 17,916098 9,205,847 8,710,551 1,376,536 1,307,698 70,838 - - 479,350 413,411 65,939 - - - 87,699 67,475 20,224 4,078,549 4,078,548 1 19,430 14,229 5,201 2,062,178 1,923,101 139,077 28,532,700 19,258,198 9,274,502 6,140,727 6,001,649 139,078 (12,165,029) (2,062,811) 10,102,218 236,372 97,215 (139,157) 6,842,447 6,842,447 - - - (203,791) (203,791) - (728,000) (98,952) 629,048 6,638,656 6,638,656 - (728,000) (98,952) 629,048 S (5,526,373) 4,575,845 �S 10.102.218 S (491.628) (1,737) S 489.891 13,954,590 5,656,699 (677,087) (216,722) S 17,653,348 S 5,438,240 Continued The accompanying notes are an integral part of the financial statements. B-9 INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED ALL GOVERNMENTAL FUND TYPES Year Ended September 30, 1992 Revenues: Taxes Licensees and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest Miscellaneous Total revenues Expenditures: Current: General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture/Recreation Debt Service: Principal Interest Capital Projects Total expenditures Excess of Revenues Over (Under) Expenditures CAPITAL PROJECTS VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 4,961,657 $ 4,871,517 $ (90,140) 1,056,842 717,571 (339,271) 483,158 423,591 (59,567) 6,501,657 6,012,679 (488,978) 12,472,816 5,789,530 6,683,286 12,472,816 5,789,530 6,683,286 (5,971,159) 223,149 6,194,308 Other Financing Sources (Uses): Operating transfers in 80,000 80,000 Operating transfers out (286,424) (286,424) Lease purchase proceeds - Total other financial sources (uses) (206.424) (206,424) Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses S (6,177,583) Fund Balances at Beginning of Year Residual Fund Equity Transfer In (Out) Fund Balances at End of Year B-10 16,725 S 6.94,308 9,415,495 574,934 S 10,007,154 14,144,965 27,808,509 267,711 18,160,505 154,800 3,541,188 5,550,701 4,273,120 2,153,723 12,472,816 88,528,038 (18,713.221) 13,771,298 (13,861,149) 29.669 (60,182) S(18,773�,403) 13,136,057 27,271,929 217,426 9,296,815 152,612 3,503,161 5,128,488 4,252,878 2,009,436 5.789,530 70,758,332 2,042,619 13,142,250 (13,226,916) 29,669 (54,997) 1,987,622 44,036,610 (216,722) S 45,809,510 1,008,908 536,580 50,285 8,863,690 2,168 38,027 422,213 20,242 144,287 6,683,286 17,769.706 20,755,840 (629,048) 634,233 5,185 S 20.761.025 The accompanying notes are an integral part of the financial statements. B-11 TOTALS (MEMORANDUM ONLY) f- VARIANCE FAVORABLE BEET ACTUAL (UNFAVORABLE) $ 44,579,154 S 46,133,709 $ 1,554,555 173,000 268,836 95,836 9,709,019 10,283,840 574,821 5,314,364 5,420,748 106,384 567,960 683,646 115,686 i 5,350,899 4,698,974 (651,925) 3,444,631 3,730,807 286,176 ? 675,790 1,580,391 904,601 69,814,817 72,800,951 2,986,134 14,144,965 27,808,509 267,711 18,160,505 154,800 3,541,188 5,550,701 4,273,120 2,153,723 12,472,816 88,528,038 (18,713.221) 13,771,298 (13,861,149) 29.669 (60,182) S(18,773�,403) 13,136,057 27,271,929 217,426 9,296,815 152,612 3,503,161 5,128,488 4,252,878 2,009,436 5.789,530 70,758,332 2,042,619 13,142,250 (13,226,916) 29,669 (54,997) 1,987,622 44,036,610 (216,722) S 45,809,510 1,008,908 536,580 50,285 8,863,690 2,168 38,027 422,213 20,242 144,287 6,683,286 17,769.706 20,755,840 (629,048) 634,233 5,185 S 20.761.025 The accompanying notes are an integral part of the financial statements. B-11 INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF REVENUES EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES Year Ended September 30, 1992 Operating Revenues: Charges for services Operating Expenses: Personal services Materials, supplies, services and other operating Depreciation Total operating expenses Operating Income Nonoperating Revenues (Expenses): Interest income Operating grants Gain on disposal of equipment Interest expense Bond amortization expense Intangible amortization expense Loss on disposal of equipment Total nonoperating revenues (expenses) Income Before Operating Transfers Operating Transfers In Net Income Add: Depreciation on Fixed Assets Acquired with Contributed Capital Increase in Retained Earnings Retained Earnings at Beginning of Year Retained Earnings at End of Year TOTALS INTERNAL (MEMORANDUM ENTERPRISE SERVICE ONLY) $18,271,108 $2,369,895 $20,641,003 6,627,713 509,317 7,137,030 6,229,148 965,521 7,194,669 4,509,806 29,491 4,539,297 17,366,667 1,504,329 18,870,996 904,441 865,566 1,770,007 1,820,184 209,903 2,030,087 215,111 - 215,111 2,497 5,722 6,219 (1,861,904) - (1,861,904) (55,669) - (55,669) (23,218) - (23,218) (56,847) (280) (57,127) 40,154 215,345 255,499 944,595 11080,911 2,025,506 84,666 - 84,666 1,029,261 1,080,911 2,110,172 1,281,704 - 1,281,704 2,310,965 11080,911 3,391,876 12.806,892 991,249 13,798,141 S15.11 7857 $2.072.160 $17.190.017 The accompanying notes are an integral part of the financial statements. B-12 INDIAN RIVER COUNTY, FLORIDA 4 - COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES Year Ended September 30, 1992 Continued The accompanying notes are an integral part of the financial statements. B-13 TOTALS INTERNAL (MEMORANDUM 4_( ENTERPRISE SERVICE ONLY) Cash Flows from Operating Activities: Cash received from customers S 18,029,788 $ 2,382,347 $ 20,412,135 '3 Cash payments to suppliers for goods A 41 and services (4,825,411) (1,774,758) (6,600,169) Cash payments to employees for services (6,595,244) (502,210) (7,097,454) Net cash provided by operating activities 6,609,133 105,379 6,714,512 Cash Flows from Noncapital Financing Activities: ;i Operating transfers in 84,666 - 84,666 {` Operating grants 215,111 - 215,111 Net cash provided by noncapital t financing activities 299,777 - 299,777 ?t Cash Flows from Capital and Related Financing I Activities: 4_ Proceeds from issuance of long-term debt 10,101,779 - 10,101,779 5 Principal paid on long-term debt (4,670,600) - (4,670,600) Interest paid on long-term debt (2,577,318) - (2,577,318) Proceeds from sale of fixed assets 4,182 8,264 12,446 Purchase of fixed assets (18,943,280) (4,597) (18,947,877) Bond paying agent fees (4,886) (4,886) Bond issuance costs (226,673) (226,673) Capital contributed by others 6,560,624 - 6,560,624 Net cash provided by (used in) capital and related financing activities (9,756,172) 3,667 (917521505) Cash Flows from Investing Activities: Purchase of special assessments (660,312) - (660,312) Purchase of investment securities (20,975,466) (4,687,085) (25,662,551) Proceeds from sale and maturities of investment securities 16,073,091 3,037,640 19,110,731 Interest and dividends on investments 2,336,705 387,629 2,724,334 Net cash used in investing activities (3,225,982) (1,261,816) (4,487,798) f. Net Decrease in Cash and Cash Equivalents (61073,244) (1,152,770) (7,226014) Cash and Cash Equivalents at Beginning of Year 11,640,223 1,203,502 12,843,725 i, Cash and Cash Equivalents at End of Year S 5.566.979 S 50.732 S 5.617.711 Continued The accompanying notes are an integral part of the financial statements. B-13 Current assets l` Restricted assets 1i Totals INDIAN RIVER COUNTY, FLORIDA BINED STATEMENT OF CASH FLOWS - CONTINUED ALL PROPRIETARY FUND TYPES Year Ended September 30, 1992 Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Amortization (Increase) decrease in assets: Accounts receivable Due from other funds Due from other governments Inventories Deposits Increase (decrease) in liabilities: Accounts payable Due to other governments Other deposits in escrow Accrued payroll Customer deposits Closure costs payable Deferred revenues Claims payable Arbitrage rebate payable Accrued compensated absences Total adjustments Net Cash Provided by Operating Activities TOTALS INTERNAL (MEMORANDUM ENTERPRISE SERVICE ONLY) $ 2,539,858 $ 50,732 S 2,590,590 3,027,121 - 3,027,121 S 5,566,979 SS 50,732, S 5,617,711 $ 904,441$ 865,566 $ 1,770,007 4,509406 29,491 4,539,297 (3,744) - (3,744) (534,820) 8,094 (526,726) (1,761) 7,200 5,439 162,635 (2,842) 159,793 (55,172) (8,025) (63,197) 42,975 - 42,975 178,610 50,980 229,790 2,543 - 2,543 2,221 - 2,221 (543) - (543) 79,550 - 79,550 956,581 - 956,581 54,599 - 54,599 - (852,192) (852,192) 278,000 - 278,000 33,012 7,107 40,119 5,704,692 (760,187) 4,944,505 S 6609,133 S 105,379 S 6,714.12 Noncash Capital and Related Financing Activities: Contributed property, plant and equipment S 876,853 S - S _876,853 The accompanying notes are an integral part of the financial statements. B-14 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEN ENT S Year Ended September 30, 1992 1. Summary of Significant Accounting Policies: Indian River County, Florida (the 'County") is a political subdivision of the State of Florida. It is governed by an elected Board of County Commissioners (the "Board") which is governed by state statutes and regulations. In addition to the members of the Board, there are five elected Constitutional Officers: Clerk of the Circuit Court, Sheriff, Tax Collector, Property Appraiser, and Supervisor of Elections. The Constitutional Officers maintain separate accounting records and budgets. The accompanying financial statements present the combined financial position and combined results of operations of the various fund types and account groups and the combined statement of cash flows of the proprietary fund types for the funds controlled by the Board and the County's Constitutional Officers. The Board funds a portion or, in certain instances, all of the operating budgets of the County's Constitutional Officers. The payments by the Board to fund the opera- tions of the Constitutional Officers are recorded as operating transfers out on the financial statements of the Board and as operating transfers in or charges for services on the financial statements of the Constitutional Officers. Accordingly, such amounts and the budget relating to those amounts have been eliminated in the accompanying combined financial statements. The accounting policies of the County conform to generally accepted accounting principles, as applicable to governments. The following is a summary of the more significant policies. A. Reporting Entity - Generally accepted accounting principles require that finan- cial operations of governmental departments, agencies, commissions or authori- ties over which the governmental unit's elected officials have oversight respon- sibility be included in the reporting entity's financial statements. Criteria used to determine if an agency should be included in the County's report were the oversight responsibility and the scope of public service. Oversight responsibility implies that an agency is dependent on another. The manifestations of oversight responsibility are financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters. The manifestations of scope of public service are whether the activity is for the benefit of the reporting entity and/or its residents and whether the activity is conducted within the geographic boundaries of the reporting entity and is generally available to the citizens of that entity. B-15 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summary of Significant Accounting Policies - Continued: A. Rerwrtin, Entitv - Continued - Applying the criteria above has caused the inclusion of the following entities: Indian River County Housing Authority (IRCH - The IRCHA was included in the report because the Board provides the primary funding for the operations of the IRCHA. The Board maintains budgetary control over the operating costs of the IRCnh. addition, they provide use Of certain furniture Due to theproprietary nature of the and equipment IRCHAatno charge. S operations, the IRCHA is reported as an enterprise fund. For budgetary control, the Board maintains a Special Revenue Fund to account for the operating costs of the IRCHA. Funding is provided from operating transfers from the Board's General Fund, Section 8 Rental Assistance Special Revenue Fund and o eratIg grants received from the State of Florida. Since the operating have been properly reported in the enterprise fund, the Special ufromn the sBbeen eliminated for the purposes of this report. Appropriations totaled $69,852 and the related actual operating costs totaled $84,666 for the fiscal year. The IRCHA cannot overspend appropriations in total. Solid Waste Disposal District ISWDDI - The SWDD was included in the report because the Board site as the Board for the SWDD and sets the non ad valorem assessment fees for the SWDD. The SWDD is included as an enterprise fund. North Indian River Count Fire District West Indian River County Fire District and South Indian River County Fire District - The fire districts were included in the report because the Board sits as the Board for each fire district, approves the budget and sets the millage rate for each fire district, and desig- nates the management of each fire district. The fire districts are reported as special revenue funds. The following entities, which meet the scope of public service criteria, have been excluded from this report: Indian River County School Board District (IRCSBDI - The IRCSBD has a separately elected board, maintains its own financial records and reports to the Florida Department of Education. Indian River Count v Hospital (IRCH) - The IRCH has a separately elected board, maintains its own financial records, can issue debt with the approval of its board or the voters, and issues its own report. Indian River Coup Mosquito Control District (IRCMgDl - The IRCMCD has a sepa- rately elected board, maintains its own financial records, and issues its own report. Indian River County Health Department (IRCHD) - The Board does provide some funds for the operations of the IRCHD, sets part of the fee schedule, and must provide the facilities for the IRCHD. However, the Florida Department of Health and Rehabilitation appoints the management of the IRCHD, maintains the financial records, and includes the IRCHD in its own report. The funds and facilities provided by the Board are mandated by the Florida State Statutes. B-16 INDIAN RIVER COUNTY, FLORIDA NOTES To FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summary of Significant AQQOuntina Policies - Continued: B. Fund Accounting - The accounts of the County are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self - balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allo- cated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are con- trolled. The purpose of the County's various funds and account groups is as follows: Governmental Funds General Fund - The General Fund is the general operating fund of the County. It is used to account for all financial resources, except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Funds - Debt Service Funds are used to account for the accu- mulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). Proprietary Funds Enterprise Funds - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. B-17 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summary of Significant Accounting Policies - Continued: Proprietary Funds - Continued Internal Service Funds - The Fleet Management and Self Insurance Internal Service Funds are used to account for the financing of goods and services provided to other departments or agencies of the County, on a cost - reimbursement basis. Fiduciary Funds Trust and Agency Funds - Trust and Agency Funds are used to account for assets held by the County in a trustee capacity or as an agent for indi- viduals, private organizations, other governments, and/or other funds. These include Agency Funds and an Expendable Trust Fund. Account Groups General Fixed Assets - To account for all fixed assets of the County, except fixed assets of proprietary funds. General Lona -Term Debt - To account for all the outstanding principal balances of general and special obligation bonds, notes, capital leases and compensated absences of the County, except long-term obligations of proprietary funds. C. Measurement Focus Governmental Fund Types - General, Special Revenue, Debt Service and Capital Projects Funds are accounted for on a "spending" or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on the balance sheets. Accordingly, the reported unreserved fund balance (net current assets) is considered a measure of available, spend- able or appropriable resources. Governmental Fund Type operating statements present increases (revenues and other financing sources) and decreases (expendi- tures and other financing uses) in net current assets. Proprietary Fund Types - The Enterprise and Internal Service Funds are accounted for on an "income determination" measurement focus. Accordingly, all assets and liabilities are included on the balance sheet, and the reported fund equity (total reported assets less total reported liabilities) provides an indication of the economic net worth of the fund. Operating statements for the Proprietary Fund Types report increases (revenues) and decreases (expenses) in total eco- nomic net worth. Fiduciary Fund Types - The Expendable Trust Fund is accounted for in the same manner as Governmental Funds. The Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. B-18 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summery of Significant Accounting Policies - Continued: C. Measurement Focus - Continued Account Groups - The General Fixed Assets Account Group and the General Long - Term Debt Account Group are concerned only with the measurement of financial position. They are not involved with the measurement of results of opera- tions. Fixed assets, which are not used in Proprietary Fund operations, are accounted for in the General Fixed Assets Account Group. Depreciation is not charged on the general fixed assets. Long-term debts, which are not intended to be financed through the Proprietary Funds, are accounted for in the General Long -Ter■ Debt Account Group. D. Basis of Accounting - Basis of accounting refers to when revenues and expendi- tures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All Governmental Funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Primary revenues, including taxes, intergovernmental revenues, charges for services, rents and interest are treated as susceptible to accrual under the modified accrual basis. Other revenue sources are not considered measurable and available, and are not treated as susceptible to accrual. Expenditures are generally recog- nized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule is that principal and interest on general long-term debt is recognized when due. Proprietary Funds - The Enterprise and the Internal Service Funds are accounted for using the accrual basis of accounting. Under this method, revenues are recognized when they are earned and expenses are recognized when they are incurred. Unbilled utility receivables are recorded at year end. Fiduciary Funds - The Expendable Trust Fund and the Agency Funds are accounted for on the modified accrual basis. E. Cash and Investments - The County maintains a cash and investment pool that is available for use by all funds. This pool has deposits, and all highly liquid investments (including restricted assets) with maturities of ninety days or less when purchased. In addition longer-term investments are held by several of the County's funds. Pooled cash is classified as "Cash and Cash Equivalents" and pooled investments are combined with other separate investments and classified as "Investments" in the financial statements. Cash and cash equivalents of Constitutional Officers are maintained in separate accounts, but have been combined with the Board's cash and cash equivalents for financial statement purposes. B-19 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30. 1992 I. Summary of Significant Accounting Policies -_Continued: F. Investments - Investments consist of Repurchase Agreements, U.S. Treasury Securities, U.S. Government Agency Securities, and the Local Government Surplus Funds Trust Fund that are recorded at cost, which approximates market value. Investments held in the deferred compensation plan are recorded at market. G. Allowance for Doubtful Accounts - The County provides an allowance for water and sewer accounts receivable that may become uncollectible. At September 30, 1992, this allowance was $23,000. The Housing Authority provides an allowance for rents receivable which may become uncollectible which amounted to $7,592 at September 30, 1992. No other allowances for uncollectible accounts are main- tained since other fund accounts receivable are considered collectible as reported at September 30, 1992. H. Inventories - Inventories are valued at cost, which approximates market, using the •first -in, first -out" method of accounting. The costs of General Fund and Expendable Trust Fund inventories are recorded as expenditures when consumed rather than when purchased. Inventory of the Clerk of the Circuit Court, included in the Combined Agency Funds, represents documentary stamps on consign- ment from the State of Florida. Stamps are carried at cost, which is their face value. I. Property Plant and Equipment (1) Property, plant and equipment purchased in the Governmental Fund Types are recorded as capital outlay expenditures at the time of purchase. Such assets are capitalized at cost in the General Fixed Assets Account Group, except for certain improvements other than buildings ("infrastructure") such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems. Donated and confiscated assets are recorded in the general fixed assets at their fair market value at the time received. No depreciation has been provided on general fixed assets. The Board holds legal title for the general fixed assets used in the operations of the Board, Property Appraiser, Tax Collector, Supervisor of Elections, and Clerk of the Circuit Court and is accountable for them under Florida law. The Sheriff is accountable for and thus maintains general fixed asset records pertaining only to equipment used in his operations. These assets have been combined with the Board's general fixed assets in the General Fixed Assets Account Group. B-20 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summary of Significant Accounting Policies - Continued: I. Property, Plant and Equipment - Continued (2) Property, plant and equipment of the Proprietary Fund types are recorded at cost. Donated property, plant and equipment are capitalized at their fair market value at the time received. Depreciation is provided using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The estimated useful lives of the various classes of depreciable assets are as follows: Assets Years Building and improvements 25 - 40 Machinery and equipment 3 - 10 Utility distribution systems 25 - 50 J. Capitalization of Interest - Interest costs related to bond issues are capital- ized during the construction period. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the Housing Authority, the Solid Waste Disposal District and the Water and Sewer System Enterprise Funds incurred interest expense during the construction period totaling 8845,624. Related interest earnings on construction fund investments totaled 8448,003 for net capitalized interest of 8397,621. K. Unamortized Bond Costs - Bond Issue costs and legal fees associated with the issuance of Proprietary Fund revenue bonds are amortized over the life of the bonds using the straight-line method of accounting. L. Unamortized Bond Discount - Bond discount associated with the issuance of Proprietary Fund revenue bonds are amortized according to the interest method, which results in a constant rate of interest being applied to the amount out- standing at any given time. For financial reporting, unamortized bond discount is netted against applicable long-term debt. M. Intangible Assets - Land use rights were purchased by the Water and Sewer System Fund from the Golf Course Fund for irrigating the golf course with treated effluent. Leachate disposal rights were purchased by the Solid Waste Disposal Fund from the Water and Sewer System Fund for removal and transporation of leachate from the County landfill to the sewer system. These assets are being amortized using the straight-line method over the estimated useful life of 20 years. B-21 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEN ENTS - CONTINUED Year Ended September 30, 1992 1. SummarV of Significant Accountina Policies - Continued: N. Deferred Revenues - Deferred revenues reported in applicable Governmental Fund Types represent unearned revenues or revenues which are measurable but not available and, in accordance with the modified accrual basis of accounting, are reported as deferred revenues. The deferred revenues will be recognized as revenue in the fiscal year they are earned or become available. y records nsated absences in the O. Accrual Governmental Hund Types isated s as an expenditureences - The for he amount eaccrued during the year that would normally be liquidated with expendable available financial resources. The remainder of the liability is reported in the General Long -Term Debt Account Group. Proprietary Fund Types accrue compensated absences in the period they are earned. P. Obligation for Bond Arbitrate Rebate - Pursuant to Section 148(f) of the U.S. Internal Revenue Code, the County must rebate to the United States Government the excess of interest earned from the investment of certain debt proceeds and pledged revenues over the yield rate of the applicable debt. This payment is typically due five years after original issuance of the debt. Amounts reflected in the balance sheet represent the latest available calculations of the County's accumulated rebate liability as of the balance sheet date. Rebate liability associated with general government debt is reported in the General Long -Term Debt Account Group until the year in which it must be paid from current resources, at which time it is reflected as a fund liability. Rebate liability for enterprise debt is reported in the applicable enterprise fund. 0. Landfill Closure Costs - Under the terms of current state and federal regula- tions, the Solid Waste Disposal District (SWDD) is required to place a final cover on closed landfill areas, and to perform certain monitoring and maintenance functions for a period of up to thirty years after closure. The SWDD recognizes these costs of closure and post -closure maintenance over the active life of each landfill area, based on landfill capacity used during the period. Required obligations for closure and post -closure costs are recognized in the Solid Waste Disposal District Enterprise Fund. R. Contributions - The contributions accounted for in the Proprietary Fund Types represent contributions from other funds, State and Federal Aid programs, and impact fees charged to new customers for their anticipated burden on the existing system. Depreciation expense on contributed fixed assets is reflected in the statement of revenues, expenses and changes in retained earnings. Depreciation on contributed fixed assets is transferrred to the related contribution accounts (reducing contributions) instead of retained earnings. B-22 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEN ENT I - CONTINUED Year Ended September 30, 1992 1. Summary of Significant Accounting Policies - Continued: S. Budgets and Budaetary Accounting - The County uses the following procedures in establishing the budgetary data reflected in the financial statements: (1) The Constitutional Officers submit, at various times, to the Board and to certain divisions within the Department of Revenue, State of Florida, a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. (2) The Department of Revenue, State of Florida, has the final authority on the operating budgets for the Tax Collector and Property Appraiser included in the General Fund. (3) On or before July 15 of each year, the Director of the Office of Management and Budget, as the Board's designated budget officer, submits to the Board a tentative budget for the ensuing fiscal year. The tenta- tive budget includes proposed expenditures and the means of financing them. The Board then holds workshops to review the tentative budget by Fund on an object level. (4) During September, public hearings are held pursuant to Section 200.065 of the Florida Statutes in order for the Board to receive public input on the tentative budget. At the end of the last public hearing, the Board enacts ordinances to legally adopt the budgets at the fund level for all govern- mental fund types. The budgets legally adopted by the Board set forth the anticipated revenues by source and the appropriations by function. (5) Formal budgetary integration of an object level is used as a management control device for the governmental funds of the County. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. Board approval to amend the budget is only required when unanticipated revenues are received that management wishes to have appropriated thereby increasing the total appropriations of a fund. B-23 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summary of Significant Accounting Policies - Continued: S. Budgets and Budgetary Accounting - Continued (6) Revisions made to the original budget by the Board for unanticipated revenues were as follows: B-24 Original Total Revised Budget Revisions Budget General Fund $42,786,468 $(1,404,673) $41,381,795 Special Revenue Funds: Road Improvement Fees 5,773,665 7,182 5,780,847 Police Academy 55,000 40,000 95,000 Section 8 - Rental Assistance 1,195,395 153,055 1,348,450 Secondary Road Construction 1,472,500 50,412 1,522,912 Transportation 7,428,058 484,129 7,912,187 Special Law Enforcement 183,620 (15,992) 167,628 South County Fire District 5,937,505 378,741 6,316,246 North County Fire District 1,123,727 63,795 1,187,522 West County Fire District 204,904 1,506 206,410 Tourist Development 314,500 127,000 441,500 Petition Paving 2,299,300 12,696 2,311,996 911 Surcharge 228,800 72,197 300,997 Street Lighting Districts 155,060 3,955 159,015 Debt Service Funds: Route 60 Sewer Assessment Bonds 378,036 1,605,501 1,983,537 North County Sewer Assessment Bonds 1,038,538 150,000 1,188,538 Capital Projects Funds: Treasure Shores Park 800000 270,000 350,000 Optional Sales Tax 1,483,500 730,385 2,213,885 Library Construction 595,355 (266,424) 308,931 (7) Budgets for the governmental fund types are adopted on a basis consistent with generally accepted accounting principles. (8) Appropriations for the County lapse at the close of the fiscal year. B-24 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 1. Summary of Significant Accounting Policies - Continued: T. Total Columns on Combined Statements - overview - Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable in a consolidation. Interfund eliminations have not been made in the aggregation of these data. 2. Cash and Investments$ The County maintains a cash and investment pool that is available for use by all funds except those whose cash and investments must be segregated due to bond cove- nants or other legal restrictions. Deposits - At September 30, 1992, the carrying amount of the County's deposits was $6,083,317 made up of demand deposits, certificates of deposit, money market accounts, savings accounts and petty cash. All deposits with financial institutions were 100% insured by federal depository insurance or by collateral pursuant to the Public Depository Security Act of the State of Florida. Various deposits were earning interest from 2.85-9.7%. Investments - Florida Statutes, the Board of County Commissioners' Investment Policy, and various bond covenants authorize investments in certificates of deposit, money market accounts, savings accounts, repurchase agreements, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, obligations of the U.S. Government, and government agencies unconditionally guaran- teed by the U.S. Government. Money market accounts, savings accounts, and bank balances are reported as cash and cash equivalents above. The County invested in only these types of instruments during the fiscal year. B-25 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 2. Cash and Investments - Continued: Investments - Continued - The County's investments are categorized below to give an indication of the level of risk assumed at year end. Category 1, defined as insured or registered or for which the securities are held by the County or its agent in the County's name. Category 2, defined as uninsured and unregistered, with securities held by the counterparty's trust department in the County's name. Schedule of Investments at September 30, 1992 Category Carrying Market 1 2 Amount Value Repurchase Agreements S - $ 66,000 S 66,000 $ 66,000 Certificates of Deposit 13,926 - 13,928 13,928 U.S. Treasury Securities 8,495,646 - 8,495,646 8,854,669 U.S. Government Agency Securities 47,763,631 - 47,763,631 48,498,347 $5627 05 5 66.000 56,339,205 57,432,944 Local Government Surplus Funds Trust Fund 16,439,159 16,439,159 Total Investments 572.77.364 573,872,103 In addition to the cash and temporary cash investments listed above, employee deferred compensation plan (see Note 10) cash and temporary cash investments were $1,116,050, which are carried at market value. These investments are held separately from those of other County funds. As prescribed by the plan documents, the investment portfolios include investment obligations of the U.S. Government, mutual funds and money market accounts, and are held by the plan administrators but not in the County's name. B-26 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 3. Property Tax Revenues: Property tax revenues recognized for the 1991-92 fiscal year were levied in October, 1991. Virtually all unpaid taxes are collected via the sale of tax certificates prior to fiscal year end, therefore, there were no material taxes receivable at fiscal year end. Rey dates in the property tax cycle (latest date where appropriate) are as follows: Revenues for Fiscal Year Endina September 30, 1992 Date of lien January 1, 1991 Assessment roll certified October 10, 1991 P rt taxes levied October 31, 1991 rope y Beginning of fiscal year for which taxes have been levied Tax bills rendered Property taxes payable: maximum discount Delinquent Tax certificates sold on unpaid property taxes B-27 October 1, 1991 October 31, 1991 November 30, 1991 April 1, 1992 may 28, 1992 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 4. Property Plant and Equipment: A. General Fixed Assets - A summary of changes in the General Fixed Assets Account Group follows: Total Buildings Property, and Construction Plant and Land Improvements Equipment in Procres8 Equipment Balance at October 1, 1991 $17,068,064 Additions 2,548,255 Deletions - $30,692,697 $18,077,021 $ 779,947 $66,617,749 111,655 1,004,075 3,300,541 6,964,726 44,052 2,648,785 2,692,837 Balance at Septem- ber 30, 1992 S19.616.339$30,8.552 $19,037,044 S 1,431,703S70.889,638 B. Proprietary Fund Type Fixed Assets - A summary of proprietary fund type property, plant and equipment follows: Land Buildings, distribution systems and improvements Equipment Construction in progress Total Property, Plant and Equipment Less: Accumulated depreciation Total B-28 Internal Enterprise Service $ 6,127,638 S - 76,965,469 113,977 8,491,204 171,594 20,284,804 - 111,869,115 285,571 (17,887,961) (224,033) S 93,981,154 S 61,538 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEN ENT S - CONTINUED Year Ended September 30, 1992 5. Restricted Cash and Cash Equivalents and Investments: Various bond covenants, resolutions and state regulations require that the County restrict -,;cash and cash equivalents and investments within the Enterprise Funds. Restricted cash and cash equivalents and investments are as follows: Solid Waste Water Disposal Golf and Sewer Housing District Course System Authority Total Sinking Funds $1,251,100 $1,285,321 $3,518,557 $ 11,951 $ 6,066,929 Renewal i Replace- ment and Capital Projects 1,541,893 1,376,240 5,187,216 126,893 8,232,242 Customer Deposits 26,200 - 723,909 12,344 762,453 Capital Construction 1,987,486 - - 72,346 2,059,834 Closure i Mainte- nance Costs 3,836,675 - - - 3,836,675 Arbitrage Rebate Payable 278,000 - - - 278,000 $8.921.354 $2.661.561 S9,429,682 $223,536 521.236.133 6. Payable from Restricted Assets: Liabilities payable from the County's Enterprise Funds restricted assets listed above are as follows: Solid Waste Water Disposal Golf and Sewer Housing District Course System Authority Total Accounts payable $ - S 554,723 $ 849,239 $176,993 $ 1,580,955 Retainage payable - 259,342 374,380 - 633,722 Arbitage rebate payable 278,000 - - - 278,000 Accrued interest payable 151,350 49,410 476,032 4,540 681,332 Bonds payable (current portion) 480,000 50,000 242,800 165,000 937,800 Closure costs payable 2,605,675 - - - 2,605,675 Customer deposits 26,200 - 723,837 10,797 760,834 13,541.225 L-211,121 52,666.288 $357,330 57.478,318 B-29 w t INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED €; i Year Ended September 30, 1992 E 7. Interfund Accounts: The following is a summary of interfund receivables and payables as of September 30, 1992 which includes Due To/Due From and Advance To/Advance From Other Funds. i Fund Receivable Payable i General Fund $1,684,611 $ - fSpecial Revenue Funds: 51000 - Policy Academy 4,228 ' Court Facilities 6,500 - South County Fire District i North County Fire District 2,659 28,736 ' 1,500,000 1 Petition Paving 9 _ west County Fire District 739 ' Drug Abuse 10,985 10,985 Criminal Justice Debt Service Funds: 1,946 - Library Bonds North County Bower Assessment Bonds (recorded as an Advance From _ 607,500 Other Funds) Enterprise Funds: Solid Waste Disposal District 1,761 _ Water and Sewer System (recorded as an Advance to Other Funds) 607,500 ' Agency Funds: _ 79,704 Clerk _ 156.485 Tax Collector S2.3� 5� S2.3_ 5�4 Totals B-30 INDIAN RIVER COUNTY. FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 8. Long -Term Debt: A. Enterprise Fund Revenue Bonds - The County has adopted resolutions for bonds payable that provide for various covenants. These covenants are listed below for each bond payable. Solid Waste Disposal System Revenue Bonds, Series 1988 (1) Pledge of Revenue - The Series 1988 bonds are payable from and collateral- ized by a lien on net revenues of the system, including the proceeds derived from the collection of disposal charges which are annual assess- ment charges against assessable property for the disposal of solid waste. (2) Establishment of Various Accounts a. Operating account to pay all operating and maintenance costs of the system. b. Sinking Fund account to pay principal and interest payments coming due during the current fiscal year. c. Reserve account to accumulate an amount equal to the maximum amount of principal and interest coming due in any ensuing fiscal year. d. Renewal and Replacement Fund and capital projects account to pay for the costs of enlargements, replacements or emergency repairs to the system. The amounts to be maintained in these accounts are determined by consulting engineers. The amounts in these accounts are restricted by the bond resolution. (3) Other Covenants - The resolution provides for several additional covenants such as required revenue rates, minimum insurance levels, adoption of annual budget, and certain required engineering reports. (4) Bonds Issued - At September 30, 1992, the revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Description Date Maturity Issue 1992 1988 Solid Waste Disposal System 5.25%-7.41 Revenue Bonds 6/1 and 12/1 6/1/02 $8,240,000 $ 6,555,000 Less: Current portion 480,000 Long -Term Portion S 6.075.000 B-31 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATP1MNTS - CONTINUED Year Ended September 30, 1992 8. Lona -Term Debt - Continued: Solid Waste Disposal System Revenue Bonds Series 1988 - Continued (5) optional Redemption - The revenue bonds maturing on or after June 1, 1997 are subject to redemption prior to maturity, at the option of the County on and after June 1, 1996, in whole at any time or in part on any interest payment date at par plus accrued interest and plus a premium ranging between 00 and 2% depending on the year of redemption. Recreational (Golf Courses Revenue Bonds, Series 1985 and 1991 (1) Pledge of Revenue - The revenue bonds are collateralized by a lien on the net revenues derived from the operations of the project and racetrack and jai alai fronton funds accruing annually to the County. (2) Establishment of Various Accounts a. operating accounts to reflect all transactions which relate to the project. b. Sinking Fund account to pay principal and interest coming due during the current fiscal year. The amounts in this account are restricted by the bond resolution. c. Reserve Fund account to accumulate an amount equal to the maximum amount of principal and interest coming due in any ensuing fiscal year. This account may be established at the option of the Board of County Commissioners. The amounts in this account are restricted by the bond resolution. d. Renewal and Replacement Fund account to pay for the costs of exten- sions, enlargements, additions, replacements or emergency repairs to the system. The amounts deposited into this account are determined by the County Administrator. The amounts in this account will be restricted by the bond resolution. B-32 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 8. Long -Term Debt - Continued: Recreational (Golf Course) Revenue Bonds, Series 1985 and 1991 - Continued (3) Other Covenants a. The proceeds of these bond issues are to finance the construction of a public golf course and related clubhouse facility, and interest on the bonds for the first three years. b. The bond resolution provides for additional covenants such as annual audit requirement and minimum insurance levels. (4) At September 30, 1992, these revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Dates Maturity Issue 1992 1985 Recreational 6.40%-7.60% Revenue Bonds 3/1 and 9/1 9/1/15 $2,720,000 $ 2,635,000 1991 Recreational 5.350-6.8751 Revenue Bonds 3/1 and 9/1 9/1/16 $6,015,000 6,015,000 Less: Current portion 50,000 Unamortized discount 188,413 Long -Term Portion S 8,411,587, (5) Optional Redemption a. The Revenue Bonds, Series 1985 maturing on or after September 1, 1996 are subject to redemption prior to maturity, at the option of the County on and after September 1, 1995, in whole at any time or in part on any interest payment date at par plus accrued interest and plus a premium ranging between 0% and 2% depending on the year of redemption. b. The Revenue Bonds, Series 1991 maturing on or after September 1, 2000 are subject to redemption prior to maturity, at the option of the County on and after September 1, 1999, in whole at any time or in part on any interest payment date at par plus accrued interest and plus a premium ranging between 0% and 2% depending on the year of redemption. B-33 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 8. Long -Term Debt - Continued: Water and Sewer Revenue Bonds, Series 1986 and 1986A (1) Pledge of Revenues - The revenue bonds are collateralized by a pledge of all net revenues of the system and impact fees. (2) Establishment of Various Accounts a. Revenue Fund account to pay all operating and maintenance costs of the system. b. Sinking Fund account to pay principal and interest coming due during the current fiscal year. The amounts in this account are restricted by the bond resolution. c. Reserve Fund account to accumulate an amount equal to the maximum amount of principal and interest coming due in any ensuing fiscal year. An initial deposit was made from bond proceeds with the remainder to be derived from operating revenues. When the maximum amount is obtained, no further deposits are necessary. The amounts in this account are restricted by the bond resolution. d. Renewal and Replacement account to pay the cost of extensions, enlargements, improvements or additions to or the replacement of capital assets of the Water and Sewer System, and for emergency repairs. The County is required to deposit 51 of the gross revenues of the system for the preceding year on an annual basis into this account. (3) Bonds Issued - At September 30, 1992, revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Description Dates Maturity Issue 1992 Water and Sewer Revenue Bonds: Series 1986 51 9/1 2029 $9,200,000 $ 9,115,000 Series 1986A 7% 9/1 2029 450,000 447,400 Less: Current portion 92,800 Long -Term Portion S 9.469.600 (4) Optional Redemption - The revenue bonds are subject to redemption prior to maturity, at the option of the County, as a whole, on any date, upon payment of the outstanding principal amount thereof, together with accrued interest to the date fixed for redemption. B-34 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 S. Long -Term Debt - Continued: Water and Sewer Revenue Refunding Bonds, Series 1989 (1) Pledge of Revenues - The revenue bonds are collateralized by a pledge of all net revenues of the system and impact fees. However, the Series 1989 is subordinate to the Water and Sewer Revenue Bonds, Series 1986 and 1986A. (2) Establishment of Various Accounts a. Revenue Fund account to pay all operating and maintenance costs Of the system. b. Sinking Fund account to pay principal and interest coming due during the current fiscal year. The amounts in this account are restricted by the bond resolution. c. Reserve Fund account to accumulate an amount equal to the maximum amount of principal and interest coming due in any ensuing fiscal year. An initial deposit was made from bond proceeds with the remainder to be derived from operating revenues. When the maximum amount is obtained, no further deposits are necessary. The amounts in this account are restricted by the bond resolution. (3) _Ronda Issued - At September 30, 1992, revenue bonds consisted of the followings Outstanding at Rates and Original September 30, Description Dates Maturityissue 1992 Water and Sewer Revenue Refunding 6.70%-7.251 Bonds, Series 1989 5/1 and 11/1 2019 $6,510,000 $ 6,300,000 Less: Current portion 801000 Unamortized bond discount 28,001 Long -Term Portion S 6.91.999 (4) Optional Redemption - The revenue bonds maturing on or after May 1, 1999 are subject to redemption prior to maturity, at the option of the County on and after May 1, 1998, in whole at any time or in part on any interest payment date at par plus accrued interest and plus a premium ranging between 0% and 1}% depending on the year of redemption. B-35 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 S. Lona -Term Debt - Continued: Water and Sewer Revenue Bonds. Series 1991 (1) Pledae of Revenues - The revenue bonds are collateralized by a pledge of all net revenues of the system and impact fees. However, the Series 1991 is subordinate to the Water and Sewer Revenue Bonds, Series 1986 and 1986A, and is on a parity with the Water and Sewer Revenue Refunding Bonds, Series 1989. (2) Establishment of Various Accounts a. Revenue Fund account to pay all operating and maintenance costs of the system. b. Sinking Fund account to pay principal and interest coming due during the current fiscal year. The amounts in this account are restricted by the bond resolution. c. Reserve Fund account to accumulate an amount equal to the maximum amount of principal and interest coming due in any ensuing fiscal year. An initial deposit was made from bond proceeds with the remainder to be derived from operating revenues. When the maximum amount is obtained, no further deposits are necessary. The amounts in this account are restricted by the bond resolution. (3) Bonds Issued - At September 30, 1992, revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Description Dates Maturity Issue 1992 Water and Sewer Revenue Bonds, 4.85%-6.70% Series 1991 5/1 and 11/1 2016 $9.205,000 $ 9,205,000 Less: Current portion Unamortized bond discount Long -Term Portion 70,000 224,954 S 8.910.046 (4) Optional Redemption - The revenue bonds maturing on or after May 1, 2002 are subject to redemption prior to maturity, at the option of the County on and after May 1, 2001, in whole at any time or in part on any interest payment date at par plus accrued interest and plus a premium ranging between 0% and 2% depending on the year of redemption. B-36 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 B. Lona -Term Debt - Continued: Housina Authority Revenue Bonds On April 1, 1986, August 23, 1988 and July 16, 1991, the Housing Authority adopted resolutions authorizing the issuance of revenue bonds payable to the U.B. Department of Agriculture, Farmers Home Administration, for the purpose of financing a part of the cost of acquiring, erecting and constructing low -rent, multi -family housing facilities (Victory Park Apartments - Phase I and Phase II and Orangewood Park Apartments), including the repayment of certain notes payable to the State of Florida for the acquisition of land. The bond and interest thereon are payable solely from and collateralized by a prior lien upon and a pledge of the gross revenue■ to be derived from the projects. The revenue bond resolution provides for the following: (1) The revenue bond obligation consists of: Long -Term Portion Original Interest Revenue Rate Description and Dates Indian River 11 per annum on County Housing the unpaid Authority balance, payable Revenue Bonds: September 1 each year Victory Park Phase I Victory Park Phase II Orangewood Park Apartments Less: Current portion Long -Term Portion Original Balance Revenue Outstanding Bond September 30, Commitment 1992 $1,9080000 $ 1,694,000 11908,000 1,748,000 2,006,400 2,006,400 55.822.400 5,448,400 165,000 S 5.283.400 (2) Optional Redemption - Each revenue bond is redeemable at the option of the Housing Authority at par plus accrued interest and plus a premium ranging between 0% and 5%, depending on the year of redemption and the holder of the bond at the time of redemption. The Housing Authority may redeem, in whole or in part, at any time, the principal portion of each revenue bond on any interest payment date, at the price of par plus accrued interest, without premium if the bond is held by the U.S. Department of Agriculture, Farmers Home Administration. B-37 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 8. Lona -Term Debt - Continued: Housing Authority Revenue Bonds - Continued (3) The revenue bond resolutions provide for the following: • The revenue bonds do not constitute a lien upon the project of any part thereof or upon any other property of the Housing Authority or a pledge of the full faith and credit of the Housing Authority. • The Housing Authority collects fees, rentals and other charges for the use of the facilities of the project, and out of such funds pays the principal of and interest on the land, the necessary expenses of operating and maintenance and all reserve and sinking fund require- ments. Fees, rentals and other charges will not be reduced so as to be insufficient to provide funds for such purposes. Establishment of Various Accounts - The Loan and Grant Resolution • provides for the creation and establishment of the following accounts, which are to be deposited with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation and which is eligible under the laws of the State of Florida to receive public funds: a. Revenue Account to deposit all gross revenues and provide for payment of costs of operation and maintenance of the project. b. Bond Service Accounts: • Interest Account to deposit monthly from Revenue Account 1/12 of all interest coming due on the next interest payment date. • Principal Account to deposit monthly from -Revenue Account 1/12 of the principal amount which will become due on such annual maturity date. • Renewal, Replacement and Improvement Account to deposit from the Revenue Account $7,357 per month. In addition, at the end of each fiscal year, all excess funds remaining in the Revenue Account are deposited in the Renewal Replacement and Improvement Account until the amount on deposit equals $882,800. B-38 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 S. Lona -Term Debt - Continued: Housing Authority Revenue Bonds - Continued c. Investment Restrictions - Monies in any account created in the resolution may be invested in authorized investments which mature not later than 15 days prior to the dates on which the monies will be needed for the purpose of such fund. Authorized investments as specified by the resolution are as follows$ • Direct obligations of the U.S. Government • Bonds, debentures or notes backed by the full faith and credit of the U.S. Government The Housing Authority did not meet all of the required monthly deposits as met forth in the resolution due to inconsistencies between FmHA requirements and the resolutions. Annual Debt Service Payments - Enterprise Fund Bonds Payable - The annual debt service payments to amortize the bonds payable outstanding at September 30, 1992 are as follows: 61ses1 lost Ending ieotesber 70. 1997 3996 1113 1996 1917 int -20.0.2 x0.13-2007 Zan -20.12 2017-7017 2019-2022 2027-2027 2029-2072 Totals lase, blunts representing interst Total Bonds Reyable imams Cutreat portion Uneaortlsed bond discount rater and solid waste water and S.wr Disposal Sever Revenue lystee sevenue Refunding Revenue bona. Bond, bonds i 1.331.111 6 343,120 6 931,030 1,332,320 513,260 936,770 1x32,366 367,310 937,660 1,751.621 S65,613 937.715 1.350.810 56],512 6.751.225 2,726.111 6,6!2,!10 61713.610 2x21.360 6x6],707 2,721.910 5,815.033 2,726,930 ],899,776 1.0!3.130 2,397. - 1.Isf.!20 Is 39.861.156 31.716.533 9,371.910 21.093.751 8.116.5]] 2.819.910 11.767.100 61300,000 6,555.000 162,100 10.000 110,000 221.951 29.001 211.379.6se 8 6.191.999 8 6.075.000 B-39 Recreational Molf Course) Revenue sousing bond. Authorlty Total 6 6621919 6 219.126 6 1,571.366 766.519 219,636 3.616.603 766,381 220,166 31222,059 713,316 219,171 3.217,616 761.]61 219,776 ],213.012 ].623.120 1.097,770 19.096,313 3.91 2.601 1.097.620 14,401.341 3.916.639 1.095.220 16.392.275 2.611.239 1.096,670 12.617.696 - 736.030 1.770.136 75.144 2.973.066 1.159.818 17,913,976 6.296.98/ 92.213.563 9.]1].971 168.586 62.192.705 2.650,000 51668,600 63.720,800 50.000 165.000 977,800 186.113 441.36. 8 e.911.9e7 85.2.3.100 .16.]11.632 ;■ INDIAN RIVER COUNTY, FLORIDA NOTES TO lINANCIA6 STATEM"S - CONTINUED Year Ended September 30, 1992 8. Long -Term Debt - Continued: General Long -Term Debt - A summary of changes in general long-term B. Changes in debt follows: Balance Balance September 30, October 1, 1991 Additions Deletions 1992 Accrued Compensated Absences: S 687,306 $ 204,222 _ S S 891,528 Board Clerk of Court 46,572 15,478 7,021 57,029 767,890 Sheriff 533,564 234,306 _ 34,567 Tax Collector 30,476 4,091 ' 2x068 30,729 Property Appraiser 32,797 Supervisor of 2,294 188 - 2,482 Elections 1,335,029 458,285 91089 1,784,225 Capital Leases: 174,025 _ 67,475 106,550 Board - 7,671 2,026 5,645 Clerk of Court 152,250 21,998 42,064 132,184 Sheriff Property Appraiser 352,582' 62,765 174.330 289,817 534,196 678,857 29,669 Arbitrage Rebate Payable: Board Bonds. Payable: Refunding and improvement Revenue Bonds - 1985 Series Capital improvement Revenue Bonds - 1987 Series General Obligation Bonds - 1989 Series Special Assessment Bonds Totals 125,791 - - 125,791 8,275,000 - 330,000 7,945,000 3,150,000 - 145,000 3,760000 - 1,175,000 8,473,548 - 2,428.548 23,658,548 - 4,078,548 S2a,79�25 S 487,954 S4.2261.967 B-40 3,005,000 2,585,000 6,045,000 19,580,000 S22.024.212 INDIAN RIVER COUNTY. FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 B. Lona -Term Debt - Continued: C. General Lona -Tera Debt (1) Revenue Bonds - On July 10, 1985, the Board adopted a resolution autho- rizing the issuance of $25,000,000 of Refunding and Capital Improvement Revenue Bonds. On November 1, 1985, the Board issued $9,855,000 of Refunding and Improvement Bonds, 1985 Series. The proceeds of this issue legally defeased the County's Capital Improvement Revenue Bonds, Series 1980 and 1981, and provided funds to finance the cost of construction and to reimburse the County for certain capital projects. On July 1, 1987, the Board issued $3,655,000 of Capital Improvement Revenue Bonds, 1987 series. The proceeds of this issue provide funds for construction of certain capital projects. The bonds and interest thereon, from both these issues, are payable solely from and collateralized by a first lien upon and pledge of the County's half -cent sales tax and related investment income. The revenue bond resolution, as dated July 10, 1985, and as amended and supplemented, provides for the following: a. The Revenue Bonds consist oft Balance Interest Outstanding Rates and Original September 30, Dates Maturity Issue 1992 Refunding and Improve- ment Revenue Bonds, 1985 Series - 5.5%-8.75% Serial Bonds 9/1 i 3/1 1997 $ 40000,000 $ 2,090,000 Term Bond 9% 2000 1,735,000 1,735,000 Term Bond 9.1251 2002 11440,000 11440,000 Term Bond 9.125% 2005 2,680,000 2,680,000 9,855,000 7,945,000 Capital Improvement Revenue Bonds, 1987 Series - 4.75%-7.30% Serial Bonds 9/1 i 3/1 Term Bond 7.751 B-41 2000 2,165,000 1,515,000 2005 1,490,000 1,490,000 3.655,000 3,005,000 S13,510,000 S10,950,000 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 8. Lona -Term Debt - Continued: C. General Long -Term Debt - Continued (1) Revenue Bonds - Continued b. Disbursements or expenditures of bond proceeds which have been desig- nated as construction funds shall be made only after written approval of the County Administrator or his designee. c. Establishment and maintenance of various funds - • Revenue Fund to record County sales tax monies received by the County from the State. • Sinking Fund to pay principal and interest payments coming due during the current fiscal year. The amounts in this account are restricted by the bond resolution and thus, a reserve of fund balance has been established for them. d. Other covenants - The resolution provides for several additional covenants such as required books and records and annual audit. (2) General Obligation Bonds - On July 27, 1989, the Board issued $5,900,000 of General Obligation Bonds, 1989 Series. The issuance of the 1989 Series Bonds was approved by a majority of votes cast in a bond referendum held on September 2, 1986 by the qualified electors of the County. The princi- pal and interest on the Bonds are payable from ad valorem taxes levied and collected upon all taxable property within the County. The proceeds from this issue provide funds for certain improvements to and expansion of the County -wide library system, including land acquisition, construction of branch buildings and purchase of library materials. At September 30, 1992, General Obligation Bonds consisted of the following: Outstanding at Rates and Original September 30, Description Dates Maturity issue 1992 General Obliga- 5.75%-6.151 tion Bonds, 1989 Series 7/1 i 1/1 1994 $5.900.000 92.585.000 B-42 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEN ENT S - CONTINUED Year Ended September 30, 1992 S. Long -Term Debt - Continued: C. General Long -Term Debt - Continued (3) Special Assessment Bonds - The proceeds of the initial special assessment bonds were used to extend the water and sewer distribution systems along Florida State Road 60. The proceeds of the Rockridge Special Assessment bonds were used for acquisition and construction of sewer line extensions in the Rockridge Sanitary Sewer area. The proceeds of the North County Special Assessment bonds were used for acquisition and construction of a physically independent North County Wastewater System. The payments of principal and interest on special assessment bonds and all other required payments are being paid solely from the proceeds of the assessments levied against benefiting property owners. There is no secon- dary lien on the assets or the revenues of the County's Water and Sewer System, however, if through foreclosure proceeding■ the property cannot be sold at auction, then the County must acquire it for its market value. At September 30, 1992, special assessment bonds consisted of the following: Outstanding at Rates and Original September 30, Description Dates Maturity Issue 1992 Route 60 Sewerline 8.47• construction 1/1 1996 S 2,797,675 $ - • Rockridge Sewer 6.75%-8.00% construction 6/1 i 12/1 2000 720,000 580,000 North County Sewer 7.75% construction 4/1 i 10/1 2000 6,075,000 5,465,000 S 9,592,675 S 6,045,000 + The County paid these bonds off early during the current fiscal year. B-43 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATERMS - CONTINUED year Ended September 30, 1992 S. Long -Term Debt - Continued: C. General Long -Term Debt - Continued: (4) annualThe obligation bonds to assessmentand special nd allamortize revenue voutst outstanding m general at September 30, 1992 are as follows: Fiscal Tsar Owing seatasMt 30. 1003 1994 1995 1096 1907 1099-2002 2003-2005 Totals Lou, Amount• representing Interest Total Fiscal Fast anding September 30, 109) 1994 0905 1096 1997 199'-2002 100)-2005 Totals Loss, Amounts repreasntin9 interest Total 9eyasue sonde Refunding and capital Improvement improveNni loss series its? series 6 1,062,344 S 367.760 1.064,318 169,760 1.063.106 169,940 1.063.150 367.960 1,059,S37 371,080 5,313.018 1.845,109 3.1s3.700 1.112.675 13,109.513 4,102,183 S,464,S13 1.797.193 6 7.945.000 6 3.005.000 swelal Maoarnt bnde 9oeY[ldge Mo[tA County Nwr Nwr 6 119,295 6 1,009,900 1081895 962,625 106,715 913,350 96,090 966,075 92,770 915,994 2561910 2,795.100 782.675 7.367.044 202.675 1.902.046 6 550.000 35y4665000 General Obila6elon sones Series 1!s! 8 1,40s.3S2 1,417,102 2.825,434 240.454 s 2.ses.a5p Total 6 1.967.651 3.921.770 2.456,011 2.1!7.475 2.339,701 10,209,206 4,296.375 29.566.869 10.006.669 619.590.000 (5) The revenue, general obligation, and special assessment bonds are reported in the General Long -Term Debt Account Group since they do not represent obligations of any governmental or proprietary fund types. B-44 PE 1 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 S. Lona -Term Debt - Continued: D. Summary of Defeased Debt Outstanding The following outstanding revenue bonds are legally defeased. Since governmental obligations are held in escrow for the payment of principal and interest, the bonds are not liabilities of the County. Outstanding Retired Outstanding at During at September 30, Fiscal Year September 30, 1991 1992 1992 Capital Improvement Revenue Bonds: Series 1980 S 3.830.000 S 95.000 S 3,7� 5 Series 1981 S 605.000 SS 30,000 S 575.000 Solid Waste Disposal System Revenue Bonds, Series 1977 S 500,000 S 1.000 S 340.000 E. Capital Leases and Notes Payable (1) General Lana -Term Debt Capital Leases - The County has entered into several lease -purchase agreements to purchase various types of equipment with lease terms varying from 24 to 60 months. The following is a schedule of future minimum lease payments under capital leases, together with the present value of the net minimum lease payments, as of September 30, 1992: Clerk Board of of the Year Ending County Circuit Property September 30, Commissioners Court Sheriff Appraiser Total 1993 $ 59,873 $ 4,608 $ 58,736 $124,730 $247,947 1994 59,873 1,921 54,219 96,644 212,657 1995 - - 32,743 57,325 90,068 1996 - - 1,126 37,995 39,121 1997 - - - - Total Minimum Lease Payments 119,746 6,529 146,824 316,694 589,793 Lose: Amount representing interest 13.196 884 14,640 26,877 55,597 Present Value of Net Minimum Lease Payments S106,550 S 5.645 S132.184 S2B9.817 S534.196 B-45 INDIAN RIVER COUNTY, FLORIDA NOTES To FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 B. Long -Term Debt - Continued: E. Capital Leases and Notes Payable - Continued The following is an analysis of the leased property under capital leases: 9. Provision for Closure Costs: As explained in Note 1.0., current regulations of the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Regulation (FDER) require the Solid Waste Disposal District (SWDD) to place a final cover on closed landfill areas, and to maintain those areas for up to thirty years after closure. The SWDD recognizes the expenses associated with final closure and post -closure maintenance of the landfill areas over the active life of those areas. These costs are recog- nized in each operating period based on the amount of waste received during that period, regardless of when cash disbursements are made for these costs. The SWDD periodically obtains updated and revised estimates of total future closure and post -closure costs from its consulting engineers. The provision for closure costs reported in the financial statements as operating expense represents the portion of these estimated future outlays which are allocable to the current year based on the amount of waste received at active landfill areas during the year. The total unrecognized closure and post -closure costs attributable to the currently active landfill area (Segment II) is approximately $2.1 million. These costs will be recognized in future periods as the remaining capacity is filled. This landfill area is expected to close in the year 1996. In addition, the SWDD has already purchased land which is expected to provide landfill capacity through the year 2002. B-46 i Capitalized Cost Clerk Board of of the Type of County Commissioners Circuit Court Property Sheriff Apnraiser Total Property Computer $ _ $ $ _ $440,694 $ 440,694 equipment Copier equipment - 7,671 70,163 _ 77,834 Automotive - - 475,775 equipment 475,775 - Communication - 129.605 - 129,605 equipment $475,775 S 7.671 S199,768 $440,694 21,123,908 The equipment listed above is recorded in the General Fixed Assets Account Group. 9. Provision for Closure Costs: As explained in Note 1.0., current regulations of the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Regulation (FDER) require the Solid Waste Disposal District (SWDD) to place a final cover on closed landfill areas, and to maintain those areas for up to thirty years after closure. The SWDD recognizes the expenses associated with final closure and post -closure maintenance of the landfill areas over the active life of those areas. These costs are recog- nized in each operating period based on the amount of waste received during that period, regardless of when cash disbursements are made for these costs. The SWDD periodically obtains updated and revised estimates of total future closure and post -closure costs from its consulting engineers. The provision for closure costs reported in the financial statements as operating expense represents the portion of these estimated future outlays which are allocable to the current year based on the amount of waste received at active landfill areas during the year. The total unrecognized closure and post -closure costs attributable to the currently active landfill area (Segment II) is approximately $2.1 million. These costs will be recognized in future periods as the remaining capacity is filled. This landfill area is expected to close in the year 1996. In addition, the SWDD has already purchased land which is expected to provide landfill capacity through the year 2002. B-46 i INDIAN RIVER COUNTY, FLORIDA NOTES To FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 9. Provision for Closure Costs - Continued: All amounts recognized are based on what it would cost to perform all closure and post -closure functions in current dollars. Actual costs may be different due to inflation, changes in technology, or changes in laws and regulations. The SWDD is required by FDER to annually show proof of ability to finance closure and post - closure costs, and has done so by fulfilling the requirements of the financial test provision of the regulation. At the same time, the SWDD is making annual deposits to a closure cost account to provide for the financing of future closure -related expenditures. The balance in this account, as of September 30, 1992, was approxi- mately $3.8 million. 10. Defined Benefit Pension Plans: A. Florida Retirement System The County's employees, except certain firemen, participate in the Florida Retirement System (FRS), a cost-sharing, multiple -employer public employee retirement system, administered by the Florida Department of Administration. The FRS is noncontributory for all members, all contributions are made by the employer. The FRS has five classes of membership with descriptions and contribution rates in effect during the period ended September 30, 1992 as follows (contribution rates are in agreement with the actuarially determined rates): Period 10/1/91 1/1/92 to 12/31/91 to 9/30/92 Regular Class - Members not qualifying for other classes 16.20% 16.991 Senior Management Service Class - Members of senior management who do not elect the optional annuity retirement program 18.87% 19.48% Special Risk Class - Members employed as law enforcement officers, firefighters, or correctional officers and meet the criteria set to qualify for this class 26.00% 26.83% Special Risk Administrative Support Class - Special risk members who are trans- ferred or reassigned to non -special risk and meet the criteria 20.64% 19.99% Elected County Officer's Class - Certain elected county officials 23.801 25.07% B-47 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 10. Defined Benefit Pension Plans - Continued: A. Florida Retirement System - Continued The FRS provides vesting after ten years of creditable service. Members are eligible ars or for regular normal0r members). Early retirementmy be o for re be takenanytime creditable serviceafter vestin& five percent efit or to g, but there retirement age(less than 30 yearsnservice ort62nfor years of age for normalregular members). Members are also eligible for in -line -of -duty or regular disability benefits if permanently disabled and unable to work. Benefits are computed on the basis of age, average final compensation and service credit. The County's contributions to the FRS, which are based on Section 121, Florida Statutes, through September 30, 1992 were $5,980,901 on covered payroll of for contribution rate. y was $30,779,665. The County scontributionrepresented less than hIt of ttotal contributions required of all participating employees. The most recent actuarial study was prepared as of July 1, 1991 and indicated no major changes in procedures and assumptions. Section 121.031(3) of the Florida Statutes requires that an actuarial review of the FRS be performed biennially. The conclusions of the review are included in the annual report of the FRS. As of the most recent annual statewide report dated July 1, 1991, the FRS had 111,821 retirees and beneficiaries, 18,131 vested but terminated potential annuitants and 544,497 active members. Of the active members, 212,247 are vested. The total annual payroll of the vested members was approximately $14 billion. The total unfunded pension benefit obligation of the FRS at July 1, 1991 is calculated as follows: Total July 1, 1991 (in millions) Pension benefit obligation: Active member contributions $ 471 Employer -financed vested benefits 20,234 Employer -financed non -vested benefits 3,261 Total 23,966 Annuitants and vested terminated 9,853 Total pension benefit obligation 33,819 Net assets available for benefits (at cost) 21,644 Unfunded pension benefit obligations 512.175 B-48 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 10. Defined Benefit Pension Plans - Continued: A. Florida Retirement System - Continued The amount of the total pension benefit obligation is based on a standardized measurement established by the GASB Statement No. S. The standardized measure- ment is" the actuarial present value of credited projected benefits. This pension valuation method reflects present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any changes in benefits. Because the standardized measure is used only for disclosure purposes only, the measurement is independent of the actuarial computation made to determine contributions to the pension plan which is the entry age actuarial cost method. For further information, including 10 -year historical trend information, refer to the State Of Florida's Comprehensive Annual Financial Report or the various publications available from the Florida Department of Administration. B. Firefighters Pension Plan in October, 1981, the South Indian River County Fire District took over opera- tions of the City of Vero Beach's Fire Department. Full-time firemen were given the option of joining the Florida Retirement System or remaining in the City's plan. Twenty full-time firemen and all of the volunteers elected to remain in the City's plan. Those who joined the Florida Retirement System received refunds of their contributions from the City's plan. The City has by Statute retained fiduciary responsibility for this plan which is a single employer public employee retirement system. Employer contributions to the PERS are made by the County. Benefits vest after 10 years of service. Firefighters who retire at the earlier of age fifty-five and ten years of contributing service or age fifty-two and twenty-five years of contributing service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 2.50 percent of their base compensation over the highest five years of employment, multipled by credited service. The PERS also provides death and disability benefits. These benefits and other requirements are established by State Statute and City of Vero Beach ordinance. The firefighters are required to contribute 7 percent of their compensation. The PERS also receives contributions from the State for insurance premium refunds. The County is required to contribute the remaining amount necessary to pay the annual normal cost plus an amount sufficient to fund any unfunded accrued liability over 40 years. B-49 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 10. Defined Benefit Pension Plans - Continued: B. Firefighters Pension Plan - Continued Funding Status and Progress - The amount shown as the "pension benefit obliga- tion" is a standardized disclosure measure of the present value of pension bene- fits, adjusted for the effects of projected salary increases and step -rate bene- fits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of the PERS on a going -concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the PERS. The pension benefit obligations were computed as a part of actuarial valuations performed as of October 1, 1992. Significant actuarial assumptions used in the valuation include (a) a rate of return on the investment of present and future assets compounded annually of 71, and (b) projected salary increases of 71 a year compounded annually attributable to inflation. _ Total unfunded pension benefit obligations are as follows: October 1, 1992 Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $1,370,968 Current employees - Accumulated employee contributions including allocated investment earnings 281,068 Employer -financed vested 1,792,853 Employer -financed nonvested 24,536 Total Pension Benefit Obligation 3,469,425 Net Assets Available for Benefits, at cost 3,599,607 Net Assets Over (Under) Pension Benefit Obligation S 130.182 During the current year, the following changes were made in the actuarial assumptions or benefit provisions that affected the pension benefit obliga- tion: The actuarially assumed rate of investment earnings was increased from 6.51 to 71, which reduced the pension benefit obligation by $174,592. B-50 INDIAN RIVER COUNTYr FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30r 1992 10. Defined Benefit Pension Plans - Continued: B. Firefighters Pension Plan - Continued Actuarially Determined Contribution Requirements and Contributions Made - The County's funding policy provides for actuarially determined periodic contribu- tions to the plans. The required contributions are actuarially determined and include normal costs (after deducting expected employee contributions) and the amount of the additional unfunded obligations created due to increases in plan benefits over a period of 40 years. Employer contribution rates are determined using the frozen entry age actuarial funding method. The Firemen's PERS uses the aggregate actuarial cost method which does not produce a past service liability that is amortized over a fixed number of years. instead, the value of all projected benefits in excess of current assets is paid off over the future working years of the covered employee. Therefore, this method automatically funds the remaining value of benefits while there are still active members. The significant actuarial assumptions used to determine the actuarially deter- mined employer contribution requirement are the same as those used to compute the actuarial present value of credited projected benefits. There was a change in the current year in the benefit provision. The number of years considered in determining the average final compensation changed from 5 years to 3 years. This change increased the pension benefit obligation by $157,050. There were no changes in the current year in the actuarial funding method. The contributions made to the plan during the fiscal year ended September 30, 1992 were based on the actuarial report dated October 1, 1991. Contributions made by employees and employer are in agreement with the actuarially determined contributions. An analysis of contributions made during the current fiscal year is as follows: Contributions made: Employee - $ 28,716 7% of compensation State - Premium Tax Refunds 75,638 Employer - Additional amount necessary to pay the annual normal cost and amortize any unfunded actuarial accrued liability - Total Contributions $104,354 Current Year Covered Payroll (same as total current year payroll) $380,268 Contributions as a Percentage of Current Year Covered Payroll: Employee 7.6% State 19.9% Employer 04 B-51 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 10. Defined Benefit Pension Plans - Continued: B. Firefighters Pension Plan - Continued Trend information - The required three-year historical trend information is as follows: Mot• in %` o[ Not Beagta Mt auta ,anion ganef It-ployer A", 16:19 Pension over )Under) covered Obligation Cont rfbutiana Valuation for Benefits Benefit Forcantage Pension Benefit Annual as a 1 of Annual as • t of Annwl Beta fat coatl Oblioatien Pug64d obligation Payroll Calami Payroll covered Payroll Ie/1/e0 { Ae72.065 0 7.026.108 101.5 1 { 46.767 8 767.752 11.71 it/1/91 1.771.219 7.205.025 101.2 0 79,217 390.785 10.01 Ie/I/02 1.5)0.607 1.465.425 103.750 130.192 390.269 34.21 For further information, including the required ten-year historical trend information, refer to the City of Vero Beach's Comprehensive Annual Financial Report. The required ten-year historical trend schedules provide information about the progress made in accumulating sufficient assets to pay benefits when due. 11. Deferred Compensation Plan: The County offers its employees deferred compensation plans created in accordance with the Internal Revenue Code, Section 457. The plan permits them to defer a portion of their compensation until future years. The monies placed in the deferred compensation plan are not available to employees until termination, retirement, death, or an unforseeable emergency. All amounts of compensation deferred under the plan, all property and rights pur- chased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or beneficiary) solely the property and rights of the County, subject only to the claims of the County's general creditors. Participants' rights under the plan are equal to those of general creditors in an amount equal to the fair market value of the deferred account for each participant. The County has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The County believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. B-52 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEN ENT S - CONTINUED Year Ended September 30, 1992 12. Seament Information: The County maintains Enterprise Funds for its Solid Waste Disposal District, Golf Course, County Building, Water and Sewer System, and Housing Authority Funds. Segment information for the year ended September 30, 1992 follows: solid Waste Mater Disposal Golf County and sewr Rousing District Coupe Bnllm, system Authority Total Operating Revenues f 5,253,281 $1,476,966 $ 471,932 $10,712,023 $ 356,903 $19,271,108 Operating Grant Revenue 203,811 _, _ - 11,297 215,111 Operating Depreciation and Amortisation sapense 1,162,685 $2,054 27,258 3,061,413 156.396 415091606 Operating Income (LOSS) (204,613) 181,321 (431,106) I.S02,923 (111,001) 904,111 Operating Transfers In - _ - 81,666 01,666 Net Income (Loss) 308,813 104,360 (395,502) 1,069.777 (78.197) 1,029,261 Piled Asasta: additions 2.158,077 3,765,534 350 11.979,376 3,S10,BS2 21,114.189 Deletions - net Of accumulated depreciation 52,321 - 11029 2,677 2,305 58,532 Net working Capital (Deficit) 1,615,342 49,231 416,043 3,289.572 82,755 5,452,943 Total Assets 17,422,513 9,776,146 530,396 90,912,935 9,068,393 127,710,383 Bonds Payable Pram Operating Revenues - Net 615SS1000 8,461,597 - 24,814,445 514481400 45,279,432 Total equity 7,583,429 261,670 464,065 63,236,266 3,420,442 74,965,874 Current Year Net Increase in Contributions 1,694 1,500 - 4,823,858 2,319,197 7,146,249 13. Operating Leases: The County has entered into noncancellable operating leases, both as lessor and lessee. Lease terms vary from 2 to 30 years. Lease revenues totaled $59,315 and lease expenditures totaled $94,775 for the year ended September 30, 1992. The County also leases other equipment and office facilities as both lessor and lessee on a month-to-month basis. B-53 1 INDIAN RIVER COUNTY, FLORIDA !'- NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 13. Operating Leases - Continued: Future !Minimum Lease Receipts The following is a schedule by years of minimus future rentals to be received on noncancellable operating leases for office space as of September 30: Year Ending September 30, 1993 $ 68,541 1994 66,541 1995 59,315 1996 46,696 1997 45,000 Remaining 549,375 Total future minimum lease receipts 5837.468 The property being leased is included in the County's General Fixed Asset Account Group and has a carrying value of $634,273. Future Minimum Lease Payments The following is a schedule by years of minimum future rentals to be paid by the County for noncancellable operating leases for office space as of September 30: Year Ending September 30, 1993 $ 57,854 1994 56,663 1995 35,953 1996 17,016 1997 17,016 Remaining 374,352 Total future minimum lease payments $558,854 14. Fund Equity: A. The County has established certain reserves for restricted assets of the Enterprise Funds. These assets are restricted by various covenants within the revenue bond issues, as described in Note B. Reserved retained earnings at September 30, 1992 consist of the following: B-54 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 14. Fund Equity - Continued: S. The following is a summary of changes in Proprietary Fund contributions by Fund: Snteroslee NMs internal "twice funds b31d wee• weer Disposal Colt count] W Sews "using Floot "it District -Coarse- l61i9lits system Autborite iss amsent Insurance Intal con,ae tobasis" Oo9sr 1. 1B1 $407.092 $427,013 $ 11.191 $50,649,979 $1,010,663 $626,210 6 9.423 $53.339.411 looses@* In contrlaotions 91.979 1,500 - 5.963.662 7,150.792 - - 6.427.953 Depsecietion on csntslYsted aeMte f0.76S - - 1.159.624 ]1.595 - - 1.761.704 Ceatstitems at ""=r 70, 1992 nea.7�( Ljyyyl i.yjdal ass.u].as7 u.MAU &ULM f 5.42] MaLl" C. The County has established certain reserves within the fund equity section of the governmental funds. Reserved fund balances at September 30, 1992 consist of the following: Amount Board of County Commissioners: General Fund: Reserved for loan receivable $ 11500,000 Reserved for emergency management 25,483 S 1,525,483 Funds for the emergency management reserve are segregated in compliance with an agreement between the County and a mobile home park to be used solely for emergency management purposes, a general fund type expenditure. Debt Service Funds: Reserved for debt service - Library Bonds Refunding and Improvement Bonds Rockridge Sewer Assessment Bonds North County Sewer Assessment Bonds These reserves represent fund balances restricted to debt service requirements of the revenue and general obligation bonds. B-55 $ 595,997 1,790,933 100,295 2,951,015 S 5,438,240 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 14. Fund Equity - Continueds Capital Projects Funds: Reserved for capital projects - $ 5,925,762 Indian River Boulevard North 3,403,741 Optional Sales Tax 677,651 Gifford Road Construction S10.0� 07.154 These reserves are the fund balances that are restricted to specified capital projects. D. The following is a summary of residual equity transfers made during the fiscal year ended September 30, 1992: Residual Equity Transfers Increase in In Out Contributions General Fund $ 102,153 S - $ - Special Revenue Funds: Pistol Permits - (3,929) - Gifford Road improvements - (673,158) - Debt Service Funds: Route 60 Water Assessment Bonds - (216.722) Capital Project Funds: - Treasure Shores Park - (98,224) - Gifford Road Construction 673.158 - Enterprise Funds: Water and Sewer System - - 216.722 S 775,311 S (992,033) S 216722 B-56 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 15. Fund Equity Deficit: The following funds had deficits in retained earnings at September 30, 1992: Fund Deficit Enterprise Fund: Golf Course $161,643 Internal Service Fund: Fleet Management 428,812 The Golf Course began operations during the fiscal year ended September 30, 1987. The retained earnings deficit in the Golf Course Enterprise Fund will be eliminated by anticipated operating income in future periods. The retained earnings deficit in the Fleet Management Internal Service Fund will be eliminated by anticipated operating income in future periods. 16. Risk Management: The County is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions: injuries to employees; and natural disasters. During a previous fiscal year, the County established a fund to account for risk management called the Self Insurance Fund (an internal service fund). The risk management program began on November 1, 1988. Under this program, the Self Insurance Fund provides coverage for up to a maximum of $100,000 for each worker's compensation claim, $100,000 for each general or auto liability claim, $100,000 for each property damage claim, and $25,000 for each errors or omissions claim. In addition, an aggregate lose fund was established of $600,000. As of November 1, 1989, the County's risk retention amounts were increased to $200,000 for each worker's compensation claim and as of October 1, 1989 $500,000 for each general or auto liability claim. Risk retention was decreased to $10,000 for each property damage claim and stayed the same for errors or omissions. The aggregate loss fund was increased to $1,000,000. The County purchases commercial insurance for claims in excess of coverage provided by the Fund and for all other risks of loss. H-57 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 16. Risk Management - Continued: All departments of the County participate in the program. Payments are made by various funds to the Self Insurance Fund based on past experience and actuarial estimates of the amounts needed to pay current year claims. The claims liability of $1,216,257 reported in the Fund at September 30, 1992 is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the finan- cial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Estimates for claims incurred but not reported are actuarially deter- mined and recorded. Changes in the Fund's claims liability amount during the current and prior fiscal years are as follows: Balance at Fiscal Year Beginning 1988-1989 $ -0- 1989-1990 415,250 1990-1991 1,113,947 1991-1992 2,070,449 Current Year Claims Balance and Changes Claim at Fiscal in Estimates Payments Year End $504,167 $ (88,917) $ 415,250 866,250 (167,553) 1,113,947 1,144,583 (188,081) 2,070,449 (426,841) (425,351) 1,218,257 Included in the charges to other funds is an amount to fund future catastrophic losses and at September 30, 1992, the retained earnings balance of $2,500,972 has been designated for this purpose. 17. Commitments and Contingencies: A. Litigation - The County is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its operations. In the opinion of management, based on the advice of legal counsel, the ultimate disposition of lawsuits will not have a material adverse effect on the financial position of the County. B. Construction Commitments - The County has various construction contracts out- standing at September 30, 1992. In the Capital Projects Funds, projects are for Indian River Boulevard North and the New Judicial Complex. in the Enterprise Funds, the landfill expansion, Golf Course expansion, Gifford Sludge Facility, and various water and sewer projects are under construction. A summary of these projects at September 30, 1992 is as follows: Capital Proiects Enterprise Total Total contract price $ 6,132,186 $17,820,440 $23,952,626 Total paid as of September 30, 1992 5,329,771 9,798,833 15,128,604 Remaining commitment at September 30, 1992 S 802,415 S 8,021,607 S 8,824,022 B-58 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 17. Commitments and Contingencies - Continued: C. Grants - Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. If any expenditures are disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the County. In the opinion of management, any such adjustments would not be significant. 16. Subsequent Events: A. Refundina Revenue Bonds, Series 1991 - On December 8, 1992, the Board issued a $7,530,000 Bond with maturity dates ranging from 1993 to 2005 and interest rates of 2.70% to 5.65%. This bond issue was used to retire a portion ($3,605,000) of the County's outstanding Refunding and Improvement Revenue Bonds, Series 1985, and all of the outstanding Capital improvement Revenue Bonds, Series 1987 ($2,855,000). The Series 1992 Bonds will be paid from and secured by a first lien upon and pledge of the proceeds of the Local Government Half -Cent Sales Tax and certain Investment Income received by the County. The County realized a present value savings of future cash flows with this refunding transaction. B. Indian River County Judicial Complex - Work has continued on the $22,000,000 Judicial Complex. The project is comprised of a three-story courthouse and a three-level parking garage. The Board authorized the project out for bid in September and received contractors' proposals in October. The contract was awarded to James A. Cummings, Inc. at a cost of $13,272,600, which was under the estimated price. Groundbreaking ceremonies were held on November 5, 1992 and construction began on that date. The contractor has fourteen months to finish the project. The move -in date is anticipated to be in early spring of 1994. The project is being funded with revenues from the optional one -cent sales tax. C. Golf Course - In early 1990, a favorable feasibility study allowed the Board of County Commissioners to approve the expansion of the Sandridge Golf Club to 36 holes. The formal dedication and opening of the new Lakes Course, a Par 72, 6,217 -yard golf course designed by acclaimed golf club architect, Ron Garl, and the new Clubhouse was held November 28, 1992. Complimenting the County's 36 -hole Sandridge Golf Club is a new 7,000 -square foot clubhouse housing the Pro Shop, Snack Bar and Restroom facilities. Also included in this expansion was an additional cart storage building and improvements to the golf maintenance area. This expansion was funded with the County's $6,015,000 1991 Recreation Revenue Bonds. D. Land Acquisition Referendem - The voters of Indian River County approved a referendum on November 3, 1992 authorizing the issuance of General Obligation Bonds in an amount not to exceed $26,000,000 to finance the cost of acquiring environmentally significant land to protect water quality, open spaces, and wildlife habitat. The maximum annual payments to be payable from ad valorem taxes shall not exceed 1/2 mill and none of the bonds shall be issued for a term longer than 15 years. B-59 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1992 18. Subsequent Events - Continued: E. Emergency Services District - The voters of Indian River County approved a referendum in a March 1991 election to consolidate the three fire districts (South, North and West) and the Advanced Life Support (ALS) units. This consolidation was completed and the Emergency Services District became operational on October 1, 1992. F. Septage/Sludge Facility - Construction of the new regional sludge treatment facility will soon be completed and has a scheduled operational date of February 1993. This facility, funded in part with the Water and Sewer Revenue Bond, Series 1991, and in part with a U.S. Environmental Protection Agency grant, is needed to meet the County's immediate and future needs for treatment and disposal of sludge (the solid or semi-solid residual by-product of the waste- water treatment plant process), septage (the liquids from residential septic tank haulers, dumping stations and portable toilet facilities), and grease (the material taken from commercial grease traps typically found at food processing facilities and restaurants). G. New Business Tax Incentives - On January 12, 1993, the Commissioners adopted a resolution calling for a special election to determine whether the Board of County Commissioners shall have the power and authority to grant ad valorem tax exemptions to new or expanding businesses. A special election will be held on April 13, 1993 to present this referendum to the voters of Indian River County. H. Housing Authority - Orangewood Park Apartments - On July 16, 1991, the Housing Authority adopted a resolution authorizing the issuance of a revenue bond payable to the U.S. Department of Agriculture, Farmers Home Administration, for the purpose of financing a part of the cost of acquiring, erecting and constructing low -rent, multi -family housing facilities (Orangewood Park Apart- ments). On September 5, 1991, the Housing Authority issued the revenue bond in the amount of $2,006,400. The bonds are payable at an annual rate of if over a period of 30 years. On September 4, 1991, a contract for $3,583,806 was entered into by the Housing Authority with a building contractor for construction of the Project. Orangewood Park Apartments was completed and dedicated on November 19, 1992 and became operational on December 1, 1992. I. Housing Authority - New Project - During fiscal year 1992, the Housing Authority signed a purchase option for acquisition of land in connection with construction of another low -rent, multi -family housing facility. The Authority has since submitted a contract to FmHA and is awaiting approval. 8-60 MTZRFRIBN FUNDS Solid Nast& Disposal District - To account for the revenues, expenses, assets and liabilities associated with the County landfill. County Golf Course - To account for the revenues, expenses, asset■ and liabilities associated with the County Golf Course. County Building - To account for the revenues, expenses, assets and liabilities associated with the building permit and inspection program. Nater and Bower System - To account for the revenues, expenses, assets and liabilities associated with the County water and sewer system. Housing Authority - To account for the revenues, expenses, assets and liabilities associated with providing low income housing within Indian River County. Financing is provided by loans from the State of Florida, U.S. Department of Agriculture, and transform from the County's General Fund. B-61 i INDIAN RIVER COUNTY, FLORIDA COMBINING BALANCE SUET ALL ENTERPRISE FUNDS September 30, 1992 B-62 SOLID WASTE DISPOSAL GOLF DISTRICT COURSE ASSETS Current Assets: $ 601,593 $ 179,789 Cash and cash equivalents 966,006 Investments 52,399 - Accounts receivable - net 1,761 - Due from other funds 41,865 38 Due from other governments 115,047 13,115 Interest receivable 27.355 inventories 1.778,671 220.297 Total current assets Restricted Assets: - 1,780,129 Cash and cash equivalents 8,921,354 881,432 Investments Due from other governments - Impact fees receivable _ Special assessments receivable Advance to other funds 8,921,354 2,661,561 Total restricted assets Property, Plant and Equipment 10,338,340 7,384,752 Less: Accumulated depreciation (3,908,195) (621,655) Total property, plant and equipment 6,430,145 6,763,097 Other Assets: 136,210 130,191 Unamortized bond costs Intangible assets 156,133 - Deposits - 292,343 11000 131.191 Total other assets $17,422.513 S9,776,146 Total Assets B-62 ■ Continued The accompanying notes are an integral part of the financial statements. B-63 WATZR COUNTY AND Sgt HOUSING TOTALS BUILDING SYSTM AUTHORITY $ 455,531 S 1,250,387 S 52,558 $ 2,539,858 - 966,006 - 1,512,222 37,418 1,602,039 _ 1,761 - 375,415 - 417,318 - 90,558 - 218,720 414,466 - 441,821 455,531 3,643,048 69,976 6,187,523 - 1,023,456 223,536 3,027,121 - 8,406,226 - 18,209,012 _ - 105,328 105,328 - 2,169,833 - 2,169,833 - 2,329,290 - 2,329,290 607,500 - 607,500 14,536,305 328,864 26,448,084 199,671 84,701,620 9,244,732 111,869,115 (124,806) (12,637,232) (5960073) (17,887,961) 74,865 72464,386 8,648,659 93,981,154 - 459,194 - 725,595 - 210,000 - 366,133 _ B94 1,894 - 669,194 894 1,093,622 Continued The accompanying notes are an integral part of the financial statements. B-63 INDIAN RIVER COUNTY, FLORIDA COMBINING BALANCE BED= - CONTINUED ALL ENTERPRISE FUNDS September 30, 1992 B-64 SOLID WASTE DISPOSAL GOLF DISTRICT COURSE LIABILITIES AND FUND EOOITY Current Liabilities (Payable from Current Assets): S 163,329 S 109,023 Accounts payable - 1,939 Due to other governments _ 16 Other deposits held in escrow 60,088 Deferred revenues Total current liabilities (payable from 171,066 current assets) 163,329 Current Liabilities (Payable from Restricted Assets): - 554,723 Accounts payable - 259,342 Retainage payable 278,000 - Arbitrage rebate payable 151,350 49,410 Accrued interest payable 480,000 50,000 Bonds payable Closure and maintenance costs payable 2 605,675, - - Customer deposits Total current liabilities (payable from 26,200 913,475 restricted assets) 3.541,225 Other Liabilities: 59,530 18,348 Accrued compensated absences 6,075,000 8,411,587 Bonds payable - net of unamortized discount 6,134,530 8,429,935 Total other liabilities 9,839,084 9,514,476 Total liabilities Fund Equity: 608,746 423,513 Contributions Retained earnings: 267,417 221,677 Reserved for debt service 1,541,893 45,000 Reserved for renewal and replacement 1,231,000 - Reeerved for closure and maintenance costs (428,520) Unreserved (deficit)3,934,373 Total retained earnings (deficit) 6,974,683 (161,843) Total fund equity 7,583,429 261,670 Total Liabilities and Fund Equity 517,452,513 59,776,146 B-64 �311yII�7BI�I�a The accompanying notes are an integral part of the financial statements. B-65 WATER COUNTY AND SEWER HOUSING TOTALS BUILDING SYSTEM AUTHORITY $ 15,549 S 353,476 S 7,221 $ 648,596 - 7,157 5,218 - _ 18,737 18,721 - 60,088 39,488 353,476 7,221 734,580 - 849,239 176,993 1,580,955 - 374,380 - 633,722 _ 276,000 - 476,032 4,540 681,332 - 242,800 165,000 937,800 _ 2,605,675 723,837 10,797 760,634 2,666,288 357030 7,478018 26,843 85,258 - 189,979 24,571,645 5,283,400 44,341,632 26,843 24,656,903 5,283,400 44,531,611 66,331 27,676,667 5,647,951 52,744,509 12,181 55,473,697 3,329,880 59,848,017 _ - 9,083 498,177 - 877,774 126,893 2,591,560 _ 1,231,000 451,884 6,884,797 (45,414) 10,797,120 451,884 7,762,571 90,562 15,117,857 464.065 b3,236,268 3,420,442 74,965,874 �311yII�7BI�I�a The accompanying notes are an integral part of the financial statements. B-65 INDIAN RIVER COUNTY, FLORIDA COMINI STATEMENT OF REVENUER EXPENSES AND CHANGES IN RETAINED EARNINGS ALL ENTERPRISE FUNDS Year Ended September 30, 1992 SOLID WASTE DISPOSAL GOLF DISTRICT COURSE Operating Revenues( Charges for services $5.253.284 81,476.966 Total operating revenues 5,253,284 1,476,966 Operating Expenses: 1,827,809 753,134 personal services p Materials, supplies, services and other operating 2,447,403 460,457 Depreciation 1,182,665 5,457,897 82,054 1,295,645 Total operating expenses Operating Income (LOSS) (204,613) 181,321 Monoperating Revenues (Expenses): 869,132 80,401 Interest income 203,614 Operating grants Gain on disposal of equipment (471,947) (151,375) Interest expense Bond amortization expense (26,834) (5,987) Intangible amortization expense (8,218) - Loss on disposal of equipment (52,521) - Total nonoperating revenues (expenses) 513,426 (76,961) Income (Loss) Before operating Transfers 308,813 104,360 operating Transfers In - - Net Income (Loss) 308,813 104,360 Adds Depreciation on Fixed Assets Acquired by Contributed Capital 90,285 - Increase (Decrease) in Retained Earnings 399,098 104,360 Retained Earnings (Deficit), at Beginning of Year 6,575,585 (266,203) Retained Earnings (Deficit), at End of Year 56,974,683 S (161,843) B-66 The accompanying notes are an integral part of the financial statements. B-67 WATZR COUNTY AND BMW HOUSING TOTALS BUILDING SYSTD( AUTHORITY $ 471,932 $10,712,023 $ 356,903 $18,271,108 16,271,108 471,932 10,712,023 356,903 720,930 3,166,806 159,034 6,627,713 154,930 2,980,881 185,477 6,229,148 27,258 3,061,413 156,396 4,509,806 903,118 9,209,100 500,907 17,366,667 (431,166) 1,502,923 (144,004) 904,441 34,413 626,670 7,568 1,820,184 - - 11,297 215,111 1,768 729 - 2,497 - (1,203,173) (35,409) (1,861,904) - (22,848) - (55,669) - (15,000) - (23,218) (497) (1,524) (2,305) (56,847) 35,684 (413,146) (18,849) 40,154 (395,502) 1,089,777 (162,853) 944,595 84,666 84,666 (395,502) 1,089,777 (78,187) 1,029,261 1,159,824 31,595 1,281,704 (395,502) 2,249,601 (46,592) 2,310,965 847,386 S 451,884 5,512,970 S 7,76271 137,154 S 90.562 12,806,892 $15,117,657 The accompanying notes are an integral part of the financial statements. B-67 INDIAN RIVER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS ALL ENTERPRISE FUNDS Year Ended September 30, 1992 B-68 SOLID WASTE DISPOSAL GOLF DISTRICT COURSE Cash Flows from Operating Activities: Cash received from customers $ 5,414,430 $ 1,531,572 Cash payments to suppliers for goods and services (1,172,314) (395,989) Cash payments to employees for services (1,813,950) (749,535) Net cash provided by (used in) operating activities 2,428,166 386,048 Cash Flows from Noncapital Financing Activities: Operating transfers in - - Operating grants 203,814 Net cash provided by noncapital financing activities 203,814 - Cash Flows from Capital and Related Financing Activitiess Proceeds from issuance of long-term debt - - Principal paid on long-term debt (455,000) (450000) Interest. paid on long-term debt (460,695) (628,979) Proceeds from sale of fixed assets - - Purchase of fixed assets (2,156,077) (2,691,796) Bond paying agent fees (11901) (543) Bond issuance costs - - Capital contributed by others 91,979 1,500 Net cash provided by (used in) capital and related financing activities (3,003,894) (3,364,818) Cash Flows from Investing Activities: Purchase of investment securities (8,978,380) - Purchase of special assessments - - Proceeds from sale and maturities of investment securities 6,889,469 360,000 Interest and dividends on investments 889,960 287,477 Net cash provided by (used in) investing activities (1,198,951) 647,477 Net Increase (Decrease) in Cash and Cash Equivalents (1,570,865) (21331,293) Cash and Cash Equivalents at Beginning of Year 2,172,458 4,291,211 Cash and Cash Equivalents at End of Year S 601,593 S 1.9918 Classified As: Current assets $ 601,593 $ 179,789 Restricted assets - 1,780,129 Totals S 601,593 S 1,95 9,9188 B-68 Continued The accompanying notes are an integral part of the financial statements. B-69 WATER COUNTY AND SEWER HOUSING BUILDING SYSTEM AUTHORITY TOTALS S 474,153 $ 10,246,233 S 363,400 $ 18,029,788 (149,014) (2,926,349) (181,745) (4,825,411) (723,164) (3,149,018) (159,577) (6,595,244) (398,025) 4,170,666 22,078 6,609,133 - - 84,666 84,666 - - 11,297 215,111 - - 95,963 299,777 - 8,985,204 1,116,575 10,101,779 - (40062,600) (108,000) (41670,600) - (11433,616) (33,828) (2,577,318) 2,300 1,682 - 4,182 (350) (10,687,533) (3,405,524) (180943,280) - (2,442) - (4,886) - (226,673) - (226,673) - 4,150,016 2,317,129 6,560,624 11950 (3,275,762) (113,648) (91756,172) - (11,997,066) - (20,975,466) - (660,312) - (660,312) - 8,823,622 - 16,073,091 34,413 1,117,287 7,568 2,336,705 34,413 (2,716,489) 7,568 (3,225,982) (3610662) (1,821,385) 11,961 (61073,244) 817,193 4,095,228 264,133 11,640,223 S 455,531 S 2,273, 843 S 276,094 S 5,566,979 S 455,531 $ 1,250,387 $ 52,558 S 2,539,858 - 1,023,456 223,536 3,027,121 S 455,531 S 2,273.843 S 276,094 S 5,566,979 Continued The accompanying notes are an integral part of the financial statements. B-69 INDIAN RIVER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS - CONTINUED ALL ENTERPRISE FUNDS Year Ended September 30, 1992 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Amortization (Increase) decrease in assets: Accounts receivable Due from other funds Due from other governments Inventories Deposits Increase (decrease) in liabilities: Accounts payable Due to other governments Other deposits in escrow Accrued payroll Customer deposits Closure costs payable Deferred revenues Arbitrage rebate payable Accrued compensated absences Total adjustments Net Cash Provided by (Used in) Operating Activities Noncash Capital and Related Financing Activities: Contributed property, plant and equipment H-70 SOLID WASTE DISPOSAL GOLF DISTRICT COURSE $ (204,613) S 181,321 1,182,685 82,054 1,779 - (1,761) - 162,628 7 - 9,959 42,975 - (2,467) 52,570 - 1,939 (1,500) - 956,581 - - 54,599 278,000 - 13,859 3,599 2,632,779 204,727 S 2.428,166 S 386,048 ®i The accompanying notes are an integral part of the financial statements. B-71 WATER COUNTY AND SEWER HOUSING BUILDING SYSTEM AUTHORITY TOTALS $ (431,186) $ 1,502,923 S (144,004) S 904,441 27,256 3461,413 156,396 4,509,806 - - (30744) (3,744) - (547,577) 10,978 (534,820) ' - - (1,761) - - - 162,635 - (65,131) - (55,172) - - - 42,975 1,459 123,516 3,732 178,810 4,457 (3,853) - 2,543 2,221 - - 2,221 - - (543) (543) - 81,767 (737) 79,550 ' - - 956,581 ' - 54,599 - - 278,000 (2,234) 17,788 - 33,012 33,161 _ 2,667,943 166,082 5,704,692 S (398.025) S 4.170.866 S 22.078 S 6.609.133 S - S 771.525 S 105.328 S 876.853 The accompanying notes are an integral part of the financial statements. B-71 APPENDIX C IMe Resolution INDIAN RIVER COUNTY, FLORIDA RESOLUTION NO. 93- A RESOLUTION AUTHORIZING THE RETIREMENT OF CERTAIN OUTSTANDING RECREATIONAL REVENUE BONDS OF THE COUNTY; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $ _ RECREATIONAL REVENUE REFUNDING BONDS, SERIES 1993, TO PROVIDE FUNDS FOR SAID RETIREMENTS; PROVIDING FOR THE RIGHTS OF THE REGISTERED OWNERS OF SAID BONDS; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: SECTION 1. AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to Chapter 125, Florida Statutes, Ordinance No. 77-19 of the County, as amended, and other applicable provisions of law. SECTION 2. DEFINITIONS. The following terms shall have the following meanings in this Resolution, unless the context otherwise clearly requires: A. "Act" shall mean Chapter 125, Florida Statutes, Ordinance No, 77-19 of the County, as amended, and other applicable provisions of law. B. "Additional Parity Bonds" shall mean additional bonds issued in compliance with the terms, conditions and limitations contained herein which have an equal lien on the Pledged Funds, as herein defined, and rank equally in all respects with all other Bonds issued hereunder as to lien and security for payment. C. "Authorized Investments" shall mean those investments specified in Exhibit A attached hereto and such other investments as are approved by the Series 1993 Bond Insurer, provided that such investments are at the time lawful investments for the funds involved under the laws of the State of Florida, including without limitation Section 125.31, Florida Statutes. D. "Board" shall mean the Board of County Commissioners of Indian River County, Florida. E. "Bonds" shall mean the Series 1993 Bonds together with any Additional Parity Bonds hereafter issued hereunder. F. "Bond Registrar" shall mean with respect to any particular series of Bonds issued hereunder the bond registrar for said series of Bonds to be determined by subsequent resolution of the Board, which shall be a bank with trust powers or a trust company. G. "Code" shall mean the Internal Revenue Code of 1986, as amended, and any similar subsequent federal revenue laws. Any reference to a particular section,subsection, etc., of the Code shall also refer to the similar section, subsection, etc., of any similar subsequent federal revenue law. H. "County" shall mean Indian River County, Florida. I. "Federal Securities" shall mean direct obligations of the United States of America, which are not redeemable prior to maturity at the option of the obligor, including without limitation such obligations issued or held in book entry form on the books of the United States of America. J. "Fiscal Year" shall mean the period beginning with and including October first of each year and ending with and including the next September 30. K. "Gross Revenues" shall mean all income and earnings derived from the operation of the Recreational Facilities; and any income from the investment of money in the funds and accounts herein established for the payment of the principal of, interest and premium, if any, on the Bonds. L. "Half -Cent Sales Tax" shall mean the portion of the proceeds of the local government half -cent sales tax on deposit from time to time in the Local Government Half -Cent Sales Tax Clearing Trust Fund in the State Treasury of the State of Florida, allocated for and distributed monthly to the County pursuant to Chapter 218, Part VI, Florida Statutes. M. "Net Revenues" shall mean the Gross Revenues less Operating Expenses. N. "Operating Expenses" shall mean the current expenses paid or accrued for the operation, maintenance and repair of the Recreational Facilities, as determined in accordance with generally accepted accounting procedures, and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the County related solely to the Recreational Facilities and costs of labor, materials and supplies, but shall exclude any reserves for renewals and replacements, extraordinary repairs and any allowances for depreciation. 0. "Paying Agent" shall mean with respect to any particular series of Bonds issued hereunder the paying agent for said series of Bonds to be determined by subsequent resolution of the Board, which shall be a bank with trust powers or a trust company. P. "Pledged Funds" shall mean the Net Revenues, the Racetrack and Jai Alai Fronton Funds, the Half -Cent Sales Tax and the other revenues and funds pledged in connection with the Bonds, all in the manner and to the extent provided herein. Q• "Qualified Independent Consultant" shall mean a qualified and recognized independent consultant retained by the County to perform the acts and carry out the duties herein provided for the Qualified Independent Consultant, which consultant, if appropriate, may be the certified public accountants retained, from time to time, to prepare the annual audit of the County, and which consultant shall have a favorable reputation for skill and experience with respect to the acts and duties to be provided hereunder. R. "Racetrack and Jai Alai Fronton Funds" shall mean that portion of the racetrack funds and jai alai fronton funds accruing annually to the County under the provisions of Chapters 550 and 551, Florida Statutes, and allocated to the Board pursuant to law. S. "Record Date" shall mean the fifteenth (15th) day of the month immediately preceding an interest or other applicable payment date for the Bonds. T. "Recreational Facilities" shall mean the properties and assets, real and personal, tangible and intangible, owned and/or operated by the County as of the date of adoption of this Resolution used or useful for two (2) public golf courses and related clubhouse facilities and all properties and assets thereafter acquired or constructed as improvements, additions or expansions thereof. U. "Registered Owner", "Bondholder", "holder" or any similar term shall mean any person who shall be the owner of any outstanding Bond or Bonds as shown on the books of the County maintained by the Bond Registrar. V. "Resolution" shall mean this resolution, as amended and supplemented from time to time. W. "Reserve Account Requirement" shall mean the lesser of (i) the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year; or (11) 1258 of the average annual amount of principal and interest on all outstanding Bonds becoming due in ensuing Fiscal Years. X. "Retired Bonds" shall mean the outstanding Series 1985 Bonds and the outstanding Series 1991 Bonds. Y. "Sales Tax Resolution" shall mean Resolution No. 85-75 of the County, as amended and supplemented. Z. "Series 1985 Bonds" shall mean the Indian River County, Florida Recreational Revenue Bonds, Series 1985, dated as of April 1, 1986, in the original aggregate principal amount of $2,720,000, issued under Resolution No. 85-78 of the County, as amended and supplemented. AA. "Series 1991 Bonds" shall mean the Indian River County, Florida Recreational Revenue Bonds, Series 1991, dated as of August 1, 1991, in the original aggregate principal amount of $6,015,000, issued under Resolution No. 85-78 of the County, as amended and supplemented. BB. "Series 1993 Bonds" shall mean the Indian River County, Florida Recreational Revenue Refunding Bonds, Series 1993, herein authorized to be issued hereunder. CC. "Series 1993 Bond Insurance Policy" shall mean the municipal bond insurance policy issued by the Series 1993 Bond Insurer insuring the payment when due of the principal of and interest on the Series 1993 Bonds, as provided therein. DD. "Series 1993 Bond Insurer" shall mean AMBAC Indemnity Corporation, a Wisconsin domiciled stock insurance company, or any successor thereto. EE. "Term Bonds" shall mean the Bonds of a series all of which are stated to mature on one date but which shall be subject to earlier retirement by operation of the Bond Amortization Account. Words importing singular number shall include the plural number and vice versa and words importing persons shall include firms and corporations or other entities and vice versa. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared that: A. It is necessary, desirable and in the best interest of the County to retire the Retired Bonds. B. It is necessary, desirable and in the best interest of the County to finance the amount necessary to retire the Retired Bonds by the issuance of the Series 1993 Bonds. C. The Bonds shall be payable solely from the Pledged Funds. D. It is expected that the Pledged Funds will be sufficient to pay the principal of, premium, if any, and interest on the Bonds. SECTION 4. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Bonds by the Registered Owners thereof who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the County and such Registered Owners. The covenants and agreements set forth herein to be performed by the County shall be for the equal benefit, protection and security of the Registered Owners of the Bonds, all of which Bonds shall be of equal rank and without preference, priority or distinction with respect to any other Bonds, except as expressly provided in this Resolution and in the Bonds. SECTION 5. AUTHORIZATION TO RETIRE THE RETIRED BONDS. The retirement of all of the outstanding Series 1985 Bonds is hereby authorized. The Series 1985 Bonds maturing before September 1, 1996 shall be retired at maturity at the price of par, plus accrued interest to the maturity date. The Series 1985 Bonds maturing on or after September 1, 1996 shall be retired on September 1, 1995, the earliest optional redemption date, at the price of 1028 of par, plus accrued interest to the redemption date. The retirement of all of the outstanding Series 1991 Bonds is hereby authorized. The Series 1991 Bonds maturing before September 1, 2000 shall be retired at maturity at the price of par, plus accrued interest to the maturity date. The Series 1991 Bonds maturing on or after September 1, 2000 shall be retired on September 1, 1999, the earliest optional redemption date, at the price of 1028 of par, plus accrued interest to the redemption date. The County shall provide for the retirement of the Retired Bonds by: (a) transferring to the Escrow Agent, to be named by subsequent resolution of the Board, from the various sinking funds for the Retired Bonds the amounts therein allocable to the Retired Bonds; (b) transferring to the Escrow Agent from the various reserve accounts for the Retired Bonds amounts, if any, to be specified by subsequent resolution of the Board; (c) depositing with the Escrow Agent an amount from the proceeds of the sale of the Series 1993 Bonds to be specified by subsequent resolution of the Board; and (d) depositing with the Escrow Agent an amount, if any, from other funds of the County to be specified by subsequent resolution of the Board, which amounts, in the aggregate, together with the interest to be earned thereon, when invested as provided in the Escrow Agreement hereinafter mentioned, shall be sufficient to provide for timely retirement of the Retired Bonds. The County shall enter into an Escrow Agreement with the Escrow Agent providing for the retirement of the Retired Bonds, the form of which shall be approved by the Chairman or Vice Chairman of the Board prior to the execution thereof. Such approval shall be conclusively presumed by the execution of the Escrow Agreement by the Chairman or Vice Chairman. The amount transferred to the Escrow Agent from each of the various sinking funds and reserve accounts shall be used only for the purpose of paying the interest on, the principal of and the premium, if any, which first become due on the Retired Bonds to which said sinking funds and reserve accounts relate and as may be more specifically specified by the County. SECTION 6. AUTHORIZATION AND DESCRIPTION OF SERIES 1993 BONDS. Subject and pursuant to the provisions of this Resolution, obligations of the County to be known as "Recreational Revenue Refunding Bonds, Series 199311, are hereby authorized to be issued in the aggregate principal amount of not exceeding $_ The Series 1993 Bonds shall be dated as of a date to be fixed by subsequent resolution of the County and may be numbered consecutively from R-1 upward or in such other manner as agreed upon between the County and the Bond Registrar. The Series 1993 Bonds shall be issued in such denominations, shall bear interest at such rate or rates, not exceeding the maximum rate authorized by applicable law, be payable at such times, shall mature on such dates and in such years and in such amounts, shall be subject to redemption, in whole or in part, prior to their respective stated dates of maturity, at the option of the County or otherwise, at such times and in such manner and shall have such other terms and conditions all as may be determined by subsequent resolution of the Board adopted at or prior to the sale of the Series 1993 Bonds. The Series 1993 Bonds shall be issued in fully registered form without coupons; shall be payable with respect to principal at a corporate trust office of the Paying Agent; shall be payable in lawful money of the United States of America; and shall bear interest from their date, payable by checks mailed to the Registered Owners at their addresses as they appear on the registration books kept by the Bond Registrar on behalf of the County. At the option of any Registered Owner of $1,000,000 or more in aggregate principal amount of the Series 1993 Bonds as of any Record Date, interest shall be payable by domestic wire transfer pursuant to written instructions from such Registered Owner; provided that such instructions are on file with the Paying Agent not later than such Record Date. Notwithstanding any other provisions of this Resolution, the Board may, at its option, prior to the date of issuance of any series of Bonds and subject to the approval of the purchasers of such Bonds, elect to use an immobilization system or pure book -entry system with respect to issuance of such Bonds, provided adequate records will be kept with respect to the ownership of such Bonds issued in book -entry form or the beneficial ownership of the such Bonds issued in the name of a nominee. As long as any of such Bonds are outstanding in book -entry form, the provisions of Sections 7, 9, 10 and 11 of this Resolution shall not be applicable to such Bonds. The details of any alternative system of bond issuance, as described in this paragraph, shall be set forth in a resolution of the Board duly adopted at or prior to the delivery of such Bonds. SECTION 7. EXECUTION AND AUTHENTICATION OF BONDS. The Bonds shall be executed in the name of the County by the Chairman or Vice Chairman of the Board attested by its Clerk and its official seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The signatures of the Chairman or Vice Chairman and Clerk may be either manual or facsimile signatures. The certificate of authentication of the Bond Registrar shall appear on the Bonds, and no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless such certificate shall have been duly executed on such Bond. The authorized signature for the Bond Registrar shall be manual. The validation certificate on the Bonds, if any, shall be executed with the manual or facsimile signature of the Chairman or Vice Chairman of the Board. In case any one or more of the officers of the Board who shall have signed or sealed any of the Bonds shall cease to be such officer or officers of the Board before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as if the persons who signed or sealed such Bonds had not ceased to hold such offices. Any Bonds may be signed and sealed on behalf of the Board by such person who at the actual time of the execution of such Bonds shall hold the proper office, although at the date of such Bonds such person may not have held such office or may not have been so authorized. SECTION 8. NEGOTIABILITY. The Bonds issued hereunder shall be and shall have all of the qualities and incidents of negotiable instruments under the laws of the State of Florida, and each successive holder, in accepting any of the Bonds, shall be conclusively deemed to have agreed that such Bonds shall be and have all of the qualities and incidents of negotiable instruments under the laws of the State of Florida. SECTION 9. REGISTRATION, TRANSFER AND EXCHANGE. The Bond Registrar shall be responsible for maintaining books for the registration, transfer and exchange of the Bonds. All Bonds presented for transfer, exchange, redemption or payment (if so required by the Bond Registrar) shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Board or the Bond Registrar, duly executed by the Registered Owner or by his duly authorized attorney. In the case of transfer or exchange of any Bond, the Bond Registrar shall deliver in the name of the designated transferee or transferees or the Registered Owner, as the case may be, a new fully registered Bond or Bonds of authorized denominations and of the same series, maturity and interest rate, in an aggregate principal amount equal to the principal amount that remains outstanding with respect to such Bond so presented. The Bond Registrar may require payment from the Registered Owner or his transferee of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection with any transfer or exchange of the Bonds. Such charges and expenses shall be paid before any such new Bond shall be delivered. Interest on the Bonds shall be paid to the Registered Owner whose name appears on the books of the Bond Registrar as of 5:00 P.M. local time at the location of the Bond Registrar on the Record Date, New Bonds delivered upon any transfer or exchange shall be valid obligations of the County, evidencing the same debt as the Bonds surrendered, shall be secured by this Resolution, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The County and the Bond Registrar may treat the Registered Owner of any Bond as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. SECTION 10. DISPOSITION OF BONDS PAID OR REPLACED. Whenever any Bond shall be delivered to the Bond Registrar for payment of the principal amount thereof upon maturity or redemption, or for replacement, transfer or exchange, such Bond shall be canceled and destroyed by the Bond Registrar, and counterparts of a certificate of destruction evidencing such destruction shall be furnished to the County. SECTION 11. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the County may, in its discretion, issue and deliver a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange for and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon the Registered Owner furnishing the County and the Bond Registrar proof of his ownership thereof and the loss thereof (if lost, stolen or destroyed) and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Board may prescribe and paying such expenses as the Board and the Bond Registrar may incur. All Bonds so surrendered shall be canceled by the Bond Registrar. If any such Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the County may pay the same, upon being indemnified as aforesaid, and if such Bond be lost, stolen or destroyed, without surrender thereof. Any such substitute Bonds issued pursuant to this section shall constitute original, additional, contractual obligations on the part of the County whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. SECTION 12. PROVISIONS FOR REDEMPTION. The Bonds or any portions thereof shall be subject to redemption prior to their respective stated dates of maturity, at the option of the County or otherwise, at such times and in such manner as shall be determined by subsequent resolution adopted prior to the sale thereof. Except as specifically prohibited or otherwise provided by subsequent resolution with respect to a particular series of Bonds, in lieu of any mandatory redemption of Term Bonds, the County may purchase from money in the Sinking Fund or the Bond Amortization Account or other available funds of the County, at a price not to exceed the principal amount thereof plus accrued interest, and tender to the Paying Agent for cancellation Term Bonds of the appropriate series and maturity. The amount of the Term Bonds of such series and maturity to be so called for redemption on the next mandatory redemption date shall be reduced by the principal amount of Term Bonds so purchased and tendered and, if the principal amount thereof is greater than the amount required to be redeemed on the next mandatory redemption date, the excess may be credited against subsequent mandatory redemptions in such manner as the County may direct. Notice of such redemption shall, not more than forty-five (45) days and not less than thirty (30) days prior to the redemption date, (i) be filed with the Bond Registrar and Paying Agent, and (ii) be mailed, postage prepaid, to all Registered Owners of Bonds to be redeemed at their addresses as they appear of record on the books of the Bond Registrar as of forty-five (45) days prior to the date fixed for redemption. Interest shall cease to accrue on any Bond duly called for prior redemption on the redemption date, if payment thereof has been duly provided. The County and the Bond Registrar shall not be required to issue or to register the transfer of or exchange any Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of Bonds to be redeemed and ending at the close of business on the day of mailing the applicable notice of redemption, as hereinafter provided, or to register the transfer of or exchange any portion of any of the Bonds selected for redemption until after the redemption date. All notices of redemption with respect to the Bonds shall specify the series, maturities and numbers of the Bonds to be redeemed (including the CUSIP numbers); the date fixed for redemption; the redemption price or prices to be applicable to the Bonds to be redeemed; and that on the date fixed for redemption such Bonds shall be payable at the principal corporate trust office of the Paying Agent (specifying the address of same). If holders or registered owners of all such Bonds to be redeemed file written waivers of notice with the Paying Agent, such Bonds may be redeemed on the redemption date without necessity of notice by mailing. Failure to mail any notice of redemption or any defect therein or in the mailing thereof shall not affect the validity of any proceeding for redemption of other Bonds so called for redemption. So long as the Series 1993 Bond Insurance Policy is in effect, notice of redemption of Series 1993 Bonds, other than mandatory sinking fund redemption and redemption resulting from a refunding, shall be given or published only if sufficient funds have been deposited with the Paying Agent to pay the redemption price of the Series 1993 Bonds to be redeemed. SECTION 13. FORM OF BONDS. The text of the Bonds, the validation certificate thereon, if applicable, and the certificate of authentication thereon shall be in substantially the following form, with such omissions, insertions and variations as may be necessary and/or desirable and authorized or permitted by this Resolution or any subsequent resolution adopted prior to the issuance thereof, or as may be necessary to comply with applicable laws, rules and regulations of the United States and the State of Florida in effect upon the issuance thereof: No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA INDIAN RIVER COUNTY RECREATIONAL REVENUE REFUNDING BOND, SERIES RATE OF INTEREST MATURITY DATE DATED DATE OF SERIES CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: KNOW ALL MEN BY THESE PRESENTS, that INDIAN RIVER COUNTY, FLORIDA (the "County"), for value received, hereby promises to pay to the Registered Owner named above, or registered assigns, solely from the special funds hereinafter mentioned, on the Maturity Date specified above, the Principal Amount specified above, unless this Recreational Revenue Refunding Bond, Series _ (the "Bond") shall be redeemable and duly shall have been called for earlier redemption and payment of the redemption price shall have been made or provided for, and to pay, solely from such special funds, semiannually on and of each year, beginning , interest on the Principal Amount specified above, at the Rate of Interest specified above, per annum, until such Principal Amount is paid in full. Interest on this Bond shall be payable from the interest payment date next preceding the date of registration and authentication of this Bond, unless: (a) this Bond is registered and authenticated as of an interest payment date, in which event this Bond shall bear interest from such interest payment date; or (b) this Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event this Bond shall bear interest from such interest payment date; or (c) this Bond is registered and authenticated on or prior to the Record Date first preceding , in which event this Bond shall bear interest from or (d) as shown by the records of the Paying Agent (hereinafter defined), interest on this Bond is in default, in which event this Bond shall bear interest from the date to which interest was last paid on this Bond. The Principal Amount hereof, together with any applicable redemption premium with respect thereto, shall be payable, when due upon maturity or earlier redemption, upon presentation and surrender of this Bond at the corporate trust office of (the "Paying Agent") located in Florida, as Paying Agent. Interest hereon shall be paid, when due, by check mailed to the Registered Owner whose name and address shall appear, at 5:00 P.M. prevailing local time at the location of the Bond Registrar (hereinafter defined) on the fifteenth (15th) day of the month next preceding each interest payment date (the "Record Date"), on the registration books maintained by (the "Bond Registrar"), , Florida, as Bond Registrar, irrespective of any transfer or exchange of this Bond subsequent to such Record Date and prior to such interest payment date, unless the County shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name this Bond is registered on such registration books at 5:00 P.M. prevailing local time at the location of the Bond Registrar on a special record date for the payment of such defaulted interest established by notice mailed by the Paying Agent to the Registered Owner of this Bond not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business of the Bond Registrar on the fifth (5th) day preceding the date of mailing. At the option of any Registered Owner of $1,000,000 or more in aggregate principal amount of Bonds as of any Record date, interest shall be payable by domestic wire transfer pursuant to written instructions from such Registered Owner; provided that such instructions are on file with the Paying Agent not later than such Record Date. The principal of, premium, if any, and interest on this Bond are payable in lawful money of the United States of America. This Bond is one of the revenue bonds authorized by the County under the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Chapter 125, Florida Statutes, Ordinance No. 77-19 of the County and Resolution No. 93-_ of the County, all as amended and supplemented, and other applicable provisions of law. The above -referenced resolution as amended and supplemented from time to time is hereinafter referred to as the "Resolution". This Bond is subject to all the terms and conditions of the Resolution. This Bond is one of the revenue bonds designated as Recreational Revenue Refunding Bonds, Series _, all of like date and tenor, except as to numbers, denominations, dates of maturity, rates of interest and provisions for redemption, in the aggregate principal amount of Dollars ($ ) (the "Bonds"). The proceeds of the Bonds, together with certain other available funds of the County, will be used to retire the Retired Bonds, as defined in the Resolution, to establish a reserve account and to pay certain costs and expenses relating to issuance of the Bonds and retirement of the Retired Bonds, all as more fully set forth in the Resolution. The principal, interest and premium, if any, on the Bonds are payable from, and are equally and ratably secured by (1) a first lien upon and pledge of (a) the Net Revenues to be derived by the County from the operation of Recreational Facilities; (b) the Racetrack and Jai Alai Fronton Funds; and (c) certain funds and accounts pledged for the payment of the principal of, premium, if any, and interest on the Bonds and certain earnings thereon; and (2) a subordinate lien upon and pledge of the Half -Cent Sales Tax distributed to the County (collectively, the "Pledged Funds"), all as defined and to the extent and as more fully provided in the Resolution. As provided in the Resolution, upon the happening of certain events, the Bonds shall be payable from and be equally and ratably secured by a first lien upon and pledge of fourteen percent (148) of the Half -Cent Sales Tax in lieu of being payable from and equally and ratably secured by the subordinate lien upon and pledge of the Half -Cent Sales Tax. Reference is made to the Resolution for terms and conditions upon which additional bonds may be issued from time to time having a lien upon and right to payment on a parity with the Bonds. This Bond does not constitute a general indebtedness of the County within the meaning of any constitutional or statutory provision or limitation. It is expressly agreed by the Registered Owner of this Bond that such Registered Owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the County for the payment of the principal of, interest or premium, if any, on this Bond or the making of any other payments specified by the Resolution. It is further agreed between the County and the Registered Owner of this Bond that this Bond and the indebtedness evidenced hereby shall constitute a lien upon only the Pledged Funds, all in the manner and to the extent provided in the Resolution. (To be inserted where appropriate on face of bond: "REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH ON THIS SIDE.") The Bonds are issuable only in the form of registered bonds, without coupons, in the denominations of $5,000 principal amount or any integral multiple thereof. This Bond may be transferred only upon the books kept by the Bond Registrar, on behalf of the County, upon surrender hereof at the designated corporate trust office of the Bond Registrar with an assignment duly executed by the Registered Owner or his duly authorized attorney, but only in the manner, subject to the limitations and upon payment of a sum sufficient to cover any tax, 10 fee or governmental charge that may be imposed in connection with such transfer, all as provided in the Resolution. Upon such transfer, there shall be executed in the name of the transferee, and the Bond Registrar shall deliver, as early as practicable, a new fully registered bond or bonds of authorized denominations in the same aggregate principal amount and of the same series, maturity and interest rate as this Bond. In like manner, subject to said conditions and upon payment of any such sum, this Bond may be surrendered at said office of the Bond Registrar in exchange for an equal aggregate principal amount of new fully registered bonds of authorized denominations of the same series, maturity and interest rate as this Bond. The County and the Bond Registrar shall not be required to issue or to register the transfer of or exchange any Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of Bonds to be redeemed and ending at the close of business on the day of mailing the applicable notice of redemption, as hereinafter provided, or to register the transfer of or exchange any portion of any of the Bonds selected for redemption until after the redemption date. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the Constitution and laws of the State of Florida applicable thereto. This Bond is and has all the qualities and incidents of a negotiable instrument under the laws of the State of Florida. (Insert redemption provisions) In lieu of any mandatory redemption of the Bonds, the County may purchase Bonds and tender them to the Paying Agent, all as more fully provided in the Resolution. If less than all Bonds of any one maturity are to be redeemed, the Bonds of such maturity to be redeemed shall be drawn by lot by the Paying Agent. For the purposes of redemption, if this Bond is of a denomination larger than $5,000, it shall be treated as representing that number of Bonds which equals the number obtained by dividing the principal amount hereof by $5,000, each $5,000 portion of this Bond being subject to redemption. In case of partial redemption of this Bond, payment of the redemption price shall be made only upon surrender of this Bond in exchange for Bonds of authorized denominations and of the same maturity and interest rate as this Bond, in aggregate principal amount equal to the unredeemed portion of the principal amount hereof. Notice of any redemption shall be given in the manner provided in the Resolution. On the date designated for redemption, notice having been provided as aforesaid, and money for payment of the principal, premium, if any, and accrued interest being held by the Paying Agent, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and such Bonds or portions thereof so called for redemption shall cease to be entitled to any benefit or security under the Resolution, and the registered owners of such Bonds or portions thereof so called for redemption shall have no rights with respect thereto, except to receive payment of the principal to be redeemed and accrued 11 interest thereon to the date fixed for redemption, together with the redemption premium, if any. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the certificate of authentication hereon shall have been executed by the manual signature of an authorized representative of the Bond Registrar. IN WITNESS WHEREOF, Indian River County, Florida, has issued this Bond and has caused the same to be executed by the Chairman of the Board of County Commissioners of the County and attested by the Clerk of the Board of County Commissioners, either manually or with their facsimile signatures, and its official seal, or a facsimile thereof, to be affixed, impressed, imprinted or otherwise reproduced hereon, all as of the day of , (SEAL) ATTEST: Clerk 12 INDIAN RIVER COUNTY, FLORIDA By: Chairman CERTIFICATE OF AUTHENTICATION AND CERTIFICATE AS TO OPINION It is certified that: (1) This Bond is one of the Bonds described in the within -mentioned Resolution; and (2) The text of the Opinion printed upon this Bond is a true and correct copy of the text of an original Opinion issued by , dated and delivered on the date of original delivery of, and payment for, such Bonds, which Opinion is on file at our corporate trust office referred to in this Bond, where the same may be inspected. As Bond Registrar By: Authorized Representative Date of Registration and Authentication: VALIDATION CERTIFICATE This Bond is one of the bonds which were validated and confirmed by judgment of the Circuit Court of the Nineteenth Judicial Circuit of Florida in and for Indian River County, Florida, rendered on _, 19 , Chairman, Board of County Commissioners of Indian River County, Florida The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship UNIF GIF MIN ACT - (Cust.) Custodian for (Minor) under Uniform Gifts to Minors Act of (State) Additional abbreviations may also be used though not in list above. 13 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers to (Name and address of Transferee) (Social Security or Taxpayer Identification Number of Transferee)this Bond and does hereby irrevocably constitute and appoint as his agent to transfer this Bond on the books kept for registration hereof, with full power of substitution in the premises. (Signature of Transferor) Date: Signature guaranteed: (Name of Bank, Trust Company or Firm) By: Title: NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee unless the signature(s) to this assignment correspond(s) to the name(s) appearing as Registered Owner upon the face of the within Bond in every particular, without enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. Signature(s) of the Transferor(s) must be guaranteed by a member firm of a major stock exchange or a commercial bank or trust company. SECTION 14. BONDS NOT GENERAL OBLIGATIONS. The Bonds shall not be or constitute general or moral obligations or a pledge of the faith, credit or taxing power of the County, the State of Florida or any political subdivision thereof or an indebtedness of any of them as "bonds" within the meaning of the Constitution of the State of Florida, but shall be special obligations of the County payable solely from and secured solely by a lien upon and a pledge of the Pledged Funds, as provided herein. No Registered Owner shall ever have the right to compel the exercise of the ad valorem taxing power of the County, the State of Florida or any political subdivision thereof, or taxation in any form of any real property therein, to pay the principal, interest or premium, if any, on the Bonds, or be entitled to payment of such principal, interest or premium, if any, from any funds of the County other than the Pledged Funds, as provided herein. SECTION 15. SECURITY FOR AND CERTAIN COVENANTS AND PROVISIONS WITH RESPECT TO THE BONDS. The payment of the principal of, premium, if any, and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and first lien upon the Pledged Funds (excluding the Half -Cent Sales Tax). The County does hereby irrevocably pledge the Pledged Funds (excluding the Half -Cent Sales Tax) to the payment of the principal of, premium, if any, and interest on the Bonds, to the extent and in the manner provided herein. The principal of, premium, if any, and interest on the Bonds shall be secured forthwith equally and ratably by a lien upon and a pledge of the Half - 14 Cent Sales Tax. The County hereby irrevocably pledges the Half -Cent Sales Tax to the payment of the principal of, premium, if any, and interest on the Bonds. Such lien and pledge shall be junior and subordinate in all respects to the lien upon and the pledge of the Half -Cent Sales Tax to the payment of the principal of, premium, if any, and interest on the bonds, now outstanding or hereafter issued, under the Sales Tax Resolution. The County shall be obligated to take all lawful action necessary or required to continue to be entitled to receive the Half -Cent Sales Tax. The County hereby covenants that it will not issue any additional installments of bonds authorized under the Sales Tax Resolution or any additional parity obligations under the Sales Tax Resolution unless there shall have been obtained and filed with the County a certificate of the Accountant stating and setting forth the same information as required by Section 17J(1) of the Sales Tax Resolution, except that for purposes of said certificate the Maximum Debt Service Requirement shall include the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year and Sales Tax receipts shall include Race Track Funds and Jai Alai Fronton Funds. However, said certificate shall not be required if compliance with the first paragraph of said Section 17J(1) is not required. If at any time hereafter there are no bonds outstanding under the Sales Tax Resolution and the County covenants not to thereafter issue any bonds under the Sales Tax Resolution, then the foregoing lien upon and pledge of the Half -Cent Sales Tax shall no longer be in effect and the principal of, premium, if any, and interest on the Bonds shall thereafter be secured forthwith equally and ratably by a first lien upon and pledge of fourteen percent (148) of the Half -Cent Sales Tax. The County in such event hereby irrevocably pledges said fourteen percent (148) of the Half -Cent Sales Tax to the payment of the principal of, premium, if any, and interest on the Bonds. In each Fiscal Year the Half -Cent Sales Tax available after the application of the Sales Tax Resolution and the Racetrack and Jai Alai Fronton Funds shall be used to pay the principal of, premium, if any, and interest on the Bonds in such Fiscal Year to the extent that amounts in the Sinking Fund (other than in the Reserve Account) are insufficient to make such payments. To the extent that the Half -Cent Sales Tax and the Racetrack and Jai Alai Fronton Funds received by the County in any Fiscal Year are not required for the payment of the principal of, premium, if any, and interest on the Bonds in such Fiscal Year, they may be used by the County for any lawful purpose. The Half -Cent Sales Tax and the Racetrack and Jai Alai Fronton Funds liened and pledged hereunder may be invested and reinvested only in Authorized Investments maturing not later than the date on which the same will be needed for the purposes therefor. Any and all income received by the County from such investments may be used by the County for any lawful purpose. The foregoing covenants and provisions shall be no longer in effect when no Bonds are outstanding or when all of the Bonds have been defeased pursuant to Section 28. Nothing in this Resolution shall constitute or be construed to constitute a conveyance or mortgage of the Recreational Facilities. 15 SECTION 16. COVENANTS OF THE COUNTY. For so long as any of the principal of and interest on any of the Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund hereinafter created a sum sufficient to pay, when due, the entire principal amount of the Bonds remaining unpaid, together with interest accrued and interest to accrue thereon through such payment date, or until the provisions of Section 28 hereof have been satisfied, the County covenants with the holders of the Bonds issued pursuant to this Resolution that: A. REVENUE FUND. All Gross Revenues shall upon receipt thereof be deposited in the "Recreational Facilities Revenue Fund" (herein the "Revenue Fund"), which is hereby created and established. B. DISPOSITION OF REVENUES. All Gross Revenues on deposit in the Revenue Fund shall be disposed of by the County as needed or as required herein only in the following manner and in the following order of priority: (1) First, the County shall transfer in each month to the "Recreational Facilities Operating Fund" (herein the "Operating Fund"), which is hereby created and established, the amount required to be deposited therein to pay the Operating Expenses due or to become due for such month. (2) Second, the County shall deposit in each month to the "Recreational Revenue Bonds Sinking Fund" (herein the "Sinking Fund"), which is hereby created and established, one-sixth (1/6th) (or such other appropriate equal monthly portion) of the interest on the Bonds to become due on the next interest payment date, together with the amount of any deficiency in prior deposits for interest on Bonds, and one -twelfth (1/12th) (or such other appropriate equal monthly portion) of the principal of Bonds to mature on the next principal payment date. Such deposit shall take into account the sums, if any, deposited in the Sinking Fund out of proceeds from the sale of Bonds to pay interest thereon on the following interest payment date and the reduction in the amount of interest payable on Term Bonds on the following interest payment date attributable to the purchase and tender of Term Bonds in lieu of mandatory redemption, if any. In addition, there shall be deposited in the Sinking Fund amounts sufficient to pay the fees and charges of the Paying Agent. (3) Third, the County shall deposit in each month into an account in the Sinking Fund to be known as the "Bond Amortization Account", hereby created and established, one -twelfth (1/12th) (or such other appropriate equal monthly portion) of the principal of Bonds, if any, subject to mandatory redemption on the next principal payment date. Such deposit shall take into account the principal amount of the Term Bonds subject to mandatory redemption on the next principal payment date that the County shall have purchased and tendered to the Paying Agent in lieu of mandatory redemption on such date (as and to the extent not prohibited under the terms of the particular series of Bonds), if any. (4) Fourth, the County shall deposit into an account in the Sinking Fund to be known as the "Reserve Account", which is hereby created and established, a sum sufficient to increase the amount on deposit in the 16 Reserve Account to the Reserve Account Requirement; Provided, however, in no Fiscal Year shall Net Revenues in excess of twenty percent (208) of the Reserve Account Requirement be required to be deposited in the Reserve Account, except as may be required by subsection L or subsection S below. No further deposits shall be required to be made into the Reserve Account as long as there shall remain on deposit therein (including any Reserve Account Credit Instrument as described below) a sum equal to the Reserve Account Requirement. A sum to be specified by subsequent resolution of the County may be deposited in the Reserve Account out of the proceeds of the sale of Bonds. The value of the Reserve Account, including investments on deposit in the Reserve Account, shall be determined as described in Exhibit A. Notwithstanding the foregoing provisions, in lieu of, in whole or in part, the required deposits into the Reserve Account, the County may cause to be deposited into the Reserve Account any of the following (each a "Reserve Account Credit Instrument"): (a) A surety bond or insurance policy issued to the Paying Agent, as agent of the Bondholders, by a company licensed to issue an insurance policy guaranteeing the timely payment of debt service on the Bonds (a "municipal bond insurer"), if the claims paying ability of the issuer thereof, at the time of issuance thereof, shall be rated "AAA" by Standard & Poor's Corporation or its successor ("S&P") and "Aaa" by Moody's Investors Service or its successor ("Moody's"); (b) A surety bond or insurance policy issued to the Paying Agent, as agent of the Bondholders, by an entity other than a municipal bond insurer, if the form and substance of such instrument and the issuer thereof shall be approved by the Series 1993 Bond Insurer; or (c) An unconditional irrevocable letter of credit issued to the Paying Agent, as agent of the Bondholders, by a bank, if such bank is rated at least "AA" by S&P and "Aa" by Moody's, at the time of issuance thereof. Any such Reserve Account Credit Instrument shall meet the further terms and conditions described in subsection S below and shall be payable or available to be drawn upon, as the case may be (upon the giving of notice as required thereunder), by the Paying Agent on any interest payment date on which a deficiency exists which cannot be cured by money in any other fund or account held pursuant hereto and available for such purpose. It shall be the duty of the Paying Agent to, and the Paying Agent shall, without further authorization or direction from the County, ascertain the necessity for a claim or draw upon any Reserve Account Credit Instrument and provide notice to the issuer of the Reserve Account Credit Instrument in accordance with its terms not later than three days (or such appropriate time period as will, when combined with the timing of required payment under the Reserve Account Credit Instrument, ensure payment under 17 the Reserve Account Credit Instrument on or before the interest payment date) prior to each interest payment date. If a disbursement is made under any such Reserve Account Credit Instrument, the County may reinstate the maximum limits of such Reserve Account Credit Instrument immediately following such disbursement, otherwise the amount of credit toward the Reserve Account Requirement for such Reserve Account Credit Instrument shall be appropriately reduced. Furthermore, the County may at any time and from time to time cause to be deposited in the Reserve Account such a Reserve Account Credit Instrument and cause an appropriate amount to be withdrawn from the Reserve Account and deposited in the Revenue Fund. Moneys in the Reserve Account shall be used only for the purpose of the payment of principal of or interest on Bonds as the same shall become due and payable when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose. However, upon the valuation of the Reserve Account in each year, if the moneys on deposit in the Reserve Account (except the investment income thereon) exceed the amount required, such excess may be withdrawn and deposited in the Revenue Fund. If the Reserve Account Requirement shall at any time be satisfied in whole or in part with a qualifying letter of credit and such letter of credit is about to expire or terminate, the County hereby authorizes and directs the Paying Agent to draw upon such letter of credit prior to its expiration or termination to the extent required to fully fund the Reserve Account Requirement unless a replacement Reserve Account Credit Instrument is in place or the Reserve Account is otherwise fully funded in its required amount. (5) Fifth, the County shall from time to time transfer to the Series 1993 Rebate Account and other similar accounts established with respect to any Additional Parity Bonds amounts required or estimated to be required for the purposes thereof. (6) Sixth, the County shall apply an amount sufficient for the payment of current debt service and reserve requirements with respect to any obligations of the County which have a lien on the Pledged Funds junior and subordinate to the lien of the Bonds. (7) Seventh, the County may deposit into the "Recreational Facilities Improvement Fund" (herein the "Improvement Fund"), which is hereby created and established, an amount to be determined by the County Administrator to be used only for the purpose of paying the costs of extraordinary repairs, renewals, replacements, improvements, additions and expansions with respect to the Recreational Facilities. Money on deposit in the Improvement Fund may be withdrawn only upon the authorization of the County Administrator. (8) Eighth, the balance of any moneys remaining in the Revenue Fund after the above required payments have been made may be used by the County for any lawful purpose. 18 No further deposits to the Sinking Fund, the Bond Amortization Account or the Reserve Account shall be required when the aggregate sums deposited therein are and remain at least equal to the sum of all of the principal and interest then due and thereafter becoming due in all ensuing years for the Bonds then outstanding. C. PLEDGED FUNDS AND INVESTMENT OF FUNDS. The Revenue Fund, the Sinking Fund, the Bond Amortization Account and the Reserve Account shall be Pledged Funds, shall constitute trust funds for the purposes provided herein for such funds and shall be used only for the purposes and in the manner provided herein. All moneys in all funds and accounts created or established hereunder shall be continuously secured in the manner by which deposits of public funds are required to be secured by the laws of the State of Florida. Moneys on deposit in the Revenue Fund and the Sinking Fund (except the Reserve Account therein) may be invested and reinvested only in Authorized Investments maturing not later than the date on which the moneys therein will be needed for the purposes of such funds. Moneys in the Reserve Account may be invested and reinvested in Authorized Investments maturing not later than ten (10) years from the date of purchase. Except as may be provided in a resolution adopted in connection with the issuance of Additional Parity Bonds, any and all income received by the County from such investments shall be deposited into the Revenue Fund. D. OPERATION AND MAINTENANCE. The County will maintain the Recreational Facilities and all parts thereof in good condition and will operate the same in an efficient and economical manner, making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. E. RATE COVENANT. The County shall, to the extent practicable, fix, establish, revise from time to time whenever necessary, maintain and collect such fees, rates, rentals and other charges for the use of the services of the Recreational Facilities so as to provide Net Revenues in each Fiscal Year sufficient to pay (a) one hundred percent (1009) of all required deposits into the Reserve Account, and (b) one hundred percent (1009) of the amount of principal and interest becoming due in such Fiscal Year on the Bonds outstanding. For purposes of this subsection, any amounts owed by the County to the issuer of a Reserve Account Credit Instrument as a result of a draw thereon, as appropriate, shall be added to the principal and interest payable on the Bonds to determine compliance with this rate covenant. F. BOOKS AND RECORDS. The County shall keep proper books, records and accounts, showing correct and complete entries of all transactions of the County relating to the Recreational Facilities and the Pledged Funds. Registered Owners of the Bonds shall have the right at all reasonable times to inspect all books, records and accounts of the County relating to the Recreational Facilities and the Pledged Funds. G. ANNUAL AUDIT. The County shall also, at least once a year, within 180 days after the close of its Fiscal Year, cause the books, records and accounts relating to the Recreational Facilities and the Pledged Funds to be audited by a independent firm of certified public accountants. A copy of such annual audits shall be furnished to any Registered Owner of the Bonds who shall have requested in writing that a copy of such audits be furnished him. 19 H. NO MORTGAGE OR SALE OF THE SYSTEM. The County will not mortgage, pledge or otherwise encumber the Recreational Facilities or any part thereof, or any Gross Revenues to be derived therefrom, and will not sell, lease or otherwise dispose of any substantial portion of the Recreational Facilities, except as provided herein. The County may sell, lease or otherwise dispose of a substantial portion of the Recreational Facilities in the event that (a) such portion is determined by resolution of the Board, upon the recommendation of the County Administrator and the Qualified Independent Consultant, to be no longer necessary or useful or profitable for the Recreational Facilities; and (b) the sale, lease or other disposition of such portion is determined by resolution of the Board, upon recommendation of the County Administrator and the Qualified Independent Consultant, not to impair the ability of the County to comply during the current or any future Fiscal Year with the rate covenant set forth herein. The proceeds derived from any sale, lease or other disposition (including condemnation) of a substantial portion of the Recreational Facilities shall be used for the retirement of outstanding Bonds. The proceeds derived from the sale, lease or other disposition (including condemnation) of less than a substantial portion of the Recreational Facilities shall be placed in the Improvement Fund, provided, however, all or a portion of such proceeds may be used for the retirement of outstanding Bonds if authorized by resolution of the Board upon the recommendation of the County Administrator and the Qualified Independent Consultant. I. INSURANCE. To the extent practicable, the County will carry adequate fire and windstorm insurance on all buildings, structures and other appropriate properties of the Recreational Facilities which are subject to loss through fire or windstorm, will carry adequate public liability insurance, and will otherwise carry insurance of all kinds and in the amounts normally carried in the operation of similar facilities and properties in Florida. Any such insurance shall be carried for the benefit of the Registered Owners of the Bonds. All moneys received from losses under any of such insurance, except public liability, are hereby pledged by the County as security for the Bonds, until and unless such proceeds are used to remedy the loss or damage for which such proceeds are received, in which event the repairing of the property damaged or the replacement of the property destroyed shall be commenced within a reasonable time after the receipt of such proceeds and shall proceed on a reasonable and continuous basis. J. NO FREE USE. The County shall not furnish or supply the facilities or services of the Recreational Facilities free of charge to any person, firm or corporation, public or private. K. REMEDIES. Any Registered Owner may by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the laws of the State of Florida, and may enforce and compel the performance of all duties required hereunder or by any applicable statutes to be performed by the County or by any officer thereof. Nothing herein, however, shall be construed to grant to any Registered Owner any lien on any property of or in the County, except in the manner and to the extent provided herein. 20 L. ADDITIONAL PARITY BONDS. No Additional Parity Bonds, payable on a parity from the Pledged Funds with the Bonds, may be issued hereunder, except for the purpose of refunding outstanding Bonds, but no refunding may be undertaken in accordance with this provision if it shall result in an increase in the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year. Each resolution authorizing the issuance of Additional Parity Bonds shall recite that all of the covenants herein contained will be applicable to such Additional Parity Bonds. Additional Parity Bonds may not be issued hereunder at any time while the County is in default in performing any of the covenants and obligations assumed hereunder, or all payments herein required to have been made into the accounts and funds, as provided hereunder, have not been made to the full extent required. The County covenants for the benefit of the Registered Owners of the Bonds issued and outstanding hereunder that the County shall, at the time of issuance of any Additional Parity Bonds, make a deposit to the Reserve Account in the Sinking Fund created hereunder so that the Reserve Account shall have a value of cash and investments at such time equal to the Reserve Account Requirement (giving effect to the Additional Parity Bonds and the retirement of any Bonds being refunded with proceeds of the Additional Parity Bonds), unless at such time all or a portion of the Series 1993 Bonds are outstanding and the Series 1993 Bond Insurer shall agree otherwise. Provided, however, in no event shall such deposit be required to exceed an amount equal to the maximum amount which if deposited from the proceeds of the Additional Parity Bonds would not adversely affect the exclusion of the interest on the Additional Parity Bonds from the gross income of the Registered Owners thereof for purposes of federal income taxation. M. ISSUANCE OF OTHER OBLIGATIONS. The County will not issue any other obligations, except under the conditions and in the manner provided herein, payable from the Pledged Funds, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien of the Bonds upon the Pledged Funds, except as specifically provided herein. The County may issue obligations other than the Bonds payable from the Pledged Funds provided such obligations are junior and subordinate in all respect to the Bonds as to lien on and source and security for payment from the Pledged Funds and such obligations contain an express statement to that effect. N. ARBITRAGE. The County covenants to and with purchasers of the issue which is comprised of the Series 1993 Bonds that it will make no use of the proceeds of such issue which will cause the Series 1993 Bonds to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) and Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") or any applicable regulations implementing said Sections and the County further covenants to comply with all other requirements of the Code and any applicable regulations promulgated thereunder if and to the extent applicable to maintain continuously the exclusion from gross income for Federal income tax purposes of the interest on the Series 1993 Bonds. O. FUNDS AND ACCOUNTS. The designation and establishment of the various funds and accounts created herein does not require the establishment of any completely independent, self -balancing funds as such term is commonly defined and 21 used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets as provided herein. P. POWER TO ISSUE BONDS AND PLEDGE PLEDGED FUNDS. The County is duly authorized under all applicable laws to create and issue the Bonds and to adopt this Resolution and to pledge the Pledged Funds in the manner and to the extent provided herein. Except to the extent otherwise provided in this Resolution and the Sales Tax Resolution, the Pledged Funds have not been pledged or hypothecated (except with respect to the Retired Bonds which are to be retired with proceeds of the Series 1993 Bonds) and, upon issuance of the Series 1993 Bonds, will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the security interest, pledge and assignment created by this Resolution, including any pledge thereof for the benefit of the Retired Bonds, and all action on the part of the County to that end has been and will be duly and validly taken. The Bonds and the provisions of this Resolution are and will be valid and legally enforceable obligations of the County in accordance with their terms and the terms of this Resolution. The County shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of and lien upon the Pledged Funds and all the rights of the Registered Owners under this Resolution against all claims and demands of all persons whomsoever. Q. BONDS SECURED BY PLEDGE OF PLEDGED FUNDS. The Bonds issued hereunder shall be direct and special obligations of the County payable in accordance with their terms and the provisions of this Resolution from the Pledged Funds hereby pledged for the benefit of the Registered Owners, to the extent and in the manner provided herein. The Pledged Funds shall be held in trust by the Clerk of the Circuit Court of the County for the benefit of the Registered Owners of the Bonds to the extent and in the manner provided herein. The Pledged Funds shall immediately be subject to the lien and charge of this Resolution without any physical delivery thereof or further act, and the lien and charge of this Resolution shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise, against the County, irrespective of whether such parties have notice thereof. R. TAX COVENANTS. The County covenants that it will not take any action or fail to take any action with respect to the proceeds of the Bonds that would result in loss of the exclusion from gross income for federal income tax purposes pursuant to section 103(a) of the Code of interest paid on outstanding Bonds which, when initially issued and sold, were the subject of an opinion of counsel to the effect that interest thereon was so excludable. S. FURTHER TERMS AND CONDITIONS OF RESERVE ACCOUNT CREDIT INSTRUMENTS. The further terms and conditions upon which the Reserve Account Requirement set forth in subsection B(4) above may be met in whole or in part with a Reserve Account Credit Instrument are, unless all or a portion of the Series 1993 Bonds are outstanding and the Series 1993 Bond Insurer agrees otherwise, as follows: (1) With respect to any letter of credit: (a) such letter of credit shall be payable in one or more draws upon presentation by the Paying Agent of a sight draft accompanied by its certificate that it 22 (3) The obligation to reimburse the issuer of a Reserve Account Credit Instrument for any fees or expenses or claims or draws upon such Reserve Account Credit Instrument shall be subordinate to the payment of debt service on the Bonds. The right of the issuer of a Reserve Account Credit Instrument to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Account, and, subject to the second succeeding sentence, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Account. The Reserve Account Credit Instrument shall provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the issuer of the Reserve Account Credit Instrument to reimbursement will be further subordinated to cash replenishment of the Reserve Account to an amount equal to the difference between the full original amount available under the Reserve Account Credit Instrument and the amount then available for further draws or claims. In the event (a) the issuer of a Reserve Account Credit Instrument becomes insolvent, or (b) the issuer of a Reserve Account Credit Instrument defaults in its payment obligations thereunder, or (c) the rating of the claims paying ability of the issuer of the insurance policy or surety bond falls below "AAA" by S&P and "Aaa" by Moody's, or (d) the rating of the issuer of the letter of credit falls below "AA" by S&P and "Aa" by Moody's, the obligation to reimburse the issuer of the Reserve Account Credit Instrument shall be subordinate to the cash replenishment of the Reserve Account. (4) In the event (a) the revolving reinstatement feature described in the preceding subparagraph (3) is suspended or terminated, or (b) the rating of the claims paying ability of the issuer of the surety bond or insurance policy falls below "AAA" by S&P and "Aaa" by Moody's, or (c) the rating of the issuer of the letter of credit falls below "AA" by S&P and "Aa" by Moody's, the Issuer shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account to equal the Reserve Account Requirement, such amount to be paid over the ensuing five years in equal installments deposited at least semi-annually or (ii) replace such instrument with another Reserve Account Credit Instrument within six months of such occurrence. In the event (a) the rating of the claims -paying ability of the issuer of the surety bond or insurance policy falls below "A", or (b) the rating of the issuer of the letter of credit falls below "A", or (c) the issuer of the Reserve Account Credit Instrument defaults in its payment obligations hereunder, or (d) the issuer of the Reserve Account Credit Instrument becomes insolvent, the County shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account to equal the Reserve Account Requirement, such amount to be paid over the ensuing year in equal installments on at least a monthly basis, or (ii) replace such instrument with another Reserve Account Credit Instrument within six months of such occurrence. 24 then holds insufficient funds to make a required payment of principal or interest on the Bonds; (b) the draws shall be payable within two days of presentation of the sight draft; (c) the letter of credit shall be for a term of not less than three years and shall be subject to an "evergreening" feature so as to provide the County with at least 30 months' notice of termination; the issuer of the letter of credit shall be required to notify the County and the Paying Agent not later than 30 months prior to the stated expiration date of the letter of credit as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice indicates that the expiration date shall not be extended, the County shall deposit in the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account, together with any other qualifying Reserve Account Credit Instruments, to equal the Reserve Account Requirement, such deposit to be paid in equal installments on a least a semi-annual basis over the remaining term of the letter of credit, unless the Reserve Account Credit Instrument is replaced by another Reserve Account Credit Instrument permitted hereunder; and (d) The letter of credit shall permit a draw in full prior to the expiration or termination of such letter of credit if the letter of credit has not been replaced or renewed. (2) The use of any Reserve Account Credit Instrument shall be subject to receipt of an opinion of counsel acceptable to the Series 1993 Bond Insurer in form and substance satisfactory to the Series 1993 Bond Insurer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the issuer of such credit instrument is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Series 1993 Bond Insurer. In addition, the use of an irrevocable letter of credit shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer in form and substance satisfactory to the Series 1993 Bond Insurer to the effect that payments under such letter of credit would not constitute avoidable preferences under Section 547 of the United States Bankruptcy Code or similar Florida laws with avoidable preference provisions in the event of the filing of a petition for relief under the United States Bankruptcy Code or similar Florida laws by or against the County (or any other account party under the letter of credit). 23 (5) Where applicable, the amount available for draws or claims under a Reserve Account Credit Instrument may be reduced by the amount of cash or permitted investments deposited in the Reserve Account pursuant to either clause (i) of the preceding subparagraph (4). (6) Cash on deposit in the Reserve Account shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Account Credit Instrument. If and to the extent that more than one Reserve Account Credit Instrument is deposited in the Reserve Account, drawings thereunder and repayments of costs associated therewith shall be made on a pro rata basis, calculated by reference to the maximum amounts available thereunder. T. VARIABLE RATE OBLIGATIONS. If the County at any time shall issue Additional Parity Bonds, the interest rate on which is not established at the time of issuance at a single numerical rate with respect to each maturity thereof ("Variable Rate Bonds"), then such Variable Rate Bonds shall, for purposes of this Resolution, save for the provisions with respect to payment of interest thereon to the holders and registered owners thereof, be assumed to bear interest at a fixed rate equal to the higher of (a) 1108 of the current interest rate on the Variable Rate Bonds; or (b) the Bond Buyer 20 General Obligation Bond Index for the last week of the month preceding the date of sale of the Variable Rate Bonds. SECTION 17. SERIES 1993 FUNDS AND ACCOUNT. There is hereby created and established the "Series 1993 Sinking Fund" within the Sinking Fund, the "Series 1993 Bond Amortization Fund" within the Bond Amortization Fund and the "Series 1993 Reserve Account" within the Reserve Account. The Series 1993 Sinking Fund, the Series 1993 Bond Amortization Fund and the Series 1993 Reserve Account shall not in any manner whatsoever affect the parity of the Bonds and are established solely for the accounting convenience of the County. Revenues and other amounts deposited in the Sinking Fund allocable to the Series 1993 Bonds shall be held in the Series 1993 Sinking Fund. Revenues and other amounts deposited in the Bond Amortization Fund allocable to the Series 1993 Bonds shall be held in the Series 1993 Bond Amortization Fund. Revenues and other amounts deposited in the Reserve Account allocable to the Series 1993 Bonds shall be held in the Series 1993 Reserve Account. SECTION 18. APPLICATION OF SERIES 1993 BOND PROCEEDS. All moneys received from the sale of the Series 1993 Bonds shall be deposited and applied by the County as follows: A. All accrued interest shall be deposited into the Series 1993 Sinking Fund and applied exclusively for the payment of interest first becoming due on the Series 1993 Bonds. B. A sum, if any, specified by subsequent resolution of the Board shall be deposited into the Series 1993 Reserve Account in the Sinking Fund. C. An amount to be specified by subsequent resolution of the Board shall be applied in connection with the retirement of Retired Bonds as specified by subsequent resolution of the Board. 25 D. The amount necessary to pay all costs and expenses associated with financial reports, studies and projections, legal fees, accountant's fees, fees of financial advisors, printing expenses, premiums and expenses related to insuring or rating the Series 1993 Bonds and all other similar costs and expenses incurred in connection with the issuance of the Series 1993 Bonds and the retirement of the Retired Bonds shall be paid or provided for. E. The balance remaining, if any, after making all the deposits and payments provided for above shall be deposited into the Series 1993 Sinking Fund and used only for the purpose of paying the principal of and interest on the Series 1993 Bonds which first become payable. SECTION 19. REBATE. Anything to the contrary contained herein notwithstanding, the County shall from time to time transfer into the "Series 1993 Rebate Account" which is hereby created and established amounts sufficient to pay to the United States of America all amounts due with respect to the Series 1993 Bonds under the provisions of Section 148 (f) of the Code. The earnings on the Series 1993 Rebate Account shall be added to and become a part of the 1993 Rebate Account. Moneys in the Series 1993 Rebate Account shall only be used to pay the amounts due to the United States of America under said Section of the Code with respect to the Series 1993 Bonds as the same shall become due and payable; provided, however, if the County shall determin that the amounts in the Series 1993 Rebate Account are in excess of the amounts sufficient for such payments, the County may transfer such excess to the Revenue Fund. It is the intent of this paragraph to provide for payment of all amounts due under said Section of the Code with respect to the Series 1993 Bonds, in such installments and at such times as may be required by said Section of the Code. In the event of any amendment to the Code or the promulgation of regulations under the Code which provide or require otherwise than as provided or required in this paragraph, this paragraph shall be deemed to be amended to incorporate such amendments or regulations, to the extent applicable, and any provisions hereof which conflict with the provisions thereof shall be deemed to be null and void. SECTION 20. SALE OF THE SERIES 1993 BONDS. The Series 1993 Bonds may be sold at public or private sale pursuant to the Act, all at one time or from time to time, as shall be provided by subsequent resolution of the Board. SECTION 21. ADDITIONAL COVENANTS RELATING TO THE SERIES 1993 BOND INSURANCE POLICY. So long as the Series 1993 Bond Insurance Policy is in effect and the Series 1993 Bond Insurer is not in default under the Series 1993 Bond Insurance Policy, bankrupt, insolvent or in receivership, the County shall observe the following covenants: A. The County shall furnish the following to the Series 1993 Bond Insurer: (1) as soon as practicable after the filing thereof, a copy of any financial statement of the County and a copy of any audit and annual report of the County; (2) a copy of any notice to be given to the Registered Owners of Series 1993 Bonds, including, without limitation, notice of any redemption of or defeasance of the Series 1993 Bonds, and any certificate rendered pursuant hereto relating to the security for the Series 1993 Bonds; and 26 (3) such additional information the Series 1993 Bond Insurer may reasonably request. B. The County shall notify the Series 1993 Bond Insurer of any failure of the County to provide any of the items enumerated in paragraphs (1) or (2) of subsection A of this Section. C. The County will permit the Series 1993 Bond Insurer to discuss the affairs, finances and accounts of the County or any information the Series 1993 Bond Insurer may reasonably request regarding the security for the Series 1993 Bonds with appropriate officers of the County. The County will permit the Series 1993 Bond Insurer to have access to the Recreational Facilities and to have access to and to make copies of all books and records relating to the Series 1993 Bonds at any reasonable time. D. The Series 1993 Bond Insurer shall have the right to direct an accounting of the Pledged Funds and other funds and revenues pledged as security for the Series 1993 Bonds, at the County's expense, and the County's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from the Series 1993 Bond Insurer shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended if compliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any Registered Owner of any of the Series 1993 Bonds, E. Notwithstanding any other provision of this Resolution, the County shall immediately notify the Series 1993 Bond Insurer if at any time there are insufficient moneys to make any payments of principal and/or interest as required and immediately upon the occurrence of any event of default hereunder. F. Any provision of hereof expressly recognizing or granting rights in or to the Series 1993 Bond Insurer may not be amended in any manner which affects the rights of the Series 1993 Bond Insurer without the prior written consent of the Series 1993 Bond Insurer. G. Unless otherwise provided in this Section, the Series 1993 Bond Insurer's consent shall be required whenever consent of the holders of the Series 1993 Bonds is required for any of the following purposes: (i) execution and delivery of any amendment, supplement or change to or modification of this Resolution; (ii) removal of the Paying Agent and selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires consent of holders of the Series 1993 Bonds. SECTION 22. CONCERNING THE PAYING AGENT FOR THE SERIES 1993 BONDS. The County covenants and agrees that while any of the Series 1993 Bonds are outstanding and all such bonds have not been defeased in accordance herewith, the Series 1993 Bond Insurance Policy is in effect, and the Series 1993 Bond Insurer is not in default under the Series 1993 Bond Insurance Policy, bankrupt, insolvent or in receivership, the following covenants shall be observed: A. The Paying Agent may be removed at any time, at the request of the Series 1993 Bond Insurer, for any breach of the duties set forth in this Resolution. 27 B. The Series 1993 Bond Insurer shall receive prior written notice of any resignation of a Paying Agent. C. No successor Paying Agent shall be appointed unless the Series 1993 Bond Insurer approves the selection of such successor in writing. D. Notwithstanding any other provision of this Resolution, no removal, resignation or termination of the Paying Agent shall take effect until a successor, acceptable to the Series 1993 Bond Insurer, shall be appointed. SECTION 23. SERIES 1993 BOND INSURER MAY CONTROL PROCEEDINGS. Anything in this Resolution to the contrary notwithstanding, while the Series 1993 Bond Insurance Policy is in effect, any of the Series 1993 Bonds are outstanding and have not been defeased in accordance herewith, and the Series 1993 Bond Insurer is not in default with respect to the Series 1993 Bond Insurance Policy, bankrupt, insolvent or in receivership, then upon default by the County as to payment of the principal of, premium, if any, and interest on Series 1993 Bonds when and as the same become due upon maturity, any earlier redemption, or otherwise, or as to the observance of any covenant of this Resolution, the Series 1993 Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the holders of Series 1993 Bonds or the Paying Agent for the benefit of the holders of Series 1993 Bonds under this Resolution. SECTION 24. PROCEDURE FOR PAYMENT OF SERIES 1993 BONDS PURSUANT TO THE SERIES 1993 BOND INSURANCE POLICY. While the Series 1993 Bond Insurance Policy is in effect and any Series 1993 Bonds insured thereunder (herein, the "Series 1993 Insured Bonds") remain outstanding, the County and the Bond Registrar and the Paying Agent for any Series 1993 Insured Bonds agree to comply with the following provisions: A. At least one (1) day prior to all interest payment dates for Series 1993 Insured Bonds, the Paying Agent will determine whether there will be sufficient available funds in the Funds and Accounts maintained by the County or the Paying Agent under this Resolution to pay the principal of or interest on the Series 1993 Insured Bonds on such interest payment date. If the Paying Agent determines that there will be insufficient funds in such Funds or Accounts, the Paying Agent shall so notify the Series 1993 Bond Insurer and the Bond Registrar. Such notice shall specify the amount of the anticipated deficiency, the Series 1993 Insured Bonds to which such deficiency is applicable and whether such Series 1993 Insured Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified the Series 1993 Bond Insurer at least one (1) day prior to an interest payment date, the Series 1993 Bond Insurer will make payments of principal or interest due on the Series 1993 Insured Bonds on or before the first (1st) day next following the date on which the Series 1993 Bond Insurer shall have received notice of nonpayment from the Paying Agent. B. The Bond Registrar and the Paying Agent shall, after notice has been given to the Series 1993 Bond Insurer as provided in A above, make available to the Series 1993 Bond Insurer and, at the Series 1993 Bond Insurer's direction, to the United States Trust Company of New York, as insurance trustee for the Series 1993 Bond Insurer or any successor insurance trustee (the "Series 1993 Insurance Trustee"), the registration books of the County maintained by the Bond Registrar and all records relating to the Funds and Accounts maintained under this Resolution. 28 C. The Bond Registrar shall provide the Series 1993 Bond Insurer and the Series 1993 Insurance Trustee with a list of registered owners of Series 1993 Bonds entitled to receive principal or interest payments from the Series 1993 Bond Insurer under the terms of the Series 1993 Bond Insurance Policy, and shall make arrangements with the Series 1993 Insurance Trustee (i) to mail checks or drafts to the registered owners of Bonds entitled to receive full or partial interest payments from the Series 1993 Bond Insurer and (ii) to pay principal upon Series 1993 Insured Bonds surrendered to the Series 1993 Insurance Trustee by the registered owners of Series 1993 Bonds entitled to receive full or partial principal payments from the Series 1993 Bond Insurer. D. The Paying Agent shall, at the time it provides notice to the Series 1993 Bond Insurer pursuant to A above, notify registered owners of Series 1993 Bonds entitled to receive the payment of principal or interest thereon from the Series 1993 Bond Insurer (i) as to the fact of such entitlement, (ii) that the Series 1993 Bond Insurer will remit to them all or a part of the interest payments next coming due upon proof of Bondholder entitlement to interest payments and delivery to the Series 1993 Insurance Trustee, in form satisfactory to the Series 1993 Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from the Series 1993 Bond Insurer, they must surrender their Series 1993 Bonds (along with an appropriate instrument of assignment in form satisfactory to the Series 1993 Insurance Trustee to permit ownership of such Series 1993 Bonds to be registered in the name of the Series 1993 Bond Insurer) for payment to the Series 1993 Insurance Trustee, and not the Paying Agent, and (iv) that should they be entitled to receive partial payment of principal from the Series 1993 Bond Insurer, they must surrender their Series 1993 Bonds for payment thereon first to the Paying Agent, who shall note on such Series 1993 Bonds the portion of the principal paid by the Paying Agent and then, along with an appropriate instrument of assignment in form satisfactory to the Series 1993 Insurance Trustee, to the Series 1993 Insurance Trustee, which will then pay the unpaid portion of principal. The Bond Registrar shall take such action as shall be appropriate to enable such notice to be given to Bondholders. E. If the Paying Agent has notice that any payment of principal of or interest on an Insured Bond which has become Due for Payment (as that phrase is defined in the Series 1993 Bond Insurance Policy), and which is made to a Bondholder by or on behalf of the County has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time the Series 1993 Bond Insurer is notified pursuant to A above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the Series 1993 Bond Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent shall furnish to the Series 1993 Bond Insurer its records evidencing the payments of principal of and interest on the Series 1993 Insured Bonds which have been made by the Paying Agent and subsequently recovered from registered owners and the dates on which such payments were made. F. In addition to those rights granted to the Series 1993 Bond Insurer under this Resolution, the Series 1993 Bond Insurer shall, to the extent it makes payment of principal of or interest on Series 1993 Insured Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Series 1993 Bond Insurance Policy, and to evidence such 29 subrogation (i) in the case of subrogation as to claims for past due interest, the Bond Registrar shall note the Series 1993 Bond Insurer's rights as subrogee on the registration books of the County maintained by the Bond Registrar, upon receipt from the Series 1993 Bond Insurer of proof of the payment of interest thereon to the registered owners of the Series 1993 Insured Bonds, and (ii) in the case of subrogation as to claims for past due principal, the Bond Registrar, shall note the Series 1993 Bond Insurer's rights as subrogee on the registration books of the County maintained by the Bond Registrar, upon surrender of the Series 1993 Insured Bonds by the registered owners thereof together with proof of the payment of principal thereof. SECTION 25. SUBROGATION RIGHTS OF SERIES 1993 BOND INSURER. Notwithstanding any provision of this Resolution to the contrary, if the principal and/or interest due on any Series 1993 Bonds insured by the Series 1993 Bond Insurance Policy shall be paid by the Series 1993 Bond Insurer pursuant to the Series 1993 Bond Insurance Policy, such Series 1993 Bonds shall remain outstanding for all purposes, shall not be defeased or otherwise satisfied by such payment and shall not be considered paid by the County, and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the County to the registered owners shall continue to exist and shall run to the benefit of the Series 1993 Bond Insurer, and the Series 1993 Bond Insurer shall be subrogated to the rights of such registered owners. SECTION 26. PARTIES IN INTEREST. Nothing in this Resolution, expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the County, the Series 1993 Bond Insurer, the Paying Agent (or Paying Agents, if applicable), and the registered owners of the Bonds, any right, remedy or claim under or by reason of this Resolution or any covenant, condition or stipulation therein contained, and all covenants, stipulations, promises and agreements in this Resolution contained by and on behalf of the County shall be for the sole and exclusive benefit of the County, the Series 1993 Bond Insurer, the Paying Agent (or Paying Agents, if applicable), and the registered owners of the Bonds. SECTION 27. INTERPRETATION OF RESOLUTION. Notwithstanding any other provision of this Resolution, in determining whether the rights of the Bondholders will be adversely affected by any action taken pursuant to the terms and provisions of this Resolution, the Paying Agent shall consider the effect on the Bondholders as if there were no Series 1993 Bond Insurance Policy. SECTION 28. DEFEASANCE. If at any time the County shall have paid, or shall have made provision for payment of, the principal, interest and premiums, if any, with respect to any of the Bonds or any series thereof, then, and in that event, the pledge of and lien on the Pledged Funds in favor of the Registered Owners of such Bonds or of such series, as the case may be, shall be no longer in effect. For purposes of the preceding sentence, the deposit of Federal Securities in irrevocable trust with a banking institution or trust company, for the sole benefit of the Registered Owners of such Bonds or such series, as the case may be, the principal of and interest on which will be sufficient to pay, when due, the principal, interest and premiums, if any, on such Bonds or such series, as applicable, shall be considered "provision for payment". For purposes of this Section, amounts paid by the Series 1993 Bond Insurer under the Series 1993 Bond Insurance Policy shall not be deemed paid and shall be deemed due and owing until paid by the County. Nothing in this section shall be deemed to require the County to call any of the outstanding Bonds or any series thereof for redemption prior to maturity pursuant to any applicable optional redemption 30 provisions, or to impair the discretion of the County in determining whether to exercise any such option for early redemption. SECTION 29. MODIFICATION OF RESOLUTION. No adverse material modification or amendment of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made without the consent in writing of the Registered Owners of 51% or more in aggregate principal amount of the Bonds then outstanding affected by such adverse material modification or amendment; provided, however, that no modification or amendment shall permit a change in the maturity of any Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof, or affect the unconditional promise of the County to collect the receipts and revenues pledged hereunder, as herein provided, or to pay the principal of and interest on the Bonds as the same shall become due from the Pledged Funds or reduce the percentage required above for an adverse material modification or amendment, without the consent of the Registered Owners of all of the Bonds affected thereby. The foregoing shall not apply with respect to supplemental resolutions adopted for the sole purpose of issuing Additional Parity Bonds or junior and subordinate obligations issued in accordance herewith. Notwithstanding the foregoing, except with respect to any modification or amendment requiring the consent of the Registered Owners of all of the Bonds affected thereby, to the extent that any Bonds are insured by a policy of municipal bond insurance and such Bonds are then rated in one of the two highest rating categories (without regard to gradation) by either Standard & Poor's Corporation or Moody's Investors Service, Inc., or the successor of either of them, then the consent of the issuer of such municipal bond insurance policy shall be deemed to constitute the consent of the Registered Owners of such Bonds; provided, however, a copy of such modification or amendment shall be provided to said rating agencies not less than thirty (30) days prior to the effective date thereof. SECTION 30. SEVERABILITY. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements and provisions hereof, and shall in no way affect the validity thereof or of the Bonds issued hereunder. SECTION 31. REPEALER. All resolutions or parts of resolutions in conflict with this Resolution or any part hereof are, to the extent of such conflict, hereby repealed. SECTION 32. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. 31 The foregoing resolution was offered by Commissioner moved for its adoption. The motion was seconded by Commissioner and, upon being put to a vote, the vote was as follows: Chairman Richard N. Bird Vice Chairman John W. Tippin Commissioner Fran B. Adams Commissioner Carolyn K. Eggert Commissioner Kenneth R. Macht who The Chairman thereupon declared the Resolution duly passed and adopted this _ day of , 1993. (SEAL) Attest Jeffrey K. Barton, Clerk APPROVED AS TO FORM AND LEGAL SUFFICIENCY Charles P. Vitunac County Attorney 32 BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA By: Richard N. Bird, Chairman EXHIBIT A PERMITTED INVESTMENTS A. AMBAC Indemnity will allow the following obligations to be used as Permitted Investments for all purposes, Including defeasance investments in refunding escrow accounts. (AMBAC Indemnity no longer gives a premium credit for the Investment of accrued and/or capitalized Interest.) (1) Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations describes) in paragraph (2) below), or (2) Direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America. B. AMBAC Indemnity will allow the following Obligations to be used as Permitted Investments for all purposes other than defeasance investments in refunding escrow accounts. (1) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including; Export - Import Bank Farmers Home Administration General Services Administration U.S. Maritime Administration Small Business Administration Government National Mortgage Association (GNMA) U.S. Department of Housing & Urban Development (PHA's) Federal Housing Administration; (2) bonds, notes or other evidences of indebtedness rated "AAA" by Standard & Poor's Corporation and "Aaa" by Moody's Investors Service issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years; (3) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1 +" by Standard & Poor's and "P-1" by Moody's and maturing no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (4) commercial paper which is rated at the time of purchase in the single highest classification, "A-1 +" by Standard & Poor's and "P-1" by Moody's Investors Service and which matures not more than 270 days after the date of purchase; (5) investments in a money market fund rated "AAAm" or "AAAm-G" or better by Standard & Poor's Corporation; (6) Pre -refunded Municipal Obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any.such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are rated, based on an irrevocable escrow account or fund (the "escrow,), i the highest rating category of Standard & Poor's Corporation and Moody's Investors Service, Inc. or any successors thereto; or (B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (1) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such Irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; [Pre -refunded Municipal Obligations meeting the requirements of subsection (B) hereof may not be used as Permitted Investments for annual appropriation lease transactions without the prior written approval of Standard & Poor's Corporation.] (7) investment agreements approved in writing by AMBAC Indemnity Corporation [supported by appropriate opinions of counsel) with notice to Standard & Poor's Corporation; and (8) other forms of investments approved in writing by AMBAC with notice to Standard & Poor's Corporation. C. The value of the above investments shall be determined as follows: "Value", which shall be determined as of the end of each month, means that the value of any investments shall be calculated as follows: a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; c) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest; and d) as to any investment not specified above: the value thereof established by prior agreement between the Issuer, the Trustee and AMBAC Indemnity Corporation. APPENDIX D Specimen Municipal Bond Insurance Policy Municipal Bond Insurance Policy Issuer: Bonds: AMBAC Indemnity Corporation clo CT Corporation Systems 44 East Mifflin St., Madison, Wisconsin 53703 Administrative Office: One State Street Plaza, New York, NY 10004 Telephone: (212) (308-0340 Policy Number: Premium: AMBAC Indemnity Corporation (AMBAC) A Wisconsin Stock Insurance Company In consideration of the payment of the premium and subject to the terms of this Policy. hereby agrees us pay to the United States Trust Company of New York, as trustee, or Its successor (the "Insurance Trustee-). for the benefit of Bondholders, that portion of the ptin- cipat of and Interest on the above-described debt obligations (the "Bonds-) which shall become Due forPrnt but shall be unpaid by reason of Nonpayment by the Issuer. AMBAC will make such payments to the Insurance Trustee within one (1) business day following otic o MBAC of Nonpay- ment. Upon a Bondholder's presentation and surrender to the Insurance Trustee of such u a t ant coupons, un - canceled and in bearer form and free of any adverse claim, the Insurance Trustee will r o th Jer t face amount of principal and interest which is then Due for Payment but is unpaid. Upon such disbu m t, A A h 1 be a owner of the surrendered Bonds and coupons and shall he fully subrogated to all of the NontJjrffA(er it ym t. In cases where the Bonds are issuable only in a form whereby principal is Insurance Trustee shall disburse principal to a Bondholder as aforesa of the unpaid Bond, uncanceled and free of any adverse claim, u e rr� Insurance Trustee, duly executed by the Bondholder or such 1 c such Bond to be registered in the name of AMBAC or its in ca. Is payable to registered Bondholders or their assign.a Ins e' us upon presentation to the Insurance Trustee of pro i ai nt t delivery to the Insurance Trustee of an instr n f ssignmen i or claimant Bondholder or such Bundhold •a I zed r r c the interest In respect of which the I r e ch u e t w ade. At payment on registered Bonds to htt• c e ns nt i rsemen IV r Bo � or their assigns, the o d render to the Insunncr Truster nment, in form satisfactory to the r rrsentative, so as to permit ownership of are issuable only in a form whereby interest terest uta Bondholder as aforesaid only to the payment ofinterest on the Bond and insurance Truster, duly executed by the transferring to AMBAC. all rights under such Bond to receive A(: shall be subrogated to all the Bondholders' rights to so made. In the event the trustee or-^ 1 get r t Bo as notice that any payment of principal of or interest on a Bond which has become Due for Payme a whi I m e o older by or on behalf of the issue of the Bonds has been deemed a preferential transfer and thePR2 o f mit egi ed owner pursuant to the United States Bankruptcy Code In accordance with a final, III n: a c n mps ten risdiction, such registered owner will be entitled tit payment from AMBAC to the extent ofsuchreco rcjCn un sarenototherwixravaihhlr. As used here the teVin"' " )n%oPcr.-.mcjns any person other titan the Issuer who, at the time of Nonpayment, Is the owner ofa Bond or ofacoupon ain oonused herein, "Due for Payment", when referring to the principal of Bonds, is when the stated maturity date or t redemption date for the application of a required sinking fund installment has been reached and does not refer trr any rarli which payment Is due by reason of call for redemption (other than by application of required sinking fund installments), acceleration or other advancement of maturity; and, when referring to interest on the Bonds, Is when the stated date for payment of interest has been reached. As used herein," Nonpayment" means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in full of all principal of and interest on the Bonds which are Due for Payment. This Policy is noncancelable. The premium on this Policy is not refundable for any reason, including payment of the Bonds prior to maturity. This Policy does not insure against loss of any prepayment or other acceleration payment which at any time may become due In respect of any Bond, other than at the sole option of AMBAC, nor against any risk other than Nonpayment. In witness whereof, AMBAC has caused this Policy to be affixed with a facsimile of its corporate seal and to be signed by its duly authorized officers in facsimile to become effective as its original seal and signatures and binding upon AMBAC by virtue of the counter- signature of Its July authorized representative. 1 I,MM"� f PD�Idell[ ; r j Secretary 441 'ti, IyBatln Date: \_ Audwrized Itpresentative UNnW SLUMS TRUST COMPANY OF NEW IORK aduiowledges that it has agreed to perform the duties of Insuninim M ustee under this iblicy. &A"17 Form N S66-0003(8192) Audi ri7,e'd Offim AMBAC Indemnity Corporation c/o CT Corporation Systems 44 East Mifflin Street Madison, Wisconsin 53703 Administrative Office: One State Street Plaza Endorsement New York, New York 10004 Policy issued to: Attached to and forming part of Effective Date of Endorsement: The insurance provided by this policy is not covered by the Florida Insu u t s ciatlon. Nothing herein contained shall be limitations of the above mention( of the terms, conditions, provisions, agreements or v In WItne"t1cqsI as ca d its Corporate Seal to be hereto affixed and these presents to be signed by its duly authorso become effective as its original seal and signatures and binding on the Company by virtueofcouauthorized agent. AMBAC Indemnity Corporation EMMI rY : SEAI, 4Z4 �:t=, /President .� �\; :",1rco�+s"..fes Secretary Authorized Representative Form I s3&0004 (3190)- APPENDIX E Proposed Form of Opinion of Bond Counsel RHOADS & SINON ATTORNEYS AT LAW SUITE 301 299 WEST CAMINO GARDENS BOULEVARD BOCA RATON, FLORIDA 33432 Re: Indian River County, Florida $ Aggregate Principal Amount of Recreational Revenue Refunding Bonds, Series 1993 Dated as of 1993 OPINION We have acted as Bond Counsel in connection with the authorization, sale, issuance and delivery of the Recreational Revenue Refunding Bonds, Series 1993, dated as of _ , 1993, in the aggregate principal amount of $ (the "Series 1993 Bonds"), of Indian River County, Florida (the "County"). The Series 1993 Bonds are issued under the Resolution hereinafter defined. No other bonds of the County have been issued and are currently outstanding under the Resolution. The Series 1993 Bonds and any Additional Parity Bonds hereafter issued under the Resolution are herein referred to as the "Bonds". The Series 1993 Bonds are issued pursuant to the Constitution and laws of the State of Florida, particularly Chapter 125, Florida Statutes, Ordinance No. 77-19, duly enacted by the Board of County Commissioners of the County (the "Board") on August 3, 1977, as amended (the "Ordinance"), and Resolution No. 93- , duly adopted by the Board on _ , 1993, as the same may be amended and supplemented (the "Resolution"), and other applicable provisions of law. Under the Resolution, First Union National Bank of Florida, Jacksonville, Florida (the "Paying Agent"), has been appointed as paying agent and registrar for the Series 1993 Bonds. The County, pursuant to power and authority vested in it by law, has determined to retire the Retired Bonds, as defined in the Resolution. The Resolution provides that the proceeds of the Series 1993 Bonds, together with other available funds of the County, are to be used for the following purposes, inter alis: (i) to retire the Retired Bonds; (ii) to make a deposit into the reserve account established under the Resolution; and (iii) to pay certain costs and expenses of issuance of the Series 1993 Bonds and retirement of the Retired Bonds, all as more fully provided in the Resolution. The Resolution contains covenants of the County to comply with provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable regulations promulgated thereunder, inter alia, to preserve the exclusion of interest on the Series 1993 Bonds from gross income for federal income tax purposes. The principal of, interest and premium, if any, on the Bonds are payable from and secured by (1) a first lien upon and pledge of, inter alia, the Net Revenues from the operation of the Recreational Facilities and the Racetrack Funds and Jai Alai Fronton Funds received by the County; and (2) a subordinate lien upon and pledge of the Half -Cent Sales Tax (collectively, the "Pledged Funds"), all as defined and to the extent and as more fully provided in the Resolution. The Series 1993 Bonds shall not constitute a general obligation or indebtedness of the County and the holders thereof shall never have the right to require or compel the exercise of the power of the County to levy ad valorem taxes for the payment of the principal of, interest or premium, if any, on the Series 1993 Bonds. As Bond Counsel, we have examined, among other things: certified copies of 2 certain proceedings of the Board with respect to the Series 1993 Bonds and other proofs submitted to us which are relevant to the authorization, sale, issuance and delivery of the Series 1993 Bonds; certified copies of the Ordinance and the Resolution; certain documents required by the Resolution to be furnished as conditions precedent to the issuance of the Series 1993 Bonds, a no -litigation certificate; a non -arbitrage certificate of the County; a rebate compliance certificate of the County; and usual and required closing affidavits, certificates and documents. We also have examined a specimen of an executed Series 1993 Bond, and assume that, as required by the Resolution, all of the Series 1993 Bonds have been similarly executed, will be issued in registered form and will be authenticated by the Paying Agent, acting as bond registrar. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify such facts by independent investigation. Based on the foregoing, we are of the opinion that: 1. The County is a political subdivision of the State of Florida and has the power to issue the Series 1993 Bonds. 2. The Ordinance and the Resolution have been duly enacted and adopted, respectively, by the County and are valid and enforceable instruments. 3. The County is legally obligated to collect, receive, hold and apply the Pledged Funds in accordance with the provisions of the Resolution. 4. The Series 1993 Bonds are valid and legally binding special obligations of the County and are payable from and secured by a lien upon and pledge of the Pledged Funds, as and to the extent provided in the Resolution. S. The Series 1993 Bonds and the income therefrom are exempt from taxation under the laws of the State of Florida, except estate taxes and taxes 3 imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, banks and savings associations. 6. Assuming investment and application of the proceeds of the Series 1993 Bonds as set forth in the Resolution and the aforementioned non-arbitrage certificate, The Series 1993 Bonds are not presently "arbitrage bonds" as described in Section 103(b)(2) and Section 148 of the Code and applicable regulations promulgated thereunder. 7. Interest on the Series 1993 Bonds (including any original issue discount properly allocable to the holder thereof) is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under present statutes, regulations and judicial decisions; although it should be noted that in the case of corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions expressed in this paragraph are subject to the condition that the County comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 1993 Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes, as the County has covenanted to do in the Resolution and other aforementioned documents. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 1993 Bonds in gross income retroactive to the date of issuance of the Series 1993 Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. It is to be understood that the rights of the holders of the Series 1993 4 Bonds and the enforceability of the Series 1993 Bonds and of the Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Very truly yours, RHOADS & SINON By: Charles L. Sieck 5