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Home My WebLink About1992-216INDIAN RIVER COUNTY, FLORIDA RESOLUTION NO. 92-Zj, A RESOLUTION SUPPLEMENTING RESOLUTION NO. 85-75 OF INDIAN RIVER COUNTY, FLORIDA, AS AMENDED AND SUPPLEMENTED; AMENDING RESOLUTION NO. 85-126 OF THE COUNTY; AUTHORIZING THE RETIREMENT OF A PORTION OF THE OUTSTANDING REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985, OF THE COUNTY AND THE RETIREMENT OF ALL OF THE OUTSTANDING CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 1987, OF THE COUNTY; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $7,530,000 REFUNDING REVENUE BONDS, SERIES 1992, OF THE COUNTY, AS THE THIRD INSTALLMENT OF THE BONDS ORIGINALLY AUTHORIZED UNDER SAID RESOLUTION, TO PROVIDE FUNDS FOR SAID RETIREMENTS; 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, which supplements the Master Bond Resolution hereinafter defined and amends Resolution No. 85-126 of the County, is adopted pursuant to Chapters 125 and 279, Florida Statutes (1991), as amended, County Home Rule Ordinance No. 77-19, as amended, the Master Bond Resolution and other applicable provisions of law. SECTION 2. DEFINITIONS. All terms used herein shall have the meanings ascribed to them in the Master Bond Resolution, except as otherwise expressly provided herein. When used in this Resolution the following terms shall have the following meanings, unless the context clearly requires otherwise: A. "Act" shall mean Chapters 125 and 279, Florida Statutes (1991), as amended, County Home Rule Ordinance No. 77-19, as amended, the Master Bond Resolution and other applicable provisions of law. B. "Board" shall mean the Board of County Commissioners of the County. C. "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. D. "Master Bond Resolution" shall mean Resolution No. 85-75 of the County, as amended and supplemented, from time to time, including, to the extent provided herein, this Resolution. E. "Pledged Funds" shall mean the Sales Tex, the money in certain funds and accounts pledged for the payment of the principal of, interest and premium, if any, on the Bonds and the Investment Income. F. "Resolution" shall mean this resolution, as amended and supplemented from time to time. G. "Series 1985 Bonds" shall mean the Indian River County, Florida Refunding and Improvement Revenue Bonds, Series 1985, dated as of November 1, 1985, in the original aggregate principal amount of $9,855,000, issued as the first installment of the Bonds originally authorized under the Master Bond Resolution. H. "Series 1987 Bonds" shall mean the Indian River County, Florida Capital Improvement Revenue Bonds, Series 1987, dated as of July 1, 1987, in the original aggregate principal amount of $3,655,000, issued as the second installment of the Bonds originally authorized under the Master Bond Resolution. I. "Series 1992 Bonds" shall mean the Refunding Revenue Bonds, Series 1992, herein authorized to be issued as the third installment of the Bonds originally authorized to be issued under the Master Bond Resolution. Words importing singular number shall include the plural number and vice versa and words importing persons shall include firms, corporations and other entities and vice versa. that: SECTION 3. FINDINGS. It is hereby ascertained, determined and declared A. It is necessary, desirable and in the best interest of the County to retire a portion of the outstanding Series 1985 Bonds and to retire all of the outstanding Series 1987 Bonds. B. It is necessary, desirable and in the best interest of the County to finance the amount necessary for said retirements by the issuance of the Series 1992 Bonds as the third installment of the Bonds originally authorized under the Master Bond Resolution. C. The Bonds, including the Series 1992 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, including the Series 1992 Bonds. SECTION 4. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Series 1992 Bonds by the Registered Owners thereof who shall hold the same from time to time, the Master Bond Resolution, including this Resolution, shall be deemed to be and shall constitute a contract between the County and Registered Owners of the Series 1992 Bonds. The covenants and agreements set forth herein and in the Master Bond Resolution to be performed by the County shall be for the equal benefit, protection and security of the Registered Owners of the Bonds, including the Series 1992 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 the Master Bond Resolution, in this Resolution and in the Bonds. SECTION 5. AUTHORIZATION TO RETIRE A PORTION OF THE OUTSTANDING SERIES 1985 BONDS AND TO RETIRE ALL OF THE OUTSTANDING SERIES 1987 BONDS. The retirement of the following outstanding Series 1985 Bonds at maturity or on September 1, 1995, the earliest optional redemption date, as indicated, is hereby authorized: Maturity Date Retirement Date September 1 Principal Amount September 1 1993 $ 170,000 Maturity 1994 180,000 Maturity 1995 195,000 Maturity 1996 215,000 1995 1997 230,000 1995 2000 825,000 1995 2002 685,000 1995 2005 1,275,000 1995 The Series 1985 Bonds to be retired at maturity shall be retired at par plus accrued interest to the maturity date. The Series 1985 Bonds to be retired prior to maturity by optional redemption on September 1, 1995 shall be retired at the price of 1028 of par, plus accrued interest to the redemption date. The retirement of all of the outstanding Series 1987 Bonds is hereby authorized. The Series 1987 Bonds maturing before September 1, 1998 shall be retired at maturity at the price of par, plus accrued interest to the maturity date. The Series 1987 Bonds maturing on or after September 1, 1998 shall be retired on September 1, 1997, the earliest optional redemption date, at the price of 1028 of par, plus accrued interest to the redemption date. The County shall provide for said retirements by: (a) transferring to the Escrow Agent, to be named by subsequent resolution of the Board, from the Sinking Fund the amount therein allocable to the Series 1985 Bonds and the Series 1987 Bonds to be retired; (b) transferring to the Escrow Agent from the Reserve Account an amount, 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 1992 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 payment for said retirements. The County shall enter into an Escrow Agreement with the Escrow Agent substantially in the form to be approved by subsequent resolution of the Board providing for said retirements. The amount transferred to the Escrow Agent from the Sinking Fund and the Reserve Account shall be used only for the purpose of paying the interest on and principal of the Series 1985 Bonds and the Series 1987 Bonds to be retired which first becomes payable. SECTION 6. AMENDMENTS TO RESOLUTION NO. 85-126. The following amendments are made to Resolution No. 85-126 of the County: A. The schedule of years and amounts in SECTION 1.(c) is replaced by the following: YEAR AMOUNT 1998 $280,000 1999 300,000 2000 330,000 B. The schedule of years and amounts in SECTION 1.(d) is replaced by the following: YEAR AMOUNT 2001 $360,000 2002 395,000 C. The schedule of years and amounts in SECTION 1.(e) is replaced by the following: YEAR AMOUNT 2003 $430,000 2004 465,000 2005 510,000 SECTION 7. AUTHORIZATION AND DESCRIPTION OF SERIES 1992 BONDS. Subject and pursuant to the provisions of the Master Bond Resolution and this Resolution, obligations of the County to be known as "Refunding Revenue Bonds, Series 1992," are hereby authorized to be issued in the aggregate principal amount of not exceeding $7,530,000. The Series 1992 Bonds shall be the third installment of the Bonds originally authorized under the Master Bond Resolution. The Series 1992 Bonds shall be dated as of a date to be fixed by subsequent resolution of the County and may be numbered consecutively from one upward or in such other manner as agreed upon between the County and the Bond Registrar. The Series 1992 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 oc 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 1992 Bonds. The Series 1992 Bonds shall be substantially in the form set forth in the Master Bond Resolution, with such omissions, insertions and variations as may be necessary and/or desirable and authorized or permitted by the Master Bond Resolution, 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. The Series 1992 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 principal amount of the Series 1992 Bonds, interest shall be payable by wire transfer pursuant to written instructions from such Registered Owner. The provisions set forth in Exhibit "A" hereto shall apply with respect to the Series 1992 Bonds and the policy insuring the payment of the principal and interest on the Series 1992 Bonds. Copies of any amendments to any resolutions, documents or instruments in connection with the Series 1992 Bonds consented to by the insurer of the Series 1992 Bonds shall be sent to Standard & Poor's Corporation. SECTION B. 1992 FUNDS AND ACCOUNT. There is hereby created and established the "Refunding Revenue Bonds, Series 1992, Sinking Fund" (herein the "1992 Sinking Fund") within the Sinking Fund, the "Refunding Revenue Bonds, Series 1992, Bond Amortization Fund" (herein the "1992 Bond Amortization Fund") within the Bond Amortization Fund and the "Refunding Revenue Bonds, Series 1992, Reserve Account" (herein the "1992 Reserve Account") within the Reserve Account. The 1992 Sinking Fund, the 1992 Bond Amortization Fund and the 1992 Reserve Account shall not in any manner whatsoever affect the parity of the Bonds. Revenues and other amounts deposited in the Sinking Fund allocable to the Series 1992 Bonds shall be held in the 1992 Sinking Fund. Revenues deposited in the Bond Amortization Fund allocable to the Series 1992 Bonds shall be held in the 1992 Bond Amortization Fund. Revenues and other amounts deposited in the Reserve Account allocable to the Series 1992 Bonds, if any, shall be held in the 1992 Reserve Account. SECTION 9. SERIES 1992 BONDS NOT GENERAL OBLIGATIONS. The Series 1992 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. 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 Series 1992 Bonds or the interest thereon, or be entitled to payment of such principal and interest from any funds of the County other than the Pledged Funds. SECTION 10. COVENANTS IN MASTER BOND RESOLUTION. All of the covenants made by the County in the Master Bond Resolution are hereby made, ratified and confirmed and shall apply with respect to the Series 1992 Bonds as if fully set forth herein. SECTION 11. ARBITRAGE. The County covenants to and with purchasers of the issue which is comprised of the Series 1992 Bonds that it will make no use of the proceeds of such issue which will cause the Series 1992 Bonds to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) and Section 148 of the Code or any applicable regulations implementing said Sections, and the County further covenants to comply with all other requirements of the Code if and to the extent applicable to maintain continuously the Federal income tax exemption of interest on the Series 1992 Bonds. SECTION 12. APPLICATION OF SERIES 1992 BOND PROCEEDS. All moneys received from the sale of the Series 1992 Bonds shall be deposited and applied by the County as follows: A. All accrued interest shall be deposited into the 1992 Sinking Fund and applied exclusively for the payment of interest first becoming due on the Series 1992 Bonds. B. A sum, if any, specified by subsequent resolution of the Board shall be deposited into the 1992 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 the Series 1985 Bonds and the Series 1987 Bonds to be retired. 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 1992 Bonds and all other similar costs and expenses incurred in connection with the issuance of the Series 1992 Bonds and the retirement of the Series 1985 Bonds and the Series 1987 Bonds to be retired 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 Sinking Fund and used only for the purpose of paying the principal of and interest on the Series 1992 Bonds which first becomes payable. SECTION 13. REBATE. Anything to the contrary contained herein notwithstanding, the County shall at least annually transfer appropriate amounts from the funds and accounts under the Master Bond Resolution and hereunder to which income on investments attributable to the Series 1992 Bonds has been deposited into an account to be known as the "Refunding Revenue Bonds, Series 1992, Rebate Account" (herein the "1992 Rebate Account") sufficient to pay to the United States of America all amounts due with respect to the Series 1992 Bonds under the provisions of Section 148 (f) of the Code. The earnings on the 1992 Rebate Account shall be added to and become a part of the 1992 Rebate Account. Moneys in the 1992 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 1992 Bonds as the same shall become due and payable. 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 1992 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 14. SALE OF THE SERIES 1992 BONDS. The Series 1992 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 15. MODIFICATION OF RESOLUTION. No adverse material modification or amendment of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made except as permitted under Section 18 of the Master Bond Resolution. SECTION 16. SEVERABILITY. If any one or more of the covenants, agreements or provisions of this Resolution should 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. SECTION 17. REPEALER. Any resolution or part thereof, except the Master Bond Resolution or part thereof, in conflict with this Resolution or part hereof is, to the extent of such conflict, hereby repealed. In the event of a conflict between the Master Bond Resolution or part thereof and this Resolution or part hereof, the Master Bond Resolution or part thereof shall, to the extent of such conflict, prevail, except as may be specifically provided herein. SECTION 18. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. The foregoing resolution was offered by Commissioner _ Bird who moved for its adoption. The motion was seconded by Commissioner _Adams and, upon being put to a vote, the vote was as follows: Chairman Carolyn K. Eggert Aye Vice Chairman Richard N. Bird y� e Commissioner Fran B. Adams .Ave Commissioner Kenneth R. MachtyA e Commissioner John W. Tippin Ave The Chairman thereupon declared the Resolution duly passed and adopted this -a day of Nnvpmhpr , 1992. BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA By: .t , Carolyn,/Y. Eggert, irman Attest: Jef re K. Bg ton, Clerk l/• APPROVED.AS TO FORM AND LEGAL SUFFICIENCY Charles P. Vitunac County Attorney Payments under the Policy A. In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Obligations, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Obligations due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Insurer or its designee. C. In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Obligation to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Obligations as follows: 1. If and to the extent there is a deficiency in amounts required to pay interest on the Obligations, the Paying Agent shall (a) execute and deliver to Citibank, N.A., or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders) and 2. If and to the extent of a deficiency in amounts required to pay principal of the Obligations, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Obligation surrendered to the Insurance Paying agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not hold by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. EXHIBIT A -2- E. Payments with respect to claims for interest on and principal of Obligations disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer with respect to such Obligations, and the Insurer shall become the owner of such unpaid Obligation and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of the Insurer that, 1. They recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Obligations, the Insurer :will be subrogated_ to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Indenture and the Obligations) and 2. They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Policy, which principal and interest shall be doomed past due and not to have been paid), with interest thereon as provided in this Indenture and the Obligation, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. G. In connection with the issuance of additional Obligations, the Issuer shall deliver to the Insurer a copy of the disclosure document, if any, circulated with respect to such additional Obligations. H. Copies of any amendments made to the documents executed in connection with the issuance of the Obligations which are consented to by the Insurer shall be sent to Standard & Poor's Corporation. I. The Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. J. The Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, copies of the Issuer's audited financial statements and Annual Budget. Notices: Any notice that is required to be given to a holder of the Obligation or to the Paying Agent pursuant to the Indenture shall also be provided to the Insurer. All notices required to be given to the Insurer under the Indenture shall be in writing and shall be sent by registered or certified mail addressed to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance. 3065a CONTRACT OF PURCHASE November 24, 1992 Board of County Commissioners of Indian River, Florida Vero Beach, Florida Re: $7,530,000 INDIAN RIVER COUNTY, FLORIDA REFUNDING REVENUE BONDS, SERIES 1992 Dear Commissioners: The undersigned, William R. Hough & Co. (hereinafter referred to as the "Underwriter'), offers to enter into the following Contract of Purchase with Indian River County, Florida (the 'County") which, upon your acceptance of this offer, will be binding upon the County and upon the Underwriter. Terms not otherwise defined herein shall have the same meanings as set forth in the Official Statement (as such term is defined in Paragraph 1 hereol). This offer is made subject to your acceptance of this Contract of Purchase on or before 5:00 p.m., New York time on November 24, 1992 or at such other time or on such other date as we may mutually agree upon. 1. Purchase and Sale of Bonds. Upon the terms and conditions and upon the basis of the respective representations, warranties and covenants hereinafter set forth, the Underwriter hereby agrees to purchase from the County, and the County hereby agrees to sell to the Underwriter, all (but not less than all) of its $7,530,000 aggregate principal amount of Refunding Revenue Bonds, Series 1992, dated December 1, 1992 (the 'Bonds'). The purchase price for the Bonds is $7,425,774.20 after deducting from the aggregate principal amount of Bonds the original issue discount of $39,994.90; and the Underwriter's discount of $64,230.90, plus accrued interest from the date thereof to the date of Closing (as referred to in Section 7 hereol). The Bonds are to be issued and secured under and pursuant to the Constitution and laws of the State of Florida, particularly Chapters 125 and 279, Florida Statutes, and other applicable provisions of Florida law, Indian River County Resolution No. 85-75 and as amended and supplemented including the supplements made by a resolution adopted by the Board of County Commissioners on November 24, 1992, (the "Resolution") providing for the issuance of the Bonds. The Bonds shall have the interest rates, maturities, principal amounts and redemption provisions set forth in Exhibit A. 2. Preliminary Official Statement and Official Statement. The preliminary official statement of the County dated October 1, 1992 relating to the Bonds, is attached hereto as Exhibit B, (which together with the cover pages, summary statement and all exhibits, appendices, reports and statements included therein or attached thereto, and any amendments and supplements that may be authorized by the County and approved in writing by the Underwriter for use with respect to the Bonds, is herein called the "Preliminary Official Statement"). The County by its acceptance hereof approves and deems 'final" the Preliminary Official Statement pursuant to Rule 15c2-12 of the Securities and Exchange Commission. Within seven business days of the date hereof, you will deliver to the Underwriter two copies of the Official Statement (which term as used herein shall include the cover page, the summary statement and appendices contained therein), substantially in the form of the Preliminary Official Statement with such additions thereto as shall be necessary to reflect the final terms and details of the Bonds (the "Official Statement"), executed on your behalf as indicated therein and as provided in Section 5 hereof. 3. Public Offerine. It shall be a condition to the County's obligation to sell and to deliver the Bonds to, or at the direction of, the Underwriter, and to the Underwriter's obligation to purchase, to accept delivery of and to pay for the Bonds, that the entire principal amount of Bonds be delivered by the County and accepted by the Underwriter at the Closing. The Underwriter intends to make an initial bona fide public offering of all of the Bonds at not in excess of the public offering prices (or lower than the yields) set forth on the cover of the Official Statement and may subsequently change such offering prices (or yields) without any requirement of prior notice. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of the Official Statement. The Underwriter agrees to promptly notify the County and its Bond Counsel of any such change in the offering price of the Bonds. 4. Good Faith Deposit. Delivered to the County herewith, as security for the performance by the Underwriter of its obligation to accept and pay for the Bonds at the Closing (as defined in Paragraph 7 below) in accordance with the provisions hereof, is a corporate check payable to the order of the County, in the amount of $75,300 (the "Good Faith Deposit"). In the event you accept this offer, the Good Faith Deposit is to be held uncashed pursuant to the provisions of this paragraph 4. In the event of the Underwriter's compliance with its obligations hereunder, the Good Faith Deposit shall be returned uncashed to the Underwriter at the Closing. In the event of the County's failure to deliver the Bonds at the Closing, or if the County shall be unable at the date of the Closing to satisfy the conditions to the obligations of the Underwriter contained herein, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Contract of Purchase, the Good Faith Deposit shall be immediately returned uncashed to the Underwriter. If the Underwriter fails (other than for a reason permitted hereunder) to accept and pay for the Bonds upon tender thereof by the County at the Closing as herein provided, the Good Faith Deposit may be cashed and the proceeds thereof shall be retained by the County as and for full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriter, and such proceeds shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults, and the County shall have no further action for damages, specific performance or any other legal or equitable relief against the Underwriter. 5. Official Statement. As soon as possible after the time of your acceptance hereof, and in any event on or before seven (7) business days from the date hereof, or by such earlier date, as reasonably requested by the Underwriter, to the extent required by paragraph (b)(3) of Rule 15c2-12 of the Securities and Exchange Commission ("SEC") or the rules of the Municipal Securities Rulemaking Board ("MSRB"), the County shall deliver or cause to be delivered to the Underwriter copies of the Official Statement, dated the date hereof, relating to the Bonds, in sufficient quantities to allow the Underwriter to comply with paragraph (b)(4) of Rule 15c2-12 of the SEC and the rules of the MSRB. The County shall also deliver at Closing to the Underwriter (a) two (2) copies of the Official Statement executed on behalf of the County by the Chairman of the Board of County Commissioners or any other officer of the County authorized to execute the Official Statement by the Resolution, and (b) two (2) certified copies of the Resolution. The County agrees to supplement or amend the Official Statement, in form and substance satisfactory to the Underwriter, when, pursuant to Paragraph 6(l) below or in the reasonable judgment of the Underwriter, such supplementation or amendment is required and agrees to furnish to the Underwriter a reasonable number of copies of such supplementation or amendment. The County has duly adopted the Resolution and authorized the execution of and approved, in substantially final form, the form of the Escrow Deposit Agreement, and any other pertinent documents to which it is a party to be used in connection with the offering, sale and issuance of the Bonds. The County hereby authorizes the use and distribution of the Official Statement in connection with the public offering and sale of the Bonds. In connection with the preparation and delivery of the Official Statement, the County hereby agrees to deliver or cause to be delivered to the Underwriter such usual certificates, opinions, consents, P -a reports, letters and statements from the County's Accountants, officers of the County, Bond Counsel or others as the Underwriter, in its sole discretion, shall reasonably determine to be necessary or desirable to permit the Underwriter to offer the Bonds to the public. 6. Representations and Warranties of the County. The County hereby represents and warrants to the Underwriter that: (a) The County is and will be at the date of Closing a public body, duly organized and validly existing under the laws of the State of Florida, with the full power and authority granted under the Act (as defined in the Resolution); (b) The County is authorized by the Act to adopt the Resolution to issue the Bonds for the purpose for which they will be issued, as described in the Official Statement, to enter into this Contract of Purchase for the sale of the Bonds without competitive bids, and to enter into the Escrow Deposit Agreement and any other agreement which it may have to enter into in connection with the offering, sale and issuance of the Bonds; (c) The County has full legal right, power and authority to: (i) enter into this Contract of Purchase and the Escrow Deposit Agreement, (ii) adopt the Resolution, (iii) sell, issue and deliver the Bonds to the Underwriter as provided herein, and (iv) carry out and consummate the transactions contemplated by this Contract of Purchase, the Resolution, the Escrow Deposit Agreement, the Preliminary Official Statement and the Official Statement, and the County has complied, and at the Closing will be in compliance in all respects, with the terms of the Act and with the obligations on its part in connection with the issuance of the Bonds contained in the Resolution, the Bonds, the Escrow Deposit Agreement and this Contract of Purchase; (d) The County shall have, prior to the Closing, duly adopted the Resolution providing for the issuance of and payment and security for the Bonds and duly authorized all necessary action to be taken by it for: (i) the issuance and sale of the Bonds upon the terms set forth herein and in the Official Statement; (ii) the approval of the Official Statement and the signing of the Official Statement by its duly authorized officer; and (iii) the execution, delivery and receipt of this Contract of Purchase, the Bonds, the Escrow Deposit Agreement and any and all such other agreements and documents as may be required to be executed, delivered and received by the County in order to carry out, give effect to, and consummate the transactions contemplated hereby, by the Official Statement, the Resolution and the Escrow Deposit Agreement; (e) The Resolution has been duly and validly adopted and remains in full force and effect, and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter. The Escrow Deposit Agreement shall be in substantially the form heretofore submitted to and approved by the Underwriter, with only such changes therein or modifications thereof as the Underwriter and the County shall mutually agree upon. The Bonds, when issued, delivered and paid for as herein and in the Resolution provided, will have been duly authorized and issued and will constitute valid and legally enforceable obligations of the County secured in the manner described in the Resolution, in accordance with their terms and the terms of the Act and the Resolution, entitled to the benefits and security of the Resolution subject to applicable bankruptcy, insolvency, and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (f) The descriptions of the Bonds, the Resolution and the Act in the Official Statement conform in all material respects to the Bonds, the Resolution and the Act; -3. (g) Except as may be slated in the Official Statement, there is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the County, threatened against or directly affecting the County (or, to the knowledge of the County, any meritorious basis therefor) contesting the due organization and valid existence of the County or wherein an unfavorable decision, ruling or finding would adversely affect (i) the transactions contemplated hereby or by the Official Statement or the validity or due adoption of the Resolution or the validity, due authorization and execution of the Bonds, the Escrow Deposit Agreement, this Contract of Purchase or any document, instrument or agreement to which the County is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement, or (ii) the exclusion of interest on the Bonds from federal income laxation, or (iii) the ability of the County to receive the Pledged Funds (as defined in the Resolution to pay debt service on the bonds; (h) Except as provided in the Official Statement, to the best knowledge of the County, the County is not in material breach of or material default under any applicable constitutional provision, law, or administrative regulation of the State of Florida or the United States or any applicable judgment or decree, or any loan agreement, indenture, bond, note, or resolution, agreement, or other instrument to which the County is a party or to which the County or any of its property or assets is otherwise subject, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a material default or event of default under any such agreement or other instrument; the execution and delivery of the Bonds, this Contract of Purchase, the Escrow Deposit Agreement, and the adoption of the Resolution and compliance with the provisions on the County's part contained therein, will not conflict with or constitute a material breach of or material default under any constitutional provisions, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement, or other instrument to which the County is a party or to which the County or any of its property or assets is otherwise subject, nor will any such execution, delivery, adoption, or compliance result in the creation or imposition of any lien, charge, or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the County, except as provided by the Bonds and the Resolution; (i) Except as provided in the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter have been duly obtained which are required for the due authorization by or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the County of its obligations in connection with the issuance of the Bonds or its obligations under this Contract of Purchase, the Resolution and the Escrow Deposit Agreement, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; (j) There is, to the best of the County's knowledge, no legislation, enacted or pending, the effect of which would be to remove or limit the exemption of the Bonds and the interest thereon from taxation imposed by the State of Florida, except as may otherwise be disclosed in the Official Statement or the legality of investment in the Bonds for certain investors as provided in the laws of the State of Florida; (k) At the time of the County's acceptance hereof and at all times subsequent thereto up to and including the date of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in fight of the circumstances under which they were made, not misleading, -4- except as shall have been remedied by a supplement or amendment pursuant to Paragraph 6(1) below; (1) If between the date of this Contract of Purchase and the date of the Closing the County shall have knowledge of the occurrence of any event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the County shall notify the Underwriter thereof, and, if in the opinion of the County such event requires the preparation and publication of a supplement or amendment to the Official Statement, the County will at its expense supplement or amend the Official Statement in a form and in a manner approved in writing by the Underwriter, unless the Underwriter, in his discretion, elects to cancel his obligations under this Contract of Purchase, pursuant to Paragraph 8(d)(v) below; (m) The County hereby agrees, immediately after the Closing, to apply the proceeds from the sale of the Bonds as specified in the Resolution and the Escrow Deposit Agreement, and as more fully described in certificates to be delivered at the Closing; and (n) The County has deemed final the Preliminary Official Statement within the meaning of paragraph (b)(3) of SEC Rule 15c2-12 except for certain permitted omissions. Any certificate signed by an authorized officer of the County delivered to the Underwriter shall be deemed a representation and warranty by the County to the Underwriter as to the statements made therein. 7. At 11:00 a.m., New York Time, on December 8, 1992, or at such other time or on such other date as shall have been mutually agreed upon by the County and the Underwriter, the County will deliver, or cause to be delivered, to the Underwriter the Bonds, duly executed in definitive form and authenticated by Nationsbank Trust of Florida, N.A., Ft. Lauderdale, Florida, (the "Paying Agent and Registrar% together with the other documents hereinafter mentioned, and the Underwriter, will accept such delivery and pay the purchase price of the Bonds, plus accrued interest, by making a wive transfer to the County or its designee in Federal Funds (such payment and delivery and the other actions contemplated hereby to take place at the time of such payment and delivery herein referred to as the "Closing"). Payment for the Bonds as aforesaid shall be made at the County Administration Building or such other place as may be mutually agreed upon by the County and the Underwriter. The authenticated Bonds shall be made available to the Underwriter and to The Depository Trust Company at least one business day prior to the Closing for purposes of inspection. 8. The Underwriter has entered into this Contract of Purchase in reliance upon the representations, warranties and agreements of the County contained herein and in reliance upon the representations, warranties and agreements to be contained in the documents, opinions, instruments and agreements to be delivered at the Closing and upon the performance by the County of its obligations hereunder as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Contract of Purchase to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon and subject to (i) the performance by the County of its obligations to be performed hereunder and under such documents, instruments and agreements to be delivered at the Closing, (u) the accuracy of the representations and warranties of the County herein as of the date hereof and as of the time of the Closing, and (iii) to the following additional conditions, including, without limitation, the delivery by the County of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Underwriter: -5- (a) the representations and warranties of the County contained herein shall be true, complete and correct in all respects on the date hereof and on the date of the Closing, as if made on and as of the Closing. The statements made in all certificates and other documents delivered to the Underwriters at the Closing shall be true and correct at the Closing. The County shall be in compliance with each of the agreements made by it in this Contract of Purchase; (b) at the time of Closing, (i) the Official Statement, the Resolution, the Escrow Deposit Agreement and this Contract of Purchase shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, (ii) the proceeds of the sale of the Bonds shall be applied in the manner described hi the Official Statement, the Resolution and the Escrow Deposit Agreement, and (iii) the County shall have duly adopted and executed and there shall be in full force and effect such resolutions and other documents as, in the opinion of Rhoads & Sinon, Boca Raton, Florida, ("Bond Counsel") shall be necessary in connection with the transactions contemplated hereby; (c) at the time of the Closing, all necessary official action of the County and the other parties relating to this Contract of Purchase, the Escrow Deposit Agreement and the Bonds shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any respect, except in each case as may have been agreed to by the Underwriter; (d) the Underwriter shall have the right to cancel its obligation under this Contract of Purchase to accept delivery of and pay for the Bonds by notifying the County of its election to do so if, after the execution hereof and prior to the Closing: (i) legislation shall have been introduced in or enacted by the Congress of the United States or enacted by the State of Florida, or legislation pending in the Congress of the United States shall have been amended, or legislation shall have been recommended to the Congress of the United States or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United Slates, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation shat► have been proposed for consideration by either such Committee, by any member thereof or presented as an option for consideration by either such Committee, by the staff of such Committee or by the staff of the Joint Committee on Taxation of the Congress of the United States, or legislation shall have been favorably reported for passage to either House of Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court of the United States or the State of Florida, including the Tax Court of the United States, or a ruling (whether published or private) shall have been made or other form of notice shall have been issued by the Treasury Department of the United States, or the Internal Revenue Service or other Federal or State of Florida authority, with respect to interest on obligations of the general character of the Bonds, which may have the purpose or effect, directly or indirectly, of affecting the tax-exempt status of Bonds issued by the County (including the Bonds) or any tax exemption granted or authorized by the State of Florida, or, which in the reasonable opinion of the Underwriter, affects materially and adversely the market for the Bonds, or the market price generally of obligations of the general character of the Bonds; or (u) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or other unforeseen national or international calamity or crisis, including, without limitation, financial crisis, shall have occurred or accelerated to such an extent as, in the reasonable opinion of the Underwriter, affects materially and adversely the market for the Bonds, or the market price generally of obligations of the general character of the Bonds; or (iii) there shall have occurred a financial crisis or default with respect to the debt obligations of the County, or the institution of proceedings under the Federal or State of Florida laws relating to the bankruptcy or -6- insolvency by or against the County or any instrumentality of the County, which, in the reasonable opinion of the Underwriter, affects materially and adversely the market for the Bonds; or (iv) there shall have occurred a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, New York State or the State of Florida authorities; or (v) an event described in Paragraph 6(I) hereof shall have occurred which in the reasonable opinion of the Underwriter requires the preparation and publication of a supplement or amendment to the Official Statement, which, in the reasonable opinion of the Underwriter, affects materially and adversely the marketability of the Bonds or the market price thereof; or (vi) any rating of the County's bonds shall have been downgraded, withdrawn or placed on a "watch" list by Fitch Investors Service, Moody's Investors Service or Standard & Poor's Corporation, and such action, in the reasonable opinion of the Underwriter, will materially adversely affect the marketability of the Bonds or the market price thereof; or (vu) there shall have occurred since September 30, 1991 any material adverse change in the affairs of the County, except for changes which the Official Statement discloses have occurred or may occur; or (viii) legislation shall be enacted or any action shall be taken by the Securities and Exchange Commission which, has the effect of requiring the contemplated distribution of the Bonds to be registered under the Securities Act of 1933, as amended, or the Resolution to be qualified under the Trust Indenture Act of 1939, as amended; or (ix) a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission shall be issued or made to the effect that the issuance, offering or sale of the Bonds, or of obligations of the general character of the Bonds as contemplated hereby, is in violation of any provision of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended; or (x) any state "Blue Sky" or securities commission shall have withheld registration, exemption or clearance of the offering, and in the reasonable judgment of the Underwriter, the market for the Bonds is materially adversely affected thereby; (e) at or prior to the Closing, as authorized by the Resolution, the County shall have appointed the Paying Agent and Registrar and the Escrow Agent; (1) at or prior to the Closing, the Underwriter shall receive two (2) executed copies, and such number of duplicate copies as the Underwriter may reasonably request, of the following documents: (1) (i) the unqualified approving opinion of Bond Counsel dated the date of Closing and addressed to the County, in substantially the form included in Appendix E to the Preliminary Official Statement relating to the Bonds, (ii) an opinion of Bond Counsel dated the date of Closing and addressed to the Underwriter stating that the Underwriter may rely on the opinion referred to in (i), and (iii) the opinion of Bond Counsel that the lien of the Refunded Obligations has been terminated; (2) an opinion of legal counsel for the County dated the date of Closing and addressed to the Underwriter in substantially the form attached hereto as Exhibit C; (3) a certificate of the County dated the date of Closing, signed by the Chairman of the County and the County Attorney, to the effect that, to the best of his knowledge, (i) the representations and warranties of the County herein are true and correct in all material respects as of the date of the Closing; (ii) since September 30, 1991, no material and adverse change has occurred in the business, properties, other assets and financial position of the County or results of operations of the County and the audited financial statements of such date present fairly the business, properties, other assets and financial position of the County as of the dale thereof and the result of its operations for the period therein described; and (iii) the Official Statement does not contain any untrue -7- statements of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which the statements were made, not misleading (including the financial and statistical information therein); (4) a letter from Coopers & Lybrand independent certified public accountants (hereinafter referred to as the "Auditors"), dated the date hereof, which, among other matters consents to the use of the audited financial statements of the County for the fiscal year ended September 30, 1991 in the Preliminary Official Statement and the Official Statement; (5) the Resolution, certified by the County as having been duly adopted by the County and as being in effect, with such supplements or amendments as may have been agreed to by the Underwriter; (G) the Escrow Deposit Agreement duly executed by the County and the Escrow Agent; (7) a certificate of the County dated the date of Closing, signed by the Clerk to the Board of County Commissioners, to the effect that the resolution adopted by the County on November 24, 1992 relating to the Bonds has not been modified, amended or repealed; (8) specimen Bonds; (9) a Non -Arbitrage Certificate executed by the Chairman of the County dated the date of Closing; (10) the insurance policy issued by the Insurer, dated as of the closing date in the form attached as Appendix D to the Official Statement; (11) rating letters evidencing that Standard & Poor's Corporation has issued a rating of "AAA" for the Bonds and that Moody's Investors Services has issued a rating of "Aaa" for the Bonds; (12) manually signed copies of the verifications of Coopers & Lybrand verifying the adequacy of the amounts held pursuant to the Escrow Deposit Agreement; (13) other certificates of the County, as shall be listed on a Closing Memorandum to be approved by counsel for the County, Bond Counsel and the Underwriter, including any certificates or representations of the County required in order for Bond Counsel to deliver the opinions referred to in Paragraph 8(f)(1) of this Contract of Purchase; and such additional legal opinions, certificates, proceedings, instruments and other documents the Underwriter or Bond Counsel may reasonably request to evidence compliance by the County with all applicable legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the County contained herein, and the due performance or satisfaction by the County at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the County. At Closing, the Underwriter shall execute and deliver to the County, a Certificate as to Issue Price, a Certificate as to Yield and other usual Closing documents executed and presented by the Underwriter. -8- Subject to the provisions of Paragraph 8 hereof, if the County shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Contract of Purchase, or if the obligations of the Underwriter to purchase and accept delivery of the Bonds shall be terminated for any reason permitted by this Contract of Purchase, this Contract of Purchase shall terminate and neither the Underwriter nor the County shall be under further obligation hereunder; except that (i) the County shall immediately return the Good Faith Deposit uncashed to the Underwriter as set forth in Paragraph 4 hereof, and (ii) the respective obligations of the parties hereto as provided in Paragraph 10 hereof, shall continue in full force and effect. 9. All representations and warranties of the County hereunder shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter. 10. If the Bonds are sold to the Underwriter by the County, the County shall pay any expenses incident to the performance of its obligations hereunder, including but not limited to: (i) the cost of the preparation and printing or other reproduction of the Resolution; (ii) the cost of the preparation, printing and delivery of the Official Statement (including any and all supplements or amendments thereto required under Paragraph 6 hercoo, together with a number of copies which the Underwriter deems reasonable; (iii) the costs and fees of Standard & Poor's Corporation and Moody's Investors Service; (iv) the cost, if any, of the preparation and printing of the definitive Bonds; (v) the fees and expenses of the Paying Agent and Registrar, and the Escrow Agent; (vi) the fees and disbursements of Bond Counsel, Financial Advisor, Verification Agent, and any other experts or consultants retained by the County, including, without limitation, the charges of the Auditors; and (vii) any out-of-pocket expenses incurred by the County. The Underwriter shall pay (i) all advertising expenses in connection with the public offering of the Bonds; and (ii) all other expenses incurred by them in connection with its public offering and distribution of the Bonds. Irrespective of whether the Bonds are sold or delivered to the Underwriter by the County, the County shall pay for the costs of the printing and delivery of the Preliminary Official Statement and the Official Statement. 11. Any notice or other communication to be given to the County under this Contract of Purchase shall be in writing and may be given by delivering the same to the County at: 1840 251h Street, Vero Beach, M 32960, Attention: Joe Baird, Finance/Budget Officer; any notice or other communication to be given to the Underwriter under this Contract of Purchase shall be in writing and may be given by delivering the same to William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attention: Ed Bullch, First Vice President. 12. The disclosure statement required by Section 218.385(4), Florida Statutes, is attached hereto as Exhibit D. 13. This Contract of Purchase is made solely for the benefit of the County and the Underwriter (including the successors or assigns of any Underwriter) and no other person shall acquire or have any right or rights hereunder or by virtue hereof. 14. The schedules and exhibits referred to herein and attached hereto are hereby incorporated herein and made a part hereof for all purposes. 15. This Contract of Purchase shall be governed by and construed in accordance with the laws of the State of Florida. -9- 16. This Contract of Purchase may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original; but such counterparts shall together constitute but one and the same Contract of Purchase. 17. This Contract of Purchase shall become effective upon your acceptance hereof. Accepted and agreed to as of the date first above written: INDIAN RIVER COUNTY, FLORIDA By: Chair- �y/9y Very truly yours, WILLIAM R. HOUGH & CO. By:. First Vice President -10- EXHIBIT A. Term Sheet B. Preliminary Official Statement C. Counsel to the County D. Disclosure Statement EXHIBIT A TO CONTRACT OF PURCHASE Dated Date: December 1, 1992 Delivery Date: December 8, 1992 Maturity: Due Amount Rate Yield Due Amoun Rate Yield 1993 340,000 2.70% 2.70% 1999 575,000 4.80% 4.90% 1994 460,000 3.40 3.40 2000 600,000 5.00 5.05 1995 480,000 3.90 3.90 2001 630,000 5.20 5.30 1996 500,000 4.10 4.20 2002 660,000 5.30 5.45 1997 525,000 4.50 4.60 2003 695,000 5.60 5.70 1998 545,000 4.625 4.75 2004 740,000 5.70 5.80 2005 780,000 5.85 5.90 (accrued interest added) Optional and Mandatory Redemption: The Series 1992 Bonds are not subject to optional or mandatory redemption. i 1 ! EXHIBIT B TO CONTRACT OF PURCHASE Preliminary Official Statement PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 16, 1992 Ratings: Moody's: Aaa Standard & Poor's: AAA (MBIA Insured) 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 1992 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 alterulive 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 Mond Counsel, the Series 1992 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, batiks and savings associations. See "TAX EXEAHYNON" herein for further information. $7,815,000* INDIAN RIVER COUNTY, FLORIDA Refunding Revenue Bonds Series 1992 Dated: October 1, 1992 Due: September 1, 1992 Indian River County, Florida (the "Issuer" or the "County") is issuing its Refunding Revenue Bonds, Series 1992 (the "Series 1992 Bonds"), in the form of fully registered bonds in the denominations of $5,000 principal amount or any integral multiple thereof. Interest on the Series 1992 Bonds is payable on March 1, 1993, and semiannually thereafter on each September 1 and March 1, by check or draft of NationsBank Trust, the Bond Registrar and Paying Agent, mailed to each Registered Owner thereof at the addresses 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. At the option of any Registered Owner of $1,000,000 or more in principal amount of the Series 1992 Bonds, interest shall be payable by wire transfer pursuant to written instructions from such Registered Owner. Principal of the Series 1992 Bonds and any redemption premium will be payable upon presentation and surrender of the Series 1992 Bonds at the principal corporate trust office of the Paying Agent. The Series 1992 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. The Series 1992 Bonds am being issued by the County to provide funds, together with other available funds, to (i) retire a portion of the County's outstanding Refunding and Improvement Revenue Bonds, Series 1985, and all of the outstanding Capital Improvement Revenue Bonds, Series 1987, (collectively, the 'Refunded Bonds'), 00 fund a Reserve Account in an amount necessary to meet the Maximum Debt Service Requirement, and (iii) pay all costs and expenses relating to the issuance of the Series 1992 Bonds, and the retirement of the Refunded 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 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 Series 1992 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 Series 1992 Bonds or the interest thereon, or be entitled to payment of such principal and interest from any funds of the County other than Pledged Funds. Payment of the principal and interest on the Series 1992 Bonds when due will he, insured by a municipal bond insurance policy to be issued by Municipal Bond Investors Assurance Corporation (MBIA), simultaneously with the delivery of the Series 1992 Bonds. I� MATURITIES, AMOUNTS, INTEREST RATES AND PRICES $ Serial Bonds - 'Prhteipal Interest 1111rlcipnt interest Due Amount Rate Price Due Amount Rate Price (acemed interest added) The Series 1992 Bonds are offered when, as and if issuer/ and received by the Underwriter, subject to the approval of legality by Rhoads & Sinwn, Boca Raton, Florida, Bond Counsel to the County. Certain legal matters will be passed upon for the County by Charles P. Vitunac, F,squire, County Attorney. It is expected that the Series 1992 Bonds in definitive form will he available for delivery in New York, New York on or about November _ _, 1992. William I Hough & Co Dated: °Preliminary, subject to change. INDIAN RIVER COUNTY, FLORIDA Board of County Commissioners Carolyn K. Eggert, Chairman Margaret C. Bowman, Vice -Chairman Richard N. Bird Don C. Scurlock, Jr. John W. Tippin Clerk of Court & Ex -Officio Clerk to the Board of County Commissioners Jeffrey K. Barton County Administrator James E. Chandler County Attorney Charles P. Vitunac Director of Management and Budget Joseph A. Baird Bond Counsel Rhoads & Sinon Boca Raton, Florida Financial Advisor Fishkind & Associates, Inc. Orlando, Florida Certified Public Accountants Coopers & Lybrand Orlando, Florida No dealer, broker, sales representative or any other person has been authorized by the County or the Underwriter to give any information or to make any representation, other than the information and representations contained herein, in connection with the offering of the Series 1992 Bonds, and if given or made, such information or representations must not be relied upon. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy any of the Series 1992 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 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 1992 BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE 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 1992 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE BOND 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 1992 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 1992 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 1992 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATIONS TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. TABLE OF CONTENTS PAGE INTRODUCTION......................................................... PURPOSE OF THE SERIES 1992 BONDS ........................................ REFUNDING PLAN ....................................................... DESCRIPTION OF THE SERIES 1992 BONDS ..................................... Optional Redemption...................................................... MandatoryRedemption.................................................... Notice of Redemption..................................................... Registration, Transfer, and Exchange ............................................ SECURITY FOR THE SERIES 1992 BONDS ...................................... PledgedFunds.......................................................... Description of the Half -Cent Sales Tax .......................................... Historical and Projected Sales Tax Revenues andDebt Service........................................................ ReserveAccount......................................................... Subordinate Bonds ....................................................... Issuance of Additional Parity Obligations ......................................... MUNICIPAL BOND INSURANCE ............................................. ESTIMATED SOURCES AND USES OF FUNDS ................................... DEBT SERVICE SCHEDULE ................................................ VALIDATION........................................................... LITIGATION............................................................ RATINGS.............................................................. FINANCIAL STATEMENTS .................................................. APPROVAL OF LEGALITY ................................................. TAX EXEMPTION........................................................ Federal Income Tax Matters ................................................. FloridaTax Matters....................................................... Other Federal Income Tax Matters ............................................. VERIFICATION OF MATHEMATICAL COMPUTATIONS ............................. UNDERWRITING........................................................ AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT .................................................. MISCELLANEOUS........................................................ 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, 1991 Appendix C - Summary of Certain Provisions of the Resolution and Copy of Resolution No. Appendix D - Specimen Copy of Bond Guaranty Insurance Policy Appendix E - Form of Opinion of Bond Counsel s INDIAN RIVER COUNTY, FLORIDA REFUNDING REVENUE BONDS, SERIES 1992 INTRODUCTION This 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 $_ Refunding Revenue Bonds, Series 1992 (the "Series 1992 Bonds"), The Series 1992 Bonds are being issued pursuant to Chapters 125 and 279, 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. 85-75, adopted July 10, 1985, as amended and supplemented including without limitation the supplements made by County Resolution No. adopted (the "Resolution"). The validity of the Series 1992 Bonds has been determined by a Final Judgment of the Circuit Court of the Nineteenth Judicial Circuit, in and for Indian River County, Florida, rendered and filed on August 26, 1985. The time for an appeal expired on September 25, 1985. 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 1992 Bonds, the security for the payment of the Series 1992 Bonds and rights and obligations of the Holders of the Series 1992 Bonds. Capitalized terms used but not defined herein have the same meaning as in the Resolution unless the context would indicate otherwise. PURPOSE OF THE SERIES 1992 BONDS The Series 1992 Bonds are being issued to provide funds, together with other available funds, to (i) retire a portion of the County's outstanding Refunding and Improvement Revenue Bonds, Series 1985, and all of the outstanding Capital Improvement Revenue Bonds, Series 1987, (collectively, the "Refunded Bonds"), (ii) fund a Reserve Account in an amount necessary to meet the Maximum Debt Service Requirement, and (iii) pay all costs and expenses relating to the issuance of the Series 1992 Bonds and the retirement of the Refunded Bonds. REFUNDING PLAN Simultaneously with the delivery of the Series 1992 Bonds, the County will deposit a portion of the proceeds of the Series 1992 Bonds and certain other funds in an irrevocable escrow account under an Escrow Deposit Agreement established for the Holders of the Refunded Bonds. NationsBank Trust, as escrow holder, will invest those proceeds and certain other funds in Federal Securities. The principal amounts of such Federal Securities, together with the interest income therefrom, will be sufficient to make timely payments of all principal, premium (if any) and interest in respect to the Refunded Bonds and all costs associated with the acquisition and management of such Federal Securities. A portion of the Refunding and improvement Revenue Bonds, Series 1985, is not being refunded and will continue to be paid from Pledged Funds. DESCRIPTION OF THE SERIES 1992 BONDS The Series 1992 Bonds will be dated October 1, 1992, and will bear interest from such date at the rates per annum as set forth on the cover page hereof, payable on March 1, 1993, and semiannually thereafter on each March 1 and September 1 and will mature on September 1 on the years and principal amounts as set forth on the cover page hereof. The Series 1992 Bonds will be issued in fully registered form in the denominations of $5,000 or any integral multiple thereof. Principal and any redemption premium is payable upon surrender of the Series 1992 Bonds at the principal corporate trust office of NationsBank Trust, 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 1992 Bonds, interest shall be payable by wire transfer pursuant to written instructions from such Registered Owner. Optional Redemption The Series 1992 Bonds maturing on or before will not be subject to optional redemption by the County. Series 1992 Bonds maturing on or after are subject to redemption prior to maturity at the option of the County, in whole or in part on any date, on or after . The County may select the maturities of the Series 1992 Bonds to be redeemed and if less than all bonds of a maturity are to be called for redemption, the selection of the particular Series 1992 Bonds to be called for redemption shall be by lot in any customary manner of selection as designated by the County, and any such redemption, either in whole or in part, shall be made at the following prices (expressed below as a percentage of the principal amount being redeemed), plus accrued interest to the redemption date: Redemption Period (Both dates inclusive) Redemption Price Mandatory Redemption The Series 1992 Term Bonds maturing on mandatory redemption and shall be callable by lot at par plus accrued interest on _, in the following years: September 1 of Year Principal Amount Notice of Redemption shall be subject to Notice of such redemption of the Series 1992 Bonds shall, at least 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 Series 1992 Bond duly called for prior redemption on the redemption date, if payment thereof has been duly provided. The privilege of transfer or exchange of any of the Series 1992 Bonds so called for redemption is suspended for a period commencing fifteen (15) days preceding the mailing of the notice of redemption and ending on the redemption date. Failure to mail any notice of redemption or any defect therein or in the mailing thereof will not affect the validity of any proceedings for redemption of other Series 1992 Bonds so called for redemption. Registration, Transfer and Exchange All Series 1992 Bonds presented for transfer, exchange, redemption or payment (if so required by the County or 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 County or the Bond Registrar, duly executed by the Registered Owner or by his duly authorized attorney. The County and 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 or the County 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 1992 Bond shall be delivered. The County and the Bond Registrar may treat the Registered Owner of any Series 1992 Bond as the absolute owner thereof for all purposes, and shall not be bound by any notice to the contrary. SECURITY FOR THE SERIES 1992 BONDS The Series 1992 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 Series 1992 Bonds or the interest thereon, or be entitled to payment of such principal and interest from any funds of the County other than Pledged Funds. Pledged Funds The Series 1992 Bonds are special obligations of the County payable solely from and secured by an irrevocable pledge of the receipts by the County from the proceeds of the local government half -cent sales tax as defined and described in, and distributed (including any emergency distributions) to the County under Part VI, Chapter 218, Florida Statutes ((he "Half -Cent Sales Tax") and, until applied as provided in the Resolution, the moneys and investments in the funds and accounts under the Resolution and the income and earnings from investments in any fund or account (other than the Rebate Fund) held thereunder (collectively, the "Pledged Funds"), all in the manner provided in the Resolution. Pursuant to the Resolution, the County has reserved the right to issue Additional Parity Obligations payable on a parity with the Series 1992 Bonds in the manner and upon the conditions provided in the Resolution (see "Issuance of Additional Parity Obligations" below). The Series 1992 Bonds are secured on a parity with the remaining outstanding Series 1985 Bonds. Description of the Hair -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 "frust 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. 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 unincorporated area population + 2/3 incorporated area population (percentage of = total county population + 2/3 incorporated area population total Half -Cent (Sales Tax Receipts) Municipality Share municipality population (percentage of = total county population + 2/3 incorporated area population total Half -Cent (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 1992 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: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1991. (1) These figures were obtained from the Florida Local Governmental Financial Information Handbook. Historical and Projected Sales Tax Revenues and Debt Service Coverage FYE Sept. 30 Sales Tax Revenue Total Actual and Estimated Maximum Debt Service Debt Service Coverage Historical Projected 1988 1989 1990 1991 1992 1993 $2,736,167 $3,149,887 $3,126,095 $3,330,467 $3,564,344(') $3,631,941(') 1,427,156 1,435,456 1,430,944 1,428,598 1,433,604 1,385,456(') 1.92x 2.19x 2.18x 2.33x 2.49x 2.62x (1) Estimated. (2) Source: Local Government Financial Handbook, July 1992. (3) Estimated Maximum Debt Service after issuance of these refunding bonds. 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 Section 165.041, Florida Statutes, have been mel. 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 1.5 persons per acre except under certain extraordinary conditions; and 5 Historical Distribution of the Half -Cent Sales Tax Year Half -Cent Amount Amount Ended Sales Distributed Distributed to Sept. 30 Tax Collected to Municipalities Indian River Countv 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) 1,331,845(1) 3,330,467 1992 (Est.) 5,004,073(1) 1,439,729(1) 3,564,344 1993 (Budgeted) 5,033,770(1) 1,401,829(1) 3,631,941 Source: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1991. (1) These figures were obtained from the Florida Local Governmental Financial Information Handbook. Historical and Projected Sales Tax Revenues and Debt Service Coverage FYE Sept. 30 Sales Tax Revenue Total Actual and Estimated Maximum Debt Service Debt Service Coverage Historical Projected 1988 1989 1990 1991 1992 1993 $2,736,167 $3,149,887 $3,126,095 $3,330,467 $3,564,344(') $3,631,941(') 1,427,156 1,435,456 1,430,944 1,428,598 1,433,604 1,385,456(') 1.92x 2.19x 2.18x 2.33x 2.49x 2.62x (1) Estimated. (2) Source: Local Government Financial Handbook, July 1992. (3) Estimated Maximum Debt Service after issuance of these refunding bonds. 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 Section 165.041, Florida Statutes, have been mel. 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 1.5 persons per acre except under certain extraordinary conditions; and 5 (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. No new incorporated municipalities have been formed within the County since 1965 when the Town of Orchid was incur rno ated. Under Section 171.041(3), Florida Statutes, a municipality may annex contiguous, compact, unincorporated territory by adopting an annexation ordinance. Following adoption, such ordinance roust 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 specified 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 more 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 properly 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 properly and, after publication as required by law, such ordinance shall become effective. Reserve Account Under the Resolution, the County is required to maintain a Reserve Account at an amount equal to the Maximum Debt Service Requirement on all Bonds issued and outstanding under the Resolution. The County may satisfy this debt service reserve requirement by making deposits either from the proceeds of sale of Bonds or from other funds of the County and/or by providing an insurance policy or a letter of credit meeting certain credit criteria set forth in the Resolution. The Reserve Account will be in an amount equal to the Maximum Debt Service Requirement upon issuance and delivery of the Series 1992 Bonds. Money in the Reserve Account shall be used only for the purpose of paying principal or interest on the Bonds issued and outstanding under the Resolution when money in the Sinking Fund is insufficient to make such payments, and for no other purpose. Subordinate Bonds The County previously issued its Recreational Revenue Bonds, Series 1985, and its Recreational Revenue Bonds, Series 1991 (collectively, the "Subordinate Bonds"), which are outstanding in the aggregate principal amount of $ and are scheduled to be retired over the period ending September 1, 2016. The Subordinate Bonds were issued pursuant to Chapter 125, Florida Statutes, County Home Rule Ordinance No. 77-19, enacted August 3, 1977, as amended and other applicable provisions of law and Indian River County Resolution No. 89-78, adopted July 17, 1985, as amended and supplemented (the "Subordinate Bonds Resolution"). The Subordinate Bonds are secured primarily by the Net Revenues of the County's Golf Course and a first lien on the racetrack funds and jai alai fronton funds accruing annually to the County pursuant to Chapter 550 and 551, Florida Statutes. The Subordinate Bonds are additionally secured by a lien on the Half -Cent Sales Tax (as described herein) subordinate to the lien and pledge in favor of the herein described Series 1992 Bonds, the remaining outstanding Refunding and Improvement Revenue Bonds, Series 1985 that were not refunded as part of this bond issue, and any additional bonds issued on a parity with the Series 1992 Bonds and the remaining Outstanding Refunding and Improvement Revenue Bonds, Series 1985. In the Subordinate Bonds Resolution, the County has covenanted that it will issue no additional obligations on a parity with the Subordinate Bonds, except for refunding purposes and then only if such refunding does not increase in the maximum annual debt service requirements with respect to the bonds issued under the Subordinate Bonds Resolution. Issuance of Additional Parity Obligations Under the Resolution, before Additional Parity Obligations may be issued, there shall have been obtained and filed with the County not later than the date of delivery of the Additional Parity Obligations, a certificate of the Accountant: (a) stating that the books and records of the County relating to the Sales Tax have been audited by him; (b) selling forth the amount of the Half -Cent Sales Tax, as defined therein, received by the County for either (i) the immediately preceding Fiscal Year or (ii) any twelve (12) consecutive months of the eighteen (18) months immediately preceding the proposed date of sale of the Additional Parity Obligations with respect to which such certificate is made, at the option of the County, and (c) slating that the Half -Cent Sales Tax receipts and certain investment income for such Fiscal Year or such twelve (12) months period, as the case may be, are equal to at least 1.35 times the Maximum Debt Service Requirement on (i) all Bonds then outstanding and (ii) the Additional Parity Obligations with respect to which such certificate is made. In addition, the issuance of Additional Parity Obligations is further restricted under the Subordinate Bonds Resolution , so long as any of the Subordinate Bonds remain outstanding. MUNICIPAL BOND INSURANCE The following information has been furnished by Municipal Bond Investors Assurance Corporation (the "Insurer") for use in this Official Statement. Reference is made to Appendix D for a specimen of the Insurer's Policy. The Insurer's policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the County to the Paying Agent or its successor of an amount equal to (i) the principal of (either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 1992 Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by the Insurer's policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner of the Series 1992 Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference"). The Insurer's policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Series 1992 Bond. The Insurer's policy does not, under any circumstances, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii) payments of the purchase price of Series 1992 Bonds upon tender by an owner thereof; or (iv) any Preference relating to (i) through (iii) above. The Insurer's policy also does not insure against nonpayment of principal of or interest on the Series 1992 Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Series 1992 Bonds. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of a Series 1992 Bond the payment of an insured amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, NA., in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Series 1992 Bonds or presentment of such other proof of ownership of the Series 1992 Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 1992 Bonds as are paid by the Insurer and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Series 1992 Bonds in any legal proceeding related to payment of insured amounts on the Series 1992 Bonds, such instruments being in a form satisfactory to Citibank, NA., Citibank, NA. shall disburse to such owners or the Paying Agent payment of the insured amounts due on such Series 1992 Bonds, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor. The Insurer is the principal operating subsidiary of MBIA, Inc., a New York Stock Exchange listed company. MBIA Inc. is not obligated to pay the debts of or claims against the Insurer. The Insurer is a limited liability corporation rather than a several liability association. The Insurer is domiciled in the State of New York and licensed to do business in all 50 states, the District of Columbia and the Commonwealth of Puerto Rico. As of December 31, 1991 the Insurer had admitted assets of $2.0 billion (audited), total liabilities of $1.4 billion (audited), and total capital surplus of $647 million (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of June 30, 1992, the Insurer had admitted assets of $2.3 billion (unaudited), total liabilities of $1.6 billion (unaudited), and total capital and surplus of $746 million (unaudi(ed) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. Copies of the Insurer's year end financial statements prepared in accordance with statutory accounting practices are available from the Insurer. The address of the Insurer is 113 King Street, Armonk, New York 10504. Moody's Investors Service rates all bond issues insured by the Insurer "Aaa" and short term loans "MIG 1", both designated to be of the highest quality. Standard & Poor's Corporation rates all new issues insured by the Insurer "AAA" Prime Grade. The Moody's Investors Service rating of the Insurer should be evaluated independently of the Standard & Poor's Corporation rating of the Insurer. No application has been made to any other rating agency in order to obtain additional ratings on the Series 1992 Bonds. The ratings reflect the respective rating agencys current assessment of the creditworthiness of the Insurer and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Series 1992 Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of either or both ratings may have an adverse effect on the market price of the Series 1992 Bonds. The insurance provided by this Policy is not covered by the Florida Insurance Guaranty Association created under Chapter 631, Florida Statutes. ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds: Sources: Par amount of Bonds Accrued Interest Moneys on Hand (1) TOTAL SOURCES Uses: Deposit to Sinking Fund Deposit to Escrow Account Deposit to Reserve Account (2) Estimated Cost of Issuance (3) TOTAL USES (1) From the Existing Reserve Account. (2) Amount required to increase the Reserve Account to the Maximum Debt Service Requirement on the Series 1992 Bonds and the Refunding and Improvement Revenue Bonds, Series 1985 not being refunded. (3) Includes Bond Insurance Premium and Bond Discount. s DEBT SERVICE SCHEDULE Nit RrinCIDAI Rig Interest Annual D/S 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 10 VALIDATION Bonds were validated in a total amount not to exceed $25,000,000 by a Final Judgment of the Circuit Court of the Nineteenth Judicial Circuit of Florida, in and for Indian River County, rendered on August 26, 1985. The time for an appeal has expired. The Series 1992 Bonds constitute the third installment on the Bonds so validated. LITIGATION In the opinion of the County Attorney there is no controversy or litigation now pending or, to the best of the County's knowledge, threatened, which seeks to restrain or enjoin the execution, sale, issuance or delivery of the Series 1992 Bonds or that in any way contests the validity of the Series 1992 Bonds; or any proceedings of the County taken with respect to the authorization, sale, issuance or delivery of the Series 1992 Bonds, or the pledge or application of any monies provided for the payment of or security for the Series 1992 Bonds. RATINGS Moody's Investors Service, Inc. and Standard & Poor's Corporation have assigned their municipal bond ratings of Aaa and AAA, respectively, to the Series 1992 Bonds with the understanding that upon delivery of the Series 1992 Bonds, a policy of municipal bond insurance insuring the payment when due of principal of and interest on the Series 1992 Bonds will be issued by MBIA. Such ratings reflect only the views of the rating agencies, and an explanation of the significance of such ratings may obtained from the applicable rating agency. There is no assurance that such ratings will continue for any given period of time or that they will not be revised or withdrawn entirely by such rating agencies, if in their judgment, circumstances so warrant. Any downward revision or withdrawal of such ratings may have an adverse effect upon the market price of the Series 1992 Bonds. FINANCIAL STATEMENTS The County's general purpose financial statements at September 30, 1991 and for the year then ended, included as Appendix B hereto, have been audited by Coopers & Lybrand, independent accountants, as set forth in their report dated January 31, 1992, which is a part of Appendix B attached hereto. APPROVAL OF LEGALITY Certain legal matters incident to the authorization, issuance, sale and delivery of the Series 1992 Bonds, and the treatment of the interest thereon for federal income tax purposes, arc 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 1992 Bonds. In its capacity as Bond Counsel, Rhoads & Sinon has participated in the preparation of, and has reviewed those portions of this Official Statement contained under the captions 'DESCRIPTION OF THE SERIES 1992 BONDS", "SECURITY FOR THE SERIES 1992 BONDS", "APPROVAL OF LEGALITY", "TAX EXEMPTION", and the "SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION" contained in Appendix C to this Official Statement and the language on the cover of this Official Statement relating to the Series 1992 Bonds, the Resolution and the tax-exempt status of the Series 1992 Bonds. Rhoads & Sinon has not been retained to pass upon, and will not express any opinion upon, any other information continued in this Official Statement or that may be made available to prospective purchasers of the Series 1992 Bonds. Certain legal matters will be passed upon for the County by the County Attorney, Charles P. Vilunac, Vero Beach, Florida. 1E TAX EXEMPTION Federal Income Tax Matters On the date of delivery of the Series 1992 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 1992 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 1992 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, inter alia, restrictions upon the yield at which proceeds of the Series 1992 Bonds and other money held for the payment of the Series 1992 Bonds and deemed "proceeds" thereof may be invested and the requirement to calculate and rebate any arbitrage that may be generated with respect to investment attributable to the Series 1992 Bonds. Failure to comply with such requirements could cause the interest on the Series 1992 Bonds to be included in gross income retroactive to the date of issuance of the Series 1992 Bonds. Ownership of the Series 1992 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 1992 Bonds. Bond Counsel will express no opinion as to such collateral tax consequences, and prospective purchasers of the Series 1992 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 1992 Bonds, the proceeds of the Series 1992 Bonds will not be used in a manner that would cause the Series 1992 Bonds to be or become "arbitrage bonds". In the opinion of Bond Counsel, based upon the facts, estimates and circumstances set forth in said certificate, the Series 1992 Bonds are not presently "arbitrage bonds" under existing statutes, regulations and decisions. No representation is made or can be made by the County or any other party associated with the issuance of the Series 1992 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 1992 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 1992 Bonds. Enactment of any legislation that subjects the interest on the Series 1992 Bonds to inclusion in gross income for federal income lax purposes or otherwise imposes taxation on the Series 1992 Bonds or the interest paid thereon may have an adverse effect on the market value or marketability. Florida Tax Matters On the date of delivery of the Series 1992 Bonds, Bond Counsel will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, the Series 1992 Bonds and the income 12 therefrom are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 200, 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 County is Doi such a "qualified issuer" and has net designated the Series 1992 Bonds as "qualified lax -exempt obligations". Financial institutions intending to purchase Series 1992 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 1992 Bonds being sold in the initial public offering with original issue discount is, to the extent properly allocable to each Holder of such Series 1992 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 1992 Bonds is the excess of the stated redemption price at maturity of such Series 1992 Bonds over the initial offering price at which a substantial amount of the Series 1992 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 the Series 1992 Bond and affect the determination of taxable gain from any sale or exchange of such Series 1992 Bond. Prospective purchasers of the Series 1992 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 (a) the mathematical computations of the adequacy of the maturing principal amounts and interest earnings thereon of the United States Treasury obligations to pay, when due, the principal of, interest on and redemption premium, if any, on the Refunded Bonds and (b) the mathematical computations supporting the conclusions that the Series 1992 Bonds are not "arbitrage bonds" within the meaning of Section 103(c) of the Code will be verified by independent certified public accountants. UNDERWRITING The Underwriter has agreed to purchase all but not less than all of the Series 1992 Bonds at an aggregated discount of from the initial public offering prices set forth on the cover page of this Official Statement. This discount includes an original issue discount of . The 13 Underwriter's obligation is subject to certain conditions precedent, and it will be obligated to purchase all of the Series 1992 Bonds if any Series 1992 Bonds are purchased. The Series 1992 Bonds may be offered to certain dealers, banks and others at prices lower than the public offering prices set forth on the cover page of this Official Statement, and such offering prices may be changed from time to time by the Underwriter. AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT The County has approved this Official Statement and authorized its execution. Concurrently with the delivery of the Series 1992 Bonds, the Chairman of the Indian River Board of County Commissioners and the County Administrator will furnish the certificate to the effect that, to the best of their knowledge, the Official Statement, as of the dated date and as of the date of delivery of the Series 1992 Bonds, does not contain any untrue statement of a material fact and does not omit to state a material fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary to make the statements contained therein, in the light of the circumstances in which they were made, not misleading. MISCELLANEOUS Any statement in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and are not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the County or the Underwriter and the purchasers or owners of any of the Series 1992 Bonds. INDIAN RIVER COUNTY BOARD OF COUNTY COMMISSIONERS By: (s/Carolyn K. Egg&rt Chairman By: /s/James E. Chandler County Administrator 14 APPENDIX A INDIAN RIVER COUNTY, FLORIDA GENERAL INFORMATION 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 1992 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 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 Office Term Expires Carolyn K. Eggert Chairman November, 1994 Margaret C. Bowman Vice -Chairman November, 1992 Richard N. Bird Member November, 1996 Don C. Scurlock, Jr. Member November, 1992 John W. Tippin Member November, 1994 On November 17, 1992, Fran B. Adams and Kenneth R. Macht will replace Margaret C. Bowman and Don C. Scurlock, Jr. as members of the Commission. Each will serve for a term of four years. 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 A-1 public facilities. 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. PODUlatiOn 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, and the County Seat, 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. Year Population % Annual Increase 1960 25,309 11.32 1970 35,992 4.22 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 1.35 1991 92,429 2.46 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. Ave Group 1960 1970 1980 1990 0-14 30.4% 27.3% 18.1% 15.6% 14-55 33.5 33.4 37.2 40.0 45-64 22.1 21.9 24.4 22.2 65+ 13.9 17.4 20.3 25.2 A-2 0 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 Indust 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 1989-1990 Indian River County had 66,116 acres of citrus which produced 17,000,808 boxes of oranges, grapefruit and specialty fruit. The County was fourth 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 50,000 acres of improved pasture and rangeland are utilized for dairy farming and beef cattle production, while approximately 35,000 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. A-3 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. Employment 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 1989 is as follows: Percent of Distribution Agriculture ........................ 11.45% Manufacturing...................... 7.16 Construction ....................... 10.24 Transportation, Communications & School system Utilities ......................... 2.63 Wholesale Trade .................... 1.59 Retail Trade ....................... 24.66 Finance, Insurance & Real Estate ......... 5.41 Services .......................... 30.12 Government ....................... ¢,Z Total ............................ 100.00% Source: State of Florida, Department of Labor and Employment Security. Major employers in Indian River County and their approximate current level of employment are as follows: Source: Indian River County A-4 Product or Establishment Service Employment Indian River County School District School system 1,893 Indian River Memorial Hospital Medical services 1,200 Indian River County County government 1,156 Publix Corporation Retail grocery 750 Sun Ag., Inc. Citrus & agriculture 550 City of Vero Beach City government 541 Grave Brothers, Inc. Citrus 450 Humana Hospital Sebastian Acute Care Facility 389 Gracewood Fruit Co. Citrus 370 Hal Groves Citrus 360 Dodgertown Complex Convention Center, Baseball 350 Johns Island Residential Resort 325 WalMart Retail Merchandise 310 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: Annual Avers Indian River County State of Florida 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 Unemployment Security Transportation 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 hospital and area residents. The Sunshine Rehabilitation Center offers physical and speech therapy to handicapped children and adults. Education 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 is 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 first 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 Communications and Electric Utilities 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. It 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 County's tax collection history, assessed property values, debt structure and principal taxpayers: A-6 INDIAN RIVER COUNTY, FLORIDA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Source: Department of Revenue, State of Florida and Indian River County Comprehensive Annual Financial Report, Fiscal Year 1991. INDIAN RIVER COUNTY, FLORIDA PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS (PER $1,000 OF ASSESSED VALUE) LAST TEN FISCAL YEARS Independent Percent of Total Couatv-Wide Real Procerty Personal Procerty _ Total Fiscal Assessed to Total Fiscal Assessed Assessed Assessed Estimated Estimated Year Value value value Actual Value Actual Value 1982 2,442,835,490 200,607,110 2,643,442,600 2,745,007,892 96.3 1983 2,984,489,960 170,588,980 3,155,078,940 3,180,523,125 99.2 1984 3,311,355,000 181,269,850 3,492,624,850 3,492,624,850 100.0 1985 3,534,025,949 187,757,610 3,721,782,559 3,721,782,559 100.0 1986 3,781,716,839 229,364,177 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 4,570,700,250 303,141,158 4,873,841,408 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 5,782,627,603 98.6 Source: Department of Revenue, State of Florida and Indian River County Comprehensive Annual Financial Report, Fiscal Year 1991. INDIAN RIVER COUNTY, FLORIDA PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS (PER $1,000 OF ASSESSED VALUE) LAST TEN FISCAL YEARS A-7 Independent Couatv-Wide Total Taxing Districts Fiscal School County. YearCounty(2) Board Other(l) Wide ities Other(l) 1982 4.29358 6.61600 .88398 11.79356 3.87881 2.34996 1983 3.46325 6.24700 .90480 10.61505 3.10724 2.11452 1984 4.07264 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 7.59160 1.68019 16.30929 5.68680 3.08220 1990 7.14860 8.07040 2.00877 17.22777 6.08563 3.00720 1991 6.77230 8.32080 2.16825 17.26135 6.04394 3.01990 (1) Composite tax rates (2) Per Florida State Statute 200.071, no ad valorem lax 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 1991. A-7 INDIAN RIVER COUNTY, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Source: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1991. INDIAN RIVER COUNTY, FLORIDA PRINCIPAL TAXPAYERS Percent SEPTEMBER 30, 1991 Current Percent Delinquent Total of Total Fiscal Total Tax of Levy Tax Tax Collections Year Tax Levv Collections Collected Collections Collections to Levv 1982 9,129,460 8,704,138 95.36 184,000 8,888,138 97.36 1983 9,276,416 8,956,111 96.55 10,511 8,966,622 96.66 1984 12,926,975 12,412,543 96.02 9,258 12,421,801 96.09 1985 15,186,814 14,423,407 94.97 26,216 14,449,623 95.15 1986 17,709,388 16,970,965 95.83 42,828 17,013,793 96.07 1987 22,292,164 21,146,969 94.86 27,719 21,174,688 94.99 1988 27,551,218 27,041,829 98.15 277,384 27,319,213 99.16 1989 28,110,296 26,916,117 95.75 93,088 27,009,205 96.08 1990 32,890,687 31,471,607 95.69 77,376 31,548,983 95.92 1991 34,559,500 33,265,772 96.26 245,389 33,511,161 96.97 Source: Indian River County Comprehensive Annual Financial Report, Fiscal Year 1991. (1) Total assessed value $5,701,670,817 Source: Indian River County Property Appraiser 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. A-8 INDIAN RIVER COUNTY, FLORIDA PRINCIPAL TAXPAYERS SEPTEMBER 30, 1991 Percent 1990 of Total Assessed Assessed Taxoaver Tvoe of Business Value(l) Value Fellsmere Joint Venture Agriculture $70,270,020 1.23% Southern Bell Telephone utility 67,306,160 1.18 John's Island, Inc. Land development 44,876,320 .79 General Development Corp. Land development 35,018,020 .61 Adult Communities Total Services Health care 33,609,470 .59 Florida Power & Light Electric utility 32,596,870 .57 Piper Aircraft Company Aircraft manufacturing 24,462,160 .43 Graves Brothers Agriculture 21,314,390 .37 Pat Corrigan Agriculture 16,946,350 .30 RO-Ed Agriculture 15,150,770 .27 (1) Total assessed value $5,701,670,817 Source: Indian River County Property Appraiser 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. A-8 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. A-9 APPENDIX B GENERAL PURPOSE FINANCIAL STATEMENT AND INDEPENDENT AUDITORS' REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1991 INDIAN RIVER COUNTY, FLORIDA ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 1991 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-2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Fund B-4 Combined Statement of Revenues, Expenditures and Changes in Fund Fund Balances - Budget and Actual - All Governmental Fund Types B-6 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types B-10 Combined Statement of Cash Flows - All Proprietary Fund Types B-11 Notes to Financial Statements B-13 Coopers a3nilied public aocountents &Lybrand Report of Independent Accountants The Honorable County Commissioners and Constitutional Officers Indian River County, Florida We have audited the general purpose financial statements of Indian River County, Florida as of September 30, 1991, and for the year then ended, as listed in the Table of Contents. These financial statements are the responsibility of the County's 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, 1991, 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. 6 O�$' /Xc , �6G Orlando, Florida January 31, 1992 B-1 INDIAN RIVER COUNTY, FLORIDA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1991 GOVERNMENTAL FUND TYPES SPECIAL DEBT CAPITAL ASSETS AND OTHER DEBITS GENERAL REVENUE SERVICE PROJECTS Cash and cash equivalents S 5,509,918 $11,484,450 $ 6,233,003 S 4,337,437 Investments 6,901,923 3,927,166 - 6,726,862 Accounts receivable - net 143,908 - - - Special assessments receivable - deferred - 796,608 6,371,996 - Due from other funds 3,229,158 49,681 4,800 - Due from other governments 407,913 293,633 93,685 442,032 Interest receivable 43,317 44,310 4,711 36,316 Inventories 47,366 - - - 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 $16,283,503 $16,595,848 $12,708,195 $11,542,649 LIABILITIES, FUND EQUITY AND OTHER CREDITS Liabilities: Accounts payable $ 1,034,333 S 262,913 $ - S 548,200 Retainage payable 9,978 55,250 - 78,954 Claims payable - - - Arbitrage rebate payable - - - - Due to other governments 134,190 15,669 - - Deferred compensation - - - - Other deposits held In escrow 82,758 - - - Deferred revenue■ 3,218 796,608 6,443,996 - Due to other funds 7,200 11510,818 - 1,500,000 Payable from restricted assets - - - - Advance from other funds - - 607,500 - Accrued compensated absences - - - - Capital leases - - - - Bond anticipation notes payable - - - - Bonds payable - net of discounts - - - - Total liabilities 1,271,677 2,641,258 7,051,496 2,127,154 Fund Equity and Other Credits: Investment in general fixed assets - - - - Contributions - - - - Retained earnings: Reserved - - - - Unreserved - - - - Fund balances: Reserved 40,000 - 5,656,699 9,415,495 Unreserved, undesignated 14,971,826 13,954,590 - - Total fund equity and other credits 15,011,826 13,954,590 5,656,699 9,415,495 Total Liabilities, Fund Equity and Other Credits 516,283,503 516,595,848 512,708,195 x,11,542,649 B-2 FIDUCIARY PROPRIETARY FUND TYPES FUND TYPES INTERNAL TRUST AND ENTERPRISE SERVICE AGENCY S 3,040,320 $ 1,203,502 $ 4,634,390 - 2,288,118 - 1,063,475 9,724 5,104 - 7,200 - 204,986 - 197,222 21,978 - 386,649 156,588 91906 8,599,903 - - 14,362,659 - - 1,116,575 - - 2,493,144 - - 658,493 - - 607,500 - - 91,144,476 296,251 - (14,009,173) (206,997) - 549,705 - 390,245 - 43,975 - - 5110.850.154 S 3.776.364 S 4.649.400 ACCOUNT GROUPS GENERAL TOTALS GENERAL LONG-TERM (MEMORANDUM FI%ED ASSETS DEBT ONLY) S 36,443,020 19,844,069 1,222,211 7,168,604 3,290,839 1,442,249 347,856 - - 600,509 8,599,903 14,362,659 1,116,575 2,493,144 658,493 607,500 66,617,749 - 158,058,476 - (14,216,170) - - 549,705 - - 390,245 - - 43,975 - 5,656,699 5,656,699 20.142,188 20,142,188 525.798.887 S268.822.749 $ 470,331 $ 54,275 S 25,136 $ - $ - S 2,395,188 - - - - - 144,182 - 2,070,449 - - - 2,070,449 - - - - 125,791 125,791 4,614 - 1,436,712 - - 1,591,185 - - 851,866 - - 851,866 16,516 - 1,962,583 - - 2,061,857 5,489 - - - - 7,249,311 - - 272,821 - - 3,290,839 4,497,760 - - - - 4,497,760 - - - - - 607,500 156,967 22,748 - - 1,335,029 1,514,744 - - - - 679,519 679,519 3,900,000 - - - - 3,900,000 36,289,817 - - 23,658,548 59,948,365 45,341,494 2,147,472 4,549,118 - 25,798,887 90,928,556 52,701,768 637,643 3,732,561 - 9,074,331 991,249 - 100,282 65,508,660 1,628,892 100,282 66,617,749 - 66,617,749 - - 53,339,411 - 3,732,561 - - 10,065,580 15,112,194 29,026,698 66,617,749 177,894,193 5110.850.154 S 3.776.364 S 4.649.400 566.617.749 525.798.887 5268.822,749 The accompanying notes are an integral -R=.1 ,-t of the financial statements. INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND Year Ended September 30, 1991 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest Miscellaneous Total revenues Expenditures: Currents General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture/Recreation Debt Services Principal Interest Capital Projects Total expenditures Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Lease purchase proceeds Total other financing sources (uses) Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses Fund Balances at Beginning of Year Residual Fund Equity Transfer In (Out) Fund Balances at End of Year B-4 12,334,049 GOVERNMENTAL 18,854,367 6,893,900 197,808 SPECIAL GENERAL REVENUE 6 29,770,983 $ 8,108,485 261,341 30,325 4,966,355 21521,815 5,151,322 349,497 649,015 217,168 - 2,166,492 1,407,418 1,431,275 328,200 326,539 42,534,634 15,151,596 12,334,049 634,661 18,854,367 6,893,900 197,808 - 99,162 7,660,063 145,083 - 2,055,903 1,145,206 4,543,508 105,250 66,463 63,510 19,686 19,385 38,316,029 16,521,975 4,218,605 (1,370,379) 7,269,664 7,643,641 (12,534,080) (6,242,136) 341,509 - (4,922,907) 1,401,505 (704,302) 31,126 15,637,331 14,002,261 78,797 (78,797) S 15,11,826 SS 13,954 ,590 FUND TYPES FIDUCIARY FUND TYPE EXPENDABLE TRUST TOTALS DEBT CAPITAL (INMATE (MEMORANDUM SERVICE PROJECTS WELFARE) ONLY) $ 1,575,969 $ 4,842,123 $ - $ 44,297,560 - - - 291,666 1,365,492 662,260 - 9,515,922 - - 150,399 5,651,218 - - - 866,183 2,371,020 - - 4,537,512 1,217,204 747,369 - 4,803,266 897 10,631 - 666,267 6,530,582 6,262,363 150,399 70,629,594 - 12,968,710 96,975 25,845,242 - 197,808 - - 7,759,225 - - 145,083 - - 3,201,109 - - - 4,648,758 2,299,154 - - 2,429,127 2,014,711 - - 2,053,782 - 10,211,036 - 10,211,036 4,313,865 10,211,036 96,975 69,459,880 2,216,717 (3,948,653) 53,424 1,169,714 5,078,909 - 19,992,214 (99,975) (1,244,368) - (20,120,559) - 341,509 (99,975) 3,834,541 213,164 2,116,742 (114,112) 53,424 1,382,878 3,530,285 9,539,279 46,858 42,756,014 9,672 (9,672) S 5.656.699 S 9.415.495 S 100,282 S 44.138.892 The accompanying notes are an integral part of the financial statements. B-5 INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL ALL GOVERNMENTAL FUND TYPES Revenues: Taxes Licenses 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 Services Principal Interest Capital Projects Total expenditures Year Ended September 30, 1991 Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses): 12,990,999 GENERAL 656,950 19,110,124 18,854,367 VARIANCE 276,132 197,808 FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 28,559,047 $ 29,770,983 $ 1,211,936 196,000 261,341 63,341 5,181,302 4,966,355 (214,947) 4,017,360 5,151,322 1,133,962 437,000 649,015 212,015 1,040,567 1,407,418 366,851 281,100 328,200 47,100 39,714,376 42,534,634 2,820,258 Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses): 12,990,999 12,334,049 656,950 19,110,124 18,854,367 255,757 276,132 197,808 78,324 205,821 99,162 106,659 148,522 145,083 3,439 2,147,542 2,055,903 91,639 5,624,603 4,543,508 1,081,095 66,465 66,463 2 19,689 19,686 3 40,589,897 38,316,029 2,273,868 (875,521) 4,218,605 5,094,126 Operating transfers in 7,441,421 7,269,664 (171,757) Operating transfers out (12,544,413) (12,534,080) 10,333 Lease purchase proceeds 341,509 341,509 - Total other financial sources (uses) (4,761,483) (4,922,907) (161,424) Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses S (5,637,004) (704,302) S 4,932,702 Fund Balances at Beginning of Year 15,637,331 Residual Fund Equity Transfer In (Out) 78,797 Fund Balances at End of Year S 15,011,826 B-6 740,137 SPECIAL REVENUE 105,476 - - VARIANCE 7,008,676 6,893,900 FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 7,781,841 $ 8,108,485 $ 326,644 - 30,325 30,325 2,538,870 2,521,815 (17,055) 320,200 349,497 29,297 73,450 217,168 143,718 2,550,203 2,166,492 (383,711) 922,549 1,431,275 508,726 213,362 326,539 113,177 14,400,475 15,151,596 751,121 740,137 DEBT SERVICE 105,476 - - VARIANCE 7,008,676 6,893,900 FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 1,541,733 $ 1,575,969 $ 34,236 1,323,944 1,365,492 41,548 1,230,887 2,371,020 1,140,133 1,080,860 1,217,204 136,344 1,813 897 (916) 5,179,237 6,530,582 1,351,345 740,137 634,661 105,476 - - - 7,008,676 6,893,900 114,776 - - - 15,673,554 7,660,063 8,013,491 - - - 1,178,480 1,145,206 33,274 - - - 266,718 105,250 161,468 - - - 93,512 63,510 30,002 2,975,007 2,299,154 675,853 19,628 19,385 243 2,070,249 2,014,711 55,538 24,980.705 16,521,975 8,458,730 5,045,256 4,313,865 731,391 (10,580,230) (1,370,379) 9,209,851 133,981 2,216,717 2,082,736 7,637,641 7,643,641 6,000 - - - (6,893,227) (6,242,136) 651,091 (266,732) (99,975) 166057 744,414 1,401,505 657,091 (266,732) (99,975) 166,757 S (9.835.816) 31,126 S 9,866,942 S (132,751) 2,116,742 S 2,249,49 14,002,261 3,530,285 (78,797) 9,672 S 13,954,590 S 5,656,699 Continued The accompanying notes are an integral part of the financial statements. B-7 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, 1991 Revenuess Taxes Licenses 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 Other Financing Sources (Uses): CAPITAL PROJECTS VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 4,837,325 $ 4,842,123 $ 4,798 120,000 662,260 542,260 260,000 747,369 487,369 - 10,631 10,631 5,217,325 6,262,383 1,045,058 15,601,082 10,211,036 5,390,046 15,601,082 10,211,036 5,390,046 (10,383,757) (3,948,653) 6,435,104 Operating transfers in 5,723,750 5,078,909 (644,841) Operating transfers out (1,244,368) (1,244,368) _ Lease purchase proceeds - Total other financial sources (uses) 4,479,382 31834,541 (644,841) Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses S (5,904,375) (114,112) $---5,790,263 Fund Balances at Beginning of Year 9,539,279 Residual Fund Equity Transfer In (Out) (9,672) Fund Balances at End of Year 6- B-8 13,731,136 TOTALS (MEMORANDUM ONLY) 762,426 26,118,800 25,748,267 VARIANCE 276,132 197,808 FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 42,719,946 $ 44,297,560 $ 1,577,614 198,000 291,666 93,666 9,164,116 9,515,922 351,806 4,337,560 5,500,819 1,163,259 510,450 866,183 355,733 3,781,090 4,537,512 756,422 3,303,976 4,803,266 1,499,290 496,275 666,267 169,992 64,511,413 70,479,195 5,967,782 13,731,136 12,968,710 762,426 26,118,800 25,748,267 370,533 276,132 197,808 78,324 15,8799375 7,759,225 8,120,150 148,522 145,083 3,439 3,326,022 3,201,109 124,913 5,891,321 4,648,758 1,242,563 3,134,984 2,429,127 705,857 2,109,566 2,053,782 55,784 15,601,082 10,211,036 5,390,046 86,216,940 69,362,905 16,854,035 (2117050527) 1,116,290 22,821,817 20,802,812 19,992,214 (810,598) (2009480740) (20,120,559) 828,181 341,509 341,509 195,581 213,164 17,583 S(21,509,946) 1,329,454 S 22,839,400 42,709,156 S 44.038.610 The accompanying notes are an integral part of the financial statements. B-9 INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES Year Ended September 30, 1991 Operating Revenues: Charges for services Operating Expenses: Personal services Materials, supplies, services and other operating Depreciation Total operating expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest income Operating grants Gain on disposal of equipment Interest expense Bond amortization expense Loss on disposal of equipment Total nonoperating revenues (expenses) Income (Loss) Before Operating Transfers Operating Transfers In Net Income (Loss) Add: Depreciation on Fixed Assets Acquired with Contributed Capital Increase (Decrease) in Retained Earnings Retained Earnings at Beginning of Year Retained Earnings at End of Year TOTALS INTERNAL (MEMORANDUM ENTERPRISE SERVICE ONLY) $14,204,991 $3,475,554 $17,680,545 5,885,636 491,206 6,376,842 5,843,169 2,400,174 8,243,343 4,227,789 34,812 4,262,601 15,956,594 2,926,192 18,882,786 (1,751,603) 549,362 _(1,202,241) 2,071,721 182,177 2,253,898 40,016 - 40,016 11,662 250 11,912 (2,021,254) - (2,021,254) (66,503) - (66,503) (106,703) (497) (109,200) (73,061) 181,930 _108,869 (1,824,664) 731,292 (1,093,372) 78,345 50,000 128,345 (1,746,319) 781,292 (965,027) 1_,155,499 - 1,155,499 (590,820) 781,292 190,472 13,397,712 209_,957 13,607,669 $12,806,892 S991.249 113,798,141 The accompanying notes are an integral part of the financial statements. B-10 INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES Year Ended September 30, 1991 Continued The accompanying notes are an integral part of the financial statements. B-11 TOTALS INTERNAL (MEMORANDUM ENTERPRISE SERVICE ONLY) Cash Flows from Operating Activities: Cash received from customers $ 11,934,403 $ 3,478,903 S 15,413,306 Cash payments to suppliers for goods and services (4,903,050) (1,495,538) (6,398,588) Cash payments to employees for services (5,847,852) (487,524) (6,335,376) Net cash provided by operating activities 1,183,501 1,495,841 2,679,342 Cash Flows from Noncapital Financing Activities: Operating transfers in 78,345 50,000 128,345 Operating grants 40,016 - 40,016 Net cash provided by noncapital financing activities 118,361 50,000 168,361 Cash Flows from Capital and Related Financing Activities: Proceeds from issuance of long-term debt 6,789,039 - 6,789,039 Principal paid on long-term debt (647,000) - (647,000) Principal paid on capital leases (30,820) - (30,820) Principal paid on note payable (237,515) - (237,515) Interest paid on long-term debt (1,977,540) - (1,977,540) Proceeds from sale of fixed assets 51,032 1,000 52,032 Purchase of fixed assets (13,424,291) (20,877) (13,445,168) Bond paying agent fees (3,700) - (3,700) Bond issuance costs (136,415) - (136,415) Capital contributed by others 12,477,560 1,000 12,478,560 Net cash provided by (used in) capital and related financing activities 2,860,350 (18,877) 2,841,473 Cash Flows from Investing Activities: Purchase of investment securities (11,275,688) (2,358,558) (13,634,246) Proceeds from sale and maturities of investment securities 13,140,896 70,440 13,211,336 Interest and dividends on investments 2,013,736 160,199 2,173,935 Net cash provided by (used in) investment activities 3,878,944 (2,127,919) 1,751,025 Net Increase (Decrease) in Cash and Cash Equivalents 8,041,156 (600,955) 7,440,201 Cash and Cash Equivalents at Beginning of Year 3,599,067 1,804,457 5,403,524 Cash and Cash Equivalents at End of Year S 11,640,223 S 1,203,502 S 12,843,725 Continued The accompanying notes are an integral part of the financial statements. B-11 INDIAN RIVER COUNTY, FLORIDA COMBINED STATEMENT OF CASH FLOWS - CONTINUED ALL PROPRIETARY FUND TYPES Year Ended September 30, 1991 Classified As: Current assets Restricted assets Totals 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 Impact fees receivable Special assessments receivable Intangible assets Deposits Prepaid insurance Increase (decrease) in liabilities: Accounts payable Due to other governments Other deposits in escrow Due to other funds Retainage payable Customer deposits Closure costs payable Deferred revenues Claims payable Prepaid impact fees Accrued compensated absences Total adjustments Net Cash Provided by Operating Activities Noncash Capital and Related Financing Activities: TOTALS INTERNAL (MEMORANDUM ENTERPRISE SERVICE ONLY) $ 3,040,320 $ 1,203,502 $ 4,243,822 8,599,903 8,599,903 S 11,640,223 S 1,203,502 S 12,843,725 $ (1,751,603) $ 549,362 $ (1,202,241) 4,227,789 34,812 4,262,601 15,840 - 15,840 (195,733) (9,553) (205,286) 54,399 (7,200) 47,199 (176,270) 20,102 (156,168) (95,067) 8,326 (86,741) (107960984) - (1,796,984) 85,659 - 85,659 (164,351) - (164,351) (43,975) - (43,975) - 36,744 36,744 780 6,897 7,677 4,614 - 4,614 (263,929) - (263,929) - (103,833) (103,833) 53,362 - 53,362 284,719 - 284,719 1,168,916 - 1,168,916 (2,449) - (2,449) - 956,502 956,502 (260,000) - (260,000) _ 37,784 3,682 41,466 2,935,104 946,479 3,881,583 $ 1,183,501 S 1,495,841 S 2� 679`342 Contributed property, plant and equipment S 2,831,938 S - S 2,831,938 The accompanying notes are an integral part of the financial statements. B-12 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS Year Ended September 30, 1991 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-13 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: A. Reporting Entity - Continued - Applying the criteria above has caused the inclusion of the following entities: Indian River County Housing Authority (IRCHA) - 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 IRCHA. In addition, they provide use of certain furniture and equipment to the IRCHA at no charge. Due to the proprietary nature of the IRCHA'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 and operating grants received from the State of Florida. Since the oper- ating costs of IRCHA have been properly reported in the enterprise fund, the Special Revenue Fund has been eliminated for the purposes of this report. Appropriations from the Board totaled $88,678 and the related actual operating costs totaled $78,345 for the fiscal year. The IRCHA cannot overspend appropri- ations in total. North Indian River County 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 (IRCSBD) - The IRCSBD has a separately elected board, maintains its own financial records and reports to the Florida Department of Education. Indian River County 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 County Mosquito Control District (IRCMCD) - 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-14 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting 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-15 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: Proprietary Funds - Continued Internal Service Funds - The Fleet Service Funds are used to account provided to other departments or reimbursement basis. Fiduciary Funds Management and Self Insurance Internal for the financing of goods and services agencies of the County, on a cost - 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 Long -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-16 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary 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 -Term 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-17 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. 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, 1991, this allowance was $4,000. The Housing Authority provides an allowance for rents receivable which may become uncollectible which amounted to $11,338 at September 30, 1991. No other allowances for uncollectible accounts are main- tained since other fund accounts receivable are considered collectible as reported at September 30, 1991. 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-18 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 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 Enterprise Fund incurred interest expense during the construction period totaling $26,815. There were no related interest earnings on construction fund investments for net capitalized interest of $26,815. 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. Intanqible 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-19 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: 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. O. Accrued Compensated Absences - The County records compensated absences in the Governmental Fund Types as an expenditure for the amount accrued 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 Arbitrage Rebate - Pursuant to Section 198(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. As of September 30, 1991, the entire arbitrage rebate liability of the County was related to general government debt. Since these amounts are not due to be paid until 1993, this liability is reported in the General Long -Term Debt Account Group. Landfill Closure Costs - Under the terms of Florida Department of Environmental Regulation and the Environmental Protection Agency requirements, the County is required to provide long-term care for landfill operations for up to thirty years after final closure. Required obligations for closure costs are recog- nized in the Solid Waste Disposal District 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. 8-20 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: S. Budgets and Budgetary 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 for all governmental 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-21 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: S. Budgets and Buddetary Accounting - Continued (6) Revisions made to the original budget by the Board for unanticipated revenues were as follows: B-22 Original Total Revised Budget Revisions Budget General Fund $37,557,542 $3,032,355 $40,589,897 Special Revenue Funds: Road Improvement Fees 5,205,000 69,290 5,274,290 Police Academy 40,000 39,000 79,000 Section 8 - Rental Assistance 1,042,886 135,594 1,178,480 Secondary Road Construction - 42,545 42,545 Road and Bridge 71310,392 86,653 71397,045 South County Fire District 5,642,143 286,501 5,928,644 North County Fire District 859,394 190,278 1,049,672 Environmental Control Board 38,155 (38,155) - Tourist Development 216,968 20,000 236,968 911 Surcharge 280,500 6,196 286,696 Street Lighting Districts 145,958 3,250 149,208 Debt Service Funds: Route 60 Water Assessment Bonds 100,921 269,944 370,865 Rockridge Sewer Assessment Bonds - 128,920 128,920 North County Sewer Assessment Bonds - 1,085,813 1,085,813 Capital Projects Funds: Treasure Shores Park 313,750 170,000 483,750 Optional Sales Tax 7,340,200 251,500 71591,700 Library Construction 1,995,000 (244,368) 1,750,632 North County Sewer - 395,000 395,000 (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-22 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: 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. U. Statements of Cash Flows - During the 1991 fiscal year, the County adopted GASB Statement No. 9, "Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting". As a result, the Statement of Changes in Financial Position for proprietary fund types has been replaced by the Statement of Cash Flows. 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, 1991, the carrying amount of the County's deposits was $5,186,338 made up of demand deposits, certificates of deposit, money market accounts, savings accounts and petty cash. All deposits with financial institutions were 1008 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 5-10.38. B-23 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 2. Cash and Investments - Continued: 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. Certificates of deposit, money market accounts and 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. 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, 1991 Repurchase Agreements U.S. Treasury Securities U.S. Government Agency Securities Local Government Surplus Funds Trust Fund Total Investments Category Carrying Market 1 2 Amount Value $ - $ 1,000,000 $ 1,000,000 $ 1,000,000 6,351,569 - 6,351,569 6,467,571 28,546,123 28,546,123 28,724,140 $34,897,692 S 1,000,000 35,897,692 36,191,711 37,313,754 37,313,754 173,211,446 173.505.465 In addition to the cash and temporary cash investments listed above, employee deferred compensation plan (see Note 10) cash and temporary cash investments were $851,867, 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. 8-24 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 3. Property Tax Revenues: Property tax revenues recognized for the 1990-91 fiscal year were levied in October, 1990. 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. Key dates in the property tax cycle (latest date where appropriate) are as follows: Revenues for Fiscal Year Ending September 30, 1991 Date of lien January 1, 1990 Assessment roll certified June 27, 1990 Property taxes levied October 31, 1990 Beginning of fiscal year for which taxes have been levied October 1, 1990 Tax bills rendered October 31, 1990 Property taxes payable: Maximum discount November 30, 1990 Delinquent April 1, 1991 Tax certificates sold on unpaid property taxes May 28, 1991 B-25 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 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 Progress Equipment Balance at October 1, 1990 $14,248,150 $17,735,576 $16,473,060 $14,445,059 $62,901,845 Additions 2,819,934 12,957,121 2,337,260 8,045,451 26,159,766 Deletions - - 733,299 21,710,563 22,443,862 Balance at Septem- ber 30, 1991 $17,068,084 $30,692,697 518,077,021 S 779,947 $66,617,749 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-26 Enterprise $ 6,098,428 Internal Service 75,530,634 108,521 6,219,509 182,274 3,295,905 5,456 91,144,476 296,251 (14,009,173) (206,997) $ 77,135,303 $ 89,254 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 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 consist of the following accounts: Solid Waste Water Disposal Golf and Sewer Housing District Course System Authority Total Sinking Funds $1,251,716 $1,470,152 $2,343,416 $ 11,959 $ 5,077,243 Renewal 6 Replace- ment and Capital Projects 1,100,540 3,894,779 6,378,535 176,906 11,550,760 Customer Deposits 27,700 - 642,050 12,774 682,524 Capital Construction 2,080,685 - - - 2,080,685 Closure Z Mainte- nance Costs 3,571,350 - - - 3,571,350 58,031,991 $5,364,931 $9,364,001 $201,639 $22,962,562 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 $ - $ - $ 690,919 $ - $ 690,919 Retainage payable - 4,064 124,531 - 128,595 Accrued interest payable 160,298 88,263 325,748 2,959 577,268 Bonds payable (current portion) 455,000 45,000 162,600 108,000 770,600 Closure costs payable 1,649,094 - - - 1,649,094 Customer deposits 27,700 - 642,050 11,534 681,284 $2,292,092 S 137,327 S1,945,848 JIU,.493 $4,497,76U B-27 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 7. Interfund Accounts: The following is a summary of interfund receivables and payables as of September 30, 1991 which includes Due To/Due From and Advance To/Advance From Other Funds. Fund Receievable Payable General Fund $3,229,158 $ 7,200 Special Revenue Funds: Policy Academy 5,011 - Court Facilities 4,564 - South County Fire District 13,126 - North County Fire District 4,820 - Petition Paving - 11500,000 Street Lighting Districts 11,342 - Criminal Justice 10,818 10,818 Debt Service Funds: Library Bonds 4,800 - North County Sewer Assessment Bonds (recorded as an Advance From Other Funds) - 607,500 Capital Projects Funds: Optional Sales Tax - 1,500,000 Enterprise Funds: Water and Sewer System (recorded as an Advance to Other Funds) 607,500 - Internal Service Funds: Self Insurance 7,200 - Agency Funds: Clerk - 75,907 Tax Collector - 196,914 Totals $3,898,339 $3,898,339 B-28 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 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, certain required engineering reports. (4) Bonds Issued - At September 30, 1991, the revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Description Date Maturity Issue 1991 1988 Solid Waste Disposal System 5.258-7.48 Revenue Bonds 6/1 and 12/1 6/1/02 $8,240,000 $ 7,010,000 Less: Current portion Long -Term Portion B-29 455,000 $ 6,555,000 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -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 08 and 28 depending on the year of redemption. Recreational (Golf Course) 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-30 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 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, 1991, these revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Dates Maturity Issue 1991 1985 Recreational 6.408-7.609 Revenue Bonds 9/1 1991 Recreational 5.358-6.8758 Revenue Bonds 9/1 Less: Current portion Unamortized discount Long -Term Portion (5) Optional Redemption 9/1/15 $2,720,000 $ 2,680,000 9/1/16 $6,015,000 6,015,000 45,000 196,385 $ 8,453,615 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 08 and 28 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 08 and 28 depending on the year of redemption. B-31 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 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 gross 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. Since the amounts are derived from operating revenues and are restricted, a corresponding reserve has been estab- lished in the retained earnings. 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. A corresponding reserve has been established in the retained earnings for the amounts derived from operating revenues. (3) Bonds Issued - At September 30, 1991, revenue bonds consisted of the following: Outstanding at Rates and Original September 30, Description Dates Maturity Issue 1991 Water and Sewer Revenue Bonds: Series 1986 58 and 9/1 2029 $9,200,000 $ 9,200,000 Series 1986A 78 and 9/1 2029 450,000 450,000 Less: Current portion 87,600 Long -Term Portion $$ 9 (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-32 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt - Continued: Al Water and Sewer Revenue Refunding Bonds Series 1989 (1) Pledge of Revenues - The revenue bonds are collateralized by a pledge of all gross 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. Since the amounts are derived from operating revenues and are restricted, a corresponding reserve has been estab- lished in the retained earnings. 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. A corresponding reserve has been established in the retained earnings for the amounts derived from operating revenues. onds Issued - At September 30, 1991, revenue bonds consisted of the ollowing: escription iter and Sewer Revenue Refunding Bonds, Series 1989 Outstanding at Rates and Original September 30, Dates Maturity Issue 1991 6.70%-7.258 5/1 and 11/1 2019 $6,510,000 $ 6,375,000 ass: Current portion 75,000 Unamortized bond discount 29,598 )ng -Term Portion S 6,270,402 :)tional Redemption - The revenue bonds maturing on or after May 1, 1999 re subject to redemption prior to maturity, at the option of the County I and after May 1, 1998, in whole at any time or in part on any interest Yyment date at par plus accrued interest and plus a premium ranging atween 0% and If% depending on the year of redemption. B-33 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt - Continued: Housing 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.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 (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 revenues to be derived from the projects. The revenue bond resolution provides for the following: (1) The revenue bond obligation consists of: Less: Current portion 108,000 Long -Term Portion S 5,448,400 (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 08 and 58, 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. 8-34 Original Balance Interest Revenue Outstanding Rate Bond September 30, Description and Dates Commitment 1991 Indian River 18 per annum on County Housing the unpaid Authority balance, payable Revenue Bonds: September 1 each year Victory Park Phase I $1,908,000 $ 1,748,000 Victory Park Phase II 1,908,000 1,802,000 Orangewood Park Apartments 2,006,400 2,006,400 $5,822,400 5,556,400 Less: Current portion 108,000 Long -Term Portion S 5,448,400 (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 08 and 58, 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. 8-34 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -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. 8-35 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 S. Long -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 Annual Debt Service Payments - Enterprise Fund Bonds Payable - The annual debt service payments to amortize the bonds payable outstanding at September 30, 1991 are as follows: Ft scsl Year Ending S6otember 301 1991 1993 1991 1995 1996 1997-2001 2002-2006 2007-1011 2012-1016 2017-2021 2022-2026 2027-2071 Total• Less: Amounts representing interest To[al Bonds Peyeble Ls as: Current portion Unamorti red bond discount Recrestlonel (Colt Course) Revenue Housing Bonds Authority Total S 673,979 5 16),561 S 2,896,9)] 617,919 219,181 7,920,111 761,519 119,811 3,011,759 761,381 110,161 3,019,157 761,116 119.171 ),019,206 3,818,117 1,097,530 15,229,511 3,:11,516 1,097,830 11,178,051 3,815,782 1,095,880 10,532,695 3,577,111 1,095,620 10,792,101 880,510 5,120,761 150,618 ),01:,915 1,739,353 18,637,953 6,160,518 72,691,585 9,962,957 906,118 35,107,185 8,695x000 5,55100 37,286,100 15,000 16, 0:,000 770,600 196,385 225.987 153.619 55.118.600 576.289.817 B. Enterprise Fund Bond Anticipation Notes - On November 29, 1988, the County issued 6 7/88 Water Revenue Bonds, Series 1988, Anticipation Notes in the principal amount of $3,900,000. These notes were issued in anticipation of their receipt by the County of the proceeds from the sale of Water Revenue Bonds. From the proceeds of the Bond Anticipation Notes, the County deposited $707,717 into the Notes Payment Account within the Sinking Fund for interest payments to be made to maturity. The Water and Sewer Revenue Bonds, Series 1991, issued October 11, 1991 will be used to retire these Bond Anticipation Notes as dicussed at Note 17. B-36 Neter end Solid Waste Water and Serer Disposal Serer Revenue System Revenue Refunding Revenue Bonds Bonds Bonds 5 579,100 S 513,995 S 9)5,895 579,866 51,8230 931,050 579,372 513,160 971,770 579,662 517,310 977,610 579,688 515,:53 937,715 7,896,392 2,725,650 1,691,515 2,897,215 1,710,710 939,750 1,898,793 1,721,010 - 3,B97,617 7,727,070 - 2,898,771 1,611,080 - 2,897,907 - - 1,779,353 22,023,721 15,260,528 10,310,635 12,373,721 81885,528 3,300,835 9,650,000 6,375,000 7,010,000 87,600 75,000 155,000 29.598 S 6,555,000 S 9,562,100 5 6,270,102 Recrestlonel (Colt Course) Revenue Housing Bonds Authority Total S 673,979 5 16),561 S 2,896,9)] 617,919 219,181 7,920,111 761,519 119,811 3,011,759 761,381 110,161 3,019,157 761,116 119.171 ),019,206 3,818,117 1,097,530 15,229,511 3,:11,516 1,097,830 11,178,051 3,815,782 1,095,880 10,532,695 3,577,111 1,095,620 10,792,101 880,510 5,120,761 150,618 ),01:,915 1,739,353 18,637,953 6,160,518 72,691,585 9,962,957 906,118 35,107,185 8,695x000 5,55100 37,286,100 15,000 16, 0:,000 770,600 196,385 225.987 153.619 55.118.600 576.289.817 B. Enterprise Fund Bond Anticipation Notes - On November 29, 1988, the County issued 6 7/88 Water Revenue Bonds, Series 1988, Anticipation Notes in the principal amount of $3,900,000. These notes were issued in anticipation of their receipt by the County of the proceeds from the sale of Water Revenue Bonds. From the proceeds of the Bond Anticipation Notes, the County deposited $707,717 into the Notes Payment Account within the Sinking Fund for interest payments to be made to maturity. The Water and Sewer Revenue Bonds, Series 1991, issued October 11, 1991 will be used to retire these Bond Anticipation Notes as dicussed at Note 17. B-36 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt - Continued: B. Enterprise Fund Bond Anticipation Notes - Continued - At September 30, 1991, revenue bond anticipation notes consisted of the following: Rates Outstanding at and Original September 30, Dates Maturity Issue 1991 Water Revenue Bonds, Series 1988, Anticipation Notes 6.8758 12/1/912,0,000 S 3,900,000 C. Changes in General Long -Term Debt - A summary of changes in general long-term debt follows: Balance Balance October 1, September 30, 1990 Additions Deletions 1991 Accrued Compensated Absences: Board $ 539,370 $ 147,936 $ - S 687,306 Clerk of Court 40,984 16,211 8,623 48,572 Sheriff 426,648 106,936 - 533,584 Tax Collector 29,406 1,070 - 30,476 Property Appraiser 28,145 4,652 - 32,797 Supervisor of Elections 1,775 519 - 2,294 1,066,328 277,324 8,623 1,335,029 Capital Leases: Board 237,535 - 63,510 174,025 Sheriff 31,058 144,261 22,406 152,913 Property Appraiser 199,390 197,248 44,057 352,581 467,983 341,509 129,973 679,519 Arbitrage Rebate Payable: Board - 125,791 - 125,791 Bonds Payable: Refunding and Improvement Revenue Bonds - 1985 Series 8,580,000 - 305,000 8,275,000 Capital Improvement Revenue Bonds - 1987 Series 3,285,000 - 135,000 3,150,000 General Obligation Bonds - 1989 Series 4,865,000 - 1,105,000 3,760,000 Special Assessment Bonds 9,227,702 754,154 8,473,548 25,957,702 2,299,154 23,658,548 Totals 127,492,013 S 744,624 $2,437,750 $25,798,887 B-37 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt - Continued: D. General Lona -Term 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 of: Balance Interest Outstanding Rates and Original September 30, Dates Maturity Issue 1991 Refunding and Improve- ment Revenue Bonds, 1985 Series - 5.58-8.758 Serial Bonds 9/1 6 3/1 Term Bond 9% Term Bond 9.125% Term Bond 9.125% Capital Improvement Revenue Bonds, 1987 Series - 4.75%-7.30% Serial Bonds 9/1 b 3/1 Term Bond 7.75% 8-38 1997 S 4,000,000 $ 2,420,000 2000 1,735,000 1,735,000 2002 1,440,000 1,440,000 2005 2,680,000 2,680,000 9,855,000 8,275,000 2000 2,165,000 1,660,000 2005 1,490,000 1,490,000 3,655,000 3,150,000 113,510,000 $11,425,000 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt - Continued: D. 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, 1909 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, 1991, General Obligation Bonds consisted of the following: 8-39 Outstanding at Rates and Original September 30, Description Dates Maturity Issue 1991 General Obliga- 5.758-6.158 tion Bonds, 1989 Series 7/1 & 1/1 1994 85,900,000 S3,760,000 8-39 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt - Continued: D. 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 proceedings the property cannot be sold at auction, then the County must acquire it for its market value. At September 30, 1991, special assessment bonds consisted of the following: B-40 Outstanding at Rates and Original September 30, Description Dates Maturity Issue 1991 Route 60 Waterline 8.47% construction 5/1 1997 $ 430,000 $ - Route 60 Sewerline 8.47% construction 1/1 1996 2,797,675 1,748,548 Rockridge Sewer 6.758-8.008 construction 6/1 b 12/1 2000 720,000 650,000 North County Sewer 7.75% construction 4/1 6 10/1 2000 6,075,000 6,075,000 $10,022,675 j_8,473.,548 * The County paid these bonds off early during the current fiscal year. B-40 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL•STATEMENTS - CONTINUED Year Ended September 30, 1991 B. Long -Term Debt - Continued: D. General Lona -Term Debt - Continued: (4) The annual debt service requirements to amortize all revenue bonds and general obligation bonds and special assessment bonds outstanding at September 30, 1991 are as follows: (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-41 General Revenue Bonds obligation Bonds Refunding Fiscal Year and Capital Ending Improvement Improvement Series September 30, 1985 Series 1987 Series 1989 1992 $ 1,062,506 S 371,097 S 1,403,852 1993 1,062,311 367,760 1,108,352 1994 1,064,388 768,760 1,117,102 1995 1,063,106 368,840 - 19 96 1,063,350 367,960 - 1997-2001 5,309,638 1,845,475 - 2002-2006 4,246,688 1,483,388 Totals 14,672,020 5,177,280 4,229,306 Less: Mount representing interest 6,597,020 2,023,280 469,306 Total 5 6,275,000 5 3,150.000 S 3,760,000 Fiscal Year Special Assessment Bonds Ending Route 60 Rockridge North County September 30, Sewsrline Sewer Sever Total 1992 S 497,811 S 119,195 S 1,033,538 S 4,487,999 1997 168,191 119,295 986,262 1,412,204 1994 138,571 108,895 978,988 1,336,704 1995 4081950 108,715 891,713 2,841,324 1996 379,330 98,090 844,438 2,753,168 1997-2001 - 347,680 3,493,874 10,996,667 2002-2006 - - - 5,730,076 Totals 2,192,853 901,870 8,188,813 35,558,142 Less: Amount representing interest 444,305 251,870 2,113,813 11,899,594 Total S 1,748,518 S 650,000 S 6,075,000 523,658,548 (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-41 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 8. Long -Term Debt.- Continued: E. 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, 1990 1991 1991 Capital Improvement Revenue Bonds: Series 1980 S 3.900,000 $0 000 S 3,8v 30 x,000 Series 1981 1-120-A-000 L-2 -5, -0o o $605,000 Solid Waste Disposal System Revenue Bonds, Series 1977 $ 650,000 $1� 5_0_000 S 500,000 F. Capital Leases and Notes Payable (1) General Long -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, 1991: Year Ending September 30, 1992 1993 1994 1995 1996 Total Minimum Lease Payments Less: Amount repre- senting interest Board of County Property Commissioners Sheriff Appraiser Total $ 81,704 $ 51,773 $122,738 $256,215 59,873 51,773 122,738 234,384 59,873 47,257 86,047 193,177 - 25,617 55,333 80,950 - 36,833 36,833 201,450 176,420 423,689 801,559 27,425 23,507 71,108 122,040 Present Value of Net Minimum Lease Payments $174,025 8-42 $152,913 $352,581 S679,519 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 B. Lona -Term Debt - Continued: F. Capital Leases and Notes Payable - Continued The following is an analysis of the leased property under capital leases: Board of County Property ype of Property Commissioners Sheriff Appraiser Total Computer equipment $ - $ - $448,368 S 448,368 Copier equipment - 46,846 - 46,846 Automotive equipment 475,775 - 475,775 Communication equipment 6,865 129,605 - 136,470 982 640 $176,451 448 368 $1.107,459 The equipment listed above is recorded in the General Fixed Assets Account Group. 9. Defined Benefit Pension Plans: A. Florida Retirement Svstem 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, 1991 as follows (contribution rates are in agreement with the actuarially determined rates): 8-43 Period 10/1/90 1/1/91 to 12/31/90 to 9/30/91 Regular Class - Members not qualifying for other classes 14.668 16.208 Senior Management Service Class - Members of senior management who do not elect the optional annuity retirement program 16.048 18.878 Special Risk Class - Members employed as law enforcement officers, firefighters, or correctional officers and meet the criteria set to qualify for this class 19.908 26.008 8-43 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 9. Defined Benefit Pension Plans - Continued: A. Florida Retirement System - Continued Period 10/1/90 1/1/91 to 12/31/90 to 9/30/91 Special Risk Administrative Support Class - Special risk members who are trans- ferred or reassigned to non -special risk and meet the criteria 14.09% 20.64% Elected County Officer's Class - Certain elected county officials 19.71% 23.801 The FRS provides vesting after ten years of creditable service. Members are eligible for normal retirement after vesting (10 years or more creditable service for regular members). Early retirement may be taken anytime after vesting, but there is a five percent benefit reduction for each year prior to normal retirement age (less than 30 years service or 62 years of age for regular 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, 1991 were $5,051,265 on covered payroll of $26,648,646, for a 18.96% contribution rate. Total payroll for the County was $27,538,123. The County's contribution represented less than 1% of total contributions required of all participating employees. The most recent actuarial study was prepared as of July 1, 1990 which recommends an increase in contribution rates over the next five years in order to meet normal cost and fund the unfunded actuarial accrued liability. The report indi- cated two major changes in procedures and assumptions. The investment return was changed to 8% from 9% and the asset valuation method was changed. 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. B-44 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 9. Defined Benefit Pension Plans - Continued: A. Florida Retirement System - Continued 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. 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 $12,175 The amount of the total pension benefit obligation is based on a standardized measurement established by the GASB Statement No. 5. 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-45 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 9. Defined Benefit Pension Plans - Continued: 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 PEAS 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. 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, 1991. Significant actuarial assumptions used in the valuation include (a) a rate of return on the investment of present and future assets compounded annually of 6 1/28, and (b) projected salary increases of 78 a year compounded annually attributable to inflation. B-46 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 9. Defined Benefit Pension Plans - Continued: B. Firefighters Pension Plan - Continued Total unfunded pension benefit obligations are as follows: October 1, 1991 Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $1,253,548 Current employees - Accumulated employee contributions including allocated investment earnings 280,000 Employer -financed vested 1,737,481 Employer -financed nonvested 26,996 Total Pension Benefit Obligation 3,298,025 Net Assets Available for Benefits, at cost 3,337,238 Net Assets Over (Under) Pension Benefit Obligation S 39.213 There were no current year changes in actuarial assumptions or benefit pro- visions that would affect the pension benefit obligation. 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 benefit in excess of current asset 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. B-47 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 9. Defined Benefit Pension Plans - Continued: B. Firefighters Pension Plan - Continued 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 were no changes in the current year in actuarial assumptions, actuarial funding method, or benefit provisions. The contributions made to the plan during the fiscal year ended September 30, 1991 were based on the actuarial report dated January 1, 1990. 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 - 7% of compensation $ 28,357 State - Premium Tax Refunds 78,565 Employer - Additional amount necessary to pay the annual normal cost and amortize any unfunded actuarial accrued liability - Total Contributions $106,922 Current Year Covered Payroll (same as total current year payroll) $390,785 Contributions as a Percentage of Current Year Covered Payroll: Employee 7.3% State 20.1% Employer 0% B-48 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 9. Defined Benefit Pension Plans - Continued: B. Firefighters Pension Plan - Continued Trend Information - The required three-year historical trend information is as follows: 11:1 !n Beua o! Net Assete Net Assets Pension B ..fit 6Ployeu Available Pension Over IUnde11 Covered Obligation Contributions Valuation for Benefits Benefit Percentage Pen -ion Benefit Annual as a \ of Annual 8 a \ o! Annual Date _(at Cost) Obligation Funded Obllgatlon Payroll Covered Payroll Covered Payroll 30/1/89 5 7,8671,790 S 7.807,156 lOt.01 1 57,6771 1 ]96,597 16.6\ - 10/1/90 7,077.965 ],076,198 101.51 66,767 767.757 17.7 - 10/1/91 7,377,778 7,798.075 101.71 39,713 390,785 10.0 - For further information, including the required ten-year historical trend information, refer to the City of Vero Beach's Comprehensive Annual Financial Report. 10. 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-49 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 11. Segment Information: The County maintains Enterprise Funds for its Water and Sewer System, Solid Waste System, County Building, and Golf Course and Housing Authority Funds. Segment information for the year ended September 30, 1991 follows: Operating Depreciation and Amortization Expense 1,133,287 93,857 Operating Income (Loss) (43,339) 296,332 Operating Transfers In - - Net Income (LOSS) 358,662 111,917 Fixed Assets: Additions 260,626 703,669 Deletions - net of accumulated depreciation - 1,020 Net Working Capital (Deficit) 2,167,666 180,318 Total Assets 16,241,196 8,823,459 Bonds Payable From Operating Revenues - Net 6,555,000 8,453,615 Total Equity 7,182,637 155,810 Current Year Net Increase in Contributions 163,345 - B-50 32,977 2,813,627 154,041 4,227,789 (372,984) (1,524,822) (106,790) (1,751,603) - 78,345 78,345 (278,000) (1,899,336) (39,562) (1,746,319) 40,436 14,587,059 664,439 16,256,229 1,676 145,377 840 148,913 785,842 1,158,762 103,114 4,395,702 919,995 78,142,742 6,722,762 110,850,154 - 15,832,802 5,448,400 36,289,817 859,567 56,162,809 1,147,837 65,508,660 - 14,002,249 (31,595) 14,153,999 Solid Waste Water Disposal Golf County and Sewer Housing District Course Building System Authority Total Operating Revenues S 5,012,765 $1,575,501 $ 548,341 $ 6,718,353 $ 350,031 $14,204,991 Operating Grant Revenue 27,769 - - - 12,247 40,016 Operating Depreciation and Amortization Expense 1,133,287 93,857 Operating Income (Loss) (43,339) 296,332 Operating Transfers In - - Net Income (LOSS) 358,662 111,917 Fixed Assets: Additions 260,626 703,669 Deletions - net of accumulated depreciation - 1,020 Net Working Capital (Deficit) 2,167,666 180,318 Total Assets 16,241,196 8,823,459 Bonds Payable From Operating Revenues - Net 6,555,000 8,453,615 Total Equity 7,182,637 155,810 Current Year Net Increase in Contributions 163,345 - B-50 32,977 2,813,627 154,041 4,227,789 (372,984) (1,524,822) (106,790) (1,751,603) - 78,345 78,345 (278,000) (1,899,336) (39,562) (1,746,319) 40,436 14,587,059 664,439 16,256,229 1,676 145,377 840 148,913 785,842 1,158,762 103,114 4,395,702 919,995 78,142,742 6,722,762 110,850,154 - 15,832,802 5,448,400 36,289,817 859,567 56,162,809 1,147,837 65,508,660 - 14,002,249 (31,595) 14,153,999 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 12. 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 $48,816 and lease expenditures totaled $102,718 for the year ended September 30, 1991. The County also leases other equipment and office facilities as both lessor and lessee on a month-to-month basis. Future Minimum Lease Receipts The following is a schedule by years of minimum future rentals to be received on noncancellable operating leases for office space as of September 30: Year Ending September 30, 1992 $ 50,088 1993 50,088 1994 50,088 1995 46,272 1996 45,000 Remaining 592,500 Total future minimum lease receipts83S 4,036 The property being leased is included in the County's General Fixed Asset Account Group and has a carrying value, which approximates cost, of $734,063. 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 Endinq September 30 1992 $ 91,511 1993 35,787 1994 34,596 1995 15,793 1996 15,793 Remaining 363,239 Total future minimum lease payments $556,719 B-51 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 13. 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 8. Reserved retained earnings at September 30, 1991 consist of the following: B. The following is a summary of changes in Proprietary Fund contributions by Fund: Solid Enterprise Funds Internal Service Waste Water and Solid Disposal Colt County Sewer Rousing District Course Building System Authority Total Reserved for debt Disposal Golf service S 267,417 6133,414 S - 5 78,028 $ 9,000 $ 487,859 Reserved for renewal District Course Building Systea Authority and replacement 1,100,540 45,000 - - 176,906 1,322,446 Reserved for closure costs 1,922,256 $422,013 $ 12,181 S36,647,590 1,922,256 Total 53.290.213 1178.414 S 78.028 53.732.561 B. The following is a summary of changes in Proprietary Fund contributions by Fund: B-52 Enterprise Funds Internal Service Funds Solid Waste water Disposal Golf County and Sever Housing Fleet Self District Course Building Systea Authority Management Insurance Total Contributions at October 1, 1990 5423,707 $422,013 $ 12,181 S36,647,590 $1,042,278 S628,220 S 8,423 $39,184,412 Increase in contributions 225,576 - - 15,083,922 - - 1,000 15,310,498 Depreclotion on contributed a wets 42,231 - - 1.081,673 31.595 - 1.15S.499 Contributions at Septeaber 30, 1991 5607.052 5422.013 S 12.101 550.649.839 51.010.683 $628,220 d 9.423 153.339.411 B-52 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 13. Fund Equity - Continued: C. The County has established certain reserves within the fund equity section of the governmental funds. Reserved fund balances at September 30, 1991 consist of the following: B-53 Amount Board of County Commissioners: General Fund: Reserved for emergency management $ 40,000 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 $ 426,794 Refunding and Improvement Bonds 1,872,098 Route 60 Sewer Assessment Bonds 915,749 Route 60 Water Assessment Bonds 110,976 Rockridge Sewer Assessment Bonds 81,194 North County Sewer Assessment Bonds 2,249,888 $5,656,699 These reserves represent fund balances restricted to debt service requirements of the revenue and general obligation bonds. Capital Projects Funds: Reserved for capital projects - Treasure Shores Park $ 161,029 Indian River Boulevard North 8,142,496 Optional Sales Tax 746,109 Library Construction 365,861 S9.415.495 These reserves are the fund balances that are restricted to specified capital projects. B-53 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 14. Fund Equity Deficit: The following funds had deficits in fund balance or retained earnings at September 30, 1991: Fund Deficit Enterprise Fund: Golf Course $266,203 Internal Service Fund: Fleet Management 363,961 The retained earnings deficit in the Fleet Management Internal Service Fund will be eliminated by anticipated operating income in future periods. 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. 15. 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 loss 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. B-54 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 15. 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 $2,070,449 reported in the Fund at September 30, 1991 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: Beginning -of - Fiscal -Year -Liability 1988-1989 $ -0- 1989-1990 415,250 1990-1991 1,113,947 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 Included in the charges to other funds is an amount to fund future catastrophic losses and at September 30, 1991, the retained earnings balance of $1,355,210 has been designated for this purpose. 16. 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-55 INDIAN RIVER COUNTY, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 16. Commitments and Contingencies - Continued: B. Construction Commitments - The County has various construction contracts out- standing at September 30, 1991. In the Capital Projects Funds projects are for Indian River Boulevard North, Treasure Shores Park, New North County and Main Libraries, and New Court House. 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, 1991 is as follows: 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. 17. Subsequent Events: A. Water and Sewer Revenue Bond, Series 1991 - On October 11, 1991, the Board issued a $9,205,000 Bond consisting of Serial Bonds in the amount of $3,655,000 with maturity dates ranging from 1993-2006 and interest rates ranging from 4.85% to 6.50% and Term Bonds in the amount of $1,310,000 and $4,240,000 with maturity dates of 2009 and 2016 and interest rates of 6.7% and 6.5%, respectively. This bond was to (1) establish the Construction Fund for the purpose of constructing the regional sludge treatment facility; (2) retire the Water Revenue Bonds, Series 1988, Anticipation Notes ($3,900,000); and (3) establish Reserve Accounts and a Sinking Fund related to the Bond. This project is needed to meet the County's immediate and future needs for the treatment of and disposal of sludge (the solid or semi-solid residual by-product of the wastewater treatment plant process), septage (the liquids and portable toilet facilities), and grease (the material taken from commercial grease traps typically found at food processing facilities and restaurants). B. The Board is continuing with plans to build a new County Courthouse estimated to cost $22,000,000. Property acquisition is nearly complete. The architect's plans for a three-story complex with adjoining parking garage have been approved by the Board. Final engineering plans are now being developed. Occupancy is estimated in mid-1994. Construction will be funded with revenues from the optional one -cent sales tax. B-56 Capital Projects Enterprise Total Total contract price $13,156,025 $10,116,855 $23,272,880 Total paid as of September 30, 1991 9,028,086 4,887,011 13,915,097 Remaining commitment at September 30, 1991 $ 4,127,939 $ 5,229,844 $ 9,357,783 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. 17. Subsequent Events: A. Water and Sewer Revenue Bond, Series 1991 - On October 11, 1991, the Board issued a $9,205,000 Bond consisting of Serial Bonds in the amount of $3,655,000 with maturity dates ranging from 1993-2006 and interest rates ranging from 4.85% to 6.50% and Term Bonds in the amount of $1,310,000 and $4,240,000 with maturity dates of 2009 and 2016 and interest rates of 6.7% and 6.5%, respectively. This bond was to (1) establish the Construction Fund for the purpose of constructing the regional sludge treatment facility; (2) retire the Water Revenue Bonds, Series 1988, Anticipation Notes ($3,900,000); and (3) establish Reserve Accounts and a Sinking Fund related to the Bond. This project is needed to meet the County's immediate and future needs for the treatment of and disposal of sludge (the solid or semi-solid residual by-product of the wastewater treatment plant process), septage (the liquids and portable toilet facilities), and grease (the material taken from commercial grease traps typically found at food processing facilities and restaurants). B. The Board is continuing with plans to build a new County Courthouse estimated to cost $22,000,000. Property acquisition is nearly complete. The architect's plans for a three-story complex with adjoining parking garage have been approved by the Board. Final engineering plans are now being developed. Occupancy is estimated in mid-1994. Construction will be funded with revenues from the optional one -cent sales tax. B-56 APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION 31102 SUMMARY OF CERTAIN PROVISIONS OF THE MASTER BOND RESOLUTION The following is a summary of certain provisions of Resolution No. 85-75, as amended and supplemented by Resolution No. 85-125 and Resolution No. 87-59 (the "Master Bond Resolution"). This summary does not purport to be comprehensive and reference should be made to the Master Bond Resolution for a full and complete statement of its provisions. Definitions of Certain Terms. The following are definitions of certain of the terms used in the Master Bond Resolution: "Additional Parity Obligations" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the Master Bond Resolution and which shall have an equal lien on the Sales Tax, and rank equally in all respects with the Bonds initially authorized under the Master Bond Resolution. "Bonds" shall mean the bonds in an aggregate principal amount not exceeding $25,000,000 authorized to be issued under the Master Bond Resolution, together with any Additional Parity Obligations which may be issued under the terms, conditions and limitations contained in the Master Bond Resolution, from time to time. "Debt Service Requirement" shall mean the sum of the interest due during the Fiscal Year on Current Interest Paying Bonds plus the amount required to pay the principal, including amortization installments for Term Bonds, coming C-1 due on Current Interest Paying Bonds plus the aggregate amount required to pay the Compounded Amounts due on any Capital Appreciation Bonds, including amortization for Term Bonds, maturing in such Fiscal Year, plus the amounts required to be deposited into the Reserve Account in such Fiscal Year. The maturity dates for the Term Bonds shall be disregarded. "Federal Securities" shall mean, collectively, (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, which are not redeemable prior to maturity at the option of the obligor; (ii) bank certificates of deposit fully secured as to principal and interest by the obligations described in (i); (iii) certificates evidencing ownership of portions of such obligations described in (i) held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and independently against the obligor on the underlying obligations if such underlying obligations are not available to satisfy any claim against the custodian; or (iv) municipal obligations that have been refunded and are secured by an escrow within which are held obligations described in (i). "Fiscal Year" shall mean the period commencing on October 1 of each year and ending on the succeeding September 30. "Maximum Debt Service Requirement" shall mean, as of any particular date of calculation, the greatest amount of the aggregate Debt Service Requirement of the then current or any future Fiscal Year. "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 C-2 Government Half -cent Sales Tax Clearing Trust Fund allocated for and distributed monthly to the County pursuant to Chapter 218, Part VI, Florida Statutes, and any allowable investment income thereon. "Serial Bonds" shall mean the Bonds of a series which shall be stated to mature in semiannual or annual installments. "Term Bonds" shall mean the Bonds of a series which shall be stated to mature on one date and which shall be subject to mandatory redemption. Resolution to Constitute Contract. In consideration of the acceptance of the Bonds authorized to be issued under the Master Bond Resolution by those who shall hold the same from time to time, the Master Bond Resolution shall be deemed to be and shall constitute a contract between the County and such holders and, so long as any of the outstanding Bonds are insured by it or held by it as subrogee of such holders following payment on a municipal bond insurance policy, the Municipal Bond Insurer, if any. The covenants and agreements set forth in the Master Bond Resolution to be performed by the County shall be for the equal benefit, protection and security of the legal holders of any and all of such Bonds, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in the Bonds or in the Master Bond Resolution. Special Obligations of the County. The principal of and interest on the Bonds and all required sinking fund, reserve and other payments shall be payable solely from the Sales Tax to be received by the County as provided in the Master Bond Resolution. No holder or holders of any Bonds shall ever have the right to require or compel the exercise of the ad valorem taxing power of the C-3 County, and the Bonds shall not constitute a lien upon any property owned by or situated within the County. Flow of Funds. All proceeds of the Sales Tax shall be deposited into the Revenue Fund created by the Master Bond Resolution. Sales Tax revenues on deposit in the Revenue Fund shall be disposed of monthly in the following order of priority: (1) A deposit shall be made to the Sinking Fund in an amount sufficient to pay in equal monthly amounts all interest becoming due on the next interest payment date on the Current Interest Paying Bonds plus (1/6) one-sixth or (1/12) one -twelfth, as the case may be, of all principal maturing on the Current Interest Paying Serial Bonds on the next maturity date, plus (1/6) one- sixth or (1/12) one -twelfth, as the case may be, of the Compounded Amount next becoming due on any Serial Capital Appreciation Bonds as well as an amount sufficient to pay the fees and charges of the Bond Registrar and paying agents. (2) On a parity with the previously described deposits, revenues shall simultaneously be applied and allocated to the "Refunding and Improvement Revenue Bonds, Bond Amortization Fund" (the "Bond Amortization Fund"). The amount to be deposited in the Bond Amortization Fund will be equal to (1/6) one-sixth of the Amortization Installment required to be made on the next semiannual payment date or (1/12) one -twelfth of the Amortization Installment required to be made on the next annual payment date for Term Bonds. Credit shall be allowed against the total interest Amortization Installments and principal due on the next interest and principal payment dates for any other funds on hand and available for such purposes in the Sinking Fund and Bond Amortization Fund. (3) Moneys remaining in the Revenue Fund shall next be deposited in a Reserve Account within the Sinking Fund to maintain a balance equal to the Maximum Debt Service Requirement on the Bonds. The County may substitute a qualified municipal bond insurance policy C-4 or a qualified reserve account letter of credit in an amount equal to the difference between the Maximum Debt Service Requirement and the sums on deposit in the Reserve Account, with the prior consent of the Municipal Bond Insurer. Moneys in the Reserve Account shall be used only for the purpose of paying maturing Amortization Installments or paying principal or interest due on the Bonds when the other moneys allocated to the Sinking Fund and Bond Amortization Fund are insufficient. (4) The balance of revenues remaining may be used by the County for any lawful purpose. Upon the issuance of Additional Parity Obligations under the terms, provisions and conditions described in the Master Bond Resolution, the deposits to the Sinking Fund, the Bond Amortization Fund and the Reserve Account (if no separate reserve account is funded) shall be increased so as to provide for the payments of principal and interest on the Additional Parity Obligations on the same basis as provided with respect to Bonds, before revenues become available for other lawful purposes of the County. Moneys on deposit in the Revenue Fund, the Sinking Fund and the Bond Amortization Fund may be invested and reinvested in Authorized Investments. The moneys in the Reserve Account, subject to arbitrage restrictions, may be invested and reinvested in Federal Securities maturing not later than the final maturity date of the Bonds. Any and all income received by the County from such investments shall be deposited in the Revenue Fund. Operation of Bond Amortization Fund. Moneys held for the credit of the Bond Amortization Fund shall be applied to the retirement of Term Bonds as follows: (1) Subject to the provisions of subparagraph (4) below, the County shall endeavor to purchase Term Bonds then outstanding, at the most advantageous price obtainable with reasonable diligence, such price not to exceed the principal of such Term Bonds and the C-5 redemption premium which would be applicable if the moneys applied to such purchase were otherwise applied to the redemption of Term Bonds under subparagraphs (2) or (3) below. The County shall pay the interest accrued on such Term Bonds to the date of delivery thereof from the Sinking Fund and the purchase price from the Bond Amortization Fund, but no such purchase shall be made by the County within the forty-five (45) days immediately preceding any interest payment date on which such Term Bonds are subject to call for redemption except from moneys in excess of the amounts set aside or deposited for the redemption of Term Bonds. (2) Subject to the provisions of subparagraph (4) below, the County shall call for redemption on each interest payment date on which Term Bonds are subject to redemption from moneys in the Bond Amortization Fund, such amount of Term Bonds then subject to redemption as will exhaust the moneys then held in the Bond Amortization Fund as nearly as may be practicable. Prior to calling Term Bonds for redemption the County shall withdraw from the Sinking Fund and from the Bond Amortization Fund and set aside in separate accounts or deposit with the Paying Agent the respective amounts required for paying the interest on the Term Bonds so called for redemption. (3) Moneys in the Bond Amortization Fund shall be applied by the County in each Fiscal Year to the retirement of Term Bonds then outstanding in the following order: (i) The Term Bonds of each series to the extent of the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding and, if the amount available in such Fiscal Year shall not be sufficient therefor, then in proportion to the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding, provided, however, that if the Term Bonds of any series shall not then be subject to redemption from moneys in the Bond Amortization Fund and if the County shall at any time be unable to exhaust the moneys applicable to the Term C -G Bonds of such series under the provisions of this clause (i) in the purchase of such Term Bonds under the provisions of subparagraph (1) above, such moneys or the balance of such moneys, as the case may be, shall be retained in the Bond Amortization Fund and, as soon as it is feasible, applied to the retirement of Term Bonds of such series; and (ii) any balance then remaining, other than moneys retained under clause (i) of this subparagraph, shall be applied to the retirement of the Bonds as the County in its sole discretion shall determine, but only in the case of the redemption of Bonds of any series, in such amounts and on such terms as may be provided in the resolution authorizing the issuance of the Bonds of such series. (4) The County shall deposit into the Bond Amortization Fund Amortization Installments for the amortization of the principal of the Current Interest Paying Term Bonds of any series, and for the payment of the Compounded Amounts for the Capital Appreciation Term Bonds of any series, together with any deficiencies for prior required deposits into the Bond Amortization Fund, such Amortization Installments to be in such amounts (or calculable amounts) and to be due on such date or dates and in such years as shall be determined by resolution of the County at or prior to the sale of the Bonds of such series. With respect to Capital Appreciation Term Bonds, subparagraphs (1) through (3) above shall not apply. After all other required payments have been made, the County shall pay from the Revenue Fund all expenses in connection with any such purchase or redemption. Books and Records. The County shall maintain books and records of the receipt and disbursements of the Sales Tax and any Bondholder shall have the right at all reasonable times to inspect all accounts, records and data of the County related thereto. C-7 Annual Audit. The County shall, immediately after the close of each Fiscal Year, cause the books, records and accounts relating to the Sales Tax to be properly audited by a recognized independent firm of certified public accountants, and shall require the auditors to complete their reports within one hundred eighty (180) days after the close of the Fiscal Year. Such audits shall contain, but not be limited to, the statements required by generally accepted accounting principles applicable to governmental units, and a certificate by the auditors disclosing any default on the part of the County with respect to any covenant in the Master Bond Resolution. A copy of such annual audit shall be made available to any Bondholder upon request. No Impairment of Sales Tax Pledge. The County will not take any action which will impair or adversely affect in any manner the pledge of the Sales Tax or the rights of the Holders of the Bonds issued pursuant to the Master Bond Resolution. The County shall be unconditionally and irrevocably obligated, so long as any of the Bonds or the interest thereon are outstanding and unpaid, to take all lawful action necessary or required to continue to entitle the County to receive the Sales Tax, to pay the principal of and interest on the Bonds and to make the other payments provided for in the Master Bond Resolution. Events of Default. It shall be an event of default under the Master Bond Resolution if: (1) The County fails to pay the principal, Amortization Installments or interest on the Bonds when due; (2) The County fails to deposit or pay within ten (10) days after the due date any required deposit or payment under the Master Bond Resolution. C-8 (3) The County fails to comply with any other covenant of the Master Bond Resolution and such failure continues for more than thirty (30) days; (4) The County is adjudicated bankrupt or insolvent and such order continues unstayed or undischarged for a period of ninety (90) days; or (5) A court having jurisdiction appoints a receiver, trustee or assignee in bankruptcy or insolvency of the County and such order or decree shall have remained in force undischarged and unstayed for a period of ninety (90) days. Remedies. Any holder of Bonds may by suit, action, mandamus or other judicial proceedings protect or enforce all rights, including the right to appointment of a receiver, or enforce or compel performance of all duties of the County under the Master Bond Resolution, including the duty of the County to remedy an event of default; but nothing in the Master Bond Resolution shall be construed to grant to any holder of such Bonds any lien on any property of or within the corporate limits of the County. Issuance of Remaining Authorized Bonds After Initial Installment and of Additional Parity Obligations. No further installment of Bonds or Additional Parity Obligations shall be issued except for the construction and/or acquisition of lawful capital projects or for refunding purposes and then only upon the following conditions: (1) There shall have been obtained and filed with the County the Certificate of an Accountant stating: (a) The books and records of the County relating to the Sales Tax have been audited by him; C9 (b) The amount of Sales Tax received by the County during the prior Fiscal Year or any twelve (12) consecutive months of the eighteen (18) months immediately preceding the date of sale of the Additional Parity Obligations; and (c) The Sales Tax receipts for the period identified in (b) are equal to at least 1.35 times the Maximum Debt Service Requirement on all Bonds and Additional Parity Obligations then outstanding plus the Additional Parity Obligations for which the Certificate is being made. (2) A series of Bonds or a portion of a series of Bonds may be refunded with the proceeds from the sale of Additional Parity Obligations without complying with the 1(c) coverage test if the Accountant will certify that the Debt Service Requirement in each Fiscal Year after the refunding does not exceed the Debt Service Requirement in each Fiscal Year before the refunding. However, no Additional Parity Obligations which bear a variable rate of interest shall be issued without the prior consent of the Municipal Bond Insurer. (3) Each resolution authorizing the issuance of Additional Parity Obligations will recite that all of the covenants contained in the Master Bond Resolution will be applicable to such Additional Parity Obligations. (4) The County shall not be in default in performing any of its covenants and obligations under the Master Bond Resolution. (5) No Designated Maturity Bonds will be issued as Additional Parity Obligations as long as Bonds insured by a Municipal Bond Insurer remain outstanding unless: (a) The Municipal Bond Insurer consents, which consent will not be unreasonably withheld; or (b) The County covenants to establish a credit facility which insures C-10 payment of the principal of such Bonds or the County covenants to refund such Bonds, in either case at a date not later than five years preceding the stated maturity thereof. Arbitraee. No use will be made of the proceeds of the Bonds which, if such use were reasonably expected on the date of issuance of the Bonds, would cause the same to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The County at all times while the Bonds and the interest thereon are outstanding will comply with the requirements of Section 103 of the Internal Revenue Code and any valid and applicable rules and regulations promulgated thereunder, to the extent required to preserve the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Payment From Sales Tax and Investment Income. The County will duly and punctually pay or cause to be paid from the Sales Tax, the principal of, and interest and premium, if any, on the Bonds. Modification or Amendment. No adverse material modification or amendment of the Master Bond Resolution or any ordinance or resolution amendatory thereof or supplemental thereto may be made without the consent in writing of the Holders of fifty-one percent (518) or more in principal amount of the Bonds of each series then outstanding; provided, however, that in the event the County obtains a policy of municipal bond insurance covering the Bonds of a series, then only the consent of the Municipal Bond Insurer for such Bonds shall be required; provided, further, that no modification or amendment shall permit a change in the maturity of the Bonds or a reduction in the rate of interest thereon or in the amount of principal obligation thereof or affecting the promise of the County to C -II pay the principal of and interest on the Bonds as the same shall become due from the Sales Tax or reduce the percentage of the Holders of the Bonds required to consent to any adverse material modification or amendment of the Master Bond Resolution without the consent of the Holders of all Bonds or the Municipal Bond Insurer, if any, of each series, as the case may be. The County may at any time amend the Master Bond Resolution to provide for the issuance or exchange of Bonds in coupon form, if and to the extent that doing so will not affect the tax-exempt status of the interest on the Bonds. Defeasance. If, at any time, the County shall have paid, or shall have made provision for payment of, the principal, interest and redemption premiums, if any, with respect to all of the Bonds, or the Bonds of any series or portion of a series or any maturity or portion of a maturity of a series, then, and in that event, the pledge of and lien on the Sales Tax in favor of the Holders of such Bonds shall be no longer in effect. For purposes of the preceding sentence, deposit of Federal Securities in irrevocable trust with a banking institution or trust company, for the sole benefit of such Bondholders, in respect to which such Federal Securities, the principal and interest received will be sufficient to make timely payment of the principal, interest, and redemption premiums, if any, on such Bonds, shall be considered "provision for payment". Nothing herein shall be deemed to require the County to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the County in determining whether to exercise any such option for early redemption. C-12 INDIAN RIVER COUNTY, FLORIDA DRAFT RESOLUTION NO. 92- A RESOLUTION SUPPLEMENTING RESOLUTION NO. 85-75 OF INDIAN RIVER COUNTY, FLORIDA, AS AMENDED AND SUPPLEMENTED; AUTHORIZING THE RETIREMENT OF A PORTION OF THE OUTSTANDING REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985, OF THE COUNTY AND THE RETIREMENT OF ALL OF THE OUTSTANDING CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 1987, OF THE COUNTY; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $ REFUNDING REVENUE BONDS, SERIES 1992, OF THE COUNTY, AS THE THIRD INSTALLMENT OF THE BONDS ORIGINALLY AUTHORIZED UNDER SAID RESOLUTION, TO PROVIDE FUNDS FOR SAID RETIREMENTS; 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, which supplements the Master Bond Resolution hereinafter defined, is adopted pursuant to Chapters 125 and 279, Florida Statutes (1991), as amended, County Home Rule Ordinance No. 77-19, as amended, the Master Bond Resolution and other applicable provisions of law. SECTION 2. DEFINITIONS. All terms used herein shall have the meanings ascribed to them in the Master Bond Resolution, except as otherwise expressly provided herein. When used in this Resolution the following terms shall have the following meanings, unless the context clearly requires otherwise: A. "Act" shall mean Chapters 125 and 279, Florida Statutes (1991), as amended, County Home Rule Ordinance No. 77-19, as amended, the Master Bond Resolution and other applicable provisions of law. B. "Board" shall mean the Board of County Commissioners of the County. C. "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. D. "Master Bond Resolution" shall mean Resolution No. 85-75 of the County, as amended and supplemented, from time to time, including, to the extent provided herein, this Resolution. E. "Pledged Funds" shall mean the Sales Tax, the money in certain funds and accounts pledged for the payment of the principal of, interest and premium, if any on the Bonds and the Investment Income. F. "Resolution" shall mean this resolution, as amended and supplemented from time to time. C-13 G. "Series 1985 Bonds" shall mean the Indian River County, Florida Refunding and Improvement Revenue Bonds, Series 1985, dated as of November 1, 1985, in the original aggregate principal amount of $9,855,000, issued as the first installment of the Bonds originally authorized under the Master Bond Resolution. H. "Series 1987 Bonds" shall mean the Indian River County, Florida Capital Improvement Revenue Bonds, Series 1987, dated as of July 1, 1987, in the original aggregate principal amount of $3,655,000, issued as the second installment of the Bonds originally authorized under the Master Bond Resolution. I. "Series 1992 Bonds" shall mean the Refunding Revenue Bonds, Series 1992, herein authorized to be issued as the third installment of the Bonds originally authorized to be issued under the Master Bond Resolution. Words importing singular number shall include the plural number and vice versa and words importing persons shall include firms, corporations and 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 a portion of the outstanding Series 1985 Bonds and to retire all of the outstanding Series 1987 Bonds. B. It is necessary, desirable and in the best interest of the County to finance the amount necessary for said retirements by the issuance of the Series 1992 Bonds as the third installment of the Bonds originally authorized under the Master Bond Resolution. C. The Bonds, including the Series 1992 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, including the Series 1992 Bonds, SECTION 4. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Series 1992 Bonds by the Registered Owners thereof who shall hold the same from time to time, the Master Bond Resolution, including this Resolution, shall be deemed to be and shall constitute a contract between the County and Registered Owners of the Series 1992 Bonds. The covenants and agreements set forth herein and in the Master Bond Resolution to be performed by the County shall be for the equal benefit, protection and security of the Registered Owners of the Bonds, including the Series 1992 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 the Master Bond Resolution, in this Resolution and in the Bonds. SECTION 5. AUTHORIZATION TO RETIRE A PORTION OF THE OUTSTANDING SERIES 1985 BONDS AND TO RETIRE ALL OF THE OUTSTANDING SERIES 1987 BONDS. The retirement of the following outstanding Series 1985 Bonds at maturity or on September 1, 1995, the earliest optional redemption date, as indicated is hereby authorized: C-14 Maturity Date Retirement Date September 1 Principal Amount S_ptember 1 1993 $ 165,000 Maturity 1994 180,000 Maturity 1995 195,000 Maturity 1996 210,000 1995 1997 230,000 1995 2000 825,000 1995 2002 685,000 1995 2005 1,270,000 1995 The Series 1985 Bonds to be retired at maturity shall be retired at par plus accrued interest to the maturity date. The Series 1985 Bonds to be retired prior to maturity by optional redemption on September 1, 1995 shall be retired at the price of 1028 of par plus accrued interest to the retirement date. The retirement of all of the outstanding Series 1987 Bonds is hereby authorized. The Series 1987 Bonds maturing before September 1, 1998 shall be retired at maturity at the price of par, plus accrued interest to the maturity date. The Series 1987 Bonds maturing on or after September 1, 1998 shall be retired on September 1, 1997, the earliest optional redemption date, at the price of 102% of par, plus accrued interest to the retirement date. The County shall provide for said retirements by: (a) transferring to the Escrow Agent, to be named by subsequent resolution of the Board, from the Sinking Fund the amount therein allocable to the Series 1985 Bonds and the Series 1987 Bonds to be retired; (b) transferring to the Escrow Agent from the Reserve Account an amount, if any, to be specified by subsequent resolution of the Board; (c) depositing with the Escrow Agent, an amount from the issuance of the 1992 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 aggregate amounts, 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 payment for said retirements. The County shall enter into an Escrow Agreement with the Escrow Agent substantially in the form to be approved by subsequent resolution of the Board providing for said retirements. The amount transferred to the Escrow Agent from the Sinking Fund shall be used only for the purpose of paying the interest on and principal of the Series 1985 Bonds and the Series 1987 Bonds to be retired which first becomes payable. SECTION 6. AUTHORIZATION AND DESCRIPTION OF SERIES 1992 BONDS. Subject and pursuant to the provisions of the Master Bond Resolution and this Resolution, obligations of the County to be known as "Refunding Revenue Bonds, Series 1992," are hereby authorized to be issued in the aggregate principal amount of not exceeding $ The Series 1992 Bonds shall be the third installment of the Bonds originally authorized under the Master Bond Resolution. The Series 1992 Bonds shall be dated as of a date to be fixed by subsequent resolution of the County and may be numbered consecutively from one upward or in such other manner as agreed upon between the County and the Bond Registrar. The Series 1992 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 C-15 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 1992 Bonds. The Series 1992 Bonds shall be substantially in the form set forth in the Master Bond Resolution, with such omissions, insertions and variations as may be necessary and/or desirable and authorized or permitted by the Master Bond Resolution, 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. The Series 1992 Bonds shall !-,v issued in fully registered form without coupons; shall be payable with respect to principal at a principal 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 check 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 principal amount of the Series 1992 Bonds, interest shall be payable by wire transfer pursuant to written instructions from such Registered Owner. SECTION 7. 1992 FUNDS AND ACCOUNT. There is hereby created and established the "Refunding Revenue Bonds, S, --les 1992, Sinking Fund" (herein the "1992 Sinking Fund") within the Sinking Fund, the "Refunding Revenue Bonds, Series 1992, Bond Amortization Fund" (herein the "1992 Bond Amortization Fund") within the Bond Amortization Fund and the "Refunding Revenue Bonds, Series 1992, Reserve Account" (herein the "1992 Reserve Account") within the Reserve Account. The 1992 Sinking Fund, the 1992 Bond Amortization Fund and the 1992 Reserve Account shall not in any manner whatsoever affect the parity of the Bonds. Revenues and other amounts deposited in the Sinking Fund allocable to the Series 1992 Bonds shall be held in the 1992 Sinking Fund. Revenues deposited in the Bond Amortization Fund allocable to the Series 1992 Bonds shall be held in the 1992 Bond Amortization Fund. Revenues and other amounts deposited in the Reserve Account allocable to the Series 1992 Bonds, if any, shall be held in the 1992 Reserve Account. SECTION 8. SERIES 1992 BONDS NOT GENERAL OBLIGATIONS. The Series 1992 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. 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 Series 1992 Bonds or the interest thereon, or be entitled to payment of such principal and interest from any funds of the County other than the Pledged Funds. SECTION 9. COVENANTS 1N MASTER BOND RESOLUTION. All of the covenants made by the County in the Master Bond Resolution are hereby made, ratified and confirmed and shall apply with respect- to the Series 1992 Bonds as if fully set forth herein. SECTION 10. ARBITRAGE. The County covenants to and with purchasers of the issue which is comprised of the Series 1992 Bonds that it will make no use of the proceeds of such issue which will cause the Series 1992 Bonds to be or become C-16 "arbitrage bonds" within the meaning of Section 103(b)(2) and Section 148 of the Code or any applicable regulations implementing said Sections, and the County further covenants to comply with all other requirements of the Code if and to the extent applicable to maintain continuously the Federal income tax exemption of interest on the Series 1992 Bonds. SECTION 11. APPLICATION OF SERIES 1992 BOND PROCEEDS. All moneys received from the sale of the Series 1992 Bonds shall be deposited and applied by the County as follows: A. All accrued interest shall be deposited into the 1992 Sinking Fund and applied exclusively for the payment of interest first becoming due on the Series 1992 Bonds. B. A sum, if any, specified by subsequent resolution of the Board shall be deposited into the 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 the Series 1985 Bonds and the Series 1987 Bonds to be retired. 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 1992 Bonds and all other similar costs and expenses incurred in connection with the issuance of the Series 1992 Bonds and the retirement of the Series 1985 Bonds and the Series 1987 Bonds to be redeemed 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 Sinking Fund and used only for the purpose of paying the principal of and interest on the Series 1992 Bonds which first becomes payable. SECTION 12. REBATE. Anything to the contrary contained herein notwithstanding, the County shall at least annually transfer appropriate amounts from the funds and accounts under the Master Bond Resolution and hereunder to which income on investments attributable to the Series 1992 Bonds has been deposited into an account to be known as the "Refunding Revenue Bonds, Series 1992, Rebate Account" (herein the "1992 Rebate Account") sufficient to pay to the United States of America all amounts due with respect to the Series 1992 Bonds under the provisions of Section 148 (f) of the Code. 'Che earnings on the 1992 Rebate Account shall be added to and become a part of the 1992 Rebate Account. Moneys in the 1992 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 1992 Bonds as the same shall become due and payable. 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 1992 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. G17 SECTION 13, SALE OF THE SERIES 1992 BONDS. The Series 1992 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 14. MODIFICATION OF RESOLUTION. No adverse material modification or amendment of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made except as permitted under Section 18 of the Master Bond Resolution. SECTION 15. SEVERABILITY. If any one or more of the covenants, agreements or provisions of this Resolution should 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. SECTION 16. REPEALER. Any resolution or part thereof, except the Master Bond Resolution or part thereof, in conflict with this Resolution or part hereof is, to the extent of such conflict, hereby repealed. In the event of a conflict between the Master Bond Resolution or part thereof and this Resolution or part hereof, the Master Bond Resolution or part thereof shall, to the extent of such conflict, prevail, except as may be specifically provided herein. SECTION 17. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. C-18 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 Carolyn K. Eggert Vice Chairman Margaret C. Bowman Commissioner Richard N. Bird Commissioner Don C. Scurlock, Jr. Commissioner John W. Tippin who The Chairman thereupon declared the Resolution duly passed and adopted this day of , 1992. Attest: Jeffrey K. Barton, Clerk APPROVED AS TO FORM AND LEGAL SUFFICIENCY Charles P. Vitunac County Attorney C-19 BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA By: Carolyn K. Eggert, Chairman APPENDIX D SPECIMEN MUNICIPAL BOND INSURANCE POLICY AMA FINANCIAL GUARANTY INSURANCE POLICY Municipal Bond Investors Assurance Corporation Annonk, New York 10504 Policy No. ICCCM Municipal Bond Investors Assurance Corporation (the 'Imurer"), in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations. the full and complete payment required to be made by or on behalf of the Issuer to (INSERT NAME Of PAYING AGENT] or its successor (tire "Paying Agent") of an amount equal to (i) the principal of (eider U the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) m such payments shall become due but shall not be so pad (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration): and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment comtilutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively m the 'Insured Amounts" "Obligations" shall mean: ]PAR AMOUNT] [LEGAL. TITLE OF OBLIGATIONS] Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required Payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, NA., in New York, New York, or its successor, sufficient for the payment of any such Imumd Amounts which are then due. Upon Presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the obligations as arc paid by the Insurer, and appropriate imtruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being , a form satisfactory to Citibank, N.A., Citibank, N.A. shall disburse to such owners, or die Paying Agent Payment of the Insured Amount+ due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or my party whose agreement with the Issuer constitutes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Armonk, New York 10504 and such service of process shall be valid and binding. This policy is nun -cancellable for any reason. The premium on this policy is not refundable for any reason including (be payment prior to maturity of the Obligations. The insurance provided by this Policy is not covered by the Florida Insurance Guaranty Associalion created under chapter 631. Florida Statutes. IN WITNESS WHEREOF, the Insurer has caused this policy to be executed in facsimile on its behalf by its duly authorized officers, this (DAY] day of (MONTH. YEAR]. COUNTERSIGNED Resident Licensed Agent - City, State Date STD-RCS/FL-4 MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION �w President o a Attest: Assistant gtcietary APPENDIX E 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 Refunding Revenue Bonds, Series 1992 Dated as of , 1992 OPINION We have acted as Bond Counsel in connection with the authorization, sale, issuance and delivery of the Refunding Revenue Bonds, Series 1992, dated as of October 1, 1992, in the aggregate principal amount of $ (the "Series 1992 Bonds"), of Indian River County, Florida (the "County"). The Series 1992 Bonds are issued as the third installment of revenue bonds of the County heretofore authorized under the Resolution (hereinafter defined) in the maximum aggregate principal amount of $25,000,000. The first installment of said bonds was heretofore issued in the aggregate principal amount of $9,855,000 of which $7,945,000 aggregate principal amount are presently outstanding. The second installment of said bonds was heretofore issued in the aggregate principal amount of $3,655,000 of which $3,005,000 aggregate principal amount are presently outstanding. Said authorized bonds, together with any Additional Parity Obligations hereafter issued under the terms and conditions provided in the Resolution are herein referred to as the "Bonds". The Series 1992 Bonds are issued pursuant to the Constitution and laws of the State of Florida, including particularly Chapters 125 and 279, Florida E-1 Statutes (1991), as amended; County 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"); Resolution No. 85-75 duly adopted by the Board on July 10, 1985, as amended and supplemented, including without limitation the supplements made by Resolution No. 92- duly adopted by the Board on 1992 (the "Resolution"); and other applicable provisions of law. Under the Resolution, NationsBank Trust (the "Paying Agent") has been appointed as paying agent and bond registrar for the Series 1992 Bonds. The County, pursuant to the power and authority vested in it by law, has determined to retire a portion of its outstanding Refunding and Improvement Revenue Bonds, Series 1985, dated as of November 1, 1985 (the "Series 1985 Bonds"), and to retire all of its outstanding Capital Improvement Revenue Bonds, Series 1987, dated as of July 1, 1987 (the "Series 1987 Bonds"), all of which bonds were heretofore issued under the Resolution. The Resolution provides that the proceeds of the Series 1992 Bonds, together with other available funds of the County, are to be used, inter alia: (i) to retire a portion of the outstanding Series 1985 Bonds and all of the outstanding Series 1987 Bonds; (ii) to make a deposit to the Reserve Account established under the Resolution to the extent necessary to comply with the Resolution; and (iii) to pay all costs and expenses in connection with the issuance of the Series 1992 Bonds and the retirement of the Series 1985 Bonds and the Series 1987 Bonds to be retired, 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 the E-2 interest on the Series 1992 Bonds from gross income for federal income tax purposes. The principal of, interest and premium, if any, on the Bonds are payable solely from and secured by a first lien on and pledge of the Pledged Funds, as defined in the Resolution, which includes the Sales Tax, as defined in the Resolution (the "Half -Cent Sales Tax"), all as more fully provided in the Resolution. The Series 1992 Bonds shall not constitute a general obligation or indebtedness of the County and the holders thereof shall never have the right to 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 1992 Bonds. As Bond Counsel, we have examined, among other things: certified copies of certain proceedings of the Board with respect to the Series 1992 Bonds and other proofs submitted to us which are relevant to the authorization, sale, issuance and delivery of the Series 1992 Bonds; a certified copy of the Resolution; certain documents required by the Resolution to be furnished as conditions precedent to the issuance of the Series 1992 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 an executed Series 1992 Bond and assume that, as required by the Resolution, all of the Series 1992 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 E-3 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 and authority to issue the Series 1992 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 receive, hold and apply the Pledged Funds in accordance with the provisions of the Resolution. 4. The Series 1992 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. 5. The Series 1992 Bonds and the income therefrom are exempt from taxation under the laws of the State of Florida, except 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. 6. Assuming investment and application of the proceeds of the Series 1992 Bonds as set forth in the Resolution and in the aforementioned non -arbitrage certificate, the Series 1992 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 1992 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 tar, 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 E-4 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 1992 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 1992 Bonds in gross income retroactive to the date of issuance of the Series 1992 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 1992 Bonds and the enforceability of the Series 1992 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 E-5 Ca111BIT C TO COINTRACT OF PURCIIASG Opinion of Charics P. Vitunac, County Attorney Re: Indian River County, Florida Refunding Revenue Bonds, Series 1992 Indian River County, Florida 1840 25th Street Vero Beach, Florida 32960 William R. Hough & Co. Suite 800 1.00 Second Avenue South St. Petersburg, Florida 33701 Ladies and Gentlemen: Rhoads & Sinon Suite 299 299 W. Camino Gardens Blvd. Boca Raton, Florida 33432 I have acted as counsel to Indian River County, Florida (the "County") in connection with the authorization, sale, issuance and delivery of the Refunding Revenue Bonds, Series 1992, dated as of December 1, 1992, in the aggregate principal amount of $7,530,000 (the "Series 1992 Bonds"), of the County. The Series 1992 Bonds are issued as the third installment of revenue bonds of the County heretofore authorized under the Resolution (hereinafter defined) in the maximum aggregate principal amount of $25,000,000. The first installment of said bonds was heretofore issued in the aggregate principal amount of $9,855,000 of which $7,945,000 aggregate principal amount are presently outstanding. The second installment- of said bonds was heretofore issued in the aggregate principal amount of $3,655,000 of which $3,005,000 aggregate principal amount are presently outstanding. Said authorized bonds, together with any Additional Parity Obligations hereafter issued under the terms and conditions provided in the Resolution are herein referred to as the "Bonds". The Series 1992 Bonds are issued pursuant to the Constitution and laws of the State of Florida, including particularly Chapters 125 and 279, Florida Statutes (1991), as amended; County 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"); Resolution No. 85-75 duly adopted by the Board on July 10, 1985, as amended and supplemented, including without limitation the amendments and supplements made by Resolution No. 92- duly adopted by the Board on. 1992 (the "Resolution"); and other applicable provisions of law. 2 Capitalized terms used, but not otherwise defined, herein shall have the respective meanings ascribed to them in the Official Statement referred to herein. As counsel to the County, I have examined, among other things, certified copies of certain proceedings of the County with respect to the Series 1992 Bonds and other proofs submitted to me which are relevant to the authorization, sale, issuance and delivery of the Series 1992 Bonds; a certified copy of the Resolution; and usual and required closing affidavits, certificates and documents. I have also participated in the preparation of the Preliminary Official Statement pertaining to the Bonds, dated October 16, 1992 and the final Official Statement dated 1992 (collectively the "Official Statement"). Based upon the foregoing, I am of the opinion that: 1. The County is a county duly organized and existing under the Constitution and laws of the State of Florida and is a subdivision thereof and has the right to receive the Half -Cent Sales Tax and the power and authority to issue the Series 1992 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 receive, hold and apply the Pledged Funds, including without limitation the Half -Cent Sales Tax, in accordance with the Resolution. 4. No consent, waiver or any other action by any person, board or body, public or private, is required as of the date hereof for the County to adopt the Resolution or issue the Series 1992 Bonds or perform its obligations under either of the foregoing. 5. The adoption of the Resolution and the execution and delivery of the Series 1992 Bonds and the compliance with the provisions of each do not and will not conflict with or constitute a breach of or default under any applicable law or administrative regulation of the State of Florida or the United States or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the County is a party or is otherwise subject. 6. There is no litigation or proceeding, pending or threatened, challenging the creation, organization or existence of the County or the validity of the Series 1992 Bonds or the Resolution, or seeking to restrain or enjoin any of the transactions referred to therein or contemplated thereby, or under which a determination adverse to the County would have a material adverse effect upon, or which in any manner questions the right of the County to receive, hold or apply the Pledged Funds or issue the Series 1992 Bonds. 7. The information in the Official Statement under the Caption "Litigation" fairly and accurately summarizes the information presented therein. Without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, except as set forth in a paragraph numbered 7 above, I have no reason to believe that the Official Statement, as of its date, contained, or on the date hereof contains, any untrue statement of a material fact, or omitted or omits to state material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except for any economic, financial, or statistical information included therein as to which no view is hereby expressed). Very truly yours, Charles P. Vitunac, County Attorney EXHIBIT D TO CONTRACT OF PURCHASE Disclosure Statement William R. Hough & Co., St. Petersburg, Florida (the "Underwriter"), as the Purchaser on this date of $7,530,000 principal amount of Refunding Revenue Bonds, Series 1992, dated December 1, 1992 (the "Bonds"), of Indian River County, Florida (the "County"), pursuant to Section 218.385, Florida Statutes, hereby states as follows: The Estimated direct expenses to be incurred are as follows: Day Loan 376.50 Federal Funds 903.60 Good Faith Check 753.00 CUSIP, MSRB, PSA 602.40 Clearance 1,88250 Travel, Out -of -Pocket 1,506.00 Underwriter's Counsel •00 Official Statement Preparation 3,765.00 2. To the best of our knowledge information and belief, there are no "finders" as defined in Section 218.386, Florida Statutes, connection with the issuance of the Bonds. 3. The amount of the total underwriting spread or bond discount expected to be realized is $64,230.90. 4. There will be a management fee in the amount of $11,295. 5. No fee, bonus or other compensation has been or will be paid by us in connection with the bond issue to any person not regularly employed or retained by us in connection with the sale or issuance of the Bonds. 6. The address of the Underwriter is: William R. Hough & Co. 100 Second Avenue South, Suite 800 St. Petersburg, Florida 33701 IN WITNESS WHEREOF, the undersigned has executed this statement on behalf of William R. Hough & Co., on this Z 't_ day of NoveMhcr , 1992. WILLIAM R. HOUGH & CO. as Underwriter By:'.��I'�v� Edwin M. Bulleit First Vice President SECOND DRAFT - November 23, 1992 31583 ESCROW AGREEMENT THIS ESCROW AGREEMENT, dated as of December 1, 1992, but effective as of the date of delivery hereof (the "Agreement", which term sometimes is referred to in this document by use of such terms as "hereof", "herein", "hereby" or "hereunder"), by and between INDIAN RIVER COUNTY, FLORIDA (the "County"), a political subdivision of the State of Florida (the "State"), party of the first part, and NATIONSBANK OF FLORIDA, N.A. (the "Escrow Agent"), having a corporate trust office in Fort Lauderdale, Florida, as escrow agent, party of the second part. WITNESSETH: WHEREAS, The Board of County Commissioners (the "Governing Body") of the County, by Resolution No. 85-75 duly adopted, in accordance with law, on July 10, 1985, as amended and supplemented (the "Master Bond Resolution"), has authorized issuance of Refunding and Improvement Revenue Bonds in an aggregate principal amount of not exceeding $25,000,000, to refund certain obligations previously issued and to provide funds for the construction, reconstruction, furnishing and equipping of certain capital facilities for the County, such bonds to be payable from the sales tax revenues of the County; and WHEREAS, The Governing Body, by Resolution No. 85-126 duly adopted, in accordance with law, on October 23, 1985 (the "Series 1985 Bonds Enabling SECOND DRAFT - November 23, 1992 Resolution"), did authorize the issuance of a first installment of the bonds authorized by the Master Bond Resolution, such installment of bonds being the "Refunding and Improvement Revenue Bonds, Series 1985", dated as of November 1, 1985, in the aggregate principal amount of $9,855,000 (the "Series 1985 Bonds"), to provide funds for and toward proper legal purposes set forth in the Master Bond Resolution; and WHEREAS, First Union National Bank of Florida (the "Paying Agent"), having a corporate trust office in Jacksonville, Florida, pursuant to provisions of the Series 1985 Bonds Enabling Resolution and of the Series 1985 Bonds, is the paying agent with respect to the Series 1985 Bonds; and WHEREAS, The Series 1985 Bonds Enabling Resolution provides, inter alia, that the Series 1985 Bonds are stated to mature on September 1 of the years 1986 to 1997, both inclusive, 2000, 2002 and 2005; and WHEREAS, The Series 1985 Bonds Enabling Resolution and the Series 1985 Bonds provide, inter alia, that the Series 1985 Bonds, or portions thereof, maturing in the year 1996 and thereafter are redeemable prior to their stated dates of maturity, at the option of the County, other than by operation of the Bond Amortization Fund, as a whole, on any date, or in part on any interest payment date, on or after September 1, 1995, at the applicable redemption price or prices set forth in the Series 1985 Bonds Enabling Resolution, that the County may select the maturities to be redeemed and that if less than all of the Series - 2 - SECOND DRAFT - November 23, 1992 1985 Bonds of a maturity are to be redeemed, the selection of the particular Series 1985 Bonds of that maturity to be redeemed shall be by lot; and WHEREAS, The Governing Body, by Resolution No. 87-60 duly adopted, in accordance with law, on June 30, 1987 (the "Series 1987 Bonds Enabling Resolution"), did authorize the issuance of a second installment of the bonds authorized by the Master Bond Resolution, such installment of bonds being the "Capital Improvement Revenue Bonds, Series 1987", dated as of July 1, 1987, in the aggregate principal amount of $3,655,000 (the "Series 1987 Bonds"), to provide funds for and toward proper legal purposes set forth in the Master Bond Resolution; and WHEREAS, The Paying Agent, as successor by merger to Florida National Bank and pursuant to provisions of the Series 1987 Bonds Enabling Resolution and of the Series 1987 Bonds, is the paying agent with respect to the Series 1987 Bonds; and WHEREAS, The Series 1987 Bonds Enabling Resolution provides, inter glia, that the Series 1987 Bonds are stated to mature on September 1 of the years 1988 to 2000, both inclusive, and 2005; and WHEREAS, The Series 1987 Bonds Enabling Resolution and the Series 1987 Bonds provide, inter alia, that the Series 1987 Bonds maturing on or after September 1, 1998, are subject to redemption prior to maturity, at the option of the County, in whole or in part, on any date on or after September 1, 1997, at the applicable redemption price or prices set forth in the Series 1987 Bonds - 3 - SECOND DRAFT - November 23, 1992 Enabling Resolution, that the County may select the maturities to be redeemed and that if less than all of the Series 1987 Bonds of a particular maturity are to be redeemed, the selection of the particular Series 1987 Bonds of that maturity to be redeemed shall be by lot; and WHEREAS, The Governing Body of the County, by Resolution No. duly adopted in accordance with law, inter alia, has authorized the sale, issuance and delivery of a further installment of bonds authorized by the Master Bond Resolution, such bonds being in the aggregate principal amount of $7,530,000, and designated as the "Refunding Revenue Bonds, Series 1992", dated as of December 1, 1992 (the "Series 1992 Bonds"), with the proceeds, together with any other money made available for the purposes, if any, to be used, inter alia, for the purposes of refunding that portion of each of the maturities of the outstanding Series 1985 Bonds that is identified in Exhibit "B-1" attached hereto and made part hereof (the "Refunded Series 1985 Bonds"), refunding the outstanding Series 1987 Bonds and providing for the payment of the costs and expenses of such refunding and of the issuance of the Series 1992 Bonds, all in accordance with applicable and appropriate provisions of the Master Bond Resolution; and WHEREAS, The County, simultaneously with the execution and delivery of this Agreement, proposes to deliver the Series 1992 Bonds to the purchasers thereof, all in accordance with prior action heretofore taken by the Governing Body of the County; and - 4 - SECOND DRAFT - November 23, 1992 WHEREAS, The County and the Escrow Agent desire to enter into this Agreement so that, simultaneously with the delivery of the Series 1992 Bonds to the purchasers thereof, the Refunded Series 1985 Bonds and the Series 1987 Bonds no longer shall be deemed to be outstanding for the purposes of the covenants of the Master Bond Resolution; and WHEREAS, The Master Bond Resolution provides, inter alia, that if at any time the County shall have made provision for payment of the principal, interest and redemption premiums, if any, with respect to all of the Bonds (as that term is defined therein), or the Bonds (as so defined) of any series or portion of a series or any maturity or portion of a maturity of a series, then and in that event the pledge of and lien on the Sales Tax and Investment Income, as those capitalized phrases are defined therein, in favor of the holders of such Bonds shall no longer be in effect and, furthermore, provides that the deposit of Federal Securities (as defined therein) in irrevocable trust with a banking institution or trust company, for the sole benefit of the holders of such Bonds, in respect to which Federal Securities the principal and interest to be received will be sufficient to make timely payment of the principal, interest and redemption premiums, if any, on such Bonds, shall be considered "provision for payment"; and WHEREAS, The County shall deposit or cause to be deposited with the Escrow Agent, as escrow agent under this Agreement, in trust, certain funds that shall be invested immediately in such "Federal Securities", more specifically in - 5 - SECOND DRAFT - November 23, 1992 direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America that are not redeemable prior to maturity at the option of the obligor ("Authorized Escrow Investments"); and WHEREAS, The funds deposited with the Escrow Agent under and pursuant to this Agreement shall be held, deposited and invested by the Escrow Agent, in escrow, as provided herein; and WHEREAS, The County and the Escrow Agent desire to agree with respect to disposition of money which shall represent income derived and/or profits realized from such investment and/or deposit of money so held by the Escrow Agent. NOW, THEREFORE, the County and the Escrow Agent, each intending to be bound legally, covenant and agree as follows: 1. The Escrow Agent acknowledges to the County that the County, simultaneously with the execution and delivery of this Agreement, has deposited or caused to be deposited with the Escrow Agent the Authorized Escrow Investments described in detail in Exhibit "A", which is attached hereto and is made part hereof (the "Obligations"), together with certain cash, if any, in the amount set forth in Exhibit "A". 2. The Escrow Agent acknowledges to the County that the Obligations and the cash referred to in Paragraph 1 are held in trust by the Escrow Agent in the name of the County and shall be subject to withdrawal and/or collection only - 6 - SECOND DRAFT - November 23, 1992 by the Escrow Agent, for application for proper purposes provided for in this Agreement. 3. The County represents that the Obligations, including the interest to be earned thereon, and the cash, if any, referred to in Paragraph 1 hereof will be sufficient for the following purposes at the following times: (a) Payment of the interest due on the Refunded 1985 Bonds in accordance with terms thereof and of the Series 1985 Bonds Enabling Resolution on March 1 and September 1 of each of the years 1993 through 1995, both inclusive; (b) Payment on September 1 of each of the years 1993 through 1995, both inclusive, of the principal of the Refunded Series 1985 Bonds stated to mature on each such date, in accordance with terms thereof and of the Series 1985 Bonds Enabling Resolution; (c) Payment on September 1, 1995, of the redemption price of the Refunded Series 1985 Bonds that are stated to mature after September 1, 1995, which the County heretofore has elected to redeem on such date, in accordance with terms thereof and of the Series 1985 Bonds Resolution; - 7 - SECOND DRAFT - November 23, 1992 (d) Payment of the interest due on the Series 1987 Bonds in accordance with terms thereof and of the Series 1987 Bonds Enabling Resolution on March 1 and September 1 of each of the years 1993 through 1997, both inclusive; (e) Payment on September 1 of each of the years 1993 through 1997, both inclusive, of the principal of the Series 1987 Bonds stated to mature on each such date, in accordance with terms thereof and of the Series 1987 Bonds Enabling Resolution; (f) Payment on September 1, 1997, of the redemption price of the Series 1987 Bonds that are stated to mature after September 1, 1997, which the County heretofore has elected to redeem on such date in accordance with terms thereof and of the Series 1987 Bonds Resolution; (g) Payment of the fees of the Escrow Agent relating to the administration of this Agreement, in the amounts, if any, set forth in Exhibit "B", which is attached hereto and made part hereof; and (h) Payment of the fees of the Paying Agent relating to the retirement of the Refunded Series 1985 - 8 - SECOND DRAFT - November 23, 1992 Bonds and the Series 1987 Bonds, in the amounts and on the dates set forth in Exhibit "B". 4. The County represents that the money required for payment of the interest and principal with respect to the Refunded Series 1985 Bonds and the Series 1987 Bonds in accordance with the provisions of Paragraph 3 on certain dates shall be the amounts set forth in Exhibit "B", which is attached hereto and which hereby is made a part hereof (excluding, however, any amounts therein identified as being available for the payment of fees and expenses of the Paying Agent and the Escrow Agent as escrow agent hereunder). 5. The Escrow Agent covenants and agrees to transfer to the Paying Agent, by Federal funds wire transfer or such other means as is acceptable to the Paying Agent, money in the amounts and on the dates set forth in Exhibit "B" and identified as the funds required to meet the "Combined Defeasance Requirements" with respect to the Refunded Series 1985 Bonds and the Series 1987 Bonds (excluding, however, any amounts identified in such Exhibit as being available for the payment of the fees and expenses of the Escrow Agent as escrow agent hereunder, which may be withdrawn by the Escrow Agent in the amounts and on the dates set forth in such Exhibit in payment of any such fees and expenses then due and payable), such money being all or a portion, as applicable, of the matured principal and interest of the Obligations and of the cash, if any, referred to in Paragraph 1. - 9 - SECOND DRAFT - November 23, 1992 6. The County authorizes and directs the Escrow Agent, in behalf of the County, to do all acts and things that shall be necessary or desirable, from time to time, to effectuate the withdrawal and/or collection of the principal and interest of the Obligations, as such shall become due and payable; and, in connection therewith, the County covenants and agrees to execute and to deliver any additional documents and/or to perform any other acts that may be required from time to time. 7. The County covenants and agrees to pay to the Escrow Agent, from time to time, the agreed compensation or, if there shall be no prior agreement as to compensation, reasonable compensation, for services performed and duties and responsibilities assumed by the Escrow Agent pursuant to this Agreement, together with all actual expenses and disbursements incurred by the Escrow Agent in connection with such services performed and duties and responsibilities assumed, to the extent that the same has not been provided for under Paragraph 3. 8. Records of the Escrow Agent related to this Agreement and the performance of duties and responsibilities assumed by the Escrow Agent pursuant to this Agreement shall be open to inspection by the County and/or its duly authorized agents and/or representatives, at reasonable times, upon reasonable request. 9. The County and the Escrow Agent agree that the County shall be permitted to substitute other Authorized Escrow Investments for the Obligations 10 - SECOND DRAFT - November 23, 1992 referred to in Paragraph 1 (whereupon the term "Obligations" shall include such substituted obligations), but only upon receipt of the following: (a) an Opinion of a nationally recognized bond counsel firm that the obligations so substituted are of the type that are permitted to be held under and pursuant to this Agreement for the purposes contemplated hereby and to the effect that such substitution has no adverse effect upon the exclusion of interest on the Series 1992 Bonds from gross income of the holders thereof for federal income tax purposes; and (b) a Certificate of an independent certified public accountant verifying that the funds on deposit after such substitution will be sufficient and available to pay the remaining principal of and interest on the Refunded Series 1985 Bonds and the Series 1987 Bonds as and to the extent contemplated by Paragraph 3. To the extent that the Certificate delivered pursuant to subparagraph (b) above demonstrates and verifies that there are excess funds not required to be held by the Escrow Agent hereunder to meet scheduled principal and interest payments on the Refunded Series 1985 Bonds and the Series 1987 Bonds, such excess funds shall be paid over to the County. Any surplus or excess funds not paid over to the County may only be invested in Authorized Escrow Investments or time deposits or certificates of deposit, with a firm rate of interest, issued by a bank or bank and trust company, that are insured by a Federal depositors, insurance fund SECOND DRAFT - November 23, 1992 administered by the Federal Deposit Insurance Corporation or, to the extent not so insured, are secured as public deposits in accordance with the laws of the State, 10. Except as provided below, the County may direct the Escrow Agent to invest, and the Escrow Agent shall invest, money and balances on hand hereunder from time to time that result from maturing principal and interest on the Obligations or earnings thereon, available for periods pending application as herein required, but only upon receipt of an opinion from a nationally recognized bond counsel firm that the additional investment of money and balances on hand hereunder is not in violation of Section 103(b)(2) and Section 148 of the Internal Revenue Code of 1986, as amended. Notwithstanding the limitations of the preceding paragraph, the Escrow Agent shall reinvest, without further direction from the County, the maturing principal and interest on the Obligations and certain other cash to be available for reinvestment on the dates, in the amounts, with the maturities and subject to the limitations, if any, set forth in Exhibit "C", which is attached hereto and made part hereof. Any reinvestment of the matured principal and interest on the Obligations or other funds held hereunder shall be only in Authorized Escrow Investments or, subject to any limitation set forth in this Agreement, time deposits or certificates of deposit, with a firm rate of interest, issued by a bank or bank and trust company, that are insured by a Federal depositors' - 12 - SECOND DRAFT - November 23, 1992 insurance fund administered by the Federal Deposit Insurance Corporation or, to the extent not so insured, are secured as public deposits in accordance with the laws of the State, in each case stated to mature on or prior to the date when such funds are required to be applied for the purposes required hereunder (whereupon the term "Obligations" shall include such reinvestment obligations). Any such Authorized Escrow Investments, other than State and Local Government Series United States Treasury Obligations, shall be purchased in an arm's length transaction and at an open market price; any time deposit or certificate of deposit shall bear interest at the rate paid by the obligor to the general public for deposits of similar size and term. Any earnings realized from such investments or deposits or any other funds on hand from time to time that are not required for application hereunder or purposes hereof shall be paid over to the County, or shall be applied as directed by the County. The Escrow Agent agrees to notify the County of balances to become available for reinvestment as provided in this Paragraph. 11. This Agreement shall be binding upon the County and the Escrow Agent and their respective successors in interest, from time to time. 12. This Agreement, in general, and each part of this Agreement, in particular, immediately upon execution and delivery hereof and at all times thereafter, shall be and shall be construed to be irrevocable. 13. Money, if any, that may be in possession of the Escrow Agent on or after September 1, 1997, pursuant to provisions hereof, and that shall not be - 13 - required to meet obligations of the County hereunder, promptly shall be returned to the County or shall be disbursed by the Escrow Agent as shall be directed, in writing, by the County. 14. Notwithstanding any other provision of this Agreement, (a) investment of the funds held under this Agreement in time deposits or certificates of deposit shall be limited to (i) surplus or excess funds not required to be applied to meet scheduled principal and interest payments as set forth in Paragraph 3 and (ii) balances in the escrow account that are not at the time eligible for investment in State and Local Government Series United States Treasury Obligations and that are in amounts less than which noncallable direct obligations of the United States of America of an appropriate maturity are available for purchase in the open market and (b) at no time may the amount of investment in any time deposit or certificate of deposit exceed the Federally - insured limit for such time deposit or certificate of deposit. 14. The County and the Escrow Agent intend to be bound legally hereby. SECOND DRAFT - November 23, 1992 IN WITNESS WHEREOF, the County has caused this Escrow Agreement duly to be executed and delivered, as of December 1, 1992. INDIAN RIVER COUNTY, FLORIDA By: (Vice) Chairman of the Board of County Commissioners ATTEST: Clerk (COUNTY SEAL) Date of Delivery: December 8, 1992 SECOND DRAFT - November 23, 1992 IN WITNESS WHEREOF, the Escrow Agent has caused this Agreement duly to be executed and delivered, as of December 1, 1992. NATIONSBANR OF FLORIDA, N.A., as escrow agent By: ATTEST Title: (SEAL) Date of Delivery: December 8, 1992 Title: EXHIBIT "A" The Obligations referred to in Paragraph 1 of the Agreement, to which this Exhibit "A" is attached, are United States of America Certificates of Indebtedness, Notes and/or Bonds, State and Local Government Series, or other direct obligations of the United States of America, as shown below: In addition, the following initial cash is deposited under the Agreement: SECOND DRAFT - November 23, 1992 EXHIBIT "B" The amounts required to be applied by the Escrow Agent, on certain dates, with respect to the retirement of the Refunded Series 1985 Bonds and the Series 1987 Bonds, as provided in Paragraphs 3 and 4 of the Agreement to which this Exhibit "B" is attached, are as follows: Funded Funded Interest Escrow Paying Total Defeasance Date Principal Due Agent Fee Agent Fee Requirements SECOND DRAFT - November 23, 1992 EXHIBIT "B-1" The Refunded Series 1985 Bonds are represented by the principal portions of each remaining maturity of the Series 1985 Bonds set forth in the following schedule: Maturity Date September 1, 1993 September 1, 1994 September 1, 1995 September 1, 1996 September 1, 1997 September 1, 2000 September 1, 2002 September 1, 2005 Principal Amount $170,000 $180,000 $195,000 $215,000 $230,000 $825,000 $685,000 $1,275,000 EXHIBIT "C" The amounts representing maturing principal and/or interest on the Obligations to be reinvested as provided in paragraph 10 of the Bond Retirement Agreement to which this Exhibit "C" is attached, the date of receipt thereof, the date of reinvestment thereof and the date for maturity of the reinvestment thereof are all as follows, respectively: Date of Receipt Maturity Amount and Reinvestment of Reinvestment