Comprehensive Annual Financial Report - Cobb County

COBB COUNTY, GEORGIA
NOTES TO FINANCIAL STATEMENTS
September 30, 2007
Note 8. Long-Term Debt (Continued)
The net proceeds from the issuance were used to purchase U.S. government securities and
those securities were deposited into an irrevocable trust with an escrow agent to provide debt
service payments on the 1993 bond issue maturing in 2010. The advance refunding met the
requirements of an in-substance defeasance, thus the refunded portions of the 1993 bonds are
no longer included in the Governmental Activities Statement of Net Assets bond payable
balance. As a result of the advanced refunding, the County reduced its total debt service
requirements by $2,570,241 that resulted in an economic gain (difference between the present
value of the debt service payments on the old and new debt) of $2,351,427.
The $18,345,000 2005 Parks and Recreation Refunding Bonds were issued at a premium of
$900,880 less an underwriting discount of $29,750 and issuance costs of $72,000 resulting in
net proceeds of $19,144,130.
These net proceeds, together with $321,704 of sinking funds monies available to pay interest
accrued on the Series 1996 Refunding Bonds, were deposited into an irrevocable trust with a
defeasance escrow agent to satisfy the defeasance requirement on January 1, 2007. As a result
of the refunding and defeasance, the County reduced its total debt service requirement by
$1,284,390 which resulted in an economic gain (difference between the present value of the
debt service payments on the Refunded Bonds and the 2005 Bonds) of $1,020,494.
Revenue Bonds:
During the fiscal year ending September 30, 2003, the County issued Series 2003 Water and
Sewer Refunding Revenue Bonds of $36,545,000 with interest rates of 3.0 percent to 5.0
percent to advance refund $49,430,000 of the 1993 Water and Sewer Revenue Bonds with
interest rates of 4.75 to 5.40 percent. The 2003 Water and Sewer Refunding Revenue Bonds
were issued at a premium of $3,149,556, less an underwriting discount of $52,259, plus
accrued interest on the Bonds from their dated date to the date of delivery of $97,735. After
paying the issuance costs of $81,931 the net proceeds were $51,460,128. The net proceeds
from the issuance were used to purchase U.S. government securities, and those securities were
deposited into an irrevocable trust with an escrow agent to provide debt service payments on
the 1993 bond issue maturing in 2008. The advance refunding met the requirements of an insubstance
defeasance, thus the refunded portions of the 1993 bonds are no longer included in
the Water and Sewer Fund Statement of Net Assets bond payable balance. As a result of the
advanced refunding, the County reduced its total debt service requirements by $2,899,909,
which resulted in an economic gain (difference between the present value of the debt service
payments on the old and new debt) of $2,683,436.
During the fiscal year ending September 30, 2004, the County issued Series 2004 Water and
Sewer Revenue Refunding Bonds in the aggregate principal amount of $34,520,000 with
interest rates of 2.0 percent to 5.0 percent. The 2004 Bonds were issued to provide funds to be
used, together with other funds available for such purpose, to refund upon optional redemption
on July 1, 2004 the outstanding Cobb County Water and Sewerage Revenue Refunding Bonds,
Series 1996 (the “Refunded Bonds”), maturing July 1 in each of the years 2005 through and
including 2008, outstanding in the aggregate principal amount of $34,380,000 with interest at
5.125% and pay expenses to accomplish the foregoing. In connection with such refunding, the
County defeased all outstanding Series 1996 Bonds, including the Refunded Bonds and the
Series 1996 Bonds maturing on July 1, 2004.
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