Fiscal Year 2013 Recommended Budget Book - Lake County

Debt Service - continuedThe second debt instrument paid from the Landfill Enterprise Fund is the Lake County Resource Recovery IndustrialDevelopment Refunding Revenue Bond issued on December 14, 2004 in the amount of $51,515,196. The Series 2004 Bondswere refunded on February 8, 2010 by the issuance of a bond for $20,234,780 bearing an interest rate of 4.16% per annum with amaturity date of October 1, 2013. This debt is not an obligation of Lake County. However, the County is responsible for the debtservice through an agreement with Covanta, Inc.In April 2007, the County issued $34.7 million in limited general obligation bonds for the purpose of acquiring and improvinglands within the County to protect drinking water resources, preserve natural areas, protect open space from overdevelopment,provide parks and trails and improve water quality. The principal, interest and reserve budget totals $3,699,424 and is supportedby a voter approved county-wide millage rate of .1900 mills. The anticipated ad valorem revenue of $2.8 million combined withinterest earnings and with approximately $925,644 in reserves will be sufficient to pay the Fiscal Year 2013 debt service.The County has sold three other revenue bond/bank notes that are backed by sales tax revenues. A $4.4 million revenue bondwas issued backed by state sales tax revenues (used to replace racing tax revenues previously distributed by the state) for landacquisition and construction of a regional park and various walking and biking trails. A $3.6 million revenue bond was issued in2011 to refund the Series 2000 bonds. The Series 2011 issue is estimated to have a total savings of $549,000. The principal,interest and reserve budget for Fiscal Year 2013 totals $457,508.An $87.4 million revenue bond was issued backed by the County’s half-cent sales tax revenues for acquiring, constructing, andequipping the Downtown Tavares Center for Governmental Operations and Judicial Center, as well as the South TavaresGovernment Complex for Public Works, Public Safety, Fleet Operations and Health Department Administration/Clinic. Currentplans have been pared down to include only the Downtown Tavares Center and the Judicial Center. The principal, interest andreserve budget for Fiscal Year 2013 totals $5,772,338.A $10 million commercial bank loan was approved in April 2008 to help fund the 800 MHz radio system backed by theCounty’s share of a one percent local option infrastructure sales tax. This note payable is being refinanced on June 12, 2012 withthe new interest rate of 1.45%. The principal, interest and reserve budget for Fiscal Year 2013 totals $1,270,823.Debt Management Policy:The objective of Lake County’s Debt Management Policy (LCC-57) is to establish guidelines and requirements for thedevelopment of a debt management system. The policy includes the following directives:When the County finances projects through the issuance of bonds, it will pay back the bonds within a period not to exceed90 percent of the useful life of the project.Where possible, the County will use self-supporting revenue, special assessment, or other self-supporting bonds, instead ofgeneral obligation bonds to fund capital projects.The County will not use long-term debt to finance current operations.The County will seek to maintain and, if applicable, improve its current bond rating.The County will maintain good communications with bond rating agencies to inform them about the County’s financialconditions. The County will follow a policy of full disclosure, including adherence to Rule 15c2-12 under the SecuritiesExchange Act of 1934. In compliance with this rule, the County's Comprehensive Annual Financial Report will be filedwith the Securities and Exchange Commission.Lake County has not adopted legal debt limits within its financial policies. However, debt ratios, such as direct and over all debtper capita and debt per taxable property value, are tracked and compared with those recommended by Moody’s InvestorsService.F - 180