Okaloosa County BOCC — November 4, 2014 — Preliminary Official Statement — reading text

Tourists may visit the USAF Armament Museum, which is located on Eglin Air Force Base. Modern motels, condominiums and apartments are available accommodating up to 16,670 rooms for visitors. Federal Installation One of the largest U.S. Air Force installations in the free world is located in Okaloosa County. Established in 1935, Eglin Air Force Base is a massive testing and research facility covering 725 square miles in Walton, Okaloosa and Santa Rosa Counties. It includes three active major airfields: Eglin Main, Hurlburt and Duke. The Armament Division is responsible for research and development of all Air Force non-nuclear munitions a satellite tracking station and more than 40 other organizations. The unique McKinley Climatic Laboratory allows military and civilian testing of components and equipment at temperature extremes much lower than that actually experienced at polar or desert base locations. Giant aircraft, capable of carrying 500 personnel, can be accommodated within the confines of the laboratory. Eglin air Force Base is the home of the h air force Test Center, under the Air Force Systems Command. The 3rd Fighter Wing is on Eglin Main Base while the 919th Special Operation Group and the 7281 Tactical Control Squadron are at Duke Field. Other units, including a large Army Range Group, occupy other facilities. In 1999, Federal military employment in Okaloosa County was approximately 16,000, and Federal civilian employment was approximately 6,750, primarily at the military bases. Because of its wide range of activities, the uniqueness of its various facilities, and its vast size and favorable location, Eglin Air Force Base should continue to play a vital role in the defense programs of the United States. Source: Economic Development Council of Okaloosa County. Tourism Tourism employs approximately 32,000 tourism-related positions. Such economic activities generate nearly 1 billion dollars per year. Okaloosa County ranked third as a drive-in vacation destination, in Florida, behind the Orlando and Miami areas, according to the State of Florida Tourism Commission. B-2 Transportation U.S. Highway 90, running from Jacksonville westward through Tallahassee, the State Capital, passes through Crestview and continues to Pensacola, Florida, and New Orleans, Louisiana. This main east-west highway is parallel to Interstate Highway 10, which follows much of the "Old Spanish Trail" which ran from St. Augustine, Florida, on the Atlantic Coast to San Diego, California, on the Pacific Coast. Along the Gulf Coast, scenic U.S. Highway 98 provides access to the famous beach area of the County on the Gulf of Mexico and adjacent bay waters. State Highways 2, 4 and 20 also carry east-west traffic. State Highway 85 is the main north- south highway, running from the Gulf Coast at Fort Walton Beach northward through Crestview to the Alabama border. State Highways 189 and 285 also carry north-south traffic in the County. Okaloosa County is served by numerous motor freight carriers. Bus service is available to major populated areas of the County. Regularly scheduled airline service to the Northwest Florida Regional Airport is provided by Delta, American Eagle Airlines, U.S. Airways and United Airlines. Executive and private planes are accommodated at the Destin Airport and at the Crestview Airport. The Crestview Airport has an 8,200- foot runway. Other regularly scheduled airline flights are available at the Pensacola and Panama City airports. The Intracoastal Waterway traverses the protected sounds and bays between the gulf beaches and the mainland along the entire southern boundary of the County. Barge service is available at Eglin Air Force Base. Access to the Gulf is at Destin. Government and County Taxes The County operates on a fiscal year ending September 30 of each year. The County is governed by a five- member Board of County Commissioners, elected for staggered four-year terms. While the Board is charged with funding all County government functions, certain officers of the County government are separately elected as constitutional officers. They are the Clerk of the Circuit Court, Sheriff, Property Appraiser, Tax Collector and Supervisor of Elections. The seat of government is at Crestview, located in the geographic center of the County, and there is a courthouse annex in Shalimar. The main offices of the County Judge, the Sheriff, the Clerk of the Circuit Court, the Tax Assessor and the Tax Collector are in Crestview. B-3  COUNTY COMMISSIONERS Name District Term Expires Wayne Harris District I November, 2016 Dave Parisot District II November, 2014 Nathan Boyles, Vice Chair District III November, 2016 Don Amunds District IV November, 2014 Kelly Windes, Chairman District V November, 2016 In 2013, the County-wide ad valorem millage rate for the County government, a Municipal Services Taxing Unit and the District School Board was 10.9459. Municipal millages range from 2.3500 mills to 4.5240 Mills. Special districts, primarily the Northwest Florida Water Management District and independent fire districts, levy millages on certain areas of the County ranging from 1.000 mills to 3.1154 mills. The following is a list of the municipalities located within Okaloosa County which have levied millages in their respective incorporated areas. 2013 Fiscal Year Municipality Millage Rate Fort Walton Beach 4.5383 Niceville 3.7000 Crestview 5.5966 Valparaiso 4.5240 Destin 1.4550 Mary Esther 2.6435 Shalimar 2.0000 Cinco Bayou 2.3500 Laurel Hill 3.5000 Utilities and Communications Electric power in the County is provided by Gulf Power Company and Choctawhatchee Electric Co-op, Inc.; telephone service is provided by Sprint; and natural gas is supplied by the Okaloosa County Gas District. Water and sewer services are available from local municipal departments and the County water and sewer system. 13 FM and 4AM radio stations broadcast into the County. A major daily newspaper is published in Fort Walton Beach. A number of newspapers of local interest are also published. B-4 Community Facilities Public health, welfare and safety for residents and visitors to the County are provided by modern hospitals in Crestview, Niceville-Valparaiso and Fort Walton Beach. Also provided in the County are private medical and dental clinics; municipal police and fire departments; highway patrol and sheriff departments; a county- wide cooperative library system; and state, county, municipal and private parks and recreational facilities. The most notable recreational preserve is the Blackwater River State Forest, which covers a major portion of the northwest section of the County. Churches of most faiths are established in the County. Fully accredited public and private secondary schools and three universities and a community college offer fine facilities for education. Industry and Labor The Economic Development Council of Okaloosa County, Florida, placed the total civilian labor force in Okaloosa County at 121,193 persons in 2013 and the 2013 unemployment rate at 5.2 percent and per capita income at $46,639 in 2013 compared to the State's per capita income at $42,179. Industrial development is concentrated in the Fort Walton Beach and Crestview areas. A 1,000-acre industrial park near Crestview offers complete utilities and services. The park also has an 8,200 foot reinforced runaway. Fairchild Industrial, Inc., an aircraft modification company, is the largest tenant in the park. At Fort Walton Beach, a municipal industrial park offers complete facilities and utility services to companies supplying space-age components to the Air Force base. Many of the larger defense contractors in the nation have local distributors or representatives in the County. Pension Plan Plan Description Okaloosa County contributes to the Florida Retirement System (FRS), a cost- sharing multiple-employer defined benefit pension plan administered by the State of Florida Division of Retirement, Department of Management Services. The FRS provides retirement, disability or death benefits to plan members or their designated beneficiaries. Florida Statutes Chapter 121 provides the authority under which benefit provisions are established. The provisions may only be amended by legislative action. Beginning in 2002, a defined contribution plan alternative to the existing defined benefit plan known as the Public Employee Optional Retirement Program or the FRS Investment Plan became available to FRS members. Members in either plan B-5 who have reached normal retirement age may retire and continue employment with the County for up to 60 months. During that period the member's retirement benefits accumulate in the FRS Trust Fund increased by a cost-of-living adjustment each July and earned interest at an annual rate of 6.5%. The FRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the State of Florida Department of Management Services website at www.dms.myflorida.com. FRS Plan Changes Effective July 1, 2011, the Florida Legislature passed Senate Bill 2100 that made substantive changes to the Florida Retirement System (FRS). The new Bill requires all FRS Investment and Pension Plan members (except those in Deferred Retirement Option Program, DROP) to now pay a 3% employee contribution, on a pretax basis, beginning on or after July 1, 2011. Cost of living adjustments (COLA) on or after July 1, 2011 are not automatic at 3%, but based on total years of service earned prior to July 1, 2011 to total years of service at retirement, multiplied by 3%. New members enrolling into FRS for the first time after July 1, 2011 will be subject to additional changes including 1) an increased vesting period from 6 years to 8 years, 2) a change calculation of benefits using Average Final Compensation (AFC) on the highest eight years of compensation as compared to highest five years. In addition, the normal retirement date for Regular, Senior Management Service, Elected Officers', and Special Risk Administrative Support Classes was modified to be age 65, with 8 years of service or 33 years of service regardless of age. Normal retirement for Special Risk Class members now at age 60, with 8 years of service, or 30 years of special risk class service or age 57, with 30 years of combined special risk class service and military service. For those members participating in the DROP program, the Legislature reduced the annual interest rate used for benefits from 6.5% to 1.3%. The funding policy relative to the FRS plan is disclosed below. Funding Policy Contribution requirements of the plan are established in Florida Statutes Chapter 121 and may only be amended by legislative action. Effective July 1, 2011, the Florida Legislature passed Senate Bill 2100 requiring all employee members to contribute