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

3% to the Plan. Formerly, only employers were required to contribute to the FRS Plan. The FRS funding policy now provides for monthly employer and employee contributions at actuarially determined rates that, expressed as percentages of annual covered payroll are adequate to accumulate sufficient assets to pay benefits when due. Level percentages of payroll employer contribution rates, established by state law, are determined using the entry-age actuarial funding method. If an unfunded actuarial liability re-emerges as a result of future plan benefit changes, B-6 assumption changes, or methodology changes, it is assumed any unfunded actuarial liability would be amortized over 30 years, using level dollar amounts. Except for gains reserved for rate stabilization, it is anticipated future actuarial gains and losses are amortized on a rolling 10% basis, as a level dollar amount. In July 2002, the Florida Legislature established a uniform contribution rate system for the FRS, which remained in effect with the passage of Senate Bill 2100. The uniform contribution system covers both the FRS Pension Plan and the FRS Investment Plan. Employers and employees contribute a percentage of the total payroll for each class of FRS membership. The current actuarially determined contribution rates expressed as a percentage of covered payrolls are for regular employees 6.95%, special risk employees 19.06%, special risk administrative support 35.96%, elected judges 28.28%, elected county officers 33.03%, senior management service class 18.31%, and 12.84% for the Deferred Retirement Option Program (DROP). The County's contributions to the plan for the years ended September 30, 2013, 2012, and 2011, listed below were equal to the required contributions for the year. Years Ended September 30, Elected Officials 2013 2012 2011 Board of County Commissioners $2,754,506 $2,297,942 $3,898,716 Clerk of the Circuit Court 366,186 325,565 450,543 Sheriff 2,153,332 2,017,147 2,887,232 Tax Collector 291,150 241,744 351,338 Property Appraiser 113,642 92,366 161,656 Supervisor of Elections 52,022 40,678 72,291 Total Contributions $5,730,838 $5,015,442 $7,821,776 Effective July 1, 2013, the Florida Legislature passed Senate Bill 1810 that sets the employer-paid contribution rates for both FRS and HIS system. The employer- paid contribution rate to pay the normal costs and amortization of the unfunded actuarial liability of the FRS increased. The established rates are based on the rates recommended in the "Blended Rate Study" associated with the 2012 Actuarial Valuation of the FRS. The "Blended Rate Study" covers a thirty-year period, with rates adjusted annually. The contributions will be deposited into the FRS Trust Fund to fund retirement benefits to members participating in the FRS. B-7 Health Insurance Subsidy Plan Description The Board of County Commissioners contributes to the Florida Retirement System Health Insurance Subsidy (FRSHIS), a cost-sharing multiple-employer defined benefit pension plan administered by the State of Florida Division of Retirement, Department of Management Services. Florida Statutes provides the authority under which benefit provisions are established. The provisions may only be amended by legislative action. 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. The FRS provides assistance to retirees of all state-administered retirement systems in paying health insurance costs. Eligible retirees received an extra $5 per month for each year of creditable service completed at the time of retirement with a minimum monthly payment of $30 and a maximum payment of $150. To be eligible to receive the Health Insurance Subsidy (HIS), a retiree under any state-administered retirement must provide proof of health insurance coverage, which can include Medicare. Any spouse or financial dependent who receives a monthly retirement benefit may also receive the HIS. Funding Policy The HIS program is funded by required contributions from FRS participating employers. According to the FRS actuarial valuation of HIS completed July 1, 2012, the unfunded actuarial liability of the HIS program was $8.8 billion. The annual required contribution (ARC) calculated in July, 2012, for the fiscal year ending June 30, 2013 is 1.71% of active payroll. Effective July 1, 2013, with the passage of Senate Bill 1810, the employer-paid contribution rate for the HIS program increased from 1.11% of the employer's payroll to 1.20% of the employer's payroll. This contribution is added to the amount submitted for retirement contributions but is deposited in a separate trust fund (The Retiree Health Insurance Subsidy Trust Fund) from which Health Insurance Subsidy payments are authorized. If these contributions fail to provide full subsidy benefits to all participants, the subsidy payments may be reduced or canceled. B-8  Principal Employers in Okaloosa County- 2013 Percentage of Employer Employees Total Employment Jacobs Teas 1,483 1.52% Fort Walton Beach Medical Center 1,250 1.28 L-3/Crestview Aerospace Corp 1,064 1.09 Lockheed Martin 800 0.82 Indyne, Inc. 800 0.82 North Okaloosa Medical Center 678 0.69 DRS Training & Control Systems 454 0.46 National Electronics Warranty 450 0.46 The Boeing Company 419 0.43 BAE Systems Technical Services 410 0.42 Total Total County Employment Source: Florida Research and Economic Database. TEN LARGEST TAXPAYERS OF OKALOOSA COUNTY Taxable Percentage of Total Assessed Taxable Assessed Value Value Taxoaver Fort Walton Defense Housing Ltd. $18,668,560 0.08% Southeastern Consulting & DEY 18,097,998 0.08% L-3 Communications Crestview 11,157,313 0.05% Colonial Bank N.A. 7,876,000 0.04% North Florida Holdings LLC 7,566,860 0.03% BankTrust 5,224,206 0.02% Homewood Properties LLC 4,062,470 0.02% JRW Investments LLC 3,725,983 0.02% Majestic Oaks Vineyard LLC 3,507,766 0.02% Adams Homes of NWF Inc. 3,386,257 0.02% Total Principal Taxpayer Value $83,273,413 0.37% TOTAL TAX ABLE ASSESSED VALUE 06840352 100.00% Source: Okaloosa County Property Appraiser B-9  PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Total Levied Collections in Fiscal For Percentage Subsequent Percentage Year The Fiscal Year Amount of Levy Years Amount of Levy 1999 $29,013,596 $27,920,789 96.2% $98,449 $28,019,238 96.6% 2000 31,666,615 30,485,905 96.3% 101,076 30,586,981 96.5% 2001 34,028,086 32,733,079 96.2% 88,893 32,821,972 96.3% 2002 36,174,693 34,743,059 96.0% 91,122 34,834,181 96.7% 2003 38,431,441 36,971,496 96.2% 174,458 37,145,955 96.6% 2004 42,144,165 40,556,384 96.2% 150,954 40,707,338 96.6% 2005 45,794,926 45,449,663 99.2% 181,918 45,631,581 96.5% 2006 57,849,177 55,634,769 96.2% 184,070 55,818,839 96.6% 2007 65,531,728 63,181,930 96.4% 100,657 63,282,587 96.6% 2008 63,123,125 62,249,498 98.6% 173,101 62,422,599 98.9% 2009 57,679,952 56,797,501 98.5% 198,907 56,996,408 98.8% 2010 53,408,513 52,477,263 98.3% 137,394 52,614,657 98.5% 2011 47,862,708 46,941,453 98.1% 235,856 47,177,309 98.6% 2012 45,434,311 44,537,852 98.0% 283,894 44,821,746 98.7% 2013 44,715,750 43,934,031 98.3% 168,991 44,103,022 98.6% Source: Okaloosa County Tax Collector Recapitulation of the Tax Roll. (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK) B-10  ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Assessed Centrally Estimated To Fiscal Real Personal Assessed Total Taxable Total Direct Actual Estimated Year Property Property Propertv Assessed Value Tax Rate Value(1) Actual 1999 $5,891,037,323 $522,100,290 $5,801,731 $6,418,939,344 13.2296 $7,551,693,346 85.00% 2000 6,435,422,487 538,514,086 6,275,364 6,980,211,937 12.5651 8,212,014,044 85.00 2001 7,067,061,592 578,955,906 5,766,918 7,651,784,416 12.7262 9,002,099,313 85.00 2002 7,680,697,180 677,541,625 5,110,044 8,363,348,849 12.6007 9,839,233,940 85.00 2003 8,193,996,199 688,433,422 5,742,536 8,888,172,157 12.7927 10,456,673,126 85.00 2004 8,913,575,789 696,513,719 7,934,493 9,618,024,001 12.8094 11,315,322,354 85.00 2005 10,027,698,523 730,162,016 10,055,839 10,767,916,378 12.8094 12,668,136,915 85.00 2006 12,783,763,622 787,145,427 5,994,612 13,576,903,661 12.6284 15,972,827,836 85.00 2007 17,056,877,307 840,818,749 1,672,030 17,899,368,086 11.6945 21,058,080,101 85.00 2008 17,921,513,970 879,629,168 5,697,214 18,806,840,352 11.1485 15,985,814,299 85.00 2009 16,605,928,228 798,827,354 5,875,411 17,410,630,993 11.1035 20,483,095,286 85.00 2010 15,379,485,139 788,963,431 6,340,541 16,174,789,111 11.1089 19,029,163,660 85.00 2011 13,745,152,717 748,267,784 6,451,134 14,499,871,635 11.0039