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

such Series 2014 Bonds for redemption in accordance with said notice, such Series 2014 Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate redemption price, plus accrued interest. All Series 2014 Bonds which have been redeemed shall be cancelled by the Registrar and shall not be reissued. SOURCES OF AND SECURITY FOR PAYMENT OF THE SERIES 2014 BONDS General The principal of, premium if any, and interest on the Series 2014 Bonds will be payable from and will be secured solely by a lien upon and a pledge of (i) the Sales Tax Revenues, and (ii), until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution other than the Rebate Fund (collectively, the "Pledged Funds"). The Series 2014 Bonds are secured by the Pledged Funds on a parity with the County's Sales Tax Revenue Bonds, Series 2009A and Taxable Sales Tax Revenue Bonds, Series 2009B (Direct Payment Build America Bonds) (collectively, the "Series 2009 Bonds"), which are currently outstanding in the aggregate principal amount of $________. The Series 2014 Bonds, Series 2009 Bonds and any Additional Bonds issued pursuant to the Resolution are collectively referred to herein as the "Bonds". The Series 2009B Bonds were issued as "Build America Bonds," whereby the United States Government is to provide a federal subsidy payment to the County on a semi-annual basis with respect to the Series 2009B Bonds. For purposes of issuing Additional Bonds (including the Series 2014 Bonds) and computing the Reserve Account Requirement, the Resolution provides that such federal subsidy payments shall be computed net of the federal payments. Set forth below is a table showing the amount of Federal Direct Payments received by the County in fiscal years 2010-2014: (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK) 12  Federal Direct Fiscal Year Payments Received* 2010 $140,442.70 2011 484,617.02 2012 487,678.58 2013 465,000.38 2014 451,145.14 *Due to federal sequestration, the County did not receive the full amount of expected federal subsidy payments in fiscal years 2013 or 2014. Limited Obligations THE PRINCIPAL OF, PREMIUM IF ANY, AND INTEREST ON THE SERIES 2014 BONDS WILL NOT BE OR CONSTITUTE A GENERAL INDEBTEDNESS OF THE COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION, AND THE COUNTY IS NOT OBLIGATED TO LEVY ANY AD VALOREM TAXES FOR THE PAYMENT THEREOF. NEITHER THE FULL FAITH AND CREDIT NOR THE AD VALOREM TAXING POWER OF THE COUNTY, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO SUCH PAYMENT, AND NO OWNER OF ANY SERIES 2014 BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE COUNTY OR TAXATION IN ANY FORM ON ANY REAL OR PERSONAL PROPERTY TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON SUCH SERIES 2014 BOND, OR BE ENTITLED TO PAYMENT THEREOF FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE SERIES 2014 BONDS DO NOT CONSTITUTE A LIEN UPON ANY PROPERTY OF OR IN THE COUNTY, OTHER THAN THE PLEDGED FUNDS, IN THE MANNER PROVIDED IN THE RESOLUTION. Establishment of Funds and Accounts The Resolution establishes several funds and accounts, including a Revenue Fund, a Debt Service Fund, a Payment Account and a Reserve Account within the Debt Service Fund, and a Rebate Fund. The Reserve Account will not secure the Series 2014 Bonds. Moneys in these funds and accounts, other than the Rebate Fund, until applied in accordance with the provisions of the Resolution, will be subject to a lien and charge in favor of the Holders of the Series 2014 Bonds and for the further security of such Holders, all as provided in the Resolution. 13  The moneys required to be accounted for in each of the funds and accounts established under the Resolution may be deposited in a single bank account, and funds allocated to such funds and accounts may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds and accounts. The designation and establishment of the various funds and accounts by the Resolution does not require the establishment of any completely independent, self- balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. Application of Pledged Funds Debt Service Fund. The Resolution requires the County to, within two Business Days after receipt thereof, deposit into the Revenue Fund all Sales Tax Revenues. On or before the last day of each month, subject to the credits provided for in the Resolution, the County shall deposit to the Payment Account in the Debt Service Fund such sums as are necessary to pay the principal and interest coming due on the Bonds in the current calendar month if such interest and principal amounts were deemed to accrue monthly (assuming that a year consists of twelve (12) equivalent calendar months having thirty (30) days each). Commencing in the month which is one year prior to the first Amortization Installment, there shall be deposited or credited to the Payment Account the sum which, together with the balance in such account, shall equal the Amortization Installment on all Term Bonds outstanding due and unpaid and that portion of the Amortization Installments of all Term Bonds outstanding next due which would have accrued on such Term Bonds during the then calendar month if such Amortization Installments were deemed to accrue monthly (assuming that a year consists of twelve (12) equivalent calendar months having thirty (30) days each) in equal amounts the next preceding Amortization Installment due date, or, if there is no such preceding Amortization Installment due date, from a date one year preceding the due date of such Amortization Installment. All Hedge Receipts and Direct Payments, if any, shall be deposited directly to the Payment Account upon receipt. Moneys in the Payment Account shall be used (a) to pay interest, principal and Amortization Installments on all outstanding Bonds, on a pro-rata basis, as and when the same become due, whether by redemption or otherwise, and (b) for Hedge Payments, and for other purposes. The County shall adjust the amount of the deposit into the Payment Account not later than the month immediately preceding any Interest Payment ate so as to provide sufficient moneys in the Payment Account to pay the 14 interest, principal and Amortization Installments on the Bonds coming due on such Interest Payment Date. No further deposit needs be made to the Interest Account when the moneys therein are equal to the interest coming due on the Outstanding Bonds on the next succeeding Interest Payment Date. With respect to debt service on any Bonds which are subject to a Qualified Hedge Agreement, any Hedge Payments due to the Qualified Hedge Agreement Counterparty relating to such Bonds shall be paid to the Qualified Hedge Agreement Counterparty on a parity basis with the aforesaid required payments into the Payment Account. In computing the interest on Variable Rate Bonds which shall accrue during a calendar month, the interest rate on such Variable Rate Bonds shall be assumed to be 120% of the average of the SIFMA Index over a 12 month period of time ending on the date immediately prior to the commencement of such calendar month. Amounts accumulated in the Payment Account with respect to any Amortization Installment (together with amounts accumulated in the Payment Account with respect to interest, if any, on the Term Bonds for which such Amortization Installment was established) may be applied by the County, on or prior to the sixtieth (60th) day preceding the due date of such Amortization Installment, (a) to the purchase of Term Bonds of the series and maturity for which such Amortization Installment was established, or (b) to the redemption at the applicable redemption prices of such Term Bonds, if then redeemable by their terms. The Bonds so purchased or redeemed shall be deemed to constitute part of the Payment Account until such Amortization Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the sixtieth (60) day preceding the due date of any such Amortization Installment, the County shall proceed to call for redemption on such due date, by causing notice to be given as provided in the Resolution, Term Bonds of the series and maturity for which such Amortization Installment was established (except in the case of Term Bonds maturing on an Amortization Installment date) in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Amortization Installment. The County shall pay out of the Payment Account to the Paying Agent, on or before the day preceding such redemption date (or maturity date), the amount required for the redemption (or for the payment of such Term Bonds then maturing), and such amount shall be applied by such Paying Agent to such redemption (or payment). All expenses in connection with the purchase or redemption of Term Bonds shall be paid by the County from the Revenue Fund. Reserve Account. The County shall establish within the Reserve Account a separate subaccount for each series of Bonds issued under the Resolution, except as described below. The Reserve Account Requirement for the Series 2014 Bonds is zero, and the Reserve Account does not secure the Series 2014 Bonds. The Series 2009 Bonds are secured by a subaccount of the Reserve Account. 15  At the option of the County, a subaccount may secure more than one series of Bonds. The moneys on deposit in each such subaccount shall be applied solely for the payment of maturing principal of, redemption price, if applicable (provided that the Reserve Account may only be applied to the payment of redemption price if all Bonds will be redeemed), or interest or Amortization Installments on the series of Bonds for which it is designated and shall not be available to pay debt service on any other series. There shall be deposited to each subaccount of the Reserve Account such sum, if any, as will be necessary to immediately restore any funds on deposit in each such subaccount to an amount equal to the Reserve Account Requirement applicable thereto including the reinstatement of any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit therein; provided, in no event shall the amount deposited in the subaccounts of the applicable Reserve Account be less than (a) one fourth (1/4) of the amount which would enable the County to restore the funds on deposit in each subaccount to an amount equal to the Reserve Account Requirement in four (4) months from the date of such shortfall in the event such shortfall is a result of a decrease in the market value of Authorized Investments on deposit therein, or (b) one twelfth (1/12) of the