$39,465,000 OSCEOLA COUNTY, FLORIDA Sales Tax Revenue Refunding Bonds, Series 2016A

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1 NEW ISSUE BOOK-ENTRY ONLY RATINGS: See RATINGS herein In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, interest on the Series 2016A Bonds is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Such interest, however, will be includable in the calculation of certain corporations alternative minimum taxable income. See TAX EXEMPTION herein regarding certain tax considerations. $39,465,000 OSCEOLA COUNTY, FLORIDA Sales Tax Revenue Refunding Bonds, Series 2016A Dated: Date of Delivery Due: October 1 in each year as shown on the inside cover Osceola County, Florida (the County ) is issuing its Sales Tax Revenue Refunding Bonds, Series 2016A (the Series 2016A Bonds ) as fully registered bonds, which initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ). Individual purchases will be made in book-entry only form in denominations of $5,000 and any integral multiple thereof. Purchasers of the Series 2016A Bonds (the Beneficial Owners ) will not receive physical delivery of the Series 2016A Bonds. Transfer of ownership in the Series 2016A Bonds will be effected by DTC s book-entry only system as described herein. As long as Cede & Co. is the registered owner as nominee of DTC, principal and interest payments will be made directly to such registered owner which will in turn remit such payments to the Participants (as defined herein) for subsequent disbursement to the Beneficial Owners. Interest on the Series 2016A Bonds is payable semi-annually on April 1 and October 1 of each year, commencing October 1, Principal of the Series 2016A Bonds is payable, when due, to the registered owners upon presentation and surrender at the designated corporate office of U.S. Bank National Association, Orlando, Florida, as Paying Agent and Registrar. All payments of principal of and interest on the Series 2016A Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The Series 2016A Bonds are payable from and secured by a lien upon the funds distributed to the County from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in Part VI, Chapter 218, Florida Statutes, as amended, and certain other investment earnings as described herein, on a parity with certain other obligations of the County as described herein. The Series 2016A Bonds are being issued pursuant to the authority and in compliance with the Constitution of the State of Florida, Chapter 212, Florida Statutes, Chapter 218, Part VI, Florida Statutes, Chapter 125, Florida Statutes, the Osceola County Home Rule Charter, and other applicable provisions of law, and pursuant to the Sales Tax Revenue Refunding Bond Resolution adopted by the Board of County Commissioners of the County (the Board ) on December 16, 1993, as amended and supplemented from time to time, and as particularly amended by Resolution No R adopted by the Board on December 8, 2008 and Resolution No R adopted by the Board on November 2, 2009, and as particularly supplemented by Resolution No R adopted by the Board on February 9, 2015, as amended by Resolution No R adopted by the Board on February 1, 2016 (collectively, the Resolution ). The Series 2016A Bonds are being issued to provide funds to (i) advance refund the County s Sales Tax Revenue Bonds, Series 2009 maturing on and after October 1, 2019, and (ii) pay costs associated with the issuance of the Series 2016A Bonds. THE SERIES 2016A BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS BONDS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY, PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED FUNDS IN ACCORDANCE WITH THE TERMS OF THE RESOLUTION. NO HOLDER OF ANY SERIES 2016A BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH SERIES 2016A BOND, OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2016A BOND FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE PLEDGED FUNDS IN THE MANNER PROVIDED IN THE RESOLUTION. Certain of the Series 2016A Bonds are subject to redemption as described herein. This cover page contains certain information for quick reference only. It is not, and is not intended to be, a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Series 2016A Bonds are offered when, as and if issued, subject to the approving legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel. Certain legal matters will be passed upon for the County by Andrew W. Mai, Esq., County Attorney, and Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel. Broad and Cassel, Orlando, Florida, is serving as Counsel to the Underwriters. Public Financial Management, Inc., Orlando, Florida is Financial Advisor to the County in regard to the issuance of the Series 2016A Bonds. The Series 2016A Bonds in definitive form are expected to be available for delivery in New York, New York through the facilities of DTC on or about April 21, Jefferies Dated: March 16, 2016 Raymond James Ramirez & Co., Inc.

2 Maturity (October 1) MATURITIES, AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS** $39,465,000 OSCEOLA COUNTY, FLORIDA Sales Tax Revenue Refunding Bonds, Series 2016A $39,465,000 Serial Series 2016A Bonds Initial CUSIP Number** Amount Interest Rate Price Yield 2019 $1,260, % % ET ,305, EU ,355, EV ,415, EW ,475, EX ,540, EY ,615, EZ ,700, * FA ,785, * FB ,880, * FC ,980, * FD ,080, * FE ,190, FF ,255, FG ,330, * FH ,450, FJ ,530, * FK ,665, FL ,755, * FN ,900, FM8 * Priced to the first optional call date of October 1, ** The County is not responsible for the use of the CUSIP Numbers referenced herein nor is any representation made by the County as to their correctness. The CUSIP Numbers provided herein are included solely for the convenience of the readers of this Official Statement.

3 OSCEOLA COUNTY, FLORIDA 1 Courthouse Square Kissimmee, Florida MEMBERS OF THE BOARD OF COUNTY COMMISSIONERS Viviana Janer, Chairwoman Cheryl Grieb, Vice Chairwoman Brandon Arrington Michael E. Harford Fred Hawkins, Jr. COUNTY MANAGER AND CLERK OF THE BOARD OF COUNTY COMMISSIONERS Donald S. Fisher COUNTY ATTORNEY Andrew W. Mai, Esq. COMMISSION AUDITOR Chijioke H. Nwachukwu BOND COUNSEL Nabors, Giblin & Nickerson, P.A. Tampa, Florida DISCLOSURE COUNSEL Bryant Miller Olive P.A. Tampa, Florida FINANCIAL ADVISOR Public Financial Management, Inc. Orlando, Florida

4 No dealer, broker, salesman or other person has been authorized by the County to give any information or to make any representations in connection with the Series 2016A Bonds other than as contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the County. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2016A Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the County, The Depository Trust Company and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the County with respect to any information provided by others. The Underwriters listed on the cover page hereof have reviewed the information in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the matters described herein since the date hereof. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2016A BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 2016A Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2016A BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE COUNTY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2016A BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE A CONTRACT BETWEEN THE COUNTY OR THE UNDERWRITERS AND ANY ONE OR MORE OF THE OWNERS OF THE SERIES 2016A BONDS.

5 TABLE OF CONTENTS Contents Page INTRODUCTION... 1 General... 1 Osceola County... 1 Authority for and Purpose of Issuance... 2 Security for the Bonds... 2 Redemption... 2 Registration and Transfers... 3 Tax Exemption... 3 Continuing Disclosure... 3 Other Information... 3 THE REFUNDING PLAN... 3 DESCRIPTION OF THE SERIES 2016A BONDS... 4 General... 4 Book-Entry Only System... 5 Optional Redemption... 7 Selection of Series 2016A Bonds to be Redeemed... 7 Notice of Redemption... 8 Interchangeability, Negotiability and Transfer... 8 SECURITY FOR THE BONDS... 9 General... 9 Funds and Accounts No Reserve for the Series 2016A Bonds Disposition of Sales Tax Revenues Additional Bonds Subordinated Indebtedness Accession of Subordinated Indebtedness to Parity Status Books and Records Collection of Sales Tax Revenues No Impairment Investments Separate Accounts SALES TAX REVENUES General Eligibility Distribution Historical Sales Tax Revenue Collections County Medicaid Contributions Proposed Legislation ESTIMATED SOURCES AND USES OF FUNDS COMBINED DEBT SERVICE SCHEDULE PRO-FORMA DEBT SERVICE COVERAGE POTENTIAL INCORPORATIONS INVESTMENT POLICY LEGAL MATTERS i

6 LITIGATION DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS TAX EXEMPTION Opinion of Bond Counsel Internal Revenue Code of Collateral Tax Consequences Other Tax Matters Tax Treatment of Original Issue Discount Bond Premium RATINGS FINANCIAL ADVISOR AUDITED FINANCIAL STATEMENTS VERIFICATION OF ARITHMETICAL COMPUTATIONS UNDERWRITING CONTINGENT FEES ENFORCEABILITY OF REMEDIES CONTINUING DISCLOSURE ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT AUTHORIZATION OF OFFICIAL STATEMENT APPENDIX A: General Information Concerning the County APPENDIX B: Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014 APPENDIX C: Form of the Resolution APPENDIX D: Form of Bond Counsel Opinion APPENDIX E: Form of Continuing Disclosure Certificate ii

7 OFFICIAL STATEMENT relating to $39,465,000 OSCEOLA COUNTY, FLORIDA Sales Tax Revenue Refunding Bonds, Series 2016A INTRODUCTION General This Official Statement, including the cover page, inside cover page and the Appendices hereto, is furnished with respect to the issuance and sale by Osceola County, Florida (the "County") of $39,465,000 aggregate principal amount of its Sales Tax Revenue Refunding Bonds, Series 2016A (the "Series 2016A Bonds"). This introduction is not, and is not intended to be, a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page, inside cover page and Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Series 2016A Bonds is made only by means of this Official Statement and is subject in all respects to the information contained herein. For a complete description of the terms and conditions of the Series 2016A Bonds, reference is made to "APPENDIX C--Form of the Resolution" attached hereto. Unless otherwise indicated, capitalized terms used in this Official Statement shall have the same meaning established in "APPENDIX C--Form of the Resolution" attached hereto. Osceola County The County was created by the Florida Legislature on May 12, 1887, from land formerly part of Brevard County and Orange County. There have been no significant boundary changes since then. The County is the sixth largest Florida County in terms of geographic area, covering 1,506 square miles. The County is located in East Central Florida, approximately midway between the Atlantic Ocean (57 miles to the east) and the Gulf of Mexico (75 miles to the west). Within the County, there are two municipalities: the City of Kissimmee ("Kissimmee") and the City of St. Cloud ("St. Cloud"). Kissimmee, the County seat, is located approximately 18 miles south of Orlando and approximately 75 miles northeast of Tampa. The County's only other incorporated municipality, St. Cloud, is located nine miles east of Kissimmee. The County's population has expanded considerably over the past ten years and growth is expected to continue through 2040, with a population projection of 532,500. According to the United States Census, the County's population in 2000 was 172,493 and grew by 55.8 percent to 268,685 in This increase in population placed the County as one of the fastest growing counties in the United States. The estimated 2015 population of the County of 308,327 represents a 14.8% increase since Kissimmee's population increased by 2,227 residents, from 64,365 in 2014 to 66,592 in 2015; St. Cloud's population increased by 1,642 residents, from 39,674 in 2014 to 41,316 in The County has operated 1

8 under a Home Rule Charter enacted by the voters by referendum in March 1992 which became effective on October 1, See "APPENDIX A General Information Concerning the County" attached hereto. Information on the County's pension and other post-employment benefit liabilities can be found in "APPENDIX A General Information Concerning the County" attached hereto. Authority for and Purpose of Issuance The Series 2016A Bonds are being issued pursuant to the authority and in compliance with the Constitution of the State of Florida, Chapter 212, Florida Statutes, Chapter 218, Part VI, Florida Statutes, Chapter 125, Florida Statutes, the Osceola County Home Rule Charter, and other applicable provisions of law, and pursuant to the Sales Tax Revenue Refunding Bond Resolution adopted by the Board of County Commissioners of the County (the "Board") on December 16, 1993, as amended and supplemented from time to time, as particularly amended by Resolution No R adopted by the Board on December 8, 2008 and Resolution No R adopted by the Board on November 2, 2009, and as particularly supplemented by Resolution No R adopted by the Board on February 9, 2015, as amended by Resolution No R adopted by the Board on February 1, 2016 (collectively, the "Resolution"). The Series 2016A Bonds are being issued to provide funds to (i) advance refund the County's Sales Tax Revenue Bonds, Series 2009 maturing on and after October 1, 2019 (the "Refunded Series 2009 Bonds"), and (ii) pay costs associated with the issuance of the Series 2016A Bonds. Security for the Bonds The Series 2016A Bonds will be payable from and secured by, on a parity with the Outstanding Parity Bonds (defined below) and any Additional Bonds subsequently issued pursuant to the Resolution, a lien on and pledge of the Pledged Funds consisting of (1) the funds distributed to the County from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in Part VI, Chapter 218, Florida Statutes, as amended (the "Sales Tax Revenues"), and (2) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution except for (A) the Unrestricted Revenue Account, (B) the Rebate Fund, and (C) moneys which are deposited in a separate account created in the Reserve Account for a particular Series of Bonds, in which case the moneys on deposit in such subaccount will be pledged solely for the payment of the Series of Bonds for which it was established. See "SECURITY FOR THE BONDS" and "SALES TAX REVENUES" herein. The Series 2016A Bonds will be issued on a parity as to the lien on and security with the County s Sales Tax Revenue Bonds, Series 2009 maturing prior to October 1, 2019, the Sales Tax Revenue Refunding Bonds, Series 2010 (the "Series 2010 Bonds") and the Sales Tax Revenue Bonds, Series 2015A (the "Series 2015A Bonds," and together with the Unrefunded Series 2009 Bonds and the Series 2010 Bonds, collectively the "Outstanding Parity Bonds"). The Series 2016A Bonds, the Outstanding Parity Bonds and any Additional Bonds subsequently issued on parity therewith pursuant to the Resolution are collectively referred to as the "Bonds." See "SECURITY FOR THE BONDS Additional Bonds" herein. Redemption The Series 2016A Bonds are subject to redemption prior to their stated dates of maturity as described herein. 2

9 Registration and Transfers Transfer of ownership in the Series 2016A Bonds will be affected by The Depository Trust Company ("DTC") book-entry system as described herein. As long as Cede & Co. is the registered owner as nominee of DTC, principal and interest payments will be made directly to such registered owner which will in turn remit such payments to the Participants (as hereinafter defined) for subsequent disbursement to the Beneficial Owners (as hereinafter defined). Interest on the Series 2016A Bonds is payable semi-annually on April 1 and October 1 of each year, commencing October 1, Tax Exemption The approving legal opinion of Nabors, Giblin & Nickerson, P.A., Bond Counsel, will include an opinion to the effect that, under existing statutes, regulations, rulings and court decisions, and assuming continuing compliance by the County with certain covenants set forth in the Resolution and with the Internal Revenue Code of 1986, as amended, interest on the Series 2016A Bonds is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Such interest, however, will be includable in the calculation of certain corporations' alternative minimum taxable income. See "TAX EXEMPTION" herein regarding certain tax considerations. Continuing Disclosure The County has agreed and undertaken, for the benefit of the Series 2016A Bondholders, to provide certain financial information and operating data relating to the County, the Pledged Funds and the Series 2016A Bonds pursuant to Rule l5c2-12 of the Securities and Exchange Commission (the "SEC"). See "CONTINUING DISCLOSURE" herein. Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of the Resolution and other documents and information are available, upon request and upon payment to the County of a charge for copying, mailing and handling, from the County Manager, 1 Courthouse Square, Kissimmee, Florida For a complete description of the terms and conditions of the Series 2016A Bonds, reference is made to the Resolution, the form of which is included in "APPENDIX C -- Form of the Resolution" attached hereto. The description of the Resolution, the Series 2016A Bonds and information from reports contained herein do not purport to be comprehensive or definitive. THE REFUNDING PLAN The County has determined that it can achieve present value savings in debt service payments by providing for payment of the Refunded Series 2009 Bonds. Provision for payment will be accomplished through the issuance of the Series 2016A Bonds and the use of a portion of the proceeds thereof to advance refund the Refunded Series 2009 Bonds. The Refunded Series 2009 Bonds will be redeemed 3

10 prior to maturity on October 1, 2018 at a redemption price of 100 percent of the principal amount thereof, plus accrued interest to the redemption date. Upon delivery of the Series 2016A Bonds, TD Bank, National Association, Cherry Hill, New Jersey (the "Escrow Agent") will enter into an Escrow Deposit Agreement (the "Escrow Agreement") with the County to provide for the advance refunding of the Refunded Series 2009 Bonds. The Escrow Agreement will create an irrevocable escrow deposit fund (the "Escrow Fund") which will be held by the Escrow Agent. The money and securities held in the Escrow Fund are to be applied to the payment of principal of and interest on the Refunded Series 2009 Bonds, as the same become due and payable at maturity or upon redemption prior to maturity. Immediately upon the issuance and delivery of the Series 2016A Bonds, the County will deposit a portion of the proceeds from the sale of the Series 2016A Bonds into the Escrow Fund. Substantially all of such money is expected to be invested in certain noncallable direct obligations of the United States of America (the "Refunding Securities"). The maturing principal amount of and interest on the Refunding Securities and any cash held in the Escrow Fund (i) will be sufficient to pay the principal of and interest on the Refunded Series 2009 Bonds to their redemption date according to the schedules prepared by Public Financial Management, Inc. and verified by Robert Thomas, CPA, LLC (the "Verification Agent"), (ii) will be pledged solely for the benefit of the holders of the Refunded Series 2009 Bonds, and (iii) will not be available for payment of debt service on the Series 2016A Bonds. See "VERIFICATION OF ARITHMETICAL COMPUTATIONS" herein. In reliance upon the above-referenced schedules, at the time of delivery of the Series 2016A Bonds, Bond Counsel will deliver to the Underwriters and the County an opinion to the effect that the lien of the holders of the Refunded Series 2009 Bonds on the Pledged Funds has ceased, determined and become void. General DESCRIPTION OF THE SERIES 2016A BONDS The Series 2016A Bonds shall be dated the date of their delivery, shall be numbered consecutively from R-1 upward, and shall be issued in denominations of $5,000 or integral multiples thereof. The Series 2016A Bonds will mature on the dates and will bear interest at the rates set forth on the inside cover page of this Official Statement. Interest on the Series 2016A Bonds shall be payable semi-annually on April 1 and October 1 in each year, commencing October 1, 2016, and is payable by check or draft of U.S. Bank National Association, Orlando, Florida, as initial registrar and paying agent (the "Registrar" and the "Paying Agent"). The principal of, or Redemption Price, if applicable, on the Series 2016A Bonds are payable upon presentation and surrender of the Series 2016A Bonds at the office of the Paying Agent and Registrar for the Series 2016A Bonds. Interest payable on any Series 2016A Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Series 2016A Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or at the prior written request and expense of such Holder, by bank wire transfer for the account of such Holder. All payments of principal of or Redemption Price, if applicable, and interest on the Series 2016A Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. 4

11 Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE COUNTY BELIEVES TO BE RELIABLE, AND THE COUNTY TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2016A BONDS, AS NOMINEE OF DTC, CERTAIN REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2016A BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2016A BONDS SHALL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2016A BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORD KEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2016A BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2016A BONDS TO DIRECT PARTICIPANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 2016A BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2016A BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DIRECT PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2016A BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC. ACCORDINGLY, THE COUNTY NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. DTC will act as securities depository for the Series 2016A Bonds. The Series 2016A Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2016A Bond certificate will be issued for each maturity of the Series 2016A Bonds as set forth in the inside cover of this Official Statement, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Direct Participants and the Indirect Participants are collectively referred to herein as the "DTC Participants." DTC has a Standard & Poor's Ratings Services ("S&P") rating of AA+. The DTC Rules applicable to its DTC Participants are on file with the SEC. More information about DTC can be found at 5

12 Purchases of Series 2016A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2016A Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2016A Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2016A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2016A Bonds, except in the event that use of the book-entry system for the Series 2016A Bonds is discontinued. To facilitate subsequent transfers, all Series 2016A Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Series 2016A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2016A Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2016A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2016A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2016A Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2016A Bonds may wish to ascertain that the nominee holding the Series 2016A Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2016A Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2016A Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Series 2016A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Series 2016A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the County or the Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by DTC Participants to Beneficial Owners will be 6

13 governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such DTC Participant and not of DTC, the Paying Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County and/or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2016A Bonds at any time by giving reasonable notice to the County or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, the Series 2016A Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Series 2016A Bond certificates will be printed and delivered to DTC. Optional Redemption The Series 2016A Bonds maturing on or before October 1, 2025 are not subject to optional redemption prior to maturity. The Series 2016A Bonds maturing on and after October 1, 2026 are subject to redemption at the option of the County from any legally available revenues in whole or in part, at any time, on or after October 1, 2025 in such order of maturities as may be determined by the County (less than all of a single maturity to be selected by lot) at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date set for redemption. Selection of Series 2016A Bonds to be Redeemed The Series 2016A Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The County shall, at least forty-five (45) days and not more than sixty (60) days prior to the redemption date (unless a shorter time period is satisfactory to the Registrar) notify the Registrar of the redemption date and of the principal amount of Series 2016A Bonds to be redeemed. For purposes of any redemption of less than all of the Outstanding Series 2016A Bonds of a single maturity, the particular Series 2016A Bonds or portions of Series 2016A Bonds to be redeemed shall be selected not more than sixty (60) days and not less than forty-five (45) days prior to the redemption date by the Registrar from the Outstanding Series 2016A Bonds of the maturity or maturities designated by the County or by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Series 2016A Bonds or portions of Series 2016A Bonds in principal amounts of $5,000 and integral multiples thereof. If less than all of the Outstanding Series 2016A Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the County and Paying Agent (if the Registrar is not the Paying Agent for such Series 2016A Bonds) in writing of the Series 2016A Bonds or portions of Series 2016A Bonds selected for redemption and, in the case of any Series 2016A Bond selected for partial redemption, the principal amount thereof to be redeemed. 7

14 Notice of Redemption Notice of redemption, which shall specify the Series 2016A Bond or Series 2016A Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the County, and (A) shall be filed with the Paying Agent, and (B) shall be mailed first class, postage prepaid, at least thirty (30) days and not more than sixty (60) days prior to the redemption date to all Holders of Series 2016A Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of the date of mailing of such notice. Failure to mail notice to the Holders of the Series 2016A Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Series 2016A Bonds as to which no such failure or defect has occurred. Each notice of redemption shall state: (1) the CUSIP numbers of all Series 2016A Bonds being redeemed, (2) the original issue date of such Series 2016A Bonds, (3) the maturity date and rate of interest borne by each Series 2016A Bond being redeemed, (4) the redemption date, (5) the Redemption Price, (6) the date on which such notice is mailed, (7) if less than all Outstanding Series 2016A Bonds are to be redeemed, the certificate number (and, in the case of a partial redemption of any Series 2016A Bond, the principal amount) of each Series 2016A Bond to be redeemed, (8) that on such redemption date there shall become due and payable upon each Series 2016A Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof in the case of Series 2016A Bonds to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable, (9) that the Series 2016A Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price at the designated office of the Paying Agent at an address specified, and (10) unless sufficient funds have been set aside by the County for such purpose prior to the mailing of the notice of redemption, that such redemption is conditioned upon the deposit of sufficient funds for such purpose on or prior to the date set for redemption; and provided, further, that such notice and the redemption set forth therein may be subject to the satisfaction of one or more additional conditions set forth therein. Interchangeability, Negotiability and Transfer The following provisions shall only be applicable if DTC's book-entry only system of registration is discontinued. Series 2016A Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Series 2016A Bonds of the same maturity of any other authorized denominations. The Series 2016A Bonds shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions for registration and transfer contained in the Resolution and in the Series 2016A Bonds. So long as any of the Series 2016A Bonds shall remain Outstanding, the County shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Series 2016A Bonds. Each Series 2016A Bond shall be transferable only upon the books of the County, at the office of the Registrar, under such reasonable regulations as the County may prescribe, by the Holder thereof in person or by his attorney duly authorized in writing upon surrender thereof together with a written 8

15 instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or his duly authorized attorney. Upon the transfer of any such Series 2016A Bond, the County shall issue, and cause to be authenticated, in the name of the transferee a new Series 2016A Bond or Series 2016A Bonds of the same aggregate principal amount and maturity as the surrendered Series 2016A Bond. The County, the Registrar and any Paying Agent or fiduciary of the County may deem and treat the Person in whose name any Outstanding Series 2016A Bond shall be registered upon the books of the County as the absolute owner of such Series 2016A Bond, whether such Series 2016A Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Series 2016A Bond and for all other purposes, and all such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Series 2016A Bond to the extent of the sum or sums so paid and neither the County nor the Registrar nor any Paying Agent or other fiduciary of the County shall be affected by any notice to the contrary. In all cases in which the privilege of exchanging Series 2016A Bonds or transferring Series 2016A Bonds is exercised, the County shall cause to be issued Series 2016A Bonds and the Registrar shall authenticate and deliver such Series 2016A Bonds in accordance with the provisions of the Resolution. Execution of Series 2016A Bonds by the Chairwoman and Clerk for purposes of exchanging, replacing or transferring the Series 2016A Bonds may occur at the time of the original delivery of the Series 2016A Bonds. All Series 2016A Bonds surrendered in any such exchanges or transfer shall be held by the Registrar in safekeeping until directed by the County to be destroyed or returned by the Registrar. For every such exchange or registration of transfer, the County or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The County and the Registrar shall not be obligated to make any such exchange or transfer of Series 2016A Bonds during the fifteen (15) days next preceding an Interest Date on the Series 2016A Bonds, or in the case of any proposed redemption of Series 2016A Bonds, then, for the Series 2016A Bonds subject to redemption, during the fifteen (15) days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. General SECURITY FOR THE BONDS The Series 2016A Bonds will be payable from and secured, on a parity with the Outstanding Parity Bonds and any Additional Bonds subsequently issued pursuant to the Resolution, by a lien on and pledge of the Pledged Funds consisting of (1) the funds distributed to the County from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in, Part VI, Chapter 218, Florida Statutes, as amended (the "Sales Tax Revenues"), and (2) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution except for (A) the Unrestricted Revenue Account, (B) the Rebate Fund, and (C) moneys which are deposited in a separate account created in the Reserve Account for a particular Series of Bonds, in which case the moneys on deposit in such subaccount will be pledged solely for the payment of the Series of Bonds for which it was established. THE SERIES 2016A BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS "BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY, PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF 9

16 THE PLEDGED FUNDS IN ACCORDANCE WITH THE TERMS OF THE RESOLUTION. NO HOLDER OF ANY SERIES 2016A BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH SERIES 2016A BOND, OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2016A BOND FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE PLEDGED FUNDS IN THE MANNER PROVIDED IN THE RESOLUTION. Funds and Accounts The County covenanted and agreed in the Resolution to establish the following funds to be known as the "Revenue Fund," the "Debt Service Fund," and the "Rebate Fund." The County shall maintain in the Revenue Fund two accounts: the "Restricted Revenue Account" and the "Unrestricted Revenue Account." The County shall maintain in the Debt Service Fund four accounts: the "Interest Account," the "Principal Account," the "Bond Amortization Account," and the "Reserve Account." Moneys in the aforementioned funds and accounts other than the Rebate Fund, the Unrestricted Revenue Account and any subaccount created in the Reserve Account to secure a particular Series of Bonds other than the Series 2016A Bonds (such as the Unrefunded Series 2009 Bonds and the Series 2010 Bonds), until applied in accordance with the provisions of the Resolution, shall be subject to a lien and charge in favor of the Holders of the Series 2016A Bonds and for further security of such Holders. No Reserve for the Series 2016A Bonds The County has determined not to fund the Reserve Account or a subaccount therein to further secure the Series 2016A Bonds. The Series 2016A Bonds are not secured by any other subaccount in the Reserve Account, including the subaccounts therein established with respect to any Outstanding Parity Bonds. Disposition of Sales Tax Revenues (A) Promptly upon receipt from the State, the County shall deposit the Sales Tax Revenues into the Restricted Revenue Account. The moneys in the Restricted Revenue Account shall be disbursed on or before the third day prior to the end of each month, in the following manner and in the following order of priority: (1) Interest Account. There shall be deposited to the Interest Account an amount which shall be sufficient to pay (a) one-sixth (1/6) of the interest becoming due on all Bonds Outstanding (except as to Capital Appreciation Bonds) on the next succeeding Interest Date, plus (b) any deposits to the Interest Account which have previously become due and the County did not make; provided however, that the County may elect to make all or any part of such deposit from any other lawfully available funds and shall receive a credit equal to the amount of such other funds actually deposited in the Interest Account. Moneys in the Interest Account shall be used to pay interest on the Bonds as and when the same become due, whether by redemption or otherwise, and for no other purpose. In the event the first interest payment date for a Series of Bonds shall occur either more or less than six months after the actual date of such Series, then the deposits required by this paragraph shall be adjusted so that the County shall make equal monthly deposits to the Interest Account in an aggregate amount sufficient to pay the interest coming due on such Series of Bonds on said first interest payment date. The County shall adjust the amount of the deposits into the Interest Account not later than the month immediately 10

17 preceding any Interest Date so as to provide sufficient moneys in the Interest Account to pay the interest on all Bonds Outstanding coming due on such Interest Date. No further deposit need 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 Date. (2) Principal Account. Commencing in the month which is one (1) year prior to the first principal payment date, there shall be deposited to the Principal Account an amount which shall be sufficient to pay (a) one-twelfth (1/12) of the principal on Serial Bonds Outstanding next due, plus (b) any deposits to the Principal Account which have previously become due and which the County did not make; provided however, that the County may elect to make all or any part of such deposit from any other lawfully available funds and shall receive a credit equal to the amount of such other funds actually deposited in the Principal Account. Moneys in the Principal Account shall be used to pay the principal of the Bonds as and when the same shall mature, and for no other purpose. Serial Capital Appreciation Bonds shall be payable from the Principal Account in the year in which such Bonds mature and monthly deposits or credits into the Principal Account shall commence in the month which is one year prior to the date on which such Bonds mature. In the event the first principal payment date for a Series of Bonds shall occur less than 12 months after the dated date of such Series, then the deposits required by this paragraph shall be adjusted so that the County shall make equal monthly deposits to the Principal Account in an aggregate amount sufficient to pay the principal coming due on such Series of Bonds on said first principal payment date. The County shall adjust the amount of the deposits into the Principal Account not later than the month immediately preceding any principal payment date so as to provide sufficient moneys in the Principal Account to pay the principal of all Serial Bonds Outstanding coming due on such principal payment date. No further deposit need be made to the Principal Account when the moneys therein are equal to the principal coming due on the Outstanding Bonds on the next succeeding principal payment date. (3) Bond Amortization Account. Commencing in the month which is one year prior to any Amortization Installment due date, there shall be deposited to the Bond Amortization Account an amount which shall be sufficient to pay (a) one-twelfth (1/12) of the Amortization Installments of all Bonds Outstanding next due, plus (b) any deposits to the Bond Amortization Account which have previously become due and which the County did not make; provided however, that the County may elect to make all or any part of such deposit from any other lawfully available funds and shall receive a credit equal to the amount of such other funds actually deposited in the Bond Amortization Account. Moneys in the Bond Amortization Account shall be used to purchase or redeem Term Bonds in the manner provided in the Resolution, and for no other purpose. In the event the first Amortization Installment due date for a Series of Bonds shall occur less than 12 months after the dated date of such Series of Bonds, then the deposits required by this paragraph shall be adjusted so that the County shall make equal monthly deposits to the Bond Amortization Account in an aggregate amount sufficient to pay the Amortization Installment coming due on such Series of Bonds on said first Amortization Installment due date. The County shall adjust the amount of the deposit into the Bond Amortization Account not later than the month immediately preceding any date for payment of an Amortization Installment so as to provide sufficient moneys in the Bond Amortization Account to pay the Amortization Installments on the Bonds coming due on such date. No further deposit need be made to the Bond Amortization Account when the moneys therein are equal to the Amortization Installments coming due on the Outstanding Bonds on the next succeeding 11

18 Amortization Installment due date. Payments to the Bond Amortization Account shall be on a parity with payments to the Principal Account. Amounts accumulated in the Bond Amortization Account with respect to any Amortization Installment (together with amounts accumulated in the Interest 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 (60 th ) 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 at a price not exceeding par plus accrued interest, or (b) to the redemption at the applicable Redemption Prices of such Term Bonds, if then redeemable by their terms at a price not exceeding par plus accrued interest. The applicable Redemption Price (or principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be deemed to constitute part of the Bond Amortization Account until such Amortization Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the sixtieth (60 th ) 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 Bond Amortization Account and the Interest Account to the appropriate Paying Agents, 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 Agents 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 Restricted Revenue Fund. (4) Reserve Account. There shall be deposited to the Reserve Account an amount which would enable the County to restore the funds on deposit in the Reserve Account to an amount equal to the Reserve Account Requirement applicable thereto whether such shortfall was caused by decreased market value or withdrawal (whether from cash or a Reserve Account Insurance Policy or Reserve Account Letter of Credit). All such deficiencies in the Reserve Account must be made up no later than 12 months from the date such deficiencies first occurred. On or prior to each principal payment date and Interest Date for the Bonds, moneys in the Reserve Account shall be applied by the County to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds to the extent moneys in the Interest Account, the Principal Account and the Bond Amortization Account shall be insufficient for such purpose. For more information regarding the Reserve Account, see " No Reserve for the Series 2016A Bonds" above and "APPENDIX C - Form of the Resolution" attached hereto. (5) Unrestricted Revenue Account. The balance of any moneys after the deposits required by sections (A)(1) through (A)(4) above, may be transferred, at the discretion of the County, to the Unrestricted Revenue Account or any other appropriate fund or account of the County and may be used for any lawful purpose. 12

19 (B) The County agreed in the Resolution that moneys in the Interest Account, the Principal Account and the Bond Amortization Account shall be used to pay the principal of or Redemption Price, if applicable, and interest on the Bonds only to the extent that such moneys are permitted to be used for such purpose by the Act. The County shall employ such accounting procedures as shall be necessary to insure compliance with the Act. (C) The County, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the County's ability to pay the principal or interest or Redemption Price coming due on such principal payment date on the Bonds not so purchased or redeemed. (D) At least two (2) Business Days prior to the date established for payment of any principal of or Redemption Price, if applicable, or interest on the Bonds, the County shall withdraw from the appropriate account of the Debt Service Fund sufficient moneys to pay such principal or Redemption Price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. Additional Bonds No Additional Bonds, payable on parity with the Bonds then Outstanding pursuant to the Resolution, shall be issued except upon the conditions and in the manner provided in the Resolution. The County may issue one or more Series of Additional Bonds for any one or more of the following purposes: financing the Costs of a Project, or the completion thereof, or refunding any or all Outstanding Bonds or of any Subordinated Indebtedness of the County. No such Additional Bonds shall be issued unless (1) no Event of Default (as specified in the Resolution) shall have occurred and be continuing thereunder and (2) the following conditions are complied with: (A) Except as otherwise provided in Section (D) below, there shall have been obtained and filed with the County a statement of an Authorized Issuer Officer: (1) stating that he or she has examined the books and records of the County relating to the Sales Tax Revenues which have been received by the County for deposit to the Restricted Revenue Account; (2) setting forth the amount of such Sales Tax Revenues during any twelve (12) consecutive months designated by the County within the eighteen (18) months immediately preceding the date of delivery of such Additional Bonds with respect to which such statement is made; and (3) stating that the amount of such Sales Tax Revenues received during the aforementioned 12-month period equals at least (i) 1.35 times the Maximum Annual Debt Service on all Bonds then Outstanding and such Additional Bonds with respect to which such statement is made and (ii) 1.00 times any amounts due and owing pursuant to a Reserve Account Letter of Credit or Reserve Account Insurance Policy. (B) For the purpose of determining the Maximum Annual Debt Service under Section (A) above, the interest rate on additional parity Variable Rate Additional Bonds then proposed to be issued and on any Outstanding Variable Rate Bonds shall be deemed to be the lesser of (1) the interest rate for 30-year revenue bonds published by The Bond Buyer no more than two weeks prior to the sale of the additional parity Variable Rate Additional Bonds, or (2) 13

20 the Maximum Interest Rate; provided, however, that so long as the Series 1993 Bonds remain Outstanding, such interest rate shall be deemed to be the Maximum Interest Rate. (C) Additional Bonds shall be deemed to have been issued pursuant to the Resolution the same as the Outstanding Bonds, and all of the other covenants and other provisions of the Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to the Resolution. Except as provided in the Resolution, all Bonds, regardless of the time or times of their issuance, shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bonds over any other; provided, however, that the County shall include a provision in any Supplemental Resolution authorizing the issuance of Variable Rate Bonds that in the event the principal thereof is accelerated due to such Bonds being held by the issuer of a Credit Facility, the lien of any accelerated debt due and owing such issuer on the Pledged Funds shall be subordinate in all respects to the pledge of the Pledged Funds created by the Resolution. (D) In the event any Additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the conditions described above shall not apply, provided that the issuance of such Additional Bonds shall result in a reduction of aggregate debt service. The conditions of Section (A) above shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of this paragraph. Subordinated Indebtedness The County will not issue any obligation, other than Additional Bonds based on the conditions and in the manner provided in the Resolution, payable from the Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon. The County may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Pledged Funds created by the Resolution. The County shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to the Resolution. The County agrees to pay promptly any Subordinated Indebtedness as the same shall become due. There is currently no Subordinated Indebtedness outstanding under the Resolution. Accession of Subordinated Indebtedness to Parity Status The County may provide for the accession of Subordinated Indebtedness to the status of complete parity with the Bonds, if (A) the County shall meet all the requirements imposed upon the issuance of Additional Bonds by the Resolution, assuming, for purposes of said requirements, that such Subordinated Indebtedness shall be Additional Bonds and (B) the Reserve Account, upon such accession, shall contain an amount equal to the Reserve Account Requirement in accordance with the Resolution. If the aforementioned conditions are satisfied, the Subordinated Indebtedness shall be deemed to have been issued pursuant to the Resolution the same as the Outstanding Bonds, and such Subordinated Indebtedness shall be considered Bonds for all purposes provided in the Resolution. 14

21 Books and Records The County will keep books and records of the receipt of the Sales Tax Revenues in accordance with generally accepted accounting principles, and any Credit Bank, Insurer or Holder or Holders of Bonds shall have the right at all reasonable times to inspect the records, accounts and data of the County relating thereto. Collection of Sales Tax Revenues The County has covenanted to do all things necessary on its part to maintain its eligibility to participate in the distribution of funds from the Local Government Half-Cent Sales Tax Clearing Trust Fund required by the Act, including, without limitation, meeting the eligibility requirements for revenue sharing as specified in Section , Florida Statutes, or any successor provision of law. The County will proceed diligently to perform legally and effectively all steps required on its part in the levy and the collection of the Sales Tax Revenues and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. No Impairment The pledging of the Pledged Funds in the manner provided in the Resolution shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution, or other proceedings of the Board. Investments Moneys on deposit in the Restricted Revenue Account and the Debt Service Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Restricted Revenue Account and the Debt Service Fund, other than the Reserve Account, may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed for the purposes of such fund or account; provided, that moneys on deposit in the Interest Account representing accrued or capitalized interest shall only be invested in the obligations specified in paragraph (A) of the definition of "Authorized Investments." "Authorized Investments" has the meaning ascribed thereto in "APPENDIX C Form of the Resolution" attached hereto. Moneys on deposit in the Reserve Account may be invested and reinvested in Authorized Investments which shall mature no later than five (5) years from the date of investment. All investments shall be valued at least semi-annually by the County at the market value thereof, exclusive of accrued interest. In the event of a deficiency in any fund or account resulting from a decline in market value, such deficiency shall be restored by the County from first available Sales Tax Revenues after satisfying other requirements described in the Resolution not later than the next succeeding valuation date. Any and all income received by the County from the investment of moneys in each account of the Interest Account, the Restricted Revenue Account and the Reserve Account (to the extent such income and the other amounts in the Reserve Account does not exceed the Reserve Account Requirement applicable thereto) shall be retained in such respective Fund or Account. Any and all income received by the County from the investment of moneys in the Reserve Account (only to the extent such income and other amounts in the Reserve Account exceeds the Reserve Account Requirement), the Principal Account and the Bond Amortization Account shall be deposited in the Restricted Revenue Account. 15

22 Nothing contained in the Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under the Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States. Separate Accounts The moneys required to be accounted for in each of the funds, accounts and subaccounts established in the Resolution may be deposited in a single, non-exclusive bank account, and funds allocated to the various funds, accounts and subaccounts established in the Resolution 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, accounts and subaccounts as provided in the Resolution. The designation and establishment of the various funds, accounts and subaccounts in and by the Resolution shall not be construed to 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 provided in the Resolution. General SALES TAX REVENUES Sales Tax Revenues consist of the amount of the Local Government Half-Cent Sales Tax distributed by the State of Florida (the "State") from the Local Government Half-Cent Sales Tax Clearing Trust Fund (the "Trust Fund") to the County pursuant to the provisions of Section , Florida Statutes (the "Sales Tax Act"). The State levies and collects a sales tax on, among other things, the sales price of each item or article of tangible personal property sold at retail in the State, subject to certain exceptions and dealer allowances. In 1982, with the enactment of Chapter 218, Part VI, Florida Statutes, the Florida legislature created the Local Government Half-Cent Sales Tax Program (the "Half-Cent Sales Tax Program") which distributes a portion of the sales tax revenue and money from the State's General Revenue Fund to counties and municipalities that meet strict eligibility requirements. In 1982, when the Half-Cent Sales Tax Program was created, the general rate of sales tax in the State was increased from 4% to 5%, and onehalf of the fifth cent was devoted to the Half-Cent Sales Tax Program, thus giving rise to the name "Half- Cent Sales Tax." Although the amount of sales tax revenue deposited into the Half-Cent Sales Tax Program is no longer one-half of the fifth cent of every dollar of the sales price of an item subject to sales tax, the name "Half-Cent Sales Tax" has continued to be utilized. Section , Florida Statutes, provides for the distribution of sales tax revenues collected by the State and further provides for the distribution of a portion of sales tax revenues to the Trust Fund, after providing for transfers to the General Fund. From 1993 until July 1, 2003, the proportion of sales tax revenues deposited in the Trust Fund (the "Half-Cent Sales Tax Revenues") had been constant at 9.653% of all state sales tax remitted to the State by a sales tax dealer located within a particular county. Effective July 1, 2003, such proportion was reduced to 9.643%, effective July 1, 2004, such proportion was further reduced to 8.814% and effective September 1, 2014, such proportion was increased to %, which 16

23 remains in effect. Such amount deposited in the Trust Fund is earmarked for distribution to the governing body of such county and each participating municipality within that county pursuant to a distribution formula. The legislative intent of the increase described above was to offset a tax rate reduction for charges for electrical power and the legislative intent of the reductions described above was to freeze for one fiscal year the total amount of Half-Cent Sales Tax Revenues distributed to the counties and municipalities throughout the State. The negative impact on municipalities from changes to the Half- Cent Sales Tax distribution was offset by the increased distribution to the Revenue Sharing Trust Fund for municipalities. Likewise, the negative impact of the change in Half-Cent Sales Tax distribution on smaller counties with a limited tax base was offset by the increased share of state taxes going for the emergency distribution. The net impact was to reduce the amount of funds distributed to county governments equal to projected growth in income from the Half-Cent Sales Tax distribution. The general rate of sales tax in the State is currently 6%. The Half-Cent Sales Tax Revenues are distributed from the Trust Fund on a monthly basis to participating units of local government in accordance with Sales Tax Act. Florida law also allows counties to impose a sales surtax of up to 1% to fund infrastructure improvements upon approval by a vote of the electors of such county. The County has imposed a 1% sales surtax. However, such surtax is not deposited in the Trust Fund, does not constitute Sales Tax Revenues, and is not pledged to the payment of the Series 2016A Bonds pursuant to the Resolution. As of October 1, 2001, the Trust Fund began receiving a portion of certain taxes imposed by the State on the sales of communication services (the "CST Revenues") pursuant to Chapter 202, Florida Statutes (the "CST Law"). Accordingly, moneys distributed from the Trust Fund now consist of funds derived from both general sales tax proceeds and CST Revenues required to be deposited into the Trust Fund. All moneys distributed to the County from the Trust Fund (whether derived from the general sales tax or from the portion of the CST Revenues) constitute Sales Tax Revenues for purposes of the Resolution and are a part of the Pledged Funds pledged to the payment of the Series 2016A Bonds. Moneys received by the County pursuant to the CST Law that are not deposited in the Trust Fund do not constitute Sales Tax Revenues and are not pledged to the payment of the Series 2016A Bonds pursuant to the Resolution. Eligibility To be eligible to participate in the Half-Cent Sales Tax Program, each municipality and county is required to have: (i) (ii) (iii) reported its finances for its most recently completed fiscal year to the State Department of Financial Services as required by Florida law; made provisions for annual post audits of financial accounts in accordance with provisions of law; levied, as shown on its most recent financial report, ad valorem taxes, exclusive of taxes levied for debt service or other special millages authorized by the voters, to produce the revenue equivalent to a millage rate of three (3) mills on the dollar based upon 1973 taxable values or, in order to produce revenue equivalent to that which would otherwise be produced by such three (3) mill ad valorem tax, to have received a remittance from the county pursuant to a municipal services benefit unit, collected an occupational license 17

24 tax, utility tax, or ad valorem tax, or have received revenue from any combination of those four sources; (iv) (v) (vi) (vii) certified that persons in its employ as law enforcement officers meet certain qualifications for employment, and receive certain compensation; certified that persons in its employ as firefighters meet certain employment qualifications and are eligible for certain compensation; certified that each dependent special district that is budgeted separately from the general budget of such county or municipality has met the provisions for annual post audit of its financial accounts in accordance with law; and certified to the Florida Department of Revenue ("FDOR") that it has complied with certain procedures regarding the establishment of the ad valorem tax millage of the county or municipality as required by law. Although the Sales Tax Act does not impose any limitation on the number of years during which a county or municipality may receive distributions of the Half-Cent Sales Tax Revenues from the Trust Fund, there may be amendments to the Sales Tax Act in subsequent years imposing additional requirements of eligibility for counties and municipalities participating in the Half-Cent Sales Tax Program, or the distribution formulas in Sections (6)(d) or , Florida Statutes, may be revised. To be eligible to receive distributions from the Trust Fund in future years, the County must comply with the financial reporting and other requirements of the Sales Tax Act. Otherwise, the County would lose its Trust Fund distributions for twelve (12) months following a "determination of noncompliance" by the FDOR. Pursuant to the Resolution, the County has covenanted to do all things on its part to maintain eligibility to participate in the distribution of funds from the Trust Fund. The County has always maintained eligibility to receive the Sales Tax Revenues. Distribution Half-Cent Sales Tax Revenues collected within a county and deposited in the Trust Fund are distributed among such county and the eligible municipalities therein in accordance with the following formula: County's share (expressed as a percentage of total Half-Cent Sales Tax Revenues) = Unincorporated county population total county population + + 2/3 of the incorporated county population 2/3 of the incorporated county population Each municipality's share (expressed as a percentage of Half- Cent Sales Tax Revenues) = municipality population total county population + 2/3 of the incorporated county population 18

25 Below are the approximate distribution percentages for the County and for the two municipalities within the County (the City of Kissimmee and the City of St. Cloud) for the fiscal year ended September 30, Distribution Percentages (Unaudited) Percentage of Half-Cent Recipient Sales Tax Distribution City of Kissimmee 18% City of St. Cloud 11% Osceola County 71% Source: Office of the Comptroller, Osceola County, Florida [Remainder of page intentionally left blank] 19

26 Historical Sales Tax Revenue Collections The following table sets forth the historical collections of Sales Tax Revenues in the County. Year Ended September 30 Osceola County, Florida Historical Sales Tax Revenues Percentage Change from Prior Fiscal Year (1) Sales Tax Revenues 2006 $15,490, ,385,552 (0.68)% ,350,115 (0.23) ,730,916 (10.55) ,760, ,327, ,843, ,640, ,753, (2) 17,896, (1) The amount of Sales Tax Revenues received by the County from the Trust Fund in fiscal years ended September 30, 2007 through and including 2009 were influenced by the significant national economic recession which adversely impacted statewide sales tax collection. (2) Unaudited. Source: Office of the Comptroller, Osceola County, Florida See "SECURITY FOR THE BONDS Additional Bonds" herein for information regarding the parity test which is based on a historical annual collection of Sales Tax Revenues and requires at least 1.35 times pro-forma debt service coverage of Maximum Annual Debt Service. The amount of Half-Cent Sales Tax Revenues distributed to the County is subject to increase or decrease due to (i) more or less favorable economic conditions, (ii) increases or decreases in the dollar volume of taxable sales within the County, (iii) legislative changes relating to the sales tax, which may include changes in the scope of taxable sales, changes in the tax rate and changes in the amount of Half Cent Sales Tax Revenues deposited into the Trust Fund, and (iv) other factors which may be beyond the control of the County or the Series 2016A Bondholders, including but not limited to the potential for increased use of electronic commerce and other internet-related sales activity that could have a material adverse impact upon the amount of sales tax collected by the State, deposited into the Trust Fund and then distributed to the County. In particular, the share of the Half-Cent Sales Tax Revenues deposited in the Trust Fund which is to be distributed to the County will be affected by changes in the relative populations of the unincorporated and incorporated areas within the County. Such relative populations are subject to change through normal increases and decreases in population within the existing unincorporated and incorporated areas of the County and are also subject to change by the annexation of previously unincorporated areas of the County by the municipalities within the County. Such annexations would 20

27 not only increase the population of the incorporated areas but also would, in equal amount, decrease the population of the unincorporated areas. See "POTENTIAL INCORPORATIONS" herein. County Medicaid Contributions Section , Florida Statutes, requires all counties in the State to pay a portion of the State matching funds required for the federal Medicaid program. Pursuant to Section , for State fiscal year , the total Florida counties required annual contribution was $269.6 million and for the total Florida counties required annual contribution is $277 million. By March 15, 2015, and each year thereafter, the Social Services Estimating Conference of the State ("SSEC") is required to determine the percentage change in the State Medicaid expenditures. For the State fiscal year ended June 30, 2016 through and including 2020, the total amount of the Florida counties annual contribution will be the total contribution for the prior fiscal year adjusted by 50 percent of the percentage change in the State Medicaid expenditures as determined by the SSEC. For each State fiscal year thereafter, the total amount of the Florida counties annual contribution shall be the total contribution for the prior fiscal year adjusted by the percentage change in the State Medicaid expenditures as determined by the SSEC. By June 1 of each year, the FDOR must notify each county of its individual required annual contribution which is determined by a formula provided in Section For the County s fiscal year ended September 30, 2014, the County paid its required annual contribution equal to $4,378,488 to the State from the County s General Fund. For County s fiscal year ended September 30, 2015, the County paid its required annual contribution equal to $4,468,010 to the State from the County s General Fund. For fiscal year ending September 30, 2016, the County budgeted $4,664, for its required annual contribution from the County s General Fund. The County s annual contribution is due in equal monthly installments by the 5 th day of each month. If the County fails to remit the payment by the 5 th of the month, FDOR shall reduce the monthly distribution of Sales Tax Revenues to the County from the Trust Fund. The County has continuously made timely payments of its annual contribution from funds on deposit in the County s General Fund. The County does not anticipate that its receipt of Sales Tax Revenues will be affected by its obligation to make the annual contributions required by Section , Florida Statutes. In addition to the annual contributions described above, the State was required to certify to each county by August 1, 2012, the amount of such county's Medicaid billings from November 1, 2001 through April 30, 2012, which remained unpaid (the "Prior Disputed Amounts"). The Agency certified the County's Prior Disputed Amounts in an amount equal to $1,497,048, which amount was paid in full by the County from the County s General Fund in fiscal year ended September 30, Proposed Legislation House Bill 7099 ( HB 7099 ) has been passed by the Florida Legislature and is awaiting the signature of the Governor, which among other things, provides new, extended or expanded sales tax exemptions for a variety of different items. HB 7099 also includes additional sales tax holidays. At the present time, it is impossible to predict the impact such tax cut bill may have on the County's financial condition. However, the County does not expect HB 7099 will affect its ability to pay debt service on the Series 2016A Bonds. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon, the County's finances. 21

28 ESTIMATED SOURCES AND USES OF FUNDS The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the Series 2016A Bonds: SOURCES: Total Principal Amount $39,465, Plus: Net Bond Premium 4,545, Total Sources $44,010, USES: Deposit to Escrow Fund $43,633, Cost of Issuance (1) 376, Total Uses $44,010, (1) Includes Underwriters' discount, financial advisory, escrow agent fees and legal fees and costs, and miscellaneous costs of issuance. [Remainder of page intentionally left blank] 22

29 COMBINED DEBT SERVICE SCHEDULE Series 2016A Bonds Year Ending October 1 Principal Interest Total Unrefunded Series 2009 Bonds Debt Service Series 2010 Bonds Debt Service Series 2015A Bonds Debt Service Total Debt Service 2016 $750, $750, $1,129, $4,175, $2,916, $8,971, ,689, ,689, ,204, ,170, ,876, ,941, ,689, ,689, ,203, ,154, ,876, ,923, $1,260,000 1,689, ,949, ,144, ,315, ,408, ,305,000 1,638, ,943, ,135, ,326, ,405, ,355,000 1,586, ,941, ,114, ,346, ,402, ,415,000 1,532, ,947, ,106, ,358, ,412, ,475,000 1,475, ,950, ,099, ,357, ,407, ,540,000 1,416, ,956, ,088, ,373, ,418, ,615,000 1,339, ,954, ,079, ,377, ,411, ,700,000 1,259, ,959, ,312, ,271, ,785,000 1,174, ,959, ,307, ,266, ,880,000 1,084, ,964, ,308, ,273, ,980, , ,970, ,309, ,280, ,080, , ,971, ,311, ,283, ,190, , ,977, ,307, ,285, ,255, , ,977, ,309, ,286, ,330, , ,981, ,309, ,291, ,450, , ,985, ,309, ,294, ,530, , ,985, ,310, ,295, ,665, , ,994, ,309, ,303, ,755, , ,994, ,311, ,306, ,900, , ,001, ,312, ,313, ,310, ,310, ,310, ,310, ,307, ,307, ,311, ,311, ,310, ,310, ,310, ,310, ,310, ,310, TOTALS $39,465, $24,034, $63,499, $3,537, $41,267, $118,321, $226,626,

30 PRO-FORMA DEBT SERVICE COVERAGE The table below sets forth pro-forma debt service coverage based on the total Sales Tax Revenues received by the County for the fiscal years ended September 30, 2006 through and including 2014 (audited) and 2015 (unaudited). Year Ended September 30 Osceola County, Florida Pro-Forma Debt Service Coverage Pro-forma Debt Service Coverage (1) Sales Tax Revenues 2006 $15,490, x ,385, ,350, ,730, ,760, ,327, ,843, ,640, ,753, (2) 17,896, (1) Calculated based upon the Maximum Annual Debt Service for the Outstanding Parity Bonds including the Series 2016A Bonds of $10,418, (2) Sales Tax Revenues for the fiscal year ended September 30, 2015 are unaudited. POTENTIAL INCORPORATIONS Absent a specific legislative exception, the incorporation of new municipalities in an unincorporated area or areas of the County would adversely affect the amount of Sales Tax Revenues available to the County to pay debt service on the Series 2016A Bonds. Over the years, incorporation discussions have taken place in various areas of the unincorporated area of the County, including, but not limited to, the Poinciana Villages area located in part in western Osceola County and in part in neighboring Polk County ("Poinciana") and the Celebration area in northwestern Osceola County ("Celebration"). The County does not expect any incorporation initiatives related to Poinciana, Celebration or anywhere else in the County to be placed on the ballot pursuant to new legislation, and does not know what the chances of passage would be even if any initiatives are placed on the ballot. INVESTMENT POLICY See "SECURITY FOR THE BONDS Investments" herein for a description of the provisions which govern the investment of moneys on deposit in funds and accounts established in the Resolution. See "APPENDIX A GENERAL INFORMATION CONCERNING THE COUNTY Cash Management" attached hereto relating to the investment of other surplus funds of the County. 24

31 LEGAL MATTERS Certain legal matters in connection with the issuance of the Series 2016A Bonds are subject to an approving legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, whose approving opinion (a form of which is attached hereto as "APPENDIX D--Form of Bond Counsel Opinion") will be available at the time of delivery of the Series 2016A Bonds. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion subsequent to its date. Certain legal matters will be passed on for the County by Andrew W. Mai, Esq., County Attorney, and Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel. Broad and Cassel, Orlando, Florida, is serving as Counsel to the Underwriters. Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2016A Bonds; provided, however, that Bond Counsel will render an opinion to the Underwriters of the Series 2016A Bonds (upon which opinion only the Underwriters may rely) relating to the fairness of the presentation of certain statements contained herein under the heading "TAX EXEMPTION" and certain statements which summarize provisions of the Resolution, the Series 2016A Bonds, the Act and federal tax law, and (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2016A Bonds. The legal opinions to be delivered concurrently with the delivery of the Series 2016A Bonds express the professional judgment of the attorneys rendering the opinions regarding the legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. LITIGATION There is no pending or, to the knowledge of the County, any threatened litigation against the County of any nature whatsoever which in any way questions or affects the validity of the Series 2016A Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the collection or pledge of the Pledged Funds. Neither the creation, organization or existence, nor the title of the present members of the Board of County Commissioners of the County, or other officers of the County is being contested. The County experiences claims, litigation, and various legal proceedings which individually are not expected to have a material adverse effect on the operations or financial condition of the County, but may, in the aggregate, have a material impact thereon. In the opinion of the County Attorney, however, the County will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences on the financial condition of the County. 25

32 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Pursuant to Section , Florida Statutes, as amended, no person may directly or indirectly offer or sell securities of the County except by an offering circular containing full and fair disclosure of all defaults as to principal or interest on its obligations since December 31, 1975, as provided by rule of the Office of Financial Regulation within the Florida Financial Services Commission (the "FFSC"). Pursuant to administrative rulemaking, the FFSC has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the County, and certain additional financial information, unless the County believes in good faith that such information would not be considered material by a reasonable investor. The County is not and has not been in default on any bond issued since December 31, 1975 that would be considered material by a reasonable investor. The County has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The County does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2016A Bonds because the County would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the County would have been pledged or used to pay such securities or the interest thereon. Opinion of Bond Counsel TAX EXEMPTION In the opinion of Bond Counsel, the form of which is included as Appendix D hereto, the interest on the Series 2016A Bonds is excludable from gross income and is not a specific item of tax preference for federal income tax purposes under existing statutes, regulations, rulings and court decisions. However, interest on the Series 2016A Bonds is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations pursuant to the Internal Revenue Code of 1986, as amended (the "Code"). Failure by the County to comply subsequently to the issuance of the Series 2016A Bonds with certain requirements of the Code, regarding the use, expenditure and investment of bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States, may cause interest on the Series 2016A Bonds to become includable in gross income for federal income tax purposes retroactive to their date of issue. The County has covenanted in the Resolution to comply with all provisions of the Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2016A Bonds for purposes of federal income taxation. In rendering this opinion, Bond Counsel has assumed continuing compliance with such covenants. Internal Revenue Code of 1986 The Code contains a number of provisions that apply to the Series 2016A Bonds, including, among other things, restrictions relating to the use of investment of the proceeds of the Series 2016A Bonds and the payment of certain arbitrage earnings in excess of the "yield" on the Series 2016A Bonds to the Treasury of the United States. Noncompliance with such provisions may result in interest on the 26

33 Series 2016A Bonds being included in gross income for federal income tax purposes retroactive to their date of issue. Collateral Tax Consequences Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of, the Series 2016A Bonds. Prospective purchasers of the Series 2016A Bonds should be aware that the ownership of the Series 2016A Bonds may result in other collateral federal tax consequences. For example, ownership of the Series 2016A Bonds may result in collateral tax consequences to various types of corporations relating to (1) denial of interest deduction to purchase or carry such Series 2016A Bonds, (2) the branch profits tax, and (3) the inclusion of interest on the Series 2016A Bonds in passive income for certain Subchapter S corporations. In addition, the interest on the Series 2016A Bonds may be included in gross income by recipients of certain Social Security and Railroad Retirement benefits. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2016A BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL OR CORPORATE BONDHOLDERS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. Other Tax Matters Interest on the Series 2016A Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2016A Bonds should consult their tax advisors as to the income tax status of interest on the Series 2016A Bonds in their particular state or local jurisdictions. During recent years legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2016A Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar to the Series 2016A Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2016A Bonds and their market value. No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2016A Bonds. For example, proposals have been discussed in connection with deficit spending reduction, job creation and other tax reform efforts that could significantly reduce the benefit of, or otherwise effect the exclusion from gross income of, interest on obligations such as the Series 2016A Bonds. The further introduction or enactment of one or more of such proposals could affect the market price or marketability of the Series 2016A Bonds. Tax Treatment of Original Issue Discount The initial offering price of the Series 2016A Bonds maturing on October 1, 2031, October 1, 2032, October 1, 2034, October 1, 2036 and October 1, 2038 (collectively, the "Discount Bonds") is less than the stated principal amounts thereof. Under the Code, the difference between the principal amount of the 27

34 Discount Bonds and the initial offering price to the public (excluding bond houses and brokers) at which price a substantial amount of such Discount Bonds of the same maturity was sold, is "original issue discount." Original issue discount represents interest which is excluded from gross income; however, such interest is taken into account for purposes of determining the alternative minimum tax imposed on corporations and accrues actuarially over the term of a Discount Bond at a constant interest rate. A purchaser who acquires a Discount Bond in the initial offering at a price equal to the initial offering price thereof set forth on the cover page of this Official Statement will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period such purchaser holds such Discount Bond and will increase its adjusted basis in such Discount Bond by the amount of such accruing discount for the purposes of determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. Prospective purchasers of Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon the sale or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. Bond Premium The difference between the principal amount of the Series 2016A Bonds maturing on October 1, 2019 through and including October 1, 2030, October 1, 2033, October 1, 2035 and October 1, 2037 (collectively, the "Premium Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond (or, in the case of a Premium Bond callable prior to maturity, the amortization period and yield must be determined on the basis of the earliest call date that results in the lowest yield on the Premium Bond). For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds. RATINGS Moody's Investors Service and Fitch Ratings have assigned ratings of "A1" and "AA-" (stable outlook), respectively, to the Series 2016A Bonds. Generally, a rating agency bases its rating on information and materials on investigations, studies and assumptions furnished to and obtained and made by the rating agency. 28

35 The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings, may have an adverse effect on the market price of the Series 2016A Bonds. An explanation of the significance of the ratings can be received from the rating agencies, at the following addresses: Moody's Investors Service, 7 World Trade Center, 250 Greenwich Street, New York, New York and Fitch Ratings, One State Street Plaza, New York, New York FINANCIAL ADVISOR The County has retained Public Financial Management, Inc., Orlando, Florida, as Financial Advisor in connection with the County's financing plans and with respect to the County s financing plans and with respect to the authorization and issuance of the Series 2016A Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement. The Financial Advisor did not participate in the underwriting of the Series 2016A Bonds. AUDITED FINANCIAL STATEMENTS The Independent Auditors' Report of the County for the fiscal year ending September 30, 2014, and report relating to the Basic Financial Statements contained therein (the "Report") of Moore Stephens Lovelace, P.A., Winter Park, Florida (the "Auditor") are included in "APPENDIX B Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014" hereto. Such statements speak only as of September 30, The consent of the Auditor to include in this Official Statement the aforementioned Report was not requested, and such Report is provided only as a publicly available document. The Auditor was not requested nor did it perform any procedures with respect to the preparation of the Official Statement or the information presented herein. The County expects the Auditors' report for the fiscal year ended September 30, 2015 to be available in mid to late April or early May, When publicly available, such Auditors' report will be (i) included in the final Official Statement, potentially as a supplement thereto (if it becomes available before closing), or (ii) filed by or on behalf of the County with the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access system ("EMMA") in an electronic format prescribed by the MSRB (if it becomes available after the closing of the Series 2016A Bonds). The Series 2016A Bonds are payable solely from the Pledged Funds as described in the Resolution and herein and the Series 2016A Bonds are not otherwise secured by, or payable from, the general revenues of the County. The Report included in "APPENDIX B Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014" hereto is presented for general information purposes only. The County covenanted and agreed in the Resolution to, immediately after the close of each fiscal year, cause the financial statements of the County to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with 29

36 applicable law. The annual financial statements shall be prepared in conformity with generally accepted accounting principles consistently applied. The Governmental Accounting Standards Board (GASB) issued Statement No. 68, "Accounting and Financial Reporting for Pensions" ("GASB No. 68") an amendment to GASB Statement No. 27, "Accounting for Pensions by State and Local Governmental Employers", which is effective for the County s fiscal year ended September 30, For a more complete description of GASB No. 68 and its effect on the County s financial reporting, see "APPENDIX A Florida Retirement System" attached hereto. VERIFICATION OF ARITHMETICAL COMPUTATIONS At the time of the delivery of the Series 2016A Bonds, the Verification Agent will deliver a report on the mathematical accuracy of the computations contained in schedules provided to them and prepared by Public Financial Management, Inc. relating to (a) the sufficiency of the anticipated cash and maturing principal amounts and interest on Refunding Securities to pay, when due, the principal, whether at maturity or upon prior redemption and interest requirements of the Refunded Series 2009 Bonds and (b) the "yield" on the Series 2016A Bonds and on the Refunding Securities considered by Bond Counsel in connection with its opinion that the Series 2016A Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Code, as amended. UNDERWRITING The Series 2016A Bonds are being purchased by Raymond James & Associates, Inc., in its capacity as agent and acting on behalf of itself and Jefferies LLC and Ramirez & Co., Inc. (collectively, the "Underwriters") at an aggregate purchase price of $43,882, (which includes a net bond premium of $4,545, and Underwriters' discount of $127,963.91). The Underwriters' obligations are subject to certain conditions precedent described in a contract of purchase with the County, and they will be obligated to purchase all of the Series 2016A Bonds if any Series 2016A Bonds are purchased. Jefferies LLC ("Jefferies"), an underwriter of the Series 2016A Bonds, has entered into an agreement (the "Agreement") with E*TRADE Securities LLC ("E*TRADE") for the retail distribution of municipal securities. Pursuant to the Agreement, Jefferies will sell Series 2016A Bonds to E*TRADE and will share a portion of its selling concession compensation with E*TRADE. The Series 2016A Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2016A Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriters. CONTINGENT FEES The County has retained Bond Counsel, the Financial Advisor and Disclosure Counsel with respect to the authorization, sale, execution and delivery of the Series 2016A Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriters (which includes the fees of Underwriters' Counsel) are each contingent upon the issuance of the Series 2016A Bonds. 30

37 ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2016A Bonds upon an event of default under the Resolution are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically the federal bankruptcy code, the remedies specified by the Resolution and the Series 2016A Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2016A Bonds (including Bond Counsel's approving opinion) will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. See "APPENDIX C -- Form of the Resolution" attached hereto for a description of events of default and remedies. CONTINUING DISCLOSURE In order to provide for compliance by the County with the secondary market disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission promulgated under the Securities and Exchange Act of 1934 (the "Rule"), the County has covenanted, for the benefit of the Series 2016A Bondholders, to annually provide, or cause to be provided, certain financial information and operating data (the "Annual Report") and to provide notices of the occurrence of certain material events. The Annual Report and audited financial statements and notices of material events will be filed by or on behalf of the County with the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access system ("EMMA") in an electronic format prescribed by the MSRB as described in the proposed form of the Continuing Disclosure Certificate, attached hereto as "APPENDIX E - Form of Continuing Disclosure Certificate." The specific nature of the information to be provided in the Annual Report and the notices of material events and other details of the undertaking are described in "APPENDIX E - Form of Continuing Disclosure Certificate" attached hereto. The County will execute and deliver the Continuing Disclosure Certificate dated the date of delivery of the Series 2016A Bonds and substantially in the form attached hereto as "APPENDIX E - Form of Continuing Disclosure Certificate." The County has previously entered into continuing disclosure obligations with respect to certain outstanding bonds. The County has never failed to comply in all material respects in the last five years with any such obligation. While not considered by the County to be a material failure to comply, the County did not file certain events notices related to downgrades in connection with its Limited General Obligation Bonds, Series 2006 on July 28, 2010 and August 4, 2010 (two underlying rating downgrades) and on November 30, 2011 (insured rating downgrade) and in connection with its Transportation Improvements Refunding Bonds, Series 2004 (underlying rating upgrade), and further, the County was late in five instances in filing certain operating data. All such failures have been cured as of the date hereof. The County then entered into a contract with Digital Assurance Certification, LLC ("DAC") to provide continuing disclosure dissemination agent services for all of its outstanding bond issues. 31

38 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The references, excerpts, and summaries of all documents, statutes, and information concerning the County and certain reports and statistical data referred to herein do not purport to be complete, comprehensive and definitive and each such summary and reference is qualified in its entirety by reference to each such document for full and complete statements of all matters of fact relating to the Series 2016A Bonds, the security for the payment of the Series 2016A Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2016A Bonds. The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements. AUTHORIZATION OF OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized and approved by the County. At the time of delivery of the Series 2016A Bonds, the County will furnish a certificate to the effect that nothing has come to their attention which would lead it to believe that the Official Statement (other than information herein related to DTC, the book-entry only system of registration and the information contained under the caption "TAX EXEMPTION" as to which no opinion shall be expressed), as of its date and as of the date of delivery of the Series 2016A Bonds, contains an untrue statement of a material fact or omits to state a material fact which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. BOARD OF COUNTY COMMISSIONERS OSCEOLA COUNTY, FLORIDA By: /s/ Viviana Janer Chairwoman, Board of County Commissioners By: /s/ Donald S. Fisher County Manager/ Clerk of the Board of County Commissioners 32

39 APPENDIX A GENERAL INFORMATION CONCERNING THE COUNTY THE FOLLOWING INFORMATION CONCERNING OSCEOLA COUNTY, FLORIDA (THE "COUNTY") IS INCLUDED ONLY FOR THE PURPOSE OF PROVIDING GENERAL BACKGROUND INFORMATION. THE INFORMATION HAS BEEN COMPILED ON BEHALF OF THE COUNTY AND SUCH COMPILATION INVOLVED ORAL AND WRITTEN COMMUNICATIONS WITH THE VARIOUS SOURCES INDICATED HEREIN. THE INFORMATION IS SUBJECT TO CHANGE, ALTHOUGH EFFORTS HAVE BEEN MADE TO UPDATE THE INFORMATION WHERE PRACTICABLE. CERTAIN OF THE TABLES THAT FOLLOW IN THIS APPENDIX HAVE BEEN DERIVED FROM THE STATISTICAL SECTION OF THE COUNTY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, General Information The County, the sixth largest Florida County in area, covering 1,506 square miles, is located in east central Florida. The Atlantic Ocean is 57 miles to the east and the Gulf of Mexico is 75 miles to the west. The County was established on May 12, 1887 from portions of Brevard and Orange Counties. The County's population has expanded considerably over the past ten years. According to the United States Census, the County's population in 2000 was 172,493 and grew by 55.8 percent to 268,685 in This increase in population placed the County as one of the fastest growing counties in the United States. The estimated 2015 population is 308,324, which shows more than a 14.8% growth since 2010, according to the University of Florida, Bureau of Economic Business Research and the Florida Research & Economic Database. Within the County, there are two municipalities: the Cities of Kissimmee and St. Cloud. The estimated population of the City of Kissimmee was 66,592 in The estimated population of the City of St. Cloud was 41,316 in The County has operated under a Home Rule Charter which was approved by the voters by referendum in March 1992 and became effective on October 1, Agriculture and cattle formed the County's economic roots and dominated commerce for more than a century. Since the opening of Walt Disney World in 1971, the County has moved from an agriculture-based economy to a tourism-based economy. Now, the County's economy is directly linked to Central Florida's tourism. Walt Disney World's main entrance is located in the County and Disney retains its status as the region's largest employer. The County's labor force totals 152,703 with an unemployment rate of 4.9% as of December, 2015, a decrease from 6.3% from the from the previous year. Although the economy of the County is somewhat diversified, the service sector still represents the single largest employment sector accounting for 41,873 employees or 41.98% of total employment in the County, according to Osceola County Economic Development Department. In recent years manufacturing and light industry have also located in the County. The influx of industry has resulted in part from the existence of a trained and large labor pool, excellent industrial sites, a strategic location, good utility service and high quality of life. One of the strongest assets the County has is the population growth it has experienced over recent decades. More importantly, this growth has been in the employable age ranges and in a skilled, bilingual labor pool. This, combined with the County's centralized location, has positioned the County well for manufacturing, distribution and corporate headquarters operations. The County has a pro-business approach to attracting new industries, and the County is also committed to its existing industries. A-1

40 Establishments and expansions have included Norseman Plastics, Inc., BASS a wholly owned subsidiary of ESPN, Inc., Symbol Mattress, Infrastructure Engineers, Inc. and Lowe's Regional Distribution Center, just to name a few. The County also recently reorganized its Economic Development Department and revised its approach with the formation of the Greater Osceola Partnership for Economic Prosperity (GOPEP), a countywide economic development authority created through an interlocal agreement between the County and the cities of St. Cloud and Kissimmee. Board of County Commissioners; Home Rule Charter The Board of County Commissioners of Osceola County, Florida (the "Board"), is the principal legislative and governing body of the County. The powers and duties of the Board are those prescribed by the State Constitution, or by the Florida Legislature and those as described in the Osceola County Home Rule Charter effective October 1, The Board consists of five Commissioners elected by the voters on an at-large basis for terms of four years. The Board elects a Chairman or Chairwoman who serves as presiding officer. The current Commissioners and the dates of their terms are as follows: Commissioners Term Began Term Expires Viviana Janer, Chairwoman November, 2014 November, 2018 Cheryl Grieb, Vice Chairwoman November, 2014 November, 2018 Brandon Arrington November, 2008 November, 2016 Michael E. Harford November, 2008 November, 2016 Fred Hawkins, Jr. November, 2008 November, 2016 The County Manager The County Manager, the chief administrative official of the County, is appointed by and serves at the pleasure of the Board. The County Manager is responsible to the Board for administration and operation of all operating departments of the County. The County Manager is also responsible to the Board for the execution of all Board policies and the preparation of the annual operating and capital improvement program budget for the County. The County Manager also serves as the Clerk of the Board. The County Attorney The County Attorney is appointed by and serves at the pleasure of the Board. The County Attorney reports directly to the Board and is responsible for providing effective and efficient legal services to the Board, and other County departments, boards and agencies as specified by the Board. Commission Auditor The Commission Auditor is appointed by and serves at the pleasure of the Board. The Commission Auditor is responsible for the maintenance of internal financial controls and for the performance of such other duties assigned by the Board. A-2

41 Budget Process The County government is committed to enhancing and improving the quality of life of residents and visitors by funding governmental services that meet the needs of the community. Great effort is made to maximize the use of available resources to address community priorities. The County's budget is based upon a fiscal year beginning October 1 and ending September 30, and is developed in accordance with Chapters 129 and 200, Florida Statutes. Chapter 129, Florida Statutes, provides general and specific directions for budget development; and Chapter 200, Florida Statues, provides specific direction for the annual levy of property taxes. In addition to the County's annual operating and capital budget, a five-year capital improvement program is adopted. The County has received the Government Finance Officers Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial Reporting to the County for its Comprehensive Annual Financial Report for the fiscal year ended September 30, This was the 25 th consecutive year that the County has received this prestigious award. To be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy both GAAP and applicable legal requirements. On September 21, 2015, the County adopted its budget for the Fiscal Year ending September 30, The Board voted unanimously for the adoption of an aggregate ad valorem millage rate of and a budget of $1,096,403,249 for such Fiscal Year. Such budget will be effective from October 1, 2015 through September 30, The County closely monitors revenue collections on a monthly basis. If actual revenues of the County for the fiscal year ending September 30, 2016 are less than the budget, then the County intends to address such reduction in revenues through expenditure reductions and/or use of reserves. Conversely, if the revenues of the County for the fiscal year ending September 30, 2016 are more than budgeted, then the County anticipates applying any such excess revenues to increase its reserves. In addition, the County has a policy to maintain a general fund reserve for cash balance to be carried forward equal to 10.5% of the current year's general fund budget. This reserve is in addition to all other reserves. See " Fund Balance" below. Annual Audit Florida law requires that an annual post audit be completed by independent certified public accountants retained by the County. The County retained the firm of Moore Stephens Lovelace, P.A., Orlando, Florida, to undertake the audit for the fiscal year ended September 30, The Comprehensive Annual Financial Report for the fiscal year ended September 30, 2014 appears in APPENDIX B attached to this Official Statement. The County expects the Auditors' report for the fiscal year ended September 30, 2015 to be available in mid to late April or in early May, When publicly available, such Auditors' report will be (i) included in the final Official Statement, potentially as a supplement thereto (if it becomes available before closing), or (ii) filed by or on behalf of the County with the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access system ("EMMA") in an electronic format prescribed by the MSRB (if it becomes available after the closing of the Series 2016A Bonds). A-3

42 The Governmental Accounting Standards Board (GASB) issued Statement No. 68, "Accounting and Financial Reporting for Pensions" ("GASB No. 68") an amendment to GASB Statement No. 27, "Accounting for Pensions by State and Local Governmental Employers", which is effective for the County s fiscal year ended September 30, For a more complete description of GASB No. 68 and its effect on the County s financial reporting, see " Florida Retirement System" below. Cash Management The investment of the County's surplus funds are governed by the Osceola County Investment Policy, adopted June 1, 2009 and amended on October 20, This investment policy designated the County Manager and his or her designee as having the authority to initiate all investment activities. This policy also identifies the maximum duration of investments, maximum amount allowed to invest in any one financial institution and requires regular submission of an investment report to the Board. The Board operates with primarily one consolidated account and maintains a cash balance sufficient to meet daily expenditures. This enables the Board to maximize interest earnings by purchasing securities with the highest rate but with a high degree of safety and adequate liquidity. The average period for which Board funds were invested as of September 30, 2015, was 6 months. The average rate of return on the Board's investments in fiscal year 2015 yielded approximately $2,601,229 of interest revenue. Debt Management Policy On March 5, 2007, the Board adopted a Debt Management Policy in order to ensure that the County maintains a sound debt position and that the County's credit quality is protected. The policy was amended on October 20, The Debt Management Policy sets forth the parameters for issuing debt and managing outstanding debt, and provides guidance to the Board regarding the timing and purposes for which debt may be issued, types and amounts of allowable debt, method of sale that may be used and structural features that may be incorporated. The primary responsibility for developing financing recommendations rests with the County Manager with the help of staff and financial advisors. Fund Balance The General Fund is the chief operating fund of the County. On September 30, 2014, the total fund balance was $80.8 million, of which $78.1 million was unrestricted. The cash and investments balance at the end of the fiscal year ended September 30, 2014 was $81.8 million. As a measure of the General Fund's liquidity, it may be useful to compare both unrestricted fund balance and total fund balance to total fund revenues. Unrestricted fund balance represents 41.2% of total General Fund operating revenue, while total fund balance represents 42.6% of that same amount. The Government Finance Officers Association's Best Practices guidelines call for an unreserved fund balance level of 5 percent to 15 percent of General Fund operating revenues. See " Budget Process" above. On September 30, 2015, the total unaudited fund balance was $90.0 million, of which $61.7 million was unassigned. A-4

43 Ad Valorem Taxation The laws of the State of Florida require that all taxable real and tangible personal property must be assessed at fair market value, with some exceptions. Real and personal property valuations are determined each year as of January 1 by the County Property Appraiser's Office. The County Property Appraiser submits the tax roll to the Florida Department of Revenue for review and determination of, among other things, whether the tax roll meets the requirements of Florida law regarding just valuation. Each taxpayer is given notice by mail of the proposed property taxes and the assessed property value for the current year, and the dates, times and places at which budget hearings are scheduled to be held. The property owner has the right to file an appeal of the determination of assessed value with the Value Adjustment Board (the "Adjustment Board"), which considers petitions relating to assessments and exemptions. The Adjustment Board is composed of members of the School Board and the Board of County Commissioners. The decision of the Adjustment Board may be appealed to the Circuit Court. The Adjustment Board certifies the assessment roll upon completion of the hearing of appeals to it. Millage rates are then computed by the various taxing authorities and certified to the Property Appraiser, who applies the millage rates to the assessment roll. This procedure creates the tax roll, which is then certified and turned over to the County Tax Collector. Pursuant to Article VII, Section 6 of the Constitution and Section , Florida Statutes, the first $25,000 of the assessed valuation of a homestead is exempt from taxation for any person who has title to a residence in such homestead on a permanent basis. Pursuant to the passage of Amendment One on January 29, 2008, each person qualifying for the previous exemption is entitled to an additional exemption of up to $25,000 of assessed value, applied to the assessed value between $50,000 and $75,000. Further, agricultural land, non-commercial recreational land, inventory and livestock are assessed at less than 100% of fair market value. In addition, pursuant to Ordinance No enacted by the County on October 24, 2002, an additional homestead exemption of $25,000 is granted by Osceola County relating to ad valorem taxes payable to persons 65 or older subject to certain income limitations. See "Florida Constitutional Limitations and Property Tax Reform" herein for a more complete description of changes in law and see "Collection of Taxes" herein for a more complete description of exemptions. Collection of Taxes Taxes become delinquent on April 1 following the year in which they are assessed or 60 days after mailing of the original tax notice, whichever is later. If the delinquency date for ad valorem taxes is later than April 1 of the year following the year in which taxes are assessed, all dates or time periods specified in the Florida Statutes relative to the collection of, or administrative procedures regarding, delinquent taxes shall be extended a like number of days. Discounts are allowed for early payment at a rate of 4% if paid in November, 3% if paid in December, 2% if paid in January and 1% if paid in February. The Tax Collector advertises and sells tax certificates on those lands on which taxes have not been paid to pay the taxes, interest, costs and charges on the parcel described in the certificate. If there are no bidders, the certificate is issued to the County. Real property taxes bear interest at a rate not to exceed 18% per year from the date of delinquency until a certificate is sold, except that the minimum charge for delinquent taxes paid prior to the sale of a tax certificate is 3%. Exemptions from the ad valorem tax include the first $25,000 of assessed value for a homestead and an additional $25,000 of assessed value, to be applied to the assessed value between $50,000 and $75,000 (see "-Property Tax Reform" below); homestead property of totally and permanently disabled A-5

44 persons; improved real property on which a renewable energy source device is installed and operated; inventory; property used by not-for-profit hospitals, nursing homes and homes for special services; property used by certain not-for-profit homes for the aged; property used exclusively for educational purposes by educational institutions or other exempt organizations, including charter schools, for educational purposes; property owned by certain charitable, literary, religious or scientific organizations and used predominately for such purposes; property owned and used for educational purposes by labor organizations; property of certain community centers; certain property used for affordable housing; property owned and used by certain governmental units; property of certain not-for-profit sewer and water companies; and the first $500 of property of every widow, widower, blind person or disabled person, deployed military personnel and surviving spouses of first responders and veterans killed in the line of duty. Florida Constitutional Limitations and Property Tax Reform Several Constitutional and Legislative amendments affecting ad valorem taxes have been approved by voters in the past including the following: Save Our Homes Amendment. By voter referendum held on November 3, 1992, Article VII, Section 4 of the State Constitution was amended by adding thereto a subsection which, in effect, limits the increases in assessed just value of homestead property to the lesser of (1) three percent of the assessment for the prior year or (2) the percentage change in the Consumer Price Index for all urban consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics. Further, the amendment provides that (1) no assessment shall exceed just value, (2) after any change of ownership of homestead property or upon termination of homestead status such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status, (3) new homestead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead, and (4) changes, additions, reductions or improvements to homestead shall initially be assessed as provided for by general law, and thereafter as provided in the amendment. This amendment is known as the "Save Our Homes Amendment." The effective date of the amendment was January 5, 1993 and, pursuant to a ruling by the Florida Supreme Court, it began to affect homestead property valuations commencing January 1, 1995, with 1994 assessed values being the base year for determining compliance. Limitations on State Revenue Amendment. In the 1994 general election, State voters approved an amendment to the State Constitution which is commonly referred to as the "Limitation On State Revenues Amendment." This amendment provides that state revenues collected for any fiscal year shall be limited to state revenues allowed under the amendment for the prior fiscal year plus an adjustment for growth. Growth is defined as an amount equal to the average annual rate of growth in State personal income over the most recent twenty quarters times the state revenues allowed under the amendment for the prior fiscal year. State revenues collected for any fiscal year in excess of this limitation are required to be transferred to a budget stabilization fund until the fund reaches the maximum balance specified in the amendment to the State Constitution, and thereafter is required to be refunded to taxpayers as provided by general law. The limitation on state revenues imposed by the amendment may be increased by the State Legislature, by a two-thirds vote in each house. The term "state revenues," as used in the amendment, means taxes, fees, licenses, and charges for services imposed by the State Legislature on individuals, businesses, or agencies outside state government. However, the term "state revenues" does not include: (1) revenues that are necessary to A-6

45 meet the requirements set forth in documents authorizing the issuance of bonds by the State; (2) revenues that are used to provide matching funds for the federal Medicaid program with the exception of the revenues used to support the Public Medical Assistance Trust Fund or its successor program and with the exception of State matching funds used to fund elective expansions made after July 1, 1994; (3) proceeds from the State lottery returned as prizes; (4) receipts of the Florida Hurricane Catastrophe Fund; (5) balances carried forward from prior fiscal years; (6) taxes, licenses, fees and charges for services imposed by local, regional, or school district governing bodies, or (7) revenue from taxes, licenses, fees and charges for services required to be imposed by any amendment or revision to the Florida Constitution after July 1, This amendment took effect on January 1, 1995, and was first applicable to the State's fiscal year Millage Rollback Legislation. In 2007, the Florida Legislature adopted Chapter , Laws of Florida, a property tax plan which significantly impacted ad valorem tax collections for Florida local governments. One component of the adopted legislation required counties, cities and special districts to rollback their millage rates for the fiscal year to a level that, with certain adjustments and exceptions, would generate the same level of ad valorem tax revenue as in fiscal year ; provided, however, depending upon the relative growth of each local government's own ad valorem tax revenues from 2001 to 2006, such rolled back millage rates were determined after first reducing ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the legislation limited how much the aggregate amount of ad valorem tax revenues may increase in future fiscal years. A local government may override certain portions of these requirements by a supermajority, and for certain requirements, a unanimous vote of its governing body. Constitutional Amendments Related to Ad Valorem Exemptions. On January 29, 2008, in a special election held in conjunction with the State's presidential primary, the requisite number of voters approved amendments to the Florida Constitution exempting certain portions of a property's assessed value from taxation. These amendments were effective for the 2008 tax year (fiscal year for local governments). The following is a brief summary of certain important provisions contained in such amendments: 1. Provides for an additional exemption for the assessed value of homestead property between $50,000 and $75,000, thus doubling the existing homestead exemption for property with an assessed value equal to or greater than $75, Permits owners of homestead property to transfer their Save Our Homes Amendment benefit (up to $500,000) to a new homestead property purchased within two years of the sale of their previous homestead property to which such benefit applied if the just value of the new homestead is greater than or is equal to the just value of the prior homestead. If the just value of the new homestead is less than the just value of the prior homestead, then owners of homestead property may transfer a proportional amount of their Save Our Homes Amendment benefit, such proportional amount equaling the just value of the new homestead divided by the just value of the prior homestead multiplied by the assessed value of the prior homestead. As discussed above, the Save Our Homes Amendment generally limits annual increases in ad valorem tax assessments for those properties with homestead exemptions to the lesser of three percent (3%) or the annual rate of inflation. 3. Exempts from ad valorem taxation $25,000 of the assessed value of property subject to tangible personal property tax. A-7

46 4. Limits increases in the assessed value of non-homestead property to 10% per year, subject to certain adjustments. The cap on increases would be in effect for a 10-year period, subject to extension by an affirmative vote of electors. Over the last few years, the Save Our Homes Amendment assessment cap and portability provisions described above have been subject to legal challenge. The plaintiffs in such cases have argued that the Save Our Homes Amendment assessment cap constitutes an unlawful residency requirement for tax benefits on substantially similar property in violation of the equal protection provisions of the Florida Constitution and the Privileges and Immunities Clause of the Fourteenth Amendment to the United States Constitution. The plaintiffs also argued that the portability provision simply extends the unconstitutionality of the tax shelters granted to long-term homeowners by the Save Our Homes Amendment. The courts in each case have rejected such constitutional arguments and upheld the constitutionality of such provisions; however, there is no assurance that any future challenges to such provisions will not be successful. In addition to the legislative activity described above, the constitutionally mandated Florida Taxation and Budget Reform Commission (required to be convened every 20 years) (the "TBRC") completed its meetings on April 25, 2008 and placed several constitutional amendments on the November 4, 2008 General Election ballot. Three of such amendments were approved by the voters of Florida, which, among other things, do the following: (a) allow the Florida Legislature, by general law, to exempt from assessed value of residential homes, improvements made to protect property from wind damage and installation of a new renewable energy source device; (b) assess specified working waterfront properties based on current use rather than highest and best use; (c) provide a property tax exemption (i) for real property that is perpetually used for conservation (began in 2010), and (ii) for land not perpetually encumbered, require the Florida Legislature to provide classification and assessment of land use for conservation purposes solely on the basis of character or use. Exemption for Deployed Military Personnel. In the November 2010 General Election, voters approved a constitutional amendment which provides an additional homestead exemption for deployed military personnel. The exemption equals the percentage of days during the prior calendar year that the military homeowner was deployed outside of the United States in support of military operations designated by the Legislature. This constitutional amendment took effect on January 1, Other Proposals Affecting Ad Valorem Taxation. During the Florida Legislature's 2011 Regular Session, it passed Senate Joint Resolution 592 ("SJR 592"). SJR 592 allows totally or partially disabled veterans who were not Florida residents at the time of entering military service to qualify for the combatrelated disabled veteran's ad valorem tax discount on homestead property. The amendment took effect on January 1, During the Florida Legislature's 2012 Regular Session, it passed House Joint Resolution 93 ("HJR 93"). HJR 93 allows the Florida Legislature to provide ad valorem tax relief to the surviving spouse of a veteran who died from service-connected causes while on active duty as a member of the United States Armed Forces and to the surviving spouse of a first responder who died in the line of duty. The amount of tax relief, to be defined by general law, can equal the total amount or a portion of the ad valorem tax otherwise owed on the homestead property. The amendment took effect on January 1, Also during the Florida Legislature's 2012 Regular Session, it passed House Joint Resolution 169 ("HJR 169") allowing the Florida Legislature by general law to permit counties and municipalities, by A-8

47 ordinance, to grant an additional homestead tax exemption equal to the assessed value of homestead property to certain low income seniors. To be eligible for the additional homestead exemption the county or municipality must have granted the exemption by ordinance; the property must have a just value of less than $250,000; the owner must have title to the property and maintained his or her permanent residence thereon for at least 25 years; the owner must be age 65 years or older; and the owner's annual household income must be less than $27,300. The additional homestead tax exemption authorized by HJR 169 would not apply to school property taxes. The County adopted Ordinance on October 20, 2014 granting this additional homestead exemption. Each of the above described proposals was approved as an amendment to the Florida Constitution by the voters on November 6, During the Florida Legislature's 2013 Regular Session, it passed Senate Bill 1830 ("SB 1830"), which was signed into law by the Governor and created a number of changes affecting ad valorem taxation. First, SB 1830 provides long-term lessees the ability to retain their homestead exemption and related assessment limitations and exemptions in certain instances. Second, SB 1830 inserts the term "algaculture" in the definition of "agricultural purpose" and inserts the terms "aquacultural crops" in the provision specifying the valuation of certain annual agricultural crops, nonbearing fruit trees and nursery stock. Third, SB 1830 allows for an automatic renewal for assessment reductions related to certain additions to homestead properties used as living quarters for a parent or grandparent and aligns related appeal and penalty provisions to those for other homestead exemptions. Fourth, SB 1830 deletes a statutory requirement that the owner of the property must reside upon the property to qualify for a homestead exemption. Fifth, SB 1830 clarifies the property tax exemptions counties and cities may provide for certain low income persons age 65 and older. Sixth, SB 1830 removes a residency requirement that a senior disabled veteran must have been a Florida resident at the time they entered the service to qualify for certain property tax exemptions. Seventh, SB 1830 repeals the ability for certain limited liability partnerships to qualify for the affordable housing property tax exemption. Eighth, SB 1830 exempts property used exclusively for educational purposes when the entities that own the property and the educational facility are owned by the same natural persons. Also during the Florida Legislature's 2013 Regular Session, the Florida Legislature passed House Bill 277 ("HB 277"), which was signed into law by the Governor. HB 277 provides that certain renewable energy devices are exempt from being considered when calculating the assessed value of residential property. HB 277 only applies to devices installed on or after January 1, HB 277 took effect on July 1, Also during the Florida Legislature's 2013 Regular Session, the Florida Legislature passed House Bill 1193 ("HB 1193"), which was signed into law by the Governor. HB 1193 eliminated three ways in which the property appraiser had authority to reclassify agricultural land as non-agricultural land. Additionally, HB 1193 relieves the value adjustment board of the authority to review the property appraisers. HB 1193 was effective immediately and applied retroactively to January 1, At present, the impact of SB 7830, HB 277 and HB 1193 on the County s finances cannot be accurately ascertained. Legislative Proposals Relating to Ad Valorem Taxation. During recent years, various other legislative proposals and constitutional amendments relating to ad valorem taxation and revenue limitation have been introduced in the State legislature. Many of these proposals provide for new or A-9

48 increased exemptions to ad valorem taxation, limit increases in assessed valuation of certain types of property or otherwise restrict the ability of local governments in the State to levy ad valorem taxes at recent, historical levels. There can be no assurance that similar or additional legislation or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon, the County s finances. Florida Retirement System The information relating to the Florida Retirement System ("FRS") contained herein has been obtained from the FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Reports available at and the Florida Comprehensive Annual Financial Reports available at No representation is made by the County as to the accuracy or adequacy of such information or that there has not been any material adverse change in such information subsequent to the date of such information. The Florida Retirement System (the "FRS") is a cost-sharing multiple-employer public-employee retirement system with two primary plans the FRS defined benefit pension plan (the "FRS Pension Plan") and the FRS defined contribution plan (the "FRS Investment Plan"). The FRS Pension Plan was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. Florida Retirement System Pension Plan Membership. FRS membership is compulsory for all employees filling a regularly established position in a state agency, county agency, state university, state community college, or district school board. Participation by cities, municipalities, special districts, charter schools, and metropolitan planning organizations, although optional, is generally irrevocable after election to participate is made. Members hired into certain positions may be eligible to withdraw from the FRS altogether or elect to participate in the non-integrated optional retirement programs in lieu of the FRS except faculty of a medical college in a state university who must participate in the State University System Optional Retirement Program. There are five general classes of membership, as follows: Regular Class - Members of the FRS who do not qualify for membership in the other classes. Senior Management Service Class (SMSC) - Members in senior management level positions in state and local governments as well as assistant state attorneys, assistant statewide prosecutors, assistant public defenders, assistant attorneys general, deputy court administrators, and assistant capital collateral representatives. Members of the Elected Officers' Class may elect to withdraw from the FRS or participate in the SMSC in lieu of the Elected Officers' Class. Special Risk Class - Members who are employed as law enforcement officers, firefighters, firefighter trainers, fire prevention officers, state fixed-wing pilots for aerial firefighting surveillance, correctional officers, emergency medical technicians, paramedics, community-based correctional probation officers, youth custody officers (from July 1, 2001 through June 30, 2014), certain health-care related positions within state forensic or correctional facilities, or specified forensic employees of a medical examiner's office or a law enforcement agency, and meet the criteria to qualify for this class. A-10

49 Special Risk Administrative Support Class - Former Special Risk Class members who are transferred or reassigned to nonspecial risk law enforcement, firefighting, emergency medical care, or correctional administrative support positions within an FRS special risk-employing agency. Elected Officers' Class (EOC) - Members who are elected state and county officers and the elected officers of cities and special districts that choose to place their elected officials in this class. Beginning July 1, 2001, through June 30, 2011, the FRS Pension Plan provided for vesting of benefits after six years of creditable service for members initially enrolled during this period. Members not actively working in a position covered by the FRS Pension Plan on July 1, 2001, must return to covered employment for up to one work year to be eligible to vest with less service than was required under the law in effect before July 1, Members initially enrolled on or after July 1, 2001, through June 30, 2011, vest after six years of service. Members initially enrolled on or after July 1, 2011, vest after eight years of creditable service. Members are eligible for normal retirement when they have met the requirements listed below. Early retirement may be taken any time after vesting within 20 years of normal retirement age; however, there is a 5% benefit reduction for each year prior to the normal retirement age. Regular Class, Senior Management Service Class, and Elected Officers' Class Members For members initially enrolled in the FRS Pension Plan before July 1, 2011, six or more years of creditable service and age 62, or the age after completing six years of creditable service if after age 62. Thirty years of creditable service regardless of age before age 62. For members initially enrolled in the FRS Pension Plan on or after July 1, 2011, eight or more years of creditable service and age 65, or the age after completing eight years of creditable service if after age 65. Thirty-three years of creditable service regardless of age before age 65. Special Risk Class and Special Risk Administrative Support Class Members For members initially enrolled in the FRS Pension Plan before July 1, 2011, six or more years of Special Risk Class service and age 55, or the age after completing six years of Special Risk Class service if after age 55. Twenty-five years of special risk service regardless of age before age 55. A total of 25 years of service including special risk service and up to four years of active duty wartime service and age 52. Without six years of Special Risk Class service, members of the Special Risk Administrative Support Class must meet the requirements of the Regular Class. For members initially enrolled in the FRS Pension Plan on or after July 1, 2011, eight or more years of Special Risk Class service and age 60, or the age after completing eight years of Special Risk Class service if after age 60. Thirty years of special risk service regardless of age before age 60. Without eight years of Special Risk Class service, members of the Special Risk Administrative Support Class must meet the requirements of the Regular Class. Benefits. Benefits under the FRS Pension Plan are computed on the basis of age, average final compensation, creditable years of service, and accrual value by membership class. Members are also eligible for in-line-of-duty or regular disability and survivors' benefits. Pension benefits of retirees and annuitants are increased each July 1 by a cost-of-living adjustment. If the member is initially enrolled in the FRS Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-july 2011 service credit by the total service credit at retirement multiplied by 3%. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. A-11

50 The Deferred Retirement Option Program ("DROP") became effective July 1, 1998, subject to provisions of Section (13), Florida Statutes. FRS Pension Plan members who reach normal retirement are eligible to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in the DROP for a maximum of 60 months. Authorized instructional personnel may participate in the DROP for up to 36 additional months beyond their initial 60-month participation period. Monthly retirement benefits remain in the FRS Trust Fund during DROP participation and accrue interest. As of June 30, 2015, the FRS Trust Fund projected $3,119,220,735 in accumulated benefits and interest for 34,829 current and prior participants in the DROP. Administration. The Department of Management Services, Division of Retirement administers the FRS Pension Plan. The State Board of Administration (the "SBA") invests the assets of the FRS Pension Plan held in the FRS Trust Fund. Costs of administering the FRS Pension Plan are funded from earnings on investments of the FRS Trust Fund. Reporting of the FRS Pension Plan is on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the obligation is incurred. Contributions. All participating employers must comply with statutory contribution requirements. Section (3), Florida Statutes, requires an annual actuarial valuation of the FRS Pension Plan, which is provided to the Legislature as guidance for funding decisions. Employer and employee contribution rates are established in Section , Florida Statutes. Employer contribution rates under the uniform rate structure (a blending of both the FRS Pension Plan and Investment Plan rates) are recommended by the actuary but set by the Legislature. Statutes require that any unfunded actuarial liability ("UAL") be amortized within 30 plan years. Pursuant to Section (3)(f), Florida Statutes, any surplus amounts available to offset total retirement system costs are to be amortized over a 10-year rolling period on a level-dollar basis. The balance of legally required reserves for all defined benefit pension plans at June 30, 2015, was $148,454,681,903. These funds were reserved to provide for total current and future benefits, refunds, and administration of the FRS Pension Plan. [Remainder of page intentionally left blank] A-12

51 Effective July 1, 2011, both employees and employers of the FRS are required to make contributions to establish service credit for work performed in a regularly established position. Effective July 1, 2002, the Florida Legislature established a uniform contribution rate system for the FRS, covering both the FRS Pension Plan and the FRS Investment Plan. The uniform rates for Fiscal Year are as follows: Membership Class Employee Contribution Rate Employer Contribution Rate (1) Total Contribution Rate Regular 3.00% 6.07% 9.07% Special Risk Special Risk Administrative Support Elected Officers Judges Elected Officers Legislators/Attorneys/Cabinet Elected Officers - County Senior Management Service Deferred Retirement Option Program N/A (1) These rates include the normal cost and unfunded actuarial liability contributions but do not include the 1.26% contribution for the HIS and the fee of 0.04% for administration of the FRS Investment Plan and provision of educational tools for both plans. Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, The County contributed amounts were $15,595,485, $11,802,963 and $10,216,958 for fiscal years ended 2014, 2013 and 2012, respectively, equal to the required contribution for each year. [Remainder of page intentionally left blank] A-13

52 Pension Amounts for the FRS Pension Plan. Schedule of Changes in Net Pension Liability and Related Ratios (1) (in thousands) Total Pension Liability June 30, 2014 June 30, 2015 Service cost $2,256,738 $2,114,047 Interest on total pension liability 11,489,921 11,721,563 Effect of plan changes 0 0 Effect of economic/demographic (gains) or losses (448,818) 1,620,863 Effect of assumption changes or inputs 1,256,045 0 Benefit payments (8,714,251) (10,201,501) Net change in total pension liability 5,839,635 5,254,972 Total pension liability, beginning 150,276, ,115,763 Total pension liability, ending (a) $156,115,763 $161,370,735 Fiduciary Net Position Employer contributions $2,190,424 $2,438,085 Member contributions 682, ,304 Investment income net of investment expenses 22,812,286 5,523,287 Benefit payments (8,714,250) (10,201,500) Administrative expenses (18,352) (18,074) Net change in plan fiduciary net position 16,952,615 (1,559,898) Fiduciary net position, beginning 133,061, ,014,292 Fiduciary net position, ending (b) $150,014,292 $148,454,394 Net pension liability, ending = (a) (b) $6,101,471 $12,916,341 Fiduciary net position as a % of total pension liability 96.09% 92.00% Covered payroll (2) $24,723,565 $32,726,034 Net pension liability as a % of covered payroll 24.68% 39.47% (1) This schedule will fill in to a ten-year schedule as results for new fiscal years are calculated. (2) For June 30, 2014, covered payroll shown includes defined benefit plan actives and members in DROP, but excludes the payroll for FRS Investment Plan members and payroll on which only UAL rates are charged. For June 30, 2015, and later, covered payroll shown includes the payroll for FRS Investment Plan members and payroll on which only UAL rates are charged. Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, A-14

53 Actuarial Methods and Assumptions for the FRS Pension Plan. The total pension liability was determined by an actuarial valuation as of the valuation date of July 1, 2015, calculated based on the discount rate and actuarial assumptions below: June 30, 2014 June 30, 2015 Discount rate 7.65% 7.65% Long-term expected rate of return, net of investment expense 7.65% 7.65% Bond Buyer General Obligation 20-Bond Municipal Bond Index N/A N/A Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, The plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees in determining the projected depletion date. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return. The actuarial assumptions used to determine the total pension liability as of June 30, 2015, were based on the results of an actuarial experience study for the period July 1, June 30, Valuation Date July 1, 2015 Measurement Date June 30, 2015 Asset Valuation Method Fair Market Value Inflation 2.60% Salary increase including inflation 3.25% Mortality Generational RP-2000 with Projection Scale BB Actuarial cost method Individual Entry Age Normal Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, Sensitivity Analysis for the FRS Pension Plan. The following presents the net pension liability of the FRS, calculated using the discount rate of 7.65%, as well as what the FRS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.65%) or one percentage point higher (8.65%) than the current rate. 1% Decrease 6.65% Current Discount Rate 7.65% 1% Increase 8.65% Total pension liability $181,923,555,126 $161,370,735,088 $144,267,412,898 Fiduciary net position 148,454,393, ,454,393, ,454,393,902 Net pension liability $33,469,161,224 $12,916,341,186 $4,186,981,004) Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, A-15

54 Retiree Health Insurance Subsidy The Retiree Health Insurance Subsidy ("HIS") Program is a cost-sharing multiple-employer defined benefit pension plan established under Section , Florida Statutes. The benefit is a monthly payment to assist retirees of state-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Department of Management Services. For the fiscal year ended June 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant to Section , Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a state-administered retirement system must provide proof of health insurance coverage, which can include Medicare. The HIS Program is funded by required contributions from FRS participating employers as set by the Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended June 30, 2015, the contribution rate was 1.26% of payroll pursuant to Section , F.S. The state contributed 100% of its statutorily required contributions for the current and preceding two years. HIS contributions are deposited in a separate trust fund from which HIS payments are authorized. HIS benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, the legislature may reduce or cancel HIS payments. [Remainder of page intentionally left blank] A-16

55 Pension Amounts for the HIS. Schedule of Changes in Net Pension Liability and Related Ratios (1) (in thousands) Total Pension Liability June 30, 2014 June 30, 2015 Service cost $190,371 $217,519 Interest on total pension liability 409, ,441 Effect of plan changes 0 0 Effect of economic/demographic (gains) or losses 0 0 Effect of assumption changes or inputs 386, ,698 Benefit payments (407,276) (425,086) Net change in total pension liability 579, ,572 Total pension liability, beginning 8,864,244 9,443,629 Total pension liability, ending (a) $9,443,629 $10,249,201 Fiduciary Net Position Employer contributions $342,566 $382,454 Member contributions 0 0 Investment income net of investment expenses Benefit payments (407,275) (425,085) Administrative expenses (54) (188) Net change in plan fiduciary net position (64,544) (42,611) Fiduciary net position, beginning 157,929 93,385 Fiduciary net position, ending (b) 93,385 50,774 Net pension liability, ending = (a) (b) $9,350,244 10,198,427 Fiduciary net position as a % of total pension liability 0.99% 0.50% Covered payroll 29,676,340 30,340,449 Net pension liability as a % of covered payroll 31.51% 33.61% (1) This schedule will fill in to a ten-year schedule as results for new fiscal years are calculated. Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, Actuarial Methods and Assumptions for the HIS. The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and then was projected to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67. The same demographic and economic assumptions that were used in the Florida Retirement System Actuarial Valuation as of July 1, 2014 ("funding valuation") were used for the HIS program, unless otherwise noted. In a given membership A-17

56 class and tier, the same assumptions for both FRS Investment Plan members and for FRS Pension Plan members were used. June 30, 2014 June 30, 2015 Discount rate 4.29% 3.80% Long-term expected rate of return, net of investment expense N/A N/A Bond Buyer General Obligation 20-Bond Municipal Bond Index 4.29% 3.80% Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, In general, the discount rate for calculating the total pension liability under GASB 67 is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. In September 2014, the Actuarial Assumptions Conference adopted the Bond Buyer General Obligation 20-Bond Municipal Bond Index as the applicable municipal bond index. The discount rate used in the 2014 valuation was updated from 4.29% to 3.80%, reflecting the change in the Bond Buyer General Obligation 20- Bond Municipal Bond Index as of June 30, The actuarial assumptions used to determine the total pension liability as of June 30, 2015, were based on the results of an actuarial experience study for the period July 1, June 30, Valuation Date July 1, 2014 Measurement Date June 30, 2015 Asset Valuation Method Fair Market Value Discount rate (municipal bond rate) 3.80% Inflation 2.60% Salary increase including inflation 3.25% Mortality Generational RP-2000 with Projection Scale BB Actuarial cost method Individual Entry Age Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, [Remainder of page intentionally left blank] A-18

57 Sensitivity Analysis for the HIS. The following presents the net pension liability of the HIS, calculated using the discount rate of 3.80%, as well as what the HIS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (2.80%) or one percentage point higher (4.80%) than the current rate. 1% Decrease 2.80% Current Discount Rate 3.80% 1% Increase 4.80% Total pension liability $11,671,407,115 $10,249,201,290 $9,063,295,120 Fiduciary net position 50,774,315 50,774,315 50,774,315 Net pension liability $11,620,632,800 $10,198,426,975 $9,012,520,805 Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, FRS Investment Plan The State Board of Administration administers the defined contribution plan officially titled the FRS Investment Plan. The Florida Legislature establishes and amends the benefit terms of the plan. Retirement benefits are based upon the value of the member's account upon retirement. The FRS Investment Plan provides vesting after one year of service regardless of membership class. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the FRS Investment Plan, the years of service required for vesting under the Pension Plan (including the service credit represented by the transferred funds) is required to be vested for these funds and the earnings on the funds. The employer pays a contribution as a percentage of salary that is deposited into the individual member's account. Effective July 1, 2011, there is a mandatory employee contribution of 3.00%. The FRS Investment Plan member directs the investment from the options offered under the plan. Costs of administering the plan, including the FRS Financial Guidance Program, are funded through an employer assessment of 0.04% of payroll and by forfeited benefits of plan members. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the FRS Investment Plan, receive a lump-sum distribution, or leave the funds invested for future distribution. Disability coverage is provided; the employer pays an employer contribution to fund the disability benefit which is deposited in the FRS Trust Fund. The member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the FRS Investment Plan and rely upon that account balance for retirement income. GASB 68 The Governmental Accounting Standards Board (GASB) issued Statement No. 68, "Accounting and Financial Reporting for Pensions" ("GASB No. 68") an amendment to GASB Statement No. 27, "Accounting for Pensions by State and Local Governmental Employers", which is effective for the County s fiscal year ended September 30, As a participating employer, the County implemented GASB No. 68, which requires an employer participating in a cost-sharing multiple-employer defined benefit pension plans to report the employer s proportionate share of the net pension liabilities of the defined benefit pension plans. The greatest impact of GASB No. 68 to the County will be the inclusion of the County s proportionate share of the FRS Net Pension Liability (the "County's Net Pension Liability"), which will reduce the County s Unrestricted Net Position and Total Net Position. Additionally, pension A-19

58 expense is no longer equal to pension contributions made, but instead is equal to the change in net pension liability from year to year, with adjustments for deferred amounts. The County is also now required to include more extensive footnote disclosures and supplementary schedules. As a result of the implementation of GASB No. 68, the information contained in the County s audited financial statements for the fiscal year ended September 30, 2014 and related notes included in Appendix B relating to pension fund liability is not indicative of how pension fund liability will be reported by the County going forward. It is expected that the financial reporting presentation in the "Statement of Activities" and "Statement of Net Position" on pages 19 through and including 21 in "APPENDIX B Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014" attached hereto will be changing, when compared to the Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, In particular, on the "Statement of Net Position," there will be a new "Non-Current Liability" category added called a "Net Pension Liability" (referred to above as the County's Net Pension Liability) that has been estimated by the County to approximate $111 million (may vary). The addition of this category is expected to contribute to a reduction in the "Unrestricted Net Position" and the "Total Net Position" from $106 million and $1.164 billion, respectively, on September 30, 2014 to approximately $33 million and $1.126 billion, respectively, on September 30, Further, on the "Statement of Activities," it is expected that there will be an increase in "General Government" and "Public Safety" Expenses from $46 million and $146 million, respectively, on September 30, 2014 to approximately $75 million and $172 million, respectively, on September 30, All of these decreases are accrual based accounting changes, and do not represent decreases in cash or liquidity positions. The County does not expect that implementation of GASB 68 to have any effect on the County s ability to pay debt service on the Series 2016A Bonds. Other Postemployment Benefit Plan Description The Board administers a single-employer defined benefit healthcare plan (the "Plan"). In accordance with Section of the Florida Statutes, because the County provides a medical plan to active employees of the County and their eligible dependents, the County is also required to provide retirees with the opportunity to participate in this plan. The Plan provides Medical/Prescription, Dental and Life benefits to both active and eligible retired employees. The post-employment benefits are extended to retirees and continued at the discretion of the Board, which reserves the right (subject to State Statute and any collective bargaining agreements) to change or terminate benefits and to change premium contributions required from retirees in the future as circumstances change. Eligibility for participation in the Plan is limited to the County's current and retired employees and their eligible dependents that participate in and satisfy the Vesting, Disability, and Early or Normal Retirement provisions of the FRS. At September 30, 2014, there were 2,171 active plan participants and 323 retired participants receiving benefits. Eligible retirees may choose among the same Medical Plan options available for active employees of the County. The Plan does not issue a publicly available financial report. A-20

59 Funding Policy Contribution rates are determined on an annual basis by the Board. In order to begin and maintain coverage, contributions are required from the retiree. For dependent coverage, the retiree is required to pay a premium as well. If any required contributions are not paid timely, the coverage for the retiree and/or the dependent(s) will cease. In addition to the Health Insurance Subsidy paid by FRS, retired employees of the Osceola County Sheriff's Office receive a subsidy of $6.34 per month for each credited year of service. This amount is limited to $ per month and in no event will the combined subsidy from FRS and the Sheriff's office exceed the total cost of health insurance. This subsidy ceases after the retiree dies and does not continue to the spouse. Members eligible for disability retirement are subject to the same premium requirements as regular retirees. An exception is made to law enforcement officers who have sustained catastrophic injuries in the line of duty. Premiums for such members and their dependents are paid by the County as prescribed by Section (2)(h)1, Florida Statutes. The surviving spouse of a retiree is eligible to continue coverage subject to premium payments applicable to an individual retiree (not a spouse). The County's annual OPEB cost, the percentage of annual expected employer contribution toward OPEB cost, and the net OPEB obligation for the preceding fiscal years ended September 30, 2012, 2013 and 2014 were as follows (in thousands): Fiscal Year Ended September 30 Employer Contributions toward the OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation Annual OPEB Cost 2012 $3,538 $ % $18, , , , ,090 Source: Osceola County, Florida Comprehensive Annual Financial Reports for the Fiscal Year Ended September 30, A-21

60 Funded Status and Funding Progress The funded status of the plan as of July 1, 2013, the most recent actuarial valuation date, was as follows (in thousands): Actuarial accrued liability (AAL) $33,142 Actuarial Value of Plan Assets --- Unfunded Actuarial Accrued Liability 33,142 Funded Ratio (Actuarial Value of Plan Assets/AAL) 0.0% Covered Payroll (Active Plan Members) 97,966 UAAL as a Percentage of Covered Payroll 33.8% Source: Office of Comptroller, Osceola County, Florida Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment and termination, mortality, and the healthcare costs trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. [Remainder of page intentionally left blank] A-22

61 Assessed Valuation years: The following table shows the total taxable value for operating millage in each of the past 10 Osceola County, Florida Assessed Value of Taxable Property (1) (000) Fiscal Year Real Property Taxable Value Personal Property Taxable Value Centrally Assessed Property Taxable Value (1) Total Taxable Value 2006 $14,717,778 $1,420,128 $3,790 $16,141, ,226,914 1,570,993 4,562 21,802, ,673,342 1,652,151 4,495 26,329, ,464,364 1,510,465 3,785 25,978, ,971,753 1,531,250 4,129 21,507, ,573,745 1,473,806 3,677 18,051, ,288,985 1,356,605 4,083 16,649, ,075,763 1,387,049 4,184 16,466, ,668,183 1,403,246 4,365 17,075, ,769,328 1,402,383 4,481 18,176,192 (1) Centrally assessed property consists of railroad and telegraph systems which are assessed by the State of Florida. Source: Osceola County, Florida Property Appraiser. [Remainder of page intentionally left blank] A-23

62 Osceola County, Florida Tax Levies and Taxes Collected (000) Collected within the Fiscal Year of the Levy Total Collections to Date Taxes Levied for the Fiscal Year Collections in Subsequent Years Fiscal Year Amount Percentage of Levy Amount 2006 $118,633 $114, % $425 $114, % , , , , , , , , , , , , , , , , , , , , , , , , , , , Source: Osceola County, Florida Property Appraiser and Florida Department of Revenue. Percentage of Levy [Remainder of page intentionally left blank] A-24

63 Principal Taxpayers The following table contains the list of the County's twenty largest taxpayers. Osceola County, Florida Principal Property Taxpayers September 30, 2015 (000) Taxpayer Taxable Assessed Value % of Total Assessed Valuation Westgate Properties/Resorts/Towers $837, % The Walt Disney Company 584, Lando Resorts Corp. 417, Duke Energy Florida LLC. 282, G. P. Limited Partnership 260, Tempus Palms International 258, Star Island/Vacation Break/Wyndham 209, Silver Lake Resort 107, Omni ChampionsGate Resort Hotel LLC 107, Osceola Regional Hospital Inc. 101, Orlando Resort Development Group, Inc. 66, Lowes Home Centers Inc. 64, Florida Gas Transmission Co. 62, Walmart Stores/Sams Club 60, IH2 Prop FL LP/IH3 Prop FL LPIH4 Prop FL LP 58, Embarq Florida Inc./Sprint 55, Timescape Resorts LLC 52, Metropolitan Life Insurance Company 49, Adventist Health System Sunbelt Inc. 46, WorldMark the Club 44, Total taxable assessed value of 20 largest taxpayers $3,730, % Total taxable assessed value of all other taxpayers 14,445, % Total taxable assessed value of all taxpayers $18,176, % Source: Osceola County, Florida Property Appraiser. Transportation The County's location makes it a hub for all forms of transportation. One of the most modern airports in the country is Orlando International Airport ("MCO"), 15 miles northeast of Kissimmee, with daily flights to all major destinations with through service to other cities. MCO ranks number 13 and number 33 in passenger traffic in the United States and the world, respectively. Kissimmee Airport, a general aviation airport, is the nearest air facility to Walt Disney World and Epcot Center. Kissimmee Gateway Airport is designated by the Federal Aviation Administration and the Florida Department of Transportation ("FDOT") as a reliever airport to MCO. A-25

64 The Florida Turnpike and Interstate-4 link the County with all major traffic routes and cities in the State and in the Southeastern United States. The County completed the Osceola Parkway in the mid- 1990's, a controlled access toll facility extending east-west from Florida's Turnpike on the east to World Drive located within the Reedy Creek Improvement District on the west. The Osceola Parkway enhances the flow of traffic by tourists and other temporary visitors to the County and the Reedy Creek Improvement District who use the recreation and entertainment facilities located therein, including Walt Disney World. SunRail is a commuter rail transit project by FDOT that will run along a 61-mile stretch of existing rail freight tracks in a four-county area that includes Osceola County. FDOT has purchased approximately 9 miles of rail corridor from CSX Transportation in Osceola County from the Orange County line to Poinciana. CSX Transportation will own the remaining railroad tracks in Osceola County. The railway moves freight to various destinations east of the Mississippi River. Amtrak will continue to use to the entire rail corridor in Osceola County to transport passengers. Population According to the 2010 United States Census, Osceola County population was 268,685 and was ranked 22 nd out of Florida's 67 counties in gross population and 30 th in population density with an average of 202 persons per square mile. Osceola County and the State of Florida Population Trends Year Osceola County Average Annual % Increase State of Florida Average Annual % Increase ,406 2,771, , % 4,951, % , ,791, , ,746, , ,938, , ,982, , ,801, (1) 353, ,021, (1) High estimates used. Source: University of Florida Bureau of Economic and Business Research, Statistical Abstract A-26

65 General Statistics Principal Regional Employers - Osceola County 2015 Employer Number Employed Osceola County Public Schools 6,622 Lowe s Distribution Center 6,007 Florida Hospital Celebration 3,802 Walt Disney World 3,700 Florida Hospital Kissimmee 2,803 Osceola County Board of County Commission 2,303 Orange Lake Resorts & Holiday Inn Club Vacation 2,250 Osceola Regional Medical Center 1,616 Westgate Vacation Villas 1,500 Wilson Resort Management 1,200 Source: Orlando Economic Development Commission. Demographic Economic Statistics Osceola County, Florida Fiscal Year Population Per Capita Income Median Age School Enrollment Unemployment Rate ,926 $23, , % ,259 24, , ,283 24, , ,609 25, , ,618 25, , ,685 26, , ,163 27, , ,866 27, , ,361 27,019 n/a 57, ,553 n/a , Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, A-27

66 Osceola County, Florida Property Values, Commercial Construction Value, and Residential Construction Value Property Residential Construction Fiscal Year Value Total (in thousands) Commercial Construction Value (in thousands) Number of Units Value (in thousands) 2005 $16,141,696 $375,940 7,443 $974, ,802, ,536 6,420 1,183, ,362, ,737 2, , ,978, , , ,507, ,352 1, , ,093, ,630 1,168 83, ,738,209 69, , ,447, ,729 1, , ,099,425 45,422 1, , ,197,033 89,953 2, ,176 Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, Osceola County, Florida Direct and Overlapping Property Tax Rates (rate per $1,000 of assessed value) Emergency Medical Services MSTU School Management District South Florida Water Mgmt. District Everglades Construction Project Fiscal Year City of St. Cloud City of Kissimmee County Library Source: Osceola County, Florida Property Appraiser. Okeechobee Basin A-28

67 Tourism Since the opening of Walt Disney World in 1971, Osceola County has moved from an agriculturebased economy to a tourism-based economy. The Osceola County Stadium is the spring training home of the Houston Astros major league baseball team. The Astros' lease at Osceola County Stadium expires after spring training in The 5,300-seat stadium, located at the Osceola Heritage Park complex, also houses the United States Specialty Sports Association's Hall of Fame Museum and national headquarters. In 2003, the stadium underwent an $18.4 million renovation. The stadium has hosted amateur, high school and collegiate championships, including the Klash in Kissimmee baseball tournament between USA and Puerto Rico, USSSA baseball championships and umpire training seminars. Osceola County, Florida Tourism Statistical Data Estimated Number of Overnight Visitors and Mode of Transportation (000) Year (1) Air Visitors Auto Visitors Train/Bus Visitors Visitors Per Year % Change ,666 2, , ,658 2, ,873 (2.9) ,803 2, , ,862 2, ,138 (0.7) ,296 2, ,361 (12.7) ,297 2, ,358 (0.1) ,555 2, , ,746 2, , ,709 3, , ,876 3, , (1) Data is on calendar year basis. Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, A-29

68 County Debt Osceola County, Florida General Long-Term Debt As of September 30, 2015 (000) Outstanding General Description Balance Limited General Obligation Bonds, Series 2006 $2,340 Limited General Obligation Bonds, Series ,010 Limited General Obligation Refunding Bonds, Series ,445 Infrastructure Sales Surtax Revenue Bonds, Series ,240 Infrastructure Sales Surtax Revenue Refunding Bonds, Series ,540 Infrastructure Sales Surtax Revenue Refunding Bonds, Series ,170 Sales Tax Revenue Bonds, Series ,060 Sales Tax Revenue Refunding Bonds, Series ,920 Sales Tax Revenue Refunding Bonds, Series 2015A 58,660 Tourist Development Tax (Fifth Cent) Revenue Bonds, Series 2012 (Rida Conference Center Phase One Project) 12,030 Tourist Development Tax Revenue Refunding & Improvement Bonds, Series ,085 Capital Improvement Revenue Bonds, Series 2009 A, B & C 119,605 West 192 Redevelopment Area Municipal Service Benefit Unit Special Assessments Bonds (Phase IIC), Series ,395 Transportation Improvement Refunding Bonds (Osceola Parkway Project), Series ,390 Expressway System Senior Lien Revenue Bonds (Poinciana Parkway Project), Series 2014A, B-1 and B-2 69,709 (Less) Unamortized Bond Discount (433) Total Business-Type Bonds and Unamortized Bond Premium 145,666 Total $614,001 Source: Osceola County, Florida Finance Department. A-30

69 Osceola County, Florida Miscellaneous Statistics September 30, 2015 Date of Incorporation 1887 Five Elected Commissioners/ Form of Government Appointed County Manager Area in square miles 1,506 Government facilities and services: Miles of streets: Paved miles 905 Unpaved miles 108 Culture and recreation: Community centers 5 Parks 34 Boat ramps 12 Stadium 1 Softball complex 1 Tennis courts 2 Racquet ball courts 4 Soccer complex 1 Nature Center 1 Libraries: Full Service 6 Fire protection: Number of stations 15 Sheriff protection: Number of stations 3 Number of sheriff personnel and officers 667 Number of patrol units 284 Facilities and services not included in the reporting entity: Public Education: Number of K-12 students 61,127 Number of elementary schools 24 Number of middle schools 8 Number of high schools 8 Number of multi-level schools 19 Alternative Programs and Adult Education 4 Virtual Schools 2 Higher Education Institutions 6 Hospitals Number of Hospitals 5 Transportation Airports-Orlando International Airport (MCO) and 2 Kissimmee Gateway Airport (ISM) Bus Service Lynx Local and Regional Bus Service 1 Sources: Osceola County Sheriff Finance Department; School District, Osceola County, Florida, Economic Development Department; and Kissimmee, Florida. A-31

70 Osceola County, Florida General Governmental Expenditures by Function Last Ten Fiscal years (Unaudited) (000) Fiscal Year General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture & Recreation Court Related Capital Outlay Debt Service Total 2005 $55,168 $89,766 $13,907 $23,861 $36,694 $11,706 $16,238 $7,582 $15,852 $25,188 $295, , ,494 3,826 43,279 42,545 17,013 21,944 8,014 35,818 20, , , ,458 2,411 56,729 22,044 18,862 23,852 9,774 54,112 23, , , ,891 23,261 34,440 19,600 28,998 20,722 16,052 56,956 31, , , ,725 4,987 64,780 22,805 12,416 27,705 23,340 47,753 30, , , ,025 2,337 44,712 23,187 15,065 21,800 18,365 74,372 86, , , ,392 10,780 50,482 26,902 19,693 17,757 18,067 26,494 37, , , ,341 3,549 34,734 34,006 14,032 20,331 16,975 51, , , , ,822 3,044 25,693 31,930 15,024 21,732 17,822 24,969 41, , , ,303 7,211 23,852 33,021 15,736 21,079 19,792 24,185 39, ,063 Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, A-32

71 Osceola County, Florida General Governmental Revenues by Source Last Ten Fiscal Years (Unaudited) (000) Fiscal Year Taxes Permit Fees and Special Assessments Inter- Governmental Charges for Services Fines and Forfeitures Interest Miscellaneous Total 2005 $172,699 $29,902 $54,373 $57,959 $15,676 $5,379 $6,083 $342, ,649 38,725 47,718 56,570 18,405 13,278 9, , ,814 39,837 44,867 68, ,294 9, , ,303 36,089 43,547 66, ,925 8, , ,545 43,418 40,993 43,355 1,622 7,209 4, , ,344 34,243 67,392 33,176 1,892 5,155 3, , ,677 34,189 74,161 24,591 3,635 3,031 3, , ,711 30,498 69,323 23,439 6,357 3,246 2, , ,678 30, ,483 23,794 5, , , ,126 35,281 66,439 26,495 2,179 3,001 9, ,636 Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, A-33

72 Osceola County, Florida Insurance Coverage September 30, 2015 Workers' Compensation Workers' Compensation Excess Workers' Compensation (Volunteers) Self-Funded $1,000,000 Per Occurrence ($750,000 Self-Insured Retention) Self-Funded Accident Policy (Volunteers) $10,000 General Liability $6,000 ($100,000 SIR) Property $75,000,000 Per Occurrence ($500,000 Deductible) Public Entity Employee Benefit Plans Administrative $6,000,000 Each Employee Limit Liability Claims Made Cover $100,000 SIR Each Employee Retention Loss & Loss Expense Public Entity Law Enforcement Liability $6,000,000 Each Wrongful Act Limit $100,000 SIR Each Wrongful Act Public Entity Management Liability $6,000,000 Each Wrongful Act Limit/$6,000,000 Aggregate Limit $100,000 SIR Each Wrongful Act Public Entity Employment Practices Liability $6,000,000 Each Wrongful Employment Practices Offense Limit/$6,000,000 Aggregate Limit $100,000 SIR Each Wrongful Act Automobile Liability $6,000,000 Combined Single Limit $100,000 Deductible Comprehensive $10,000 Deductible Collision $10,000 Deductible Money and Securities, Per Occurrence $250,000, Varies by Location, $10,000 Deductible Employee Fidelity $1,250,000 Electronic Data Equipment $1,000 Deductible Emergency Care Services EMT's and Paramedics $6,000,000 Per Occurrence Services for Contracted Physicians Serving as Medical Directors, Jail and Emergency Services-Separate Policies Law Enforcement/Firefighters Death Benefits Jail Nurses Medical Professional Liability Claims Made $1,000,000 Each Claim/$3,000,000 Aggregate Limit $25,000 Each Claim Deductible $68,889/$68,889/$195,618 Per State Statute $2,000,000 Each Claim/$4,000,000 Aggregate $0 Deductible Inmate Medical Care Excess Policy $40,000 Retention/$250,000 Limits Accident Policy Community Corrections $10,000 Environmental Liability, Including Above and Underground Tanks $1,000,000 ($10,000 Deductible) Passenger Boat Liability $1,000,000 ($2,500 Deductible) Health Insurance Health Insurance Excess Dental Insurance Self-funded Claims in Excess of $250,000 Per Covered Insured Self-funded Source: Osceola County Risk Management A-34

73 APPENDIX B COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014

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85 INDEPENDENT AUDITOR S REPORT Honorable Board of County Commissioners Osceola County, Florida B-11 INDEPENDENT AUDITORS REPORT Report on the Financial Statements We have audited the accompanying financial statements of governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Osceola County, Florida (the County ) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the County s basic financial statements, as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the County as of September 30, 2014, and the respective changes in financial position, and, where applicable, cash flows thereof, and the respective budgetary comparison for the general fund and each major special revenue fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. 1 2

86 B-12 Honorable Board of County Commissioners Osceola County, Florida Other Matters INDEPENDENT AUDITOR S REPORT (Concluded) Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis and the Schedules of Funding Progress and Employer Contributions Other Postemployment Benefits Plan, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County s basic financial statements as a whole. The introductory section, combining and individual non-major fund financial statements and schedules, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual non-major fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual non-major fund financial statements and schedules are fairly stated, in all material respects, in relation to the financial statements as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 13, 2015, on our consideration of the County s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County s internal control over financial reporting and compliance. THIS PAGE INTENTIONALLY LEFT BLANK MOORE STEPHENS LOVELACE, P.A. Certified Public Accountants Orlando, Florida March 13,

87 B-13 MANAGEMENT S DISCUSSION AND ANALYSIS (MD&A) MANAGEMENT S DISCUSSION AND ANALYSIS The County s Management s Discussion and Analysis (MD&A) presents an overview of the County s financial activities for the fiscal year ended September 30, The County s financial performance is discussed and analyzed within the context of the accompanying financial statements and disclosures following this section. Additional information is available in the transmittal letter that precedes the MD&A. Financial Highlights Government-wide Statements Osceola County s assets exceeded its liabilities and deferred inflows at September 30, 2014 by $1,205.8 MM (net position). Of this amount, $121.1 MM may be used to meet the government s ongoing obligations to citizens and creditors. The County s total assets at September 30, 2014, were $1,877.6 MM. The County s total liabilities at September 30, 2014, were $668.9 MM. Total net position is comprised of the following: 1) Net Investment in Capital Assets of $846.3 MM. This includes land, buildings, improvements other than buildings, vehicles, equipment, construction in-progress, intangibles, and infrastructure, net of accumulated depreciation, and reduced for outstanding debt related to the purchase and construction of those capital assets. 2) Net position of $238.4 MM are restricted by constraints imposed from outside the County, such as debt covenants, grantors, laws or regulations. 3) Governmental unrestricted net position of $106.8 MM represents the portion available to maintain the County s continuing obligations to citizens and creditors. Business-type unrestricted net position was $14.4 MM. The County s total net position increased $53.5 MM in fiscal year ending September 30, 2014, with an increase of $48.9 resulting from governmental activities and $4.6 MM resulting from business-type activities. The increase in business activities results primarily from an increase in toll revenue and a decrease of operational expenses. The increase in the governmental activities resulted primarily from an increase in intergovernmental revenue, service charges, and miscellaneous revenue, and a decrease in expenditures for general government, economic environment, culture and recreation, and human services. Total assets are comprised of the following: 1) Capital assets, net of accumulated depreciation, of $1,330.7 MM. This includes land, buildings, improvements other than buildings, vehicles, equipment, construction in-progress, intangibles and infrastructure. 2) Current assets and non-current restricted assets (excluding capital assets) of $547.0 MM. 3) The restricted assets of $3.7 MM include cash and equivalents restricted by constraints imposed from outside the County such as debt covenants, grantors laws or regulations. The County s total assets increased $96.4 MM over the previous year, with an increase of $31.0 MM in governmental and an increase of $65.4 MM resulting from business-type activities. The increase in total assets in governmental activities resulted primarily from the additions to capital assets of $30.6 of right of way donated to the County. The increase in business-type activities resulted primarily from an increase in the accounts receivable to Osceola Expressway Authority for a bond issue by the County on their behalf. Total liabilities are comprised of the following: 1) Current liabilities of $58.4 MM, of which $20.8 MM is the current portion of outstanding bonded debt. 2) Non-current liabilities of $668.9 MM, of which $546.0 MM is the long-term portion of outstanding bonded debt. The County s total liabilities increased by $39.9 MM over the previous year, with a decrease of $18.0 MM resulting from governmental activities and an increase of $57.9 MM resulting from business-type activities. The decrease from governmental activities resulted primarily from scheduled payments of long term liabilities. The increase in business-type activities resulted primarily from the issues of the Poinciana Parkway Revenue Bond, Series 2014, 5 6

88 B-14 and the Osceola Parkway Refunding Bond, Series Information about these obligations can be found in the Notes to the Financial Statements, Note 9, Long Term Liablilities. Fund Statements At September 30, 2014, the County s governmental funds reported combined ending fund balances of $396.3 MM, a decrease of $17.9 MM in comparison with the prior fiscal year. At September 30, 2014, unrestricted fund balance for the General Fund was $78.1 MM or 41.2 % of General Fund operating revenue. Unrestricted fund balance includes committed, assigned, and unassigned fund balances. Governmental funds revenues increased by $22.4 MM or 6.5% compared to the prior fiscal year. The increase in governmental funds revenues resulted primarily from an increase in ad valorem taxes, sales taxes, intergovernmental revenues and miscellaneous revenues, due primarily to a modest increase in the economy. Other revenue categories had no significant changes. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the County s basic financial statements. The County s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-Wide Financial Statements The government-wide financial statements, which consist of the following two statements, are designed to provide readers with a broad overview of the County s finances in a manner similar to a private sector business. The statement of net position presents information on all of the County s assets less liabilities plus deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The statement of activities presents information showing how the government s net position changed during fiscal year All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes; accrued liabilities). These financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include General Government, Public Safety, Physical Environment, Transportation, Economic Environment, Human Services, Culture/Recreation, and Court Related. The business-type activities of the County include Environmental Services (Landfill) and the Osceola Parkway. Fund Financial Statements A fund is a grouping of related accounts that is used to account for resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with generally accepted accounting principles and with finance-related legal requirements. All County funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide reconciliations to facilitate this comparison between governmental funds and governmental activities. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Tourist Development Council Fund, Countywide Fire District, and General Capital Outlay Fund which are considered to be major funds. The General Fund is the operating fund of the County, and includes the operating funds of the constitutional officers of the County. Data from other governmental funds are combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the supplementary information section of this report. Proprietary Funds The County maintains two different types of proprietary funds. Enterprise funds are used to report business-type activities in the government-wide financial statements. The County uses enterprise funds to account for the fiscal activities relating to Environmental Services (Landfill) and the Osceola Parkway. Internal Service funds are used to accumulate and allocate costs internally among the County s various functions. The County uses internal service funds to account for its Workers Compensation Self-Insurance, Property and Casualty Insurance, Dental Self- Insurance, Health Self-Insurance, Disability and Life Insurance and Fleet Management. Since these services predominantly benefit governmental rather than business-type functions, they have been included within the government-wide financial statements as governmental activities. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of outside parties. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County s own programs. At the end of fiscal year 2014, the County s fiduciary funds consisted only of several agency funds. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Government-wide Financial AnalysisNet position may serve as a useful indicator of a government s financial position over time. In the case of the County, assets exceeded liabilities and deferred inflows by $1,205.8 MM at the close of the fiscal year ended September 30, In addition to liabilities, the statement of net position includes a separate section for deferred inflows of resources in accordance with GASB No. 65. This represents an acquisition of net position by the government that is applicable to a future reporting period. This amount is deferred and recognized as an inflow of resources in the period that the amount becomes available. For the County, only one type of item qualifies for reporting in this category. It is the deferred credit on the issuance of the Transportation Improvement Refunding Bonds, Series 2014, reported in the proprietary and the government-wide statement of net position. At the end of fiscal year 2014, the County is able to report positive balances in net position for the government as a whole and separately for its governmental and business-type activities. The largest portion of the County s net position ($846.2 MM or 70.2%) reflects its investment in capital assets, less any related outstanding debt used to acquire those assets. The County uses these capital assets to provide services to its citizens. Although the County s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot generate funds to liquidate these liabilities. 7 8

89 B-15 An additional portion of the County s net position ($ MM or %) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($121.1 MM or 10.0%) may be used to meet the government s ongoing obligations to citizens and creditors. Governmental Activities The County s total net position increased by $53.5 MM in fiscal year ending September 30, 2014, with $48.9 MM of the increase resulting from governmental activities. The increase was primarily due to increase in ad-valorem taxes, intergovernmental revenue, service charges, and miscellaneous revenues, and cost-cutting measures in general government, economic environment, culture and recreation, and human services expenditures. Business-type Activities Business-type activities increased the County s net position by $4.6 MM, resulting primarily from an increase in toll revenues and a decrease in operational expenditures. Fund Financial Analysis The County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Osceola County, Florida Net Position (in millions) Governmental Business-type Activities Activities Total Current and Other Assets $ $ $ $ 31.5 $ $ Noncurrent Assets 1, , , ,470.9 Total Assets 1, , , ,781.2 Current Liabilities Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources Deferred Credit-Refunding Bonds Net Position Net Investment in Capital Assets Restricted for General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture and Recreation Court Related Debt Service Capital Projects Unrestricted Total Net Position $ 1,164.9 $ 1,115.9 $ 40.9 $ 36.3 $ 1,205.8 $ 1,152.2 Osceola County, Florida Change in Net Position (in millions) Governmental Business-type Activities Activities Total Revenues: Program Revenues: Charges for Services $ 65.6 $ 61.5 $ 33.3 $ 29.1 $ 98.9 $ Operating Grants and Contributions Capital Grants and Contributions Property Taxes Sales Taxes Gas Taxes Public Service Taxes Communication Service Taxes Resort Taxes State Revenue Sharing Interest Earnings Miscellaneous Total Revenues Expens es : General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture and Recreation Court Related Interest and Fiscal Charges Environmental Services Parkway Total Expenses Excess in Net Position before Transfers (3.8) Transfers (8.4) (8.4) - - Change in Net Position $ 48.9 $ 26.0 $ 4.6 $ 8.1 $ 53.5 $ 34.1 Governmental Funds The primary purpose of the County s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the County s financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2014, the County s governmental funds reported combined ending fund balances of $396.3 MM, a decrease of $17.8 MM in comparison with the prior year. Based on GASB 54 fund balance is reported in five different categories, nonspendable, restricted, committed, assigned or unassigned. The total of the last three categories, which include only resources without a constraint on spending or for which the constraint on spending is imposed by the government itself, is termed unrestricted fund balance. Of the $396.3 MM total fund balance, unrestriced fund balance is $148.9 MM, and $247.4 MM is restricted for specific purposes. 9 10

90 Major Funds The General Fund, Tourist Development Council, Countywide Fire District, and General Capital Outlay are reported as major funds. The General Fund is the chief operating fund of the County which includes the operating funds of the constitutional officers of the County. The total fund balance in the general fund was $80.8 MM, of which $78.1 MM was unrestricted. The cash and cash equivalents balance at the end of the year was $81.8 MM. The General Fund fund balance increased by $4.6 MM from the previous year. This increase resulted primarily from increases in revenues in ad-valorem taxes, service charges, intergovernmental revenue, and miscellaneous revenues, and a decreased in expenditures in general government, econmomic environment, culture and recreation, and human services.as a measure of the General Fund s liquidity, it may be useful to compare both unrestricted fund balance and total fund balance to total fund revenues. Unrestricted fund balance represents 41.2 % of total General Fund operating revenue, while total fund balance represents 42.6% of that same amount. The GFOA s Best Practices recommends, at a minimum, that general-purpose governments, regardless of size, maintain unrestricted fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures. The Tourist Development Council fund provides funding for tourist development, major parks and the stadium. The principal funding source comes from the 6% Tourist Development Tax, which is used according to Florida Statutes, Section This tax is a levy on hotel rooms and other temporary lodging. This fund had a total combined fund balance as of September 30, 2014, of $89.04 MM. The Countywide Fire District was created in fiscal year ended September 30, 1990, as a means of providing fire protection service to the unincorporated areas of Osceola County. Its primary funding is provided by a special assessment and ad valorem taxes paid by property owners in the unincorporated area. As of September 30, 2014, the fund had a total fund balance of $20.5 MM. The net increase in fund balance from operations during this year was $6.9 MM, which was due primarily to collection of higher charges for services and a reduction in operating expenditures. Millions $140 $120 $100 $80 $60 $40 $20 $0 Revenue - Governmental Activities B-16 The General Capital Outlay Fund accounts for general capital projects in Osceola County. The primary source of revenue is transfers from General Fund and other governmental funds. This fund had a total fund balance as of September 30, 2014, of $44.0 MM. The net decrease of $0.1 MM in fund balance was the result of a transfer out to fund the Poinciana Parkway project. Proprietary Funds Revenue by Source - Governmental Activities The County s proprietary fund statements provide the same type of information found in the government-wide financial statements but in more detail. Total assets of the enterprise funds as of September 30, 2014, were $209.9 MM, deferred inflows were $2.9, total liabilities were $166.1 MM, and net position was $40.9 MM. The Environmental Services (Landfill), the Toll Road fund, are reported as major funds. The Environmental Services (Landfill) Fund is used to account for the operation of the County s off-site collection centers and closure of the County s landfills. It operates like a business where the rates established by the County generate sufficient funds to pay the costs of current operations and provide for long-term closure care. As required by the Florida Department of Environmental Protection, the County has recorded a $13.4 MM liability for landfill closure of which $1.0 MM was recorded as due within one year. The Toll Roads fund includes Osceola Parkway Toll fund and the Poinciana Parkway Toll fund. The Oscoela Parkway Toll fund was established to account for the operations and maintenance of the Osceola Parkway road, a county-owned toll road. The Poinciana Parkway Toll fund which was established to accounts for the operations and maintenance of the Poinciana Parkway toll road, this project has not been completed as of September 30, Resort Taxes 11% Communication Service Taxes 2% Public Service Taxes 3% Gas Taxes 4% Sales Taxes 11% State Revenue Sharing 2% Interest Earnings 0% Miscellaneous 1% Charges for Services 18% Operating Grants and Contributions 8% Capital Grants and Contributions 3% Property Taxes 37% 11 12

91 Millions $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 Expenditures - Governmental Activities General Fund Budgetary Highlights The difference between the General Fund s original budgeted and final amended budgeted fund balances was a decrease of $11.6 MM that was caused by the following amendments: Increase in intergovernmental revenues of $.05 MM, resulted from budget amendments to adjust funding of several transportation and public safety grants. Increase in miscellaneous revenues of $.35 MM, resulted from expected reimbursements of expenditures Increase in public safety expenditures of $1.4 MM, required to adjust personal services, and medical expenditures in the Correction facility. Increase in transportation expenditures of $5.9 MM, resulted primarily from an appropriation of $4.6 MM from the reserves for capital undesignated to fund the Poinciana Boulevard Phase III, and the adjustment of carry forward balances for several road projects. Increase in transfers in of $.8 MM, resulted primarily from increase in transfer to general fund from the capital outlay fund to cover expenditures related to the Florida Manufacturing Research Center. Increase in transfer out of $5.2 MM, resulted from increase in transfers out in the Capital Improvement Revenue Fund of $2.3 MM to the Road Impact Fee Fund for Osceola Parkway Phase II, and other transfers to fund the Children s Advocacy Center, the Florida Manufacturing Research Center, and to increase budget for the Fire Assessment subsidy. The following is a review of significant differences between the final amended budget for the general fund and actual amounts. B-17 Court Related 6% Culture ure and Recreation 6% Human Services 4% Economic Environment 9% Transportation 9% Expenditures - Governmental Activities Physical Environment 1% Interest and Fiscal Charges 8% General Government 15% Public Safety 42% The decrease of $4.5 MM in taxes resulted primarily from the actual collection of the advalorem taxes during this fiscal year. As of September 30, 2014, the amount of ad valorem tax collected was 97% of the total tax levied. The increase of $2.8 MM in intergovernmental revenue resulted from an increase in the collection of the State Share Revenues of $.6 MM.. Also include an increase in collections of the Local Government Half- Cent Sales Taxes of $.5 MM, $1.2 MM collected from the State at the Clerk of the Court, and $.5 MM in grants for public safety at the Sheriff s Office. An increase in service charges revenue of $2.1 MM, resulted primarily from additional amount of $1 MM collected at the Clerk of the Court for recording fees, and other fees, and $1 MM in service charges collected at the Sheriff s Office. An increase of $3.9 MM in miscellaneous revenue resulted primarily from a reimbursement by the Clerk of the Court of a prior year expenditure of $2.9 MM, $.6 MM from miscellaneous revenues not budgeted at the Sheriff s Office, and some other unbudgeted reimbursements. A decrease of $6.7 MM in general government expenditures resulted primarily from stragegic cost-cutting measures implemented by management, reducing salaries, professional services, communication services, repairs and maintenance, operating supplies and other current charges. A decrease of $1.9 in economic environment expenditures resulted from expenditures budgeted but not expensed as of September 30, This amount includes $1.1 in incentives for the STEM program, and the UCF-St. Cloud Incubator program. A decrease of $1.6 MM in human services expenditures resulted primarily for lower expenditures for HCRA (Health Care Responsibility Act) than budgeted in the amount of $1.1 MM, and other decrease in expenditures for professional services, and aids to private organizations. A decrease in cutlture and recreation expenditures of $ 1.3 MM resulted primarily from budgeted projects that were not completed as of September 30,2014, and a decrease in expenditures in communications services, salaries, repairs and maintenance, machinery and equipment, and other current charges and obligations. The amount includes Shingle Creek project, Poinciana Scrub, Split Oak and Lake Lizzie, Holopaw Preserves, and other projects. An increase in transfers in of $2.7 MM resulting primarily from a transfer of funds from a capital project to a special revenue fund to cover for Osceola Parkway Phase II expenditures. An increase in transfer out of $2.5 MM resulted primarily from the transfer mentioned above for the Osceola Parkway Phase II expenditures

92 Capital Assets The County s investment in capital assets for its governmental and business-type activities as of September 30, 2014, totaled $1,330.7 MM (net of accumulated depreciation) and included land, land right of way, work of arts/collections, buildings, improvements other than buildings, books, vehicles, equipment, infrastructure, intangible software, and construction in progress. Additional information of the County s capital assets can be found in the Notes to the Financial Statements (Note 5) of this report. Long-term Debt Requests for Information This financial report is designed to present users with a general overview of the County s finances and to demonstrate the County s accountability. Questions concerning any of the information provided in this report, or requests for additional financial information, should be directed to the Office of the Comptroller, Osceola County, 1 Courthouse Square, Suite 2100, Kissimmee, Florida This information is also available at our web page At the end of fiscal year 2014, the County had a total of $566.4 MM in outstanding bond debt. The County s debt represents bonds secured solely by specified revenue sources (i.e., revenue bonds, voted debt and special assessment debt). During the current fiscal year, the County s outstanding bonded debt increased by $41.2 MM. This increase was the result of the issuance of the Poinciana Parkway Revenue Bonds, Series 2014, and the scheduled principal payments of outstanding debt during the year. Additional information on the County s long-term debt can be found in the Notes to the Financial Statements (Note 9) of this report. Construction Commitments At September 30, 2014, the County was committed or in the process of committing to various capital outlay expenditures. Among the more significant ones were (in millions): B-18 construction of Commuter Rail $ 23.4 construction at Judge Property 21.6 construction of Florida Advanced Manufacturing Research Facility 9.7 improvements of the 800 Mhz Digital Communication Ph II 7.9 construction of the Training Facility & Shooting Range 7.9 expansion to the Poinciana Boulevard Phase III 7.1 improvements to Boggy Creek Road Phase improvements at Osceola Parkway Phase II 4.8 improvements at Osceola Parkway Phase I 3.9 improvements at Overstreet Fire Station 2.1 Economic Factors and Next Year s Budgets and Rates The average unemployment rate for Osceola County during 2014 was 6.4%. This rate is slightly higher than that of the state averages. The assessed taxable value of real and personal property combined increased 3.7% in fiscal year The population estimate for Osceola County for fiscal year 2014 was 295,553 an increase of 2.5% from fiscal year During the current fiscal year, new residential construction in the County was valued at $627.2 MM and commercial construction at $89.9 MM, an increase of 137.4% and 98.0% respectively. Tourist statistical data shows a 4.6% increase in total visitors compared to fiscal year Fiscal year 2015 adopted budget was $1,015,337,873.00; this represents a 16.5% increase compared to fiscal year Primary changes to the County s expenditures for fiscal year 2014 include the following: Increase in promotional expenditures to market Kissimmee/St Cloud tourist area new capital projects For fiscal year 2014, the ad valorem tax operating millage rate for governmental funds remains the same (6.70) as fiscal year The library and EMS millage rates also remain the same as last fiscal year (.2566 and respectively)

93 B-19 BASIC FINANCIAL STATEMENTS [THIS PAGE INTENTIONALLY LEFT BLANK] 17

94 B-20 Primary Government Governmental Business-type Component Activities Activities Total Unit ASSETS Current Assets Cash and Investments $ 404,802 $ 26,292 $ 431,094 $ 569 Accounts Receivable, Net 3,431 1,268 4,699 - Due from Other Governments 20,955 73,502 94,457 - Due from Other Funds (Internal Balances) (198) Inventories 1,435-1,435 - Prepaid Items 11,535-11,535 - Restricted Current Assets Cash and Investments - 1,985 1,985 - Total Current Assets 441, , , Noncurrent Assets Restricted Assets Cash and Investments - 1,765 1,765 - Capital Assets Land and Improvements 164,332 1, ,317 - Land Right of Way 240,253 43, ,700 - Works of Art and Collections Construction in Progress 243, ,541 - Building and Improvements 393,173 5, ,752 - Machinery and Equipment 124,391 2, ,173 - Infrastructure 439,748 96, ,069 - Intangibles 9,800-9,800 - Less Accumulated Depreciation (389,470) (45,219) (434,689) - Total Capital Assets, Net 1,225, ,895 1,330,665 - Total Noncurrent Assets 1,225, ,660 1,332,430 - Total Assets $ 1,667,730 $ 209,905 $ 1,877,635 $ 569 Continued OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION - CONCLUDED September 30, 2014 (In thousands) Primary Government Governmental Business-type Component Activities Activities Total Unit LIABILITIES Current Liabilities Accounts Payable $ 8,165 $ 235 $ 8,400 $ 1 Accrued Liabilities 6, ,983 - Accrued Interest 10,456-10,456 - Due to Other Governments 1,033-1,033 - Unearned Revenue Deposits Payable 1,724-1,724 - Claims Payable 4,436-4,436 - Compensated Absences Capital Lease Notes Payable 1,093-1,093 - Revenue Bonds Payable 17,140 2,705 19,845 - Payable from Restricted Assets Landfill Closure Liability Revenue Bonds Payable - 1,005 1,005 - Total Current Liabilities 53,407 5,036 58,443 1 Noncurrent Liabilities Payable from Restricted Assets Deposits Payable Compensated Absences 13, ,501 - Landfill Closure Liability - 12,445 12,445 - Claims Payable 2,079-2,079 - Revenue Bonds Payable 399, , ,571 - Notes Payable 3,539 2,725 6,264 - Other Post Employment Benefit Liability 23, ,090 - Capital Lease 6,543-6,543 - Total Noncurrent Liabilities 449, , ,535 - Total Liabilities 502, , ,978 1 DEFERRED INFLOWS OF RESOURCES Deferred Credit-Refunding Bonds - 2,869 2,869 - Total Deferred Inflows - 2,869 2,869 - NET POSITION Net Investment in Capital Assets 821,408 24, ,203 - Restricted for General Government 73,155-73,155 - Public Safety 11,777-11,777 - Physical Environment 2,206-2,206 - Transportation 8,370 1,723 10,093 - Economic Environment 17,790-17,790 - Human Services Culture and Recreation 13,180-13,180 - Court Related 15,973-15,973 - Debt Service 44,953-44,953 - Capital Projects 48,531-48,531 - Unrestricted 106,752 14, , Total Net Position $ 1,164,881 $ 40,907 $ 1,205,788 $ 568 The notes to the financial statements are an integral part of this statement

95 OSCEOLA COUNTY, FLORIDA STATEMENT OF ACTIVITIES For the year ended September 30, 2014 (In thousands) B-21 Program Revenues FUNCTIONS/PROGRAMS Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Primary Government Governmental Activities General Government $ 46,642 $ 13,736 $ 350 $ - Public Safety 146,134 35,718 3,291 1,020 Physical Environment 4,066 1, Transportation 29, ,600 Economic Environment 32, ,193 - Human Services 15, ,065 Culture/Recreation 24,846 5, Court-Related 21,015 8,530 10,064 - Interest 20, ,032 Total Governmental Activities 340,518 65,592 27,390 39,238 Business-type Activities Landfill 12,789 18, Toll Roads 24,319 15, Total Business-type Activities 37,108 33, Total Primary Government $ 377,626 $ 98,886 $ 27,390 $ 39,238 Component Unit $ 12 $ 41 $ - $ - General Revenues Property Taxes Sales Taxes Gas Taxes Public Service Taxes Communication Service Tax Resort Tax State Revenue Sharing - unrestricted Interest Revenue Miscellaneous Transfers Total General Revenues and Transfers Change in Net Position Net Position - Beginning, as previously stated Net Position - Ending Governmental Activities Net (Expense) Revenue and Changes in Net Position Business-type Activities Total Component Unit $ (32,556) $ - $ (32,556) $ - (106,105) - (106,105) - (1,906) - (1,906) - 1,999-1,999 - (19,976) - (19,976) - (10,605) - (10,605) - (18,740) - (18,740) - (2,421) - (2,421) - (17,988) - (17,988) - (208,298) - (208,298) - - 5,363 5, (9,177) (9,177) - - (3,814) (3,814) - (208,298) (3,814) (212,112) , ,320-41,481 41,481-14,002 14,002-12,728 12,728-6,108 6,108-40,583 40,583-6,195 6,195-3,169 3,169-8,056 8,056 - (8,377) 8, ,265 8, ,642-48,967 4,563 53, ,115,914 36,344 1,152, $ 1,164,881 $ 40,907 $ 1,205,788 $ 568 The notes to the financial statements are an integral part of this statement

96 OSCEOLA COUNTY, FLORIDA BALANCE SHEET Governmental Funds September 30, 2014 (In thousands) B Tourist Countywide General Development Fire Fund Council District ASSETS Cash and Investments $ 81,825 $ 74,504 $ 20,593 Accounts Receivable, Net 1, ,257 Due from Other Funds Due from Other Governments 5,705 5, Prepaid Items 288 9, Inventories Total Assets $ 90,216 $ 90,420 $ 22,279 LIABILITIES AND FUND BALANCES Liabilities Accounts Payable $ 3,041 $ 864 $ 428 Accrued Liabilities 3, ,308 Deposits Due to Other Governments Unearned Revenue Due to Other Funds 1, Total Liabilities 9,389 1,383 1,751 Fund Balances Nonspendable 390 9, Restricted 2,358 79,625 - Committed 22,799-20,480 Assigned Unassigned 55, Total Fund Balances 80,827 89,037 20,528 Total Liabilities and Fund Balances $ 90,216 $ 90,420 $ 22, General Nonmajor Total Capital Governmental Governmental Outlay Funds Funds $ 43,508 $ 160,205 $ 380, , , ,421 20, , $ 44,437 $ 170,408 $ 417,760 $ 211 $ 3,315 $ 7, ,208 6, ,633 1, ,033-1,233 1,703-1,044 2, ,478 21, , , ,721 44,021 6,296 93, ,280 44, , ,343 $ 44,437 $ 170,408 $ 417,760 The notes to the financial statements are an integral part of this statement

97 OSCEOLA COUNTY, FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION as of September 30, 2014 (In thousands) Total fund balances of governmental funds $ 396,343 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Capital assets are reported in the Statement of Net Position and at year-end consist of: Capital assets, at cost $ 1,615,240 Less: Accumulated depreciation (389,470) Less: Internal service fund capital assets reported below (388) 1,225,382 THIS PAGE INTENTIONALLY LEFT BLANK B-23 Internal service funds are used by management to charge the costs of risk management services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 19,859 Other assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 1,029 Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position. Long-term liabilities at year-end consist of: Bonds payable (405,985) Add: Deferred charge for premium (to be amortized over life of debt) (11,080) Notes payable (4,632) Accrued interest payable (10,456) Accrued post-employment benefits other than pension (23,896) (exclude $45 related to internal service funds included above) Capital leases (7,482) Compensated absences (excludes $4 and $66 related to internal service funds included above) (14,201) (477,732) Total net position of governmental activities $ 1,164,881 The notes to the financial statements are an integral part of this statement

98 OSCEOLA COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Governmental Funds For the Year Ended September 30, 2014 (In thousands) B Tourist Countywide General Development Fire Fund Council District REVENUES Taxes $ 129,786 $ 40,583 $ 13,538 Permits, Fees and Special Assessments 3,784-22,730 Intergovernmental 36, Charges for Services 11,553 3,258 6,909 Fines and Forfeitures 1, Interest Income Miscellaneous 5,314 1, Total Revenues 189,665 45,320 43,607 EXPENDITURES Current General Government 43,396 2,957 - Public Safety 97,613-42,271 Physical Environment 1, Transportation 7, Economic Environment 2,643 16,095 - Human Services 9, Culture/Recreation 2,567 12,226 - Court Related 17, Debt Service Principal Interest Other Debt Service Costs Capital Projects Total Expenditures 183,004 31,278 42,398 Excess (Deficiency) of Revenues Over (Under) Expenditures 6,661 14,042 1,209 OTHER FINANCING SOURCES (USES) Transfers In 16, ,504 Transfers (Out) (18,428) (7,375) (5,004) Total Other Financing Sources and (Uses) (2,065) (7,181) (2,500) Net Change in Fund Balances 4,596 6,861 (1,291) Fund Balances - Beginning 76,231 82,176 21,819 Fund Balances - Ending $ 80,827 $ 89,037 $ 20, General Nonmajor Total Capital Governmental Governmental Outlay Funds Funds $ - $ 42,219 $ 226,126-8,767 35,281-29,420 66,439-4,775 26, , ,011 3,001 1,016 1,714 9,110 1,303 88, ,631-3,734 50,087-3, ,303-6,070 7,211-16,005 23,852-14,283 33,021-5,941 15,736-6,286 21,079-2,290 19,792-17,979 18,548-21,188 21, ,765 24, , , (32,227) (9,432) ,137 60,449 (2,044) (36,015) (68,866) (1,793) 5,122 (8,417) (910) (27,105) (17,849) 44, , ,192 $ 44,021 $ 161,930 $ 396,343 The notes to the financial statements are an integral part of this statement

99 OSCEOLA COUNTY, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES - Concluded For The Year Ended September 30, 2014 (In thousands) B-25 Net change in fund balances - total governmental funds $ (17,849) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital purchases as expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives and reported as depreciation expense. The amounts of the items that make up these differences in the treatment of capital assets are: Capital outlay $ 46,840 Depreciation (29,440) 17,400 In the statements of activities, only the loss on the sale/disposal of capital assets is reported. The change in net position differs from the change in fund balance by the cost (book value) of the capital assets sold/disposed. (184) Contributions of capital assets increase net position in the statement of activities, but are not reported in the governmental funds because they are not financial resources. 30,600 Under the modified accrual basis of accounting used in governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. This adjustment is as follows: Other Post Employment Benefits Liability (2,605) Change in accrued interest expense 302 Compensated absences (1,593) (3,896) Internal service funds are used by management to charge the costs of risk management services to other funds. The change in net position of the internal service fund is reported with governmental activities (excludes amounts for depreciation, compensated absences, and a transfer of capital assets). 3,392 Change in net position of governmental activities $ 48,967 The notes to the financial statements are an integral part of this statement. The issuance of bonds and similar long-term debt provides current financial resources to governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the statement of net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts of the items that make up these differences in the treatment of long-term debt and related items are: Principal repayments Bonds (includes payment on refunded bonds) $ 16,590 Bond premium amortization 956 Notes 1,047 Capital leases ,504 Continued 28 29

100 OSCEOLA COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL General Fund For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Tourist Development Council For the Year Ended September 30, 2014 (In thousands) B-26 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Taxes $ 134,334 $ 134,334 $ 129,786 $ (4,548) Permits, Fees and Special Assessments 4,708 4,708 3,784 (924) Intergovernmental 34,147 34,196 36,957 2,761 Charges for Services 9,427 9,427 11,553 2,126 Fines and Forfeitures 1,402 1,402 1,349 (53) Interest Income Miscellaneous 1,075 1,379 5,314 3,935 Total Revenues 185, , ,665 3,718 EXPENDITURES Current General Government 50,918 50,107 43,396 6,711 Public Safety 97,079 98,481 97, Physical Environment 1,323 1,331 1, Transportation 2,597 8,538 7, Economic Environment 4,237 4,527 2,643 1,884 Human Services 10,758 11,406 9,795 1,611 Culture/Recreation 3,681 3,832 2,567 1,265 Court Related 17,230 17,163 17,502 (339) Debt Service Principal Interest Total Expenditures 188, , ,004 12,881 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,729) (9,938) 6,661 16,599 OTHER FINANCING SOURCES (USES) Transfers In 12,803 13,624 16,363 2,739 Transfers (Out) (10,702) (15,939) (18,428) (2,489) Total Other Financing Sources and (Uses) 2,101 (2,315) (2,065) 250 Net Change in Fund Balances (628) (12,253) 4,596 16,849 Fund Balances - Beginning 76,111 76,111 76, Budgeted Amounts Actual Original Final Amounts Final Budget REVENUES Taxes $ 38,200 $ 38,200 $ 40,583 $ 2,383 Charges for Services 3,435 3,435 3,258 (177) Interest Income Miscellaneous , Total Revenues 42,106 42,106 45,320 3,214 EXPENDITURES Current General Government 3,703 3,031 2, Economic Environment 16,238 16,916 16, Culture/Recreation 25,306 28,153 12,226 15,927 Total Expenditures 45,247 48,100 31,278 16,822 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,141) (5,994) 14,042 20,036 OTHER FINANCING SOURCES (USES) Issuance of Debt Transfers In Transfers (Out) (7,343) (7,343) (7,375) (32) Total Other Financing Sources and (Uses) (7,203) (7,203) (7,181) 22 Net Change in Fund Balances (10,344) (13,197) 6,861 20,058 Fund Balances - Beginning 82,176 82,176 82,176 - Fund Balances - Ending $ 71,832 $ 68,979 $ 89,037 $ 20,058 The notes to the financial statements are an integral part of this statement. Variance with Fund Balances - Ending $ 75,483 $ 63,858 $ 80,827 $ 16,969 The notes to the financial statements are an integral part of this statement

101 OSCEOLA COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Countywide Fire District For the Year Ended September 30, 2014 (In thousands) B-27 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Taxes $ 14,140 $ 14,140 $ 13,538 $ (602) Permits, Fees and Special Assessments 22,024 22,024 22, Intergovernmental Charges for Services 5,774 5,774 6,909 1,135 Interest Income Miscellaneous Total Revenues 42,185 42,185 43,607 1,422 EXPENDITURES Current Public Safety 41,725 44,316 42,271 2,045 Debt Service Principal Interest Total Expenditures 41,852 44,443 42,398 2,045 Excess (Deficiency) of Revenues Over (Under) Expenditures 333 (2,258) 1,209 3,467 THIS PAGE INTENTIONALLY LEFT BLANK OTHER FINANCING SOURCES (USES) Transfers In 2,095 2,186 2, Transfers (Out) (4,988) (5,004) (5,004) - Total Other Financing Sources and (Uses) (2,893) (2,818) (2,500) 318 Net Change in Fund Balances (2,560) (5,076) (1,291) 3,785 Fund Balances - Beginning 21,819 21,819 21,819 - Fund Balances - Ending $ 19,259 $ 16,743 $ 20,528 $ 3,785 The notes to the financial statements are an integral part of this statement

102 OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION Proprietary Funds September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION - CONCLUDED Proprietary Funds September 30, 2014 (In thousands) B-28 Business-type Activities - Enterprise Funds Governmental Activities - Environmental Internal Services Toll Service Landfill Roads Totals Funds ASSETS Current Assets Cash and Cash Equivalents $ 25,459 $ 833 $ 26,292 $ 24,167 Accounts Receivable, Net 1, , Due from Other Governments - 73,502 73,502 - Due from Other Funds Inventories Prepaid Items ,810 Restricted Current Assets Cash and Cash Equivalents Total Current Assets 980 1,005 1,985-27,893 75, ,245 26,457 Noncurrent Assets Restricted Assets Cash and Cash Equivalents 41 1,724 1,765 - Capital Assets Land and Improvements 1,985-1,985 - Land Right of Way - 43,447 43,447 - Buildings and Improvements 2,506 3,073 5, Machinery and Equipment 1, ,782 1,291 Infrastructure 3,796 92,525 96,321 - Less Accumulated Depreciation (7,881) (37,338) (45,219) (1,137) Total Capital Assets, Net 2, , , Total Noncurrent Assets 2, , , Total Assets $ 30,211 $ 179,694 $ 209,905 $ 26,845 Continued Business-type Activities - Enterprise Funds Governmental Activities - Environmental Internal Services Toll Service Landfill Roads Totals Funds LIABILITIES Current Liabilities Accounts Payable $ 129 $ 106 $ 235 $ 306 Accrued Liabilities Unearned Revenue Claims Payable ,436 Compensated Absences Revenue Bonds Payable - 2,705 2,705 - Payable from Restricted Assets Landfill Closure Liability Revenue Bonds Payable - 1,005 1,005 - Total Current Liabilities 1,151 3,885 5,036 4,796 Noncurrent Liabilities Payable from Restricted Assets Deposits Payable Compensated Absences Landfill Closure Liability 12,445-12,445 - Claims Payable ,079 Notes Payable - 2,272 2,272 - Revenue Bonds Payable - 146, ,099 - Other Post Employment Benefit Liability Total Noncurrent Liabilities 12, , ,093 2,190 Total Liabilities 13, , ,129 6,986 DEFERRED INFLOWS OF RESOURCES Deferred Credit-Refunding Bonds - 2,869 2,869 - Total Deferred Inflows - 2,869 2,869 - NET POSITION Net Investment in Capital Assets 2,277 22,518 24, Restricted Transportation - 1,723 1,723 - Unrestricted 14, ,389 19,471 Total Net Position $ 16,341 $ 24,566 $ 40,907 $ 19,859 The notes to the financial statements are an integral part of this statement

103 OSCEOLA COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION Proprietary Funds For The Year Ended September 30, 2014 (In thousands) Business-type Activities - Enterprise Funds Governmental Activities- Environmental Internal Services Toll Service Landfill Roads Totals Funds Operating Revenues Charges for Services $ 6,043 $ 13,949 $ 19,992 $ 35,861 Special Assessments 11,891-11,891 - Miscellaneous 2 1,186 1, Total Operating Revenues 17,936 15,135 33,071 36,079 B-29 Operating Expenses Personal Services 1, ,126 1,105 Contracted Services 11,489 3,808 15,297 1,451 Repairs and Maintenance 73 4,668 4, Supplies ,456 Depreciation 77 1,955 2, Insurance ,929 Utilities Landfill Closure Claims Expense ,907 Miscellaneous (110) 8,079 7, Total Operating Expenses 12,789 18,587 31,376 32,900 THIS PAGE INTENTIONALLY LEFT BLANK Operating Income (Loss) 5,147 (3,452) 1,695 3,179 Nonoperating Revenues (Expenses) Interest (Expense) - (4,323) (4,323) - Debt Issuance Costs - (1,409) (1,409) - Interest Revenue Other Revenue (Expense) (7) Total Nonoperating Revenues (Expenses) 216 (5,725) (5,509) 131 Income (Loss) Before Tranfers 5,363 (9,177) (3,814) 3,310 Transfers In 198 8,688 8, Transfers (Out) (450) (59) (509) (239) Change in Net Position 5,111 (548) 4,563 3,350 Total Net Position - Beginning 11,230 25,114 36,344 16,509 Total Net Position - Ending $ 16,341 $ 24,566 $ 40,907 $ 19,859 The notes to the financial statements are an integral part of this statement

104 B Governmental Environmental Activities - Services Toll Internal Service Landfill Roads Totals Funds Cash Flows from Operating Activities Receipts from Customers and Users $ 18,014 $ 13,250 $ 31,264 $ 36,081 Payments to Suppliers (12,954) (14,774) (27,728) (30,651) Payments to Employees (1,127) (9) (1,136) (1,267) Net Cash Provided (Used in) Operating Activities 3,933 (1,533) 2,400 4,163 Cash Flows from Noncapital Financing Activities Transfers In 197 8,688 8, Transfers (Out) (450) (59) (509) (239) Net Cash Provided by (Used in) Noncapital Financing Activities (253) 8,629 8, Cash Flows from Capital and Related Financing Activities Bond Issue Costs Revenue Bond Payments Debt Proceeds Purchase of Capital Assets Proceeds from Disposition of Capital Assets Interest Payments Net Cash Provided (Used) in Capital and Related Financing Activities - (1,416) (1,416) - - (87,745) (87,745) ,775 84,775 - (30) - (30) (4,316) (4,316) - (6) (8,702) (8,708) 4 Cash Flows from Investing Activities Interest Revenue Net Cash Provided by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents 3,872 (8,695) (4,823) 4,345 Cash and Cash Equivalents at Beginning of Year OSCEOLA COUNTY, FLORIDA STATEMENT OF CASH FLOWS Proprietary Funds For The Year Ended September 30, 2014 (In thousands) Business-type Activities - Enterprise Funds 22,608 12,257 34,865 19,822 OSCEOLA COUNTY, FLORIDA STATEMENT OF CASH FLOWS - CONCLUDED Proprietary Funds For The Year Ended September 30, 2014 (In thousands) Business-type Activities - Enterprise Funds Governmental Environmental Activities - Services Toll Internal Service Landfill Roads Totals Funds Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income $ 5,147 $ (3,452) $ 1,695 $ 3,179 Depreciation Expense 77 1,955 2, Change in Assets and Liabilities (Increase) Decrease in Accounts Receivable (Increase) Decrease in Due from Other Governments (Increase) Decrease in Due from Other Funds (2) - (2) 3 (Increase) Decrease in Inventories (45) (Increase) Decrease in Prepaid Items Increase (Decrease) in Accounts Payable (822) (33) (855) (107) Increase (Decrease) in Accrued Liabilities Increase (Decrease) in Due to Other Governments (10) Increase (Decrease) in Due to Other Funds (181) Increase (Decrease) in Customer Deposits 11 (4) 7 - Increase (Decrease) in Claims Payable Increase (Decrease) in Unearned Revenue Increase (Decrease) in Other Post Employment Benefits Increase (Decrease) in Compensated Absences (14) 1 (13) 8 Increase (Decrease) in Landfill Closure Costs (555) - (555) - Total Adjustments (1,214) 1, Net Cash Provided by (Used in) Operating Activities $ 3,933 $ (1,533) $ 2,400 $ 4,163 Cash and Cash Equivalents at End of Year $ 26,480 $ 3,562 $ 30,042 $ 24,167 Cash and Cash Equivalents Classified As Unrestricted Assets $ 25,459 $ 833 $ 26,292 $ 24,167 Restricted Assets 1,021 2,729 3,750 - Total Cash and Cash Equivalents $ 26,480 $ 3,562 $ 30,042 $ 24,167 The notes to the financial statements are an integral part of this statement. Continued 38 39

105 OSCEOLA COUNTY, FLORIDA STATEMENT OF FIDUCIARY NET POSITION Fiduciary Funds - Agency Funds September 30, 2014 (In thousands) B-31 ASSETS Cash and Investments $ 23,878 Accounts Receivable, Net 2,752 Due from Other Governments 130 Deposits 1 Total Assets $ 26,761 LIABILITIES Accounts Payable $ 885 Other Current Liabilities 273 Due to Other Governments 11,541 Deposits 11,996 Installment Tax Deposits 2,043 Escrow Payable 23 Total Liabilities $ 26,761 NOTES TO FINANCIAL STATEMENTS The notes to the financial statements are an integral part of this statement

106 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, Summary of Significant Accounting Policies 1. Summary of Significant Accounting Policies (Continued) The financial statements of Osceola County, Florida (the County) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The County s more significant accounting policies are described below. Osceola County Water Districts No. 1 through No. 5 - These Water Districts were established to serve the entire County, which is part of the South Florida Water Management District. The governing board of these Water Districts is composed of the Board. The Water Districts had no assets, liabilities or fund equity, nor any revenues or expenditures as of and for the year ended September 30, The Districts were created as follows: B-32 Reporting Entity Osceola County, Florida, was established by Article VIII, Section 1, of the Florida State Constitution. As of October 1, 1992, the County operates under a Home Rule Charter enacted by referendum in March The accompanying financial statements of the County (the primary government) include the operations of the Board of County Commissioners (the Board), the Osceola County Library District (in special revenue funds), the Osceola County Water Districts No. 1 through No. 5 (no financial transactions), the East U.S. 192 Community Redevelopment Agency (no financial transactions), the West 192 Development Authority (no financial transactions), the Supervisor of Elections, Clerk of the Circuit Court, Sheriff, Tax Collector and Property Appraiser of the County. These entities provide services, including general government, public safety, physical environment, transportation, economic environment, human services, culture and recreation and court related. The Board funds a portion or, in certain instances, all of the operating budgets of the County's constitutional officers. Florida Statutes require the applicable budget excess of the constitutional officers to be remitted back to the Board at the close of the fiscal year. In accordance with generally accepted accounting principles, the accompanying financial statements present the County (the primary government) and its component units. A component unit is a legally separate organization for which the County is financially accountable. The County is financially accountable if it appoints a voting majority of the organization's governing Board and, (1) it is able to impose its will on the organization, or (2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the County. Additionally, the County is required to consider other organizations for which the nature and significance of their relationship with the County are such that exclusion would cause the County's basic financial statements to be misleading or incomplete. Furthermore, GAAP requires that the accompanying financial statements allow the user to clearly distinguish between the primary government and its component units. Because of the closeness of their relationship with the primary government (County), some component units are blended as though they are part of the primary government. However, the GASB suggests that most component units should be discretely presented. The application of these criteria results in the inclusion of the following component units in the County's financial statements. Because of the closeness of their relationship with the County, these component units are blended as special revenue funds in the County's combined financial statements. Blended Component Units The financial statements also include various special districts, which are reported as blended component units. Blended component units are legally separated entities that are in substance parts of the County s operations, as they either have government bodies that are substantially the same as the Board or they provide their services nearly or exclusively to the County government. The financial transactions of these component units are merged with similar transactions of the County as part of the primary government. District No. 1 created by County Ordinance 87-6 on March 23, 1987 District No. 2 created by County Ordinance on July 20, 1987 District No. 3 created by County Ordinance on July 20, 1987 District No. 4 created by County Ordinance on July 20, 1987 District No. 5 created by County Ordinance on March 12, 2001 Osceola County Community Redevelopment Agency - East U.S The East U.S. 192 Community Redevelopment Agency was created by resolution of the County on April 9, 2012, pursuant to Chapter 163, Part III, Florida Statutes for the purpose of renewing economic interest and improve the commercial diversity and viability of a redevelopment area along East U.S The governing body of the Agency is composed of the Board. The East U.S. 192 Community Redevelopment Agency had no assets or liabilities, or fund equity, nor any revenues or expenditures as of and for the year ended September 30, West192 Development Authority - The West192 Development Authority was created by resolution of the County on June 18, 2012, pursuant to Chapter 163, Part III, Florida Statutes for the purpose of renewing economic interest and improve the commercial diversity and viability of a redevelopment area along West U.S The governing body of the Agency is composed of the Board. The West U.S. 192 Community Redevelopment Agency had no assets or liabilities, or fund equity, nor any revenues or expenditures as of and for the year ended September 30, Discretely Presented Component Units Osceola County Housing Finance Authority - The Housing Finance Authority was created by Ordinance 81-4 adopted September 28, 1981, to alleviate a shortage of housing and capital for investment in housing in the County. Its five-member board was initially appointed by the Board of County Commissioners. There is no budget approval required by the Board of County Commissioners, although there is an approval requirement for any bonded debt issuance, and the Board of County Commissioners has no obligation to pay its outstanding debt. The Housing Finance Authority had no significant transactions with the primary government or any of its other component units. It is classified as a governmental fund type. Osceola County Health Facilities Authority - The Health Facilities Authority was created by County Resolution on August 13, 1979, and serves to assist health facilities in the acquisition, construction, financing and refinancing of projects in any incorporated or unincorporated area within the geographical limits of the County. Its five-member board is appointed by the Board. The Health Facilities Authority is not legally required to adopt a budget however; the Board must authorize the issuance of bonded debt. Neither the Health Facilities Authority nor the Board has any legal obligation for repayment of the revenue bonds issued through the Health Facilities Authority. The Health Facilities Authority is classified as a governmental fund type, however, as an issuer of "conduit" debt obligations, it has no assets, liabilities, revenues, expenditures or fund balance as of and for the year ended September 30, Osceola County Library District - The Library District was created by County Ordinance 79-2, adopted March 26, 1979, and serves to provide comprehensive library services and serves all County residents. The governing board of the Library District is composed of the Board, with a library advisory board appointed by the Board. This governing board levies the property taxes necessary to operate the Library District, adopts the annual budget, and approves debt issuances. This Library District is presented as a special revenue fund, and its assets and debt are included in the statement of net position

107 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Summary of Significant Accounting Policies (Continued) The application of the above criteria results in the exclusion of the following boards, agencies, commissions and authorities as component units of the County: Anthem Park Community Development District Osceola Soil and Water Conservation District Bellalago Educational Facilities Benefit District Osceola Marketplace Community Development Brighton Lakes Community Development District District Celebration Community Development District Overoaks Community Development District Central Florida Regional Transportation Authority Portofino Vista Community Development District Champions Gate Community Development District Reedy Creek Improvement District City of Kissimmee Remington Community Development District City of Kissimmee Community Redevelopment Agency Reunion East Community Development District City of St. Cloud Reunion West Community Development District City of St. Cloud Community Redevelopment School District of Osceola County Agency Shingle Creek Community Development District Concorde Estates Community Development District South Florida Water Management District Crescent Lakes Common Facilities District St. Johns River Water Management District Cypress Woods Common Facilities District Stevens Plantation Community Development Enterprise Community Development District District Flora Ridge Education Facilities Benefit District Stevens Plantation Improvement Project Gramercy Farms Community Development District Dependent Special District Greater Osceola Partnership for Economic Prosperity Agency Stoneybrook South Community Development Harmony Central Community Development District District Harmony Community Development District Tapestry Community Development District Harmony West Community Development District Tohopekaliga Water Authority District Indian Creek Common Facilities District VillaSol Community Development District Indian Pointe Common Facilities District Water Cooperative of Central Florida Indian Ridge Villas Common Facilities District Westside Community Development District Indian Ridge Villas Common Facilities District Windsor at Westside Community Development District Kissimmee Utility Authority Xentury City Community Development District Osceola County Expressway Authority Government-Wide and Fund Financial Statements The basic financial statements of the County are composed of the following: Government-Wide Financial Statements Fund Financial Statements Notes to Financial Statements Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities) report information on the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business-type activities of the primary government and its component units. The effect of inter-fund activity has been eliminated from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for services. The Statement of Activities shows the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly related to a specific function or segment. Program revenues include: a) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; and, b) grants and contributions that are restricted to meeting specific requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. 1. Summary of Significant Accounting Policies (Continued) Separate financial statements are provided for governmental funds, proprietary funds, discretely presented component units, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and proprietary funds are reported as separate columns in the fund financial statements. Fund Financial Statements The accounts of the County are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenue and expenditures, or expenses, as appropriate. Government resources are allocated to, and accounted for, in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the County's governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements show information about major funds individually and non-major funds in the aggregate for governmental funds. The fiduciary statements include financial information for the agency funds. The agency funds of the County primarily represent assets held by the County in a custodial capacity for other individuals or governments. GASB Statement No. 34 sets forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of the fund category, and the governmental and enterprise categories combined) for the determination of major funds. The remaining governmental non-major funds are combined in a column in the fund financial statements and detailed in the combining section. Governmental Major Funds General Fund The general fund is the operating fund of the County, and includes the operating funds of the constitutional officers of the County. It is used to account for all financial resources except those that are required to be accounted for in another fund. Tourist Development Council The Tourist Development Council fund is used to account for the promotion of the County. It also provides for the operation of the stadium and major parks. The primary funding source comes from the Six Percent Tourist Development Tax levied on hotel rooms and temporary lodgings. Countywide Fire District This fund was created in fiscal year 1990 as a means of providing fire protection service to the unincorporated areas of Osceola County. Primary funding is provided by a special assessment and ad valorem taxes paid by property owners in the unincorporated area. General Capital Outlay This fund was established to allocate funding for general capital outlay projects and has been used to distinguish between capital projects funded from the infrastructure sales surtaxes and other revenue sources. Proprietary Major Funds Environmental Services (Landfill) This fund was established to account for the County's landfills, a recycling division and the hazardous waste division. In addition, estimated costs of closure and long-term care of the landfill operations are accounted for in this fund. Toll Road Funds These funds were established to account for the business-type activities of the Osceola and Poinciana Parkway toll roads. Funding is provided by toll revenues, which are also used to pay the bonded debt on these roadways

108 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Summary of Significant Accounting Policies (Continued) Additionally, the County reports internal service funds to account for payment of insurance claims and premiums, and fleet management; fiduciary funds to account for inmates bond and personal funds as well as various other agency funds of the constitutional officers; non-major special revenue funds, debt service funds and capital projects funds. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-Wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Agency funds, however, report only assets and liabilities, therefore, they do not have a measurement focus; they do, however, use the accrual basis of accounting to recognize receivables and payables. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets and liabilities resulting from non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33, Accounting and Financial Reporting for Non-exchange Transactions. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program. Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of related liability, rather than as expenditures. Governmental Fund Financial Statements Governmental fund financial statements are reported using current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers most revenues to be available if they are collected within sixty days of the end of the current fiscal period. Grant revenues are considered available if they are collected within twelve months of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Franchise fees, licenses, sales taxes, gas taxes, operating and capital grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable only when received by the County. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. Governmental funds report fund balances either as non-spendable or spendable. Spendable balances are further classified as restricted, committed, assigned or unassigned, based on the extent to which there are external or internal constraints on the spending of these fund balances. Non-spendable Fund Balance: Amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. Not in spendable form includes items that are not expected to be converted to cash (such as inventories and prepaid amounts) and generally items such as long-term amounts of loans and notes receivable, as well as property acquired for resale. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. 1. Summary of Significant Accounting Policies (Continued) Spendable Fund Balance: Restricted Fund Balance Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance This classification includes amounts that can be spent only for specific purposes pursuant to constraints imposed by formal action (Resolution) of the highest level of County decision making authority, Osceola County s Board of County Commissioners. Such formal action (Resolution) may only be rescinded or lifted by Osceola County s Board of County Commissioners taking the same formal action (Resolution) that imposed the original constraint. Resources accumulated pursuant to stabilization arrangements are reported in this category only if they are specific and non-recurrent. Assigned Fund Balance The classification includes amounts that are intended by the Board to be used for specific purposes, but are neither restricted nor committed. The Board has authorized the County Manager and/or his designee (such as the OMB Director and/or the Comptroller) as the official authorized to assign fund balance to a specific purpose as approved by the fund balance policy. Unassigned Fund Balance Unassigned fund balance is the residual classification for the general fund. This classification represents fund balance that is spendable and that has not been restricted, committed, or assigned to specific purposes within the general fund. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. Governmental funds operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Because of the spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. The proceeds of long-term debt are recorded as another financing source rather than as a fund liability. However, debt service expenditures, as well as expenditures related to compensated absences claims and judgments, are recorded only when payment is due. The County spends restricted amounts first, when both restricted and unrestricted fund balance is available, unless prohibited by legal documents, grant agreements or contracts. Additionally, the County uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. Proprietary Fund Financial Statements The County's enterprise funds and internal service funds are proprietary funds. In the accompanying financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when the related goods or services are delivered. Proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities

109 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Summary of Significant Accounting Policies (Continued) Proprietary fund operating expenses include those expenses associated with the principal ongoing operations of the fund that are normally covered by operating revenues. Non-operating expenses include interest expense. Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expenses. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities, rather than as an expense. The County spends restricted amounts first, when both restricted and unrestricted net position are available, unless prohibited by legal documents, grant agreements or contracts. Cash and Cash Equivalents Cash and investments are defined as short-term highly liquid investments that are both readily convertible to known amounts of cash and have an original maturity of three months or less. This includes cash in banks, repurchase agreements with financial institutions, petty cash, cash with claims administrators and balances in Florida PRIME, formerly the State Board of Administration Investment Pool, the Florida Local Government Investment Trust, and the Florida Fixed Income Trust. All funds participate in the pooled cash investment program. Investment income is allocated to individual funds based upon their average daily balance in the cash pool. Each fund s individual equity in the County s investment pool is considered to be a cash equivalent, since the funds can deposit or effectively withdraw cash at any time without prior notice or penalty. This methodology is also used in the statement of cash flows for the Proprietary funds. Investments Investments are stated at fair value on the balance sheet with unrealized gains and losses charged or credited to investment income. In accordance with authorized investment laws, the County invests in various U.S. Treasury and Agency securities. Property Taxes - Liens and Levy Dates All real and tangible personal property taxes are due and payable on November 1 of each year or as soon thereafter, as the assessment rolls are certified by the County Property Appraiser. The Tax Collector mails, to each property owner on the assessment roll, a notice of taxes levied by the various governmental entities in the County. Taxes may be paid upon receipt of such notice with discounts at the rate of 4% if paid in the month of November, 3% if paid in the month of December, 2% if paid in the month of January, and 1% if paid in the month of February. Taxes paid during the month of March are without discount. All unpaid taxes on real and tangible personal property become delinquent on April 1 of the year after which taxes were assessed. Prior to May 1 of each year, a list of delinquent personal property taxpayers is advertised. Warrants are issued directing seizure and sale of the personal property of the taxpayer if the delinquent taxes are not paid before May 1. By May 31, of each year following the year in which taxes were assessed, tax certificates are sold on all real estate parcels with outstanding taxes. These parcels are advertised once a week for four weeks prior to the tax certificate sale. The key dates in the property tax cycle are as follows: Assessment date January 1 Assessment roll validated July 1 Millage resolution approved September 30 Beginning of fiscal year for which taxes have been levied October 1 Tax bills rendered and due November 1 Property tax payments: Maximum discount November 30 Delinquent April 1 Tax certificates sold (lien date) May Summary of Significant Accounting Policies (Continued) Inventories and Prepaid Items Inventories are stated at cost (first-in, first-out method). Inventories in the General, Special Revenue, and Internal Service funds consist of expendable supplies held for consumption. Inventories are recorded as expenditures at the time items are consumed (consumption method). Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Inventories and prepaid items reported in governmental fund statements are equally offset by non-spendable fund balance reserve which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. Restricted Assets Certain funds of the County are classified as restricted assets on the statement of net position because the restriction is either imposed by law through constitutional provisions or enabling legislation, or imposed externally by creditors, grantors, contributions, or laws or regulations of other governments; therefore, their use is limited by applicable laws and regulations. Certain solid waste system enterprise fund assets are required to be segregated from other current assets. These assets are legally restricted for specific purposes, such as landfill closure and post-closure care. Capital Assets Capital assets, which include property, plant, and equipment infrastructure (e.g., roads, bridges, sidewalks, traffic signals, storm water drainage and similar items), and intangible assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the County as assets with an initial, individual cost of $1,000 or more and an estimated useful life in excess of one year. Capital assets are valued at historical cost. Roads, bridges, traffic signals and storm water basins constructed prior to September 30, 1997, are reported at estimated historical cost. Donated capital assets are recorded at estimated fair market value at the time of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are completed. The capital assets used in the operations of the Board of County Commissioners, Property Appraiser, Tax Collector, Clerk of the Circuit and County Courts and Supervisor of Elections are accounted for by the Board of County Commissioners, as the Board holds legal title and is accountable for them under Florida law. The Sheriff, under Florida law, is accountable for and thus maintains capital asset records pertaining to equipment used in their operations. The Sheriff s assets have been combined with the Board s governmental activities capital assets in the statement of net position. Property, plant and equipment of the primary government, as well as the component units, are depreciated or amortized in the case of intangible assets, using the straight-line method over the following estimated useful lives: Assets Years Building and Improvements Books, Machinery and Equipment 3-10 Infrastructure 50 Intangibles 3-10 Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period for Proprietary activities only. GASB Statement No. 37 removes the requirement for governmental activities. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the County did not have any capitalized interest

110 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Summary of Significant Accounting Policies (Continued) Arbitrage Rebate The U.S. Treasury has issued regulations on calculating the rebate due the federal government on arbitrage profits, calculating arbitrage penalties and determining compliance with the arbitrage rebate provisions of the Tax Reform Act of Arbitrage profits arise when the County temporarily invests the proceeds of tax exempt debt in securities with higher yields. As of September 30, 2014, the County did not have an arbitrage liability. Revenues Pledged to Secure Revenue Bonds All Revenue bonds are secured by a pledge of the revenues for that type of revenue bond as listed by the individual bond resolutions. The notes to the statements (Note 9) describe each of these pledges. Budgets and Budgetary Accounting The Board and other Constitutional Officers, governed by Florida Statutes, follow these procedures in establishing the budgetary data reflected in the accompanying financial statements: The Constitutional Officers submit, at various times, to the Board and to certain divisions within the Department of Revenue, State of Florida, a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means for financing them. The Department of Revenue, State of Florida, has the final authority on the operating budgets for the Tax Collector and Property Appraiser. The tentative budget is reviewed and/or modified by the Board after which public hearings are conducted pursuant to Section of the Florida Statutes. Prior to October 1, the budget is legally enacted by approval of the Board. Revision to the total budget requires Board approval. Expenditures may not legally exceed appropriations at the fund level. Budgets are adopted on a basis consistent with GAAP. All governmental funds have legally adopted annual budgets. All encumbered and unencumbered appropriations lapse at the close of the fiscal year. The combining budgetary comparison schedules for non-major special revenue, non-major debt service and nonmajor capital projects funds present comparisons of the legally adopted budget and actual data. Budgetary information is found in the Basic Financial Statements for the major funds of the County. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the general fund, special revenue funds and capital projects funds. While appropriations lapse at year-end, the County intends to honor purchase orders and contracts in process. Outstanding encumbrances at year end for major funds were $ 6,415,295, which include $ 1,544,935 for General Fund, $ 1,832,280 for Tourist Development Council, $ 417,956 for Countywide Fire District, and $ 2,620,124 for General Capital Outlay. Outstanding encumbrances in the aggregate for nonmajor funds were $ 16,925,973. Total encumbrances outstanding at year end were $ 23,341,268. Encumbrances outstanding at year end are reappropriated in the ensuing year's budget. Compensated Absences In accordance with GASB Statement 16, Accounting for Compensated Absences, the County accrues a liability for compensated absences, as well as certain other salary-related costs associated with the payment of compensated absences. The entire compensated absences liability, both short-term and long-term portions, is recorded in the government-wide financial statements and the separate proprietary fund financial statements. Compensated absences liabilities are liquidated by the governmental or proprietary fund paying the employee s salary and benefits. During fiscal year 2014, governmental funds, basically the General Fund and Countywide Fire District account for 98% of the compensated absences liability liquidated. Proprietary fund, mainly Environmental Services (Landfill), accounts for 2% of the compensated liability liquidated during this fiscal year. 1. Summary of Significant Accounting Policies (Concluded) Landfill Closure and Post-closure Care Costs Under the terms of the Florida Department of Environmental Protection regulations, the County is required to provide for long-term care for landfill operations for up to 30 years after final closure. The estimated costs of closure and post-closure care are recognized in the Environmental Services (Landfill) fund over the estimated useful life of the landfills based on the percentage of capacity used. An audited report is filed each year with the Florida Department of Environmental Protection. The liability on the face of the statement is equal to the total estimated cost of closure/post-closure care. The estimates are reviewed and adjusted each year for changes due to inflation, technology or applicable laws or regulations. Post-Employment Benefits Other than Pension (OPEB) In fiscal year 2008, the County implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions. This standard is required of all governmental employers who provide Other Post-Employment Benefits (OPEB) for which the employer pays all or a part of the OPEB costs. Post-Employment liabilities are liquidated by the governmental or proprietary fund paying the employee s salary and benefits. During fiscal year 2014, governmental funds, basically the General Fund and Countywide Fire District account for 98% of the Post -Employment liability liquidated. Proprietary fund, mainly Environmental Services (Landfill), accounts for 2% of the Post-Employment liability liquidated during this fiscal year. Additional information on the County s OPEB liability can be found in Note 16. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates

111 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Cash and Investments Deposits As of September 30, 2014, the carrying value of the Osceola County Board of County Commissioners (Board) and Constitutional Officer s deposits in financial institutions totaled approximately $152,844,888. In addition, cash on hand totaled $49,149. The total deposits include $23,877,283 that is recorded in the agency funds of the County. These amounts are not reflected in the basic financial statements. Custodial Credit Risk for Deposits Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the county will not be able to recover deposits or collateral securities that are in the possession of an outside party. The county s deposits are held by qualified public depositories (QPD), as defined in Section (26), Florida Statutes. The State Chief Financial Officer determines the collateral requirements and collateral pledging level for each QPD following guidelines outlined in Section , F.S., and Florida Department of Financial Services Rules, Chapter 69C-2, Florida Administrative Code. Therefore deposits are considered fully insured. Investments The value of the Board and Constitutional Officer s investments with their respective Standard & Poor s credit ratings was as follows (in thousands): Investment Type Fair Value Rating Florida PRIME $ 123,937 AAAm Florida Local Government Investment Trust (FLGIT) 32,410 AAAf Money Market Mutual Fund 28,492 AAAm Florida Fixed Income Trust (FL-FIT) 10,072 Unrated Federal Instrumentalities 110,481 AA+ Total Investments $ 305,392 The Florida State Board of Administration (SBA) administers the Local Government Surplus Funds Trust Fund (Florida PRIME) and the Fund B Surplus Funds Trust Fund (Fund B). Florida PRIME is an external investment pool, not registered with the SEC; however, it is structured as an SEC regulated Rule 2a-7 like money-market fund. Florida PRIME is governed by Chapters 215 and 218, Florida Statutes, and Chapter 19-7 of the Florida Administrative Code, which identifies the rules of the SBA. These rules provide guidance and establish the general operating procedures for the administration of the Florida PRIME. Additionally, the State of Florida, Office of the Auditor General performs the operational audit of the activities and investments of the SBA. The fair value of the county s position in the pool approximates the value of the pool shares. The Florida Local Government Investment Trust (FLGIT) is a public entity created via a trust indenture under the laws of the State of Florida. It was developed through the joint efforts of the Florida Association of Court Clerks and Comptrollers and the Florida Association of Counties. The FLGIT is an external investment pool, not subject to SEC or other regulatory oversight. It is accounted for as a fluctuating net asset value investment pool. The trust is governed by a Board of Trustees and has appointed Payden & Rygel as the investment advisor. The trust invests in U.S. government securities, asset-backed securities, mortgage backed securities and corporate bonds. The fair value of the county s position in the pool approximates the value of the pool shares. The Florida Fixed Income Trust (FL-FIT), also, is a public entity created via a trust indenture under the laws of the State of Florida in April FL-FIT is an external investment pool, not subject to SEC or other regulatory oversight. It is accounted for as a fluctuating net asset value investment pool. The trust is governed by a Board of Trustees and has appointed Wertz York Capital Management Group, LLC (Wertz York) as the investment manager. Wertz York Capital is a Tampa Bay based SEC Registered Investment Advisor. As of September 30, 2014, the county has invested in the FL-FIT 180+ Portfolio. This portfolio consisted of institutional money market 2. Cash and Investments (Continued) funds (including Treasury, Government and Prime), short-term governmental bond funds and FDIC insured bank deposits. The fair value of the county s position in the pool approximates the value of the pool shares. Fund B was composed of distressed securities resulting from the credit crisis that began in late The sale of all remaining Fund B collateral assets was completed on September 26, Once all expenses related to the termination of Fund B have been estimated and accrued, and in compliance with statutory requirements, the Fund will be closed down. The following is a reconciliation of reported cash and investment balances in the financial statements (in thousands): Statement of Net Position: Cash and Investments $ 431,094 Restricted Cash and Investments 3,750 Statement of Fiduciary Net Position: Cash and Investments 23,878 Less: Accrued Interest (306) Total Cash and Investments* $ 458,416 *Fiduciary funds are not included in the Statement of Net Position. Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the county manages interest rate risk by limiting individual investments maturities to no longer than five years. In addition, the average aggregate maturity of the investment portfolio is limited to a maximum of two years. As of September 30, 2014, the investments of the Board of County Commissioners had the following maturities (in thousands): More Fair Market Less Than 1-5 than 10 Value 1 Year Years Years Florida PRIME $ 123,937 $ 123,937 $ - $ - Florida Local Government Investment Trust (FLGIT) Money Market Mutual Fund Florida Fixed Income Trust (FL-FIT) Federal Instrumentalities 32,410-32,409-28,492 28, ,072 10, , , Total Investments $ 305,392 $ 162,501 $ 142,771 $ 119 The weighted average of days to maturity (WAM) of the Florida PRIME, the Money market mutual fund and the FL-FIT at September 30, 2014 is 40 days, 47 days, and 257 days, respectively. The weighted average of years to maturity of the FLGIT is 1.82 years. Prior to implementing its current investment policy, the county invested in several instruments with maturities longer than ten years. These instruments are backed by adjustable rate mortgages, which are being paid down gradually, and the county has elected to hold them until maturity or full payment, whichever comes first. The remaining fair market value balance invested in these securities is $119,

112 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Cash and Investments (Concluded) Credit Risk for Investments Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Section , Florida Statutes, limits the types of investments that a government can invest in unless specifically authorized in an investment policy. The Board s Investment Policy allows for investments in any stable or constant net asset value structured pool; any variable or fluctuating net asset value structured pool; negotiable direct obligations of the United States Government; bonds and debentures of Federal Instrumentalities; nonnegotiable interest bearing time certificates of deposit or savings accounts; securities in collateralized investment trusts; repurchase agreements comprised of only those securities mentioned above. Credit quality risk identified with S&P ratings, is provided in the table above. The FL-FIT is not rated by any nationally recognized statistical agency. The trust investments in registered investment companies consisted of funds that are AAA rated by a nationally recognized credit rating organization or consisted of underlying securities that are AAA rated or backed by the US Treasury or FDIC. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government s investment in a single issuer. The county's investment policy establishes asset allocation limits as follows: Any Stable or Constant Net Asset Value structured pool 75% maximum U.S. Treasury securities 50% maximum Federal agencies and instrumentalities 50% maximum Demand and time deposits 30% maximum Any Variable or Fluctuating Net Asset Value structured pool 30% maximum Securities in collateralized investment trusts 20% maximum Repurchase agreements 20% maximum Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to the transaction, the county will not be able to recover the value of investments or collateral securities. The Board s investment policy requires that all securities purchased or sold will be transferred only under the delivery versus payment (D.V.P.) method. U.S. government agency and instrumentality securities are held by the county s agent, in the county s name, in accordance with the county s investment policy requiring third party custody and safekeeping. 3. Accounts Receivable Accounts receivable with related allowance for doubtful accounts at September 30, 2014, were as follows (in thousands): 4. Due from Other Governments Funds due from Other Governments as of September 30, 2014, are as follows (in thousands): Governmental Activities: Clerk of the Court Agency Fund $ 505 Federal and State Grants 1,826 Florida Department of Transportation 944 Florida Department of Revenue LOT 1,018 Florida Department of Revenue Gas & Fuel Tax 709 Florida Department of Revenue - Sales Tax 575 Interlocal Agreements and Other 387 Osceola Expressway Authority (1) 144 SMG Management 216 State of Florida- 911 Emergency 398 State of Florida - Discretionary Sales Taxes 4,138 State of Florida - Sales Taxes 2,637 State of Florida-Communications Service Tax 1,000 State of Florida-Public Service Tax 438 Tax Collector Agency Fund 5,934 Sheriff Agency Fund 55 Miscellanious others 31 Total Governmental Funds 20,955 Business-type Activities: Central Florida Expressway 1,521 Osceola Express Authority 71,981 Grand Total $ 94,457 Note 1: Due from Osceola Expressway Authority is a non-current loan established to provide funding for the operating expenses related to Poinciana Parkway Activities Governmental Activities Business-type Activities Total Allowance Outstanding for Doubtful Balance Accounts Net $ 11,705 $ (8,274) $ 3,431 1,270 (2) 1,268 $ 12,975 $ (8,276) $ 4,699 The majority of the allowance for doubtful accounts in governmental funds pertains to receivables in the Countywide Fire District Fund, which provides emergency services to the public

113 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Capital Assets Capital asset activity for the year ended September 30, 2014, including the Sheriff, was as follows (in thousands): Beginning Transfers and Ending Balance Increases Decreases Reclassifications Balance Governmental Activities Capital assets not being depreciated/amortized Land $ 160,096 $ 4,236 $ - $ - $ 164,332 Land Right of Way 209,653 30, ,253 Work of Arts/Collections Construction in Progress 225,881 34,447 (16,781) (6) 243,541 Total not being Depreciated/Amortized 595,632 69,283 (16,781) (6) 648,128 Capital assets being depreciated/amortized Buildings 312,861 1, ,130 Improvements Other Than Buildings 76,436 2,610 (3) - 79,043 Books 7, ,489 Machinery & Equipment 105,251 17,493 (6,842) - 115,902 Infrastructure 439, ,748 Intangibles 8,115 2,600 (915) - 9,800 Total being Depreciated/Amortized 949,940 24,932 (7,760) - 967,112 Total before Depreciation/Amortization 1,545,572 94,215 (24,541) (6) 1,615,240 Less Accumulated Depreciation/Amortization for: Buildings (68,423) (6,893) - - (75,316) Improvements Other Than Buildings (20,074) (3,110) 1 - (23,183) Books (4,492) (782) - - (5,274) Machinery & Equipment (78,447) (9,058) 6,650 - (80,855) Infrastructure (190,715) (9,020) - - (199,735) Intangibles (5,445) (577) (5,107) Total Accumulated Depreciation/Amortizati (367,596) (29,440) 7,566 - (389,470) Total being Depreciated/Amortized, Net 582,344 (4,508) (194) - 577,642 Governmental Acitivities, CA, Net $ 1,177,976 $ 64,775 $ (16,975) $ (6) $ 1,225,770 Business-type Activities Capital Assets not being Depreciated/Amortized Land $ 1,985 $ - $ - $ - $ 1,985 Land Right of Way 43, ,447 Total not being Depreciated/Amortized 45, ,432 Capital Assets being Depreciated/Amortized Buildings 3,477 - (40) - 3,437 Improvements Other Than Buildings 2, ,142 Machinery & Equipment 2, (125) - 2,782 Infrastructure 96, ,321 Total being Depreciated/Amortized 104, (165) - 104,682 Total before Depreciation/Amortization 150, (165) - 150,114 Less Accumulated Depreciation/Amortization for: Buildings (1,383) (68) 36 - (1,415) Improvements Other Than Buildings (2,117) (3) - - (2,120) Machinery & Equipment (2,566) (74) (2,517) Infrastructure (37,280) (1,887) - - (39,167) Total Accumulated Depreciation/Amortizati (43,346) (2,032) (45,219) Total being Depreciated/Amortized, Net 61,470 (2,001) (6) - 59,463 Business-type Activities, CA, Net $ 106,902 $ (2,001) $ (6) $ - $ 104, Capital Assets (Concluded) Depreciation and amortization expense in governmental activities was charged to functions/programs as follows (in thousands): General government $ 6,542 Public safety 7,078 Physical environment 202 Transportation 9,589 Economic environment 272 Human services 238 Culture and recreation 3,940 Court related 1,579 Total Depreciation and Amortization Expense Governmental Activities $ 29,440 Construction Commitments At September 30, 2014, the County was committed or in the process of committing to various capital outlay expenditures. Among the more significant ones were (in thousands): Commuter Rail $ 23,430 Judge Property 21,619 Florida Advanced Manufacturing Research Facility 9, Mhz Digital Communication Ph II 7,984 Training Facility & Shooting Range 7,908 Poinciana Boulevard Phase III 7,114 Boggy Creek Road Phase 1 5,215 Osceola Parkway Phase II 4,770 Osceola Parkway Phase I 3,941 Overstreet Fire Station 2,136 Invested in Capital Assets The amount reported on the statement of net position as invested in capital assets, net of related debt, at September 30, 2014, consists of the following (in thousands): Governmental Business-Type Activities Activities Total Net Capital Assets $ 1,225,770 $ 104,895 $ 1,330,665 Less: Debt Related to purchase of capital assets Bonded indebtedness-net (392,248) (80,100) (472,348) Notes payable (4,632) - (4,632) Capital lease (7,482) - (7,482) Invested in capital assets, net of related debt $ 821,408 $ 24,795 $ 846,

114 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, Capital Lease Obligations 6. Interfund Receivables and Payables Interfund balances at September 30, 2014, are as follows (in thousands): Due to/from Other Funds- Detail Payable Fund Tourist Other Total General Development Governmental Governmental Proprietary Grand Fund Council Fund Funds Funds Funds Total Governmental Funds General Fund Tourist Development Countywide Fire Other Governmental Total Governmental Proprietary Funds Grand Total $ - $ 1 $ 987 $ 988 $ - $ ,044 2,044-2, $ 1,212 $ 1 $ 1,044 $ 2,257 $ - $ 2,257 All amounts above are expected to be repaid within one year and resulted from amounts owed between elected official/agencies or amounts borrowed to cover cash flow needs, primarily associated with reimbursable grant programs. Governmental Funds Outstanding capital lease obligations at September 30, 2014, are as follows: The Board has a 5.97% interest rate lease purchase agreement on Firefighter Bunker Gear to be used by the County Fire District. The purchase price was $592,940 and is reported in governmental activities machinery and equipment net of accumulated depreciation of $238, Payments are due annually until The principal balance is $232,714 and the annual requirements to amortize the installment capital lease as of September 30, 2014, are as follows (in thousands): Firefighter Bunker Gear Year Ended September 30 Principal Interest Total 2015 $ 113 $ 14 $ Totals $ 232 $ 21 $ 253 The Board has a 2.65% interest rate lease purchase agreement for communications equipment to migrate to a P25 platform for emergency communications. The purchase price was $11,837,938 and is reported in governmental activities machinery and equipment net of accumulated depreciation of $1,409,399. Payments are due annually until The principal balance is $7,250,278, and the annual requirements to amortize the installment capital lease as of September 30, 2014, are as follows (in thousands): B-40 P 25 Communications Equipment Year Ended September 30 Principal Interest Total 2015 $ 826 $ 192 $ 1, , , , , , , ,016 Totals $ 7,250 $ 891 $ 8,

115 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Interfund Transfers Interfund transfers for the year ended on September 30, 2014, are as follows (in thousands): Transfers to General Fund from Tourist Development Council Fund $ 1,655 Countywide Fire District 3,120 General Capital Outlay 510 Nonmajor Governmental Funds 10,358 Proprietary Funds 720 Total Transfers to General Fund $ 16,363 Transfers to Tourist Development Council Fund from General Fund $ 194 Nonmajor Governmental Funds - Proprietary Funds - Total Transfers to Tourist Development Council Fund $ 194 Transfers to Countywide Fire District Fund from General Fund $ 2,504 Proprietary Funds - Total Transfers to Countywide Fire District Fund $ 2,504 Transfers to General Capital Outlay Fund from General Fund $ 251 Nonmajor Governmental Funds - Proprietary Funds - Total Transfers to General Capital Outlay Fund $ 251 Transfers to Nonmajor Governmental Funds from General Fund $ 10,581 Tourist Development Council Fund 5,720 Countywide Fire District 99 Proprietary Funds 28 Nonmajor Governmental Funds 24,709 Total Transfers to Nonmajor Governmental Funds Total Transfers to Governmental Funds $ 41,137 $ 60,449 Transfers to Proprietary Funds from General Fund $ 4,482 General Capital Outlay 1,534 Countywide Fire District 279 Nonmajor Governmental Funds 2,870 Total Transfers to Proprietary Funds Total Transfers $ 9,165 $ 69,614 THIS PAGE INTENTIONALLY LEFT BLANK Generally transfers are used to: 1) move revenues from the fund that collects them to the fund that the budget requires to expend them, 2) move receipts restricted to the debt service from the funds collecting the receipts to the Debt Service Fund, or 3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. All interfund transfers are budgeted. They are adopted by the Board of County Commissioners as part of the annual budget

116 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, General Long-Term Debt 9. General Long-Term Debt (Continued) B-42 The following is a summary of long-term debt at September 30, 2014 (in thousands): Principal Principal Amount Amount Balance Balance Due Due October 01, September 30, Within After Fund Debt 2013 Additions Deductions 2014 One Year One Year Governmental-type Activities Bonds 234 Limited General Obligation Bonds, Series 2006 $ 11,645 $ - $ 695 $ 10,950 $ 720 $ 10, Limited General Obligation Bonds, Series ,735-1,335 20,400 1,390 19, Infrastructure Sales Surtax Revenue Bonds, Series ,535-3,300 57,235 3,465 53, Infrastructure Sales Surtax Revenue Refunding Bonds, Series ,500-2,455 27,045 2,505 24, Sales Tax Revenue Bonds, Series , , , Sales Tax Revenue Refunding Bonds, Series ,230-2,620 35,610 2,690 32, Tourist Development Tax (Fifth Cent) Revenue Bonds, Series 2012, (Rida Conference Center Phase One Project) 12, , , Tourist Development Tax Revenue Refunding & Improvement Bonds, Series ,790-2,330 72,460 2,375 70, Capital Improvement Revenue Bonds, Series 2009 A, B & C 124,950-2, ,330 2, , West 192 Redevelopment Area Municipal Service Benefit Unit Special Assessments Bonds (Phase IIC), Series 2003 Subtotal Governmental Bonds 2, , ,595 - Payable 422,575-16, ,985 17, ,845 Plus (Less) Unamortized Bond Premium (Discount) 12, ,080-11,080 (Less) Deferred Loss on Refunding Total Governmental-Type Bonds and Unamoritized Charges $ 434,611 $ - $ 17,546 $ 417,065 $ 17,140 $ 399,925 Business-Type Activities Bonds 407 Transportation Improvement Bonds (Osceola Parkway Project), Series 2004 $ 87,745 $ - $ 87,745 $ - $ - $ Transportation Improvement Refunding Bonds (Osceola Parkway Project), Series ,100-80,100 3,710 76, Expressway System Senior Lien Revenue Bonds (Poinciana Parkway Project), Series 2014A, B-1 & B-2-69,709-69,709-69,709 Principal Principal Amount Amount Balance Balance Due Due October 01, September 30, Within After Debt 2013 Additions Deductions 2014 One Year One Year Business-Type Activities Bonds (Concluded) Subtotal Governmental Bonds Payable 87, ,809 87, ,809 3, ,099 Plus (Less) Unamortized Bond Premium (Discount) 2,869 (447) 2,869 (447) - (447) Total Business-Type Bonds and Unamortized Bond Premium 90, ,362 90, ,362 3, ,652 Total Governmental and Business-Type Net Bonds Other Long-Term Debt Governmental-Type Activities Capital Lease Firefighter Bunker Gear P25 Communications Equipment Concurrency Management Agreement The Wilder Companies/Loop Orlando LLC Other Post Employment Benefits Compensated Absences: Board of County Commissioners Clerk of the Court Tax Collector Sheriff Property Appraiser Supervisor of Elections Total Other Long-Term Debt Governmental-Type Activities Total Governmental and Business- Type Long-Term Debt $ 525,225 $ 149,362 $ 108,160 $ 566,427 $ 20,850 $ 545, , , ,424 4, , , ,299 3, ,941-23,941 5,854 7,230 6,194 6, , ,431 4,299 3,623 6, , $ 48,040 $ 16,358 $ 14,073 $ 50,325 $ 2,888 $ 47,437 Other Long-Term Debt Business-Type Activities Landfill Closure 13, , ,445 Other Post Employment Benefits Compensated Absences Board of County Commissioners FL Department of Transportation SIB Loan - 2,725-2,725-2,725 Total Other Long-Term Debt Business-Type Activities 14,225 2, , ,404 $ 587,490 $ 168,454 $ 122,802 $ 633,142 $ 24,724 $ 608,

117 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B General Long Term Debt (Continued) Principal and Interest Requirement to Maturity The following are the bonds annual debt service requirements as of September 30, 2014 (in thousands): Year Ended Governmental Activities Business-Type Activities September 30 Principal Interest Total Principal Interest Total 2015 $ 17,140 $ 20,138 $ 37,278 $ 3,710 $ 2,828 $ 6, ,800 19,450 37,250 7,910 3,588 11, ,530 18,710 37,240 8,550 3,410 11, ,275 17,902 37,177 7,735 3,218 10, ,145 17,031 37,176 8,065 3,043 11, ,085 70, ,684 49,871 14,710 64, ,990 45, ,706 2,421 24,899 27, ,280 29,106 91,386 5,969 28,151 34, ,635 11,960 64,595 10,267 27,575 37, , ,613 16,376 21,282 37, ,935 3,346 32,281 $ 405,985 $ 251,120 $ 657,105 $ 149,809 $ 136,050 $ 285,859 A description of the bonds and other long-term debt is as follows: A. Governmental-Type Activities Outstanding Principal Balance 09/30/2014 General Obligation Bonds (In thousands) $15,295,000 Limited General Obligation Bonds, Series 2006, dated July 26, 2006, of which a portion is due on October 1 of each year beginning in 2007 through Interest at 4.00% to 4.50% due semi-annually on April 1 and October 1. Issued to finance the cost of acquisition of environmentally significant lands for the protection of water resources, wildlife habitat and public green space for passive recreation within the County, and pay costs associated with the issuance of the Series 2006 Bonds; payable from voter approved ad valorem tax revenues. $10, General Long-Term Debt (Continued) Outstanding Principal A. Governmental-Type Activities (Continued) Balance 09/30/2014 Revenue Bonds (In thousands) $75,000,000 Infrastructure Sales Surtax Revenue Bonds, Series 2007, dated June 06, 2007, of which a portion is due on October 1 of each year beginning in 2009 through Interest at 4.00% to 5.00% due semi-annually on April 1 and October 1; unamortized premium of $2,696,564 at September 30, Issued to finance a portion of the cost of acquisition, construction and equipping of certain transportation improvements within the County; advance refund of a portion of the Series 2002 bonds, and pay costs associated with the issuance of the Series 2007 Bonds, including the financial guaranty insurance premium and the reserve account insurance policy premium; payable from one cent local infrastructure sales surtax revenues distributed to the County. $29,500,000 Infrastructure Sales Surtax Revenue Refunding Bonds, Series 2011, dated December 9, 2011, of which a portion is due October 1 of each year beginning in 2013 through Interest of 3.25% to 5.00% due semi-annually on April 1 and October 1; unamortized premium of $2,715,883 at September 30, Issued to provide funds to advance refund a portion of the County s outstanding Infrastructure Sales Surtax Revenue Bonds, Series 2002, and pay costs associated with the issuance of the Series 2011 Bonds; payable from one cent local infrastructure sales surtax revenues distributed to the County. $48,735,000 Sales Tax Revenue Bonds, Series 2009, dated January 15, 2009, of which a portion is due October 1 of each year beginning in 2010 through 2038; $8,325,000 Term Bonds due on October 1, 2028: $24,785,000 Term Bonds due on October 1, Interest at 3.00% to 5.375% due semi-annually on April 1 and October 1; unamortized discount of $382,800 at September 30, Issued to finance the costs of acquisition, construction and improvement of various properties and facilities of the County, including without limitation, the acquisition of approximately 400 acres of right-of-way and stormwater management ponds for the purpose of extending and improving the County s transportation system through six major developments of regional impact projects in east Osceola County, bordering Lake Tohopekaliga, the acquisition, construction and installation of facilities to provide an emergency operation center, the purchase of two firefighting ladder trucks and ancillary equipment and acquisition of approximately one half acre of real property contiguous to the County s Administration Building and Courthouse. Payable from the local government half-cent sales tax distributed to the County. $57,235 $27,045 $45,045 $24,295,000 Limited General Obligation Bonds, Series 2010, dated August 26, 2010, of which a portion is due on October 1 of each year beginning in 2012 through 2025; unamortized premium of $898,498 at September 30, Interest at 3.00% to 4.00% due semi-annually on April 1 and October 1. Issued to refinance previously issued Osceola County, Florida Revenue Note, Draw No A-1-1 (Limited Obligation), dated November 1, 2007, and Osceola County Florida Note, draw A-1-2 (Limited Obligation), dated February 28, 2008, both of which originally financed the acquisition of environmentally significant lands for the protection of water resources, wildlife habitat, and public green space for passive recreation within the County; to finance the cost of acquisition of environmentally significant lands for the protection of water resources, wildlife habitat, and public green space for passive recreation within the County; and pay cost associated with the issuance of the Series 2010 Bonds; payable from voter approved ad valorem tax revenues. $20,400 $43,470,000 Sales Tax Revenue Refunding Bonds, Series 2010, dated March 25, 2010, of which a portion is due on October 1 of each year beginning in 2010 through Interest at 3.00% to 5.00% due semi-annually on April 1 and October 1; unamortized premium of $1,479,178 at September 30, Issued to refund the County s outstanding Sales Tax Revenue Bonds, Series 1999, to fund required reserves, and pay costs associated with the issuance of the Series 2010 Bonds. Payable from local government half-cent sales tax distributed to the County. $12,565,000 Tourist Development Tax (Fifth Cent) Revenue Bonds, Series 2012, (Rida Conference Center Phase One Project), dated February 1, 2012 of which a portion is due October 1 of each year beginning in 2012 through 2041; $1,220,000 in Term Bonds due October 1, 2012; $1,545,000 in Term Bonds due October 1, 2026; $1,750,000 in Term Bonds due October 1, 2031; and $7,090,000 in Term Bonds due October 1, Interest at 2.83% to 6.44% due semi-annually on April 1 and October1; unamortized discount of $202,025 at September 30, Issued to provide funds to finance the acquisition, construction and equipping of an approximately 55,000 square foot Class A conference center located adjacent to the Omni Orlando Resort at ChampionsGate as part of the Rida $35,610 $12,

118 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, General Long-Term Debt (Continued) Outstanding Principal A. Governmental-Type Activities (Continued) Balance 09/30/2014 Revenue Bonds (Concluded) (In thousands) 9. General Long-Term Debt (Continued) Outstanding Principal A. Governmental-Type Activities (Concluded) Balance 09/30/2014 Special Assessments (Concluded) (In thousands) B-44 Conference Center, fund a deposit into the Rida Senior Lien Reserve Account Subaccount, and pay costs associated with the issuance of the Series 2012 Bonds; payable from the fifth cent of the tourist development tax revenues distributed to the County and the RIDA Special Assessments. $74,790,000 Tourist Development Tax Revenue Refunding and Improvement Bonds, Series 2012, dated July 31, 2012, of which a portion is due October 1 of each year beginning 2013 through 2034; $3,785,000 in Term Bonds due October 1, Interest at 3.00% to 5.00% due semi-annually on April 1 and October 1; unamortized premium of $4,297,116 at September 30, Issued for the purpose of providing funds, to refund a portion of the Tourist Development Tax Revenue Bonds, Series 2002A and Subordinated Tourist Development Revenue Bond, Series 2009, finance and refinance the costs of acquisition, construction and equipping of certain capital improvements in the County, and pay costs associated with the issuance of the Series 2012 Bonds; payable from certain proceeds of tourist development tax revenues distributed to the County. $132,250,000 Capital Improvement Revenue Bonds, Series 2009A, and Taxable Capital Improvement Revenue Bonds Series 2009B (Federally Taxable - Build America Bonds - Direct Subsidy), and 2009C (Federally Taxable Build America Bonds - Recovery Zone Economic Development Bonds - Direct Subsidy) dated October 02, 2009, of which a portion is due on October 1 of each year beginning 2010 through Interest at % to 6.946% due semi-annually on April 1, and October 1; unamortized premium of $533,621 at September 30, Issued to finance construction of various capital projects, including road and ancillary improvements within the County, the construction of a parking garage adjacent to the Osceola County Courthouse and Administrative Building, the construction of a training facility for the Sheriff s Department, the construction and equipping of a new community center in Marydia, other capital projects, fund the reserves, and pay the cost associated with the issuance of the Series 2009 Bonds. Payable from the proceeds of the local communications services tax levied by the County pursuant to Sections , and , Florida Statutes, (excluding the communications services tax levied pursuant to Section (3), Florida Statues), and Resolution No. 00/ adopted by the Board on July 2, 2001, (the Communications Services Tax Revenues ) and the proceeds of the public service tax levied by the County pursuant to Section , Florida Statutes, the Act and Ordinance No enacted by the Board on May 1, 2006 (but not including the Communications Services Tax collected pursuant to Chapter 202, Florida Statutes, or Public Service tax retained by other entities pursuant to the Interlocal Agreements), any Issuer Bond Subsidy Payments and any additional security provided by the County pursuant to the Resolution. Special Assessment Bonds $4,415,000 West 192 Redevelopment Area Municipal Service Benefit Unit Special Assessment Bonds (Phase IIC), Series 2003, dated July 11, 2003, of which a portion is due on November 1 of each year beginning in 2007 through 2033; $135,000 in Term Bonds due November 1, 2011; $705,000 in Term Bonds due November 1, 2019; $620,000 in Term Bonds due November 1, 2024; $1,660,000 in Term Bonds due November 1, Interest at 5.00% to 5.50% due semi-annually on May 1 and November 1 beginning 2007 through Issued to complete installation of roadway landscaping and street lighting, pedestrian pathways, and crosswalks, roadway signage and transit facilities in the Phase IIC Benefit area. The project is part of an overall redevelopment effort of the County to enhance the $72,460 $122,330 $2,675 commercial viability of the West 192 MSBU; payable from the proceeds of capital special assessments lawfully levied and collected by the County upon property benefited by the 2003 Phase IIC project. B. Business-Type Activities $80,100,000 Transportation Improvement Refunding Bonds (Osceola Parkway Project), Series 2014, dated September 9, 2014, of which the principal amount is due on April 1, Interest at 2.25% due semi-annually on April 1 and October 1; at September 30, Issued to refund the County s outstanding Transportation Improvement Bonds (Osceola Parkway Project), Series 2004, pay costs of the issuance related to the Series 2014 bonds, payable from the proceeds of the net revenues of Osceola Parkway plus a semi-annual County contribution from the constitution gas tax. Reedy Creek Improvement District still acts as a financial guaranty on behalf of the County. $69,709,000 Expressway System Senior Lien Revenue Bonds, Series 2014A and Expressway System Senior Lien Revenue Capital Appreciation Bonds, Series 2014B-1 and Expressway System Senior Lien Revenue Convertible Capital Appreciation Bonds, Series 2014B-2 (Poinciana Parkway Project) dated March 27, 2014, of which a portion is due October 1 of each year beginning in 2019 through 2047; $12,915,000 Term Bonds maturing on October 1, 2039; $15,480 Term Bonds maturing on October 1, Interest at 3.17% to 6.25% due semi-annually on April 1, and October 1. Issued to finance the initial project of facilities designated as the Expressway System, pay costs of the issuance related to the Series 2014A, B-1, and B-2. C. Other Governmental-Type Long-Term Debt The Board has a 5.97% interest rate lease purchase agreement on Firefighter Bunker Gear to be used by the County Fire District. The purchase price was $592,940 Payments are due annually until October The Board has a 2.65% interest rate lease purchase for communications equipment to migrate to a P25 platform for emergency communications. The purchase price was $11,837,938. Payments are due annually until December The County entered into a Concurrency Management participation agreement with Reedy Creek Improvement District for the development of various road improvements interchanges, and additional traffic lanes. This agreement was for $11,333,273 with the first annual payment paid on October 1, 1998; with final payment is due October 1, The County entered into an agreement with The Wilder Companies, LTD., for the reimbursement of costs associated with land and road improvements in the development of The Loop, a shopping, dining and entertainment complex. The agreement totaled $4,994,081 due annually on October 1, in ten equal installments. The first installment was paid on October 1, 2005; final payment is due October 1, $80,100 $69,709 $232 $7,250 $4,152 $

119 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, General Long-Term Debt (Continued) Outstanding Principal C. Other Governmental-Type Long-Term Debt (Concluded) Balance 09/30/2014 (In thousands) Compensated absences. The valuation of accrued leave benefits is calculated in accordance with GASB Statement No. 16. The liability is typically liquidated with the resources of the same fund that has paid the applicable employee s regular salaries and fringe benefits. The current portion of the accrued compensated absences liability, $1,247,000 is estimated based on the percentage of employee s resignations and retirements over the previous years. Other Post Employment Benefit, for complete disclosure requirements see Notes to Financial Statements Number 16. $14,270 $23,941 D. Other Business-Type Long-Term Debt Landfill closure, for complete disclosure requirements see Notes to Financial Statements Number 9. Compensated absences. The valuation of accrued leave benefits is calculated in accordance with GASB Statement No. 16. The liability is typically liquidated with the resources of the same fund that has paid the applicable employee s regular salaries and fringe benefits. The current portion of the accrued compensated absences liability, $6,000 is estimated based on the percentage of employee s resignations and retirements over the previous years. $13,425 $91 THIS PAGE INTENTIONALLY LEFT BLANK B-45 Other Post Employment Benefit, for complete disclosure requirements see Notes to Financial Statements Number 10. In March 2014, a loan was approved for the fixed capital outlay portions of the construction of the Poinciana Parkway project in the total available amount of $20,000,000. The first payment of this loan is due on April 1, Subsequent annual payments, including interest at 3.00%, are due on October 1 of each year through October 1, E. Current Year Refunding On September 9, 2014, the County issued $80,100,000 in Transportation Improvement Refunding Bonds (Osceola Parkway Project), Series The County used the proceeds of this bond issue to redeem the County s outstanding Transportation Improvement Bonds (Osceola Parkway Project), Series 2004 maturing each year through As a result, the liability for the redeemed bonds was removed from the Statement of Net Position. The transaction resulted in an economic gain (at present value) of $10,575,567 and a reduction in future debt service of $11,872,566. $149 $2,

120 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Long-Term Debt (Continued) Pledged Revenues (in thousands) Term of Purpose of Issue Revenue Pledged Commitment Governmental-Type Activities: Limited General Obligation Bonds, Series 2006 Capital Acquisitions Ad-valorem Revenues (voted) Limited General Obligation Bonds, Series 2010 Capital Acquisitions Ad-valorem Revenues (voted) Infrastructure Sales Surtax Refunding and Revenue Bonds, Series 2007 Capital Acquisition Local Infrastructure Sales Surtax Infrastructure Sales Surtax Revenue Refunding Bonds, Series 2011 Refunding Local Infrastructure Sales Surtax Sales Tax Revenue Bonds, Series 2009 Capital Acquisitions Sales Tax Revenue Sales Tax Refunding Revenue Bonds, Series 2010 Refunding Sales Tax Revenue Tourist Development Tax (Fifth Cent) Revenue Bonds, Series 2012, (Rida Tourist Development Tax Conference Center Phase One Project) Capital Acquisitions and Special Assessments Tourist Development Tax Revenue Refunding & Improvement Bonds, Refunding and Series 2012 Capital Improvement Tourist Development Tax Capital Improvement Communications Service Tax Revenue Bonds, Series 2009 A, B, & C Capital Acquisitions and Public Service Tax West 192 Redevelopment Area Municipal Service Benefit Unit Special Assesments Bonds, Redevelopment Series 2003 West 192 Road Special Assessments Total Governmental-Type Activities Business-Type Activities: Revenue Bonds: Osceola Parkway Project, Refunding and Improvement Series 2014 Osceola Parkway Road Tolls Revenue Poinciana Parkway Project, Construction Series 2014 A, B-1, & B-2 (3) Poinciana Parkway Road Tolls Revenue Total Business-Type Activities 9. Long-Term Debt (Concluded) Amount Outstanding % Amount Total Debt Service and/or Total Outstanding Pledged as Portion Pledged Pledged and/or Pledged Revenue of Revenue Amount Interest (Includes Revenue to Total Recognized Pledged (2) Issued Rates Interest) (1) Estimated Pledged Revenue For Year 2014 For Year 2014 $ 15, % % $ 14,094 $ 36, % $ 3, % 24, % % 24,667 36, % 3, % 75, % % 75, , % 24, % 29, % % 33, , % 24, % 48, % % 79, , % 16, % 43, % % 45, , % 16, % 12, % % 25, , % 7, % 74, % % 107, , % 20, % 132, % % 246, , % 18, % 4, % % 4,374 4, % % $ 460,315 $ 657,105 $ 80, % $ 89, , % 14, % 69, %-6.25% 195, % % $ 149,809 $ 285,859 Note 1: See Schedule of Debt Service Requirement Note 2: Debt service includes extraordinary redemptions Note 3: Construction phase, tolls revenue have not been collected 70 71

121 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Landfill Post Closure Costs The County is required by federal and state laws and regulations to place a final cover on closed landfill areas and perform certain maintenance and monitoring functions for up to 30 years after closure. GASB Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Post-closure Care Costs, requires the County to estimate the post-closure care costs. The County obtains these estimates from its consulting engineers and are adjusted for inflation. The liability associated with these costs is recognized in the Environmental Services (Landfill) enterprise fund. Actual costs may be different due to inflation, changes in technology, or changes in laws and regulations. The following schedule reflects the payments and changes in estimates for the year ended September 30, 2014: LANDFILL POS T CLOS URE COS TS September 30, 2014 Payments & Balance Changes in Balance October 1, 2013 Estimates September 30, 2014 Post-Closure Costs Bass Road Landfill $ 5,699,000 $ 206,935 $ 5,492,065 Southport Landfill 8,281, ,087 7,932,913 Total Estimated Costs $ 13,980,000 $ 555,023 $ 13,424,977 The Southport Landfill and Bass Road Landfill are officially closed. Rule (9) (d), F.A.C. establishes a long-term care period of 5 years for C&D disposal areas and 30 years for Class I facilities. The Southport Landfill is in its sixth year of the 30 year long-term care period; the Bass Road Landfill is in its second year. The County completed a review of its post-closure costs estimates. The liability was estimated strictly based on GASB Statement No. 18. requirements. The estimate was decreased based on this change of measurement. The effect of this change reduced post closure costs by $10.03 million. The Florida Department of Environmental Protection requires the County to make annual contributions to an escrow account to finance at least one year of post-closure costs. The County is in compliance with this requirement, and at September 30, 2014, held $965,348 as a restricted part of the County funds with the Florida Prime State Board of Administration (SBA) to be used specifically for long term care of the landfills. The County expects that future inflation costs will be paid from interest earnings on these annual contributions. However, if interest earnings are inadequate or additional post-closure care requirements are determined; these costs may need to be covered by charges of activities related to the landfill or from future tax revenue. Below is a summary of changes in the escrow account: 11. Conduit Debt The following bonds are not reported as liabilities in the accompanying basic financial statements. In order to provide financial assistance to private-sector entities, Osceola County has issued Industrial Development Authority Revenue Bonds, Housing and Finance Authority Revenue Bonds, and Health Facilities Authority Revenue Bonds. Neither the County, nor State of Florida nor any other political division thereof, is obligated in any manner for repayment of the Revenue Bonds. As of September 30, 2014, Revenue Bonds outstanding were (in thousands): Osceola County Housing Finance Authority (Multi-Family Housing) Original Issue Outstanding Project Series Issue Date Maturity Date Amount Principal Arrow Ridge Apartments 1998A 24-Mar Oct-2032 $ 13,400 $ 10,515 Regatta Bay Apartments 2002A 1-Jun Sept ,920 12,920 Regatta Bay Apartments 2002B 1-Jun Sept ,400 2,060 Boca Palms Apartments Mar Mar ,250 4,250 St. Cloud Village Apartments 2013B 1-Jul Jul ,110 8,025 St. Cloud Village Apartments 2013C 1-Jul Jul ,900 7,900 Total $ 51,980 $ 45,670 Osceola County Industrial Development Authority Original Issue Outstanding Project Series Issue Date Maturity Date Amount Principal Wells Charter School 2001A 1-Nov Aug-2031 $ 9,075 $ 6,590 Canoe Creek Charter School 2001A 1-Feb Aug ,675 7,095 Eastern Sleep Products 2005A 1-Jun Jun ,500 2,983 Total $ 23,250 $ 16,668 LANDFILL ESCROW ACCOUNT September 30, 2014 Beginning Ending Disposal Facility Balance Deposits (a) Withdrawals Balance Southport Class I $ 531,124 $ 7,966 $ - $ 539,090 Bass Road Class I 390,380 5, ,235 Bass Road C&D 43, ,502 $ 965,348 $ 14,480 $ - $ 979,828 (a) deposit dated 9/30/

122 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Fund Balance Classification Fund balances are presented in the following categories: non-spendable, restricted, committed, assigned and unassigned (see Note 1 for a description of these categories). A detailed schedule of fund balances at September 30, 2014, is as follows (in thousands): Tourist Countywide General Non-Major Total General Development Fire Capital Governmental Governmental Fund Balance Fund Council District Outlay Funds Funds Nonspendable: Inventory $ 288 $ 34 $ - $ - $ 849 $ 1,171 Prepaids 102 9, ,540 Total Nonspendable fund balance 390 9, ,711 Restricted for: General Government Support Services - 65, ,560 Environmental Land ,906 5,906 Special Taxing Unit Projects Municipal Services Tax and Benefits Units ,220 1,220 Traffic Education Roadway Bank Public Safety 911 Revenue ,383 1,383 Building and Permitting ,293 5,293 Emergency Services ,246 2,246 Special Programs as Approved by BOCC ,645 2,645 Criminal Justice Education Inmate Welfare Fund Physical Environment Community Development Projects ,103 2,103 Tree Bank Transportation Building Maintenance Transp Impact Fee Road Construction Projects ,074 8,074 Economic Environment CRA West & East 192 Road Housing Program Section ,018 1,018 West 192 Redevelopment MSBU ,064 2,064 Homelessness, Shelter and Emergency Program Special Recreation Facility Project - 13, ,968 Human Services Mosquito Control Housing Neighborhood Stabilization Program Fund Balance Classification (Concluded) Tourist Countywide General Non-Major Total General Development Fire Capital Governmental Governmental Fund Balance Fund Council District Outlay Funds Funds Culture/Recreation Community Development Projects Library ,038 6,038 Boating Improvement Parks 1, ,194 6,307 Court Related Drug Court Programs Court Facilities Projects ,676 9,676 Communications, Computer Network Support ,235 1,235 Homestead Foreclosure Mediation Record Technology ,217 4,217 Debt Service ,953 44,953 Capital Projects Road Improvement Projects ,531 48,531 Total restricted fund balance 2,358 79, , ,721 Committed for: General Government Support Services 22, ,609 Public Safety Animal Control Public Safety Projects 129-3, ,960 Radio Communication-800 MHZ System ,042 2,042 Information Technology Sheriff-Emergency Communications - - 1, ,380 Fire and Emergency Medical Services , ,581 Transportation Road Projects ,021-44,021 Road Signals ,233 4,233 Stormwater Human Services Health Service Projects Court Related Mediation Debt Service Total Committed Fund Balance 22,799-20,480 44,021 6,296 93,596 Assigned for: Debt service Total Assigned Fund Balance Unassigned Fund Balance 55, ,280 Total Fund Balances $ 80,827 $ 89,037 $ 20,528 $ 44,021 $ 161,930 $ 396,

123 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Commitments and Contingencies Federal and State Grants Grant monies received and disbursed by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County. Litigation The County is a defendant in various lawsuits in the normal course of business, some of which are covered by the County s risk management program. While the results of litigation and claims cannot be predicted with certainty, management believes the final outcome will not have a material adverse impact on the County s financial position. Risk Management The County is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The County is self-insured for workers' compensation, dental and health insurance claims. Commercial insurance is purchased for all other risks including property and casualty, vehicles and public officials. Coverage is at levels such that the County does not retain a significant risk of loss. 14. Insurance Programs Health On October 1, 2008, the County implemented a self-insurance program for the health insurance. The County purchased a reinsurance policy for employee claims in excess of $250,000 per occurrence. The liability of $2,000,000 of accrued claims has been estimated based on average claims incurred during the year. The schedule below presents the changes in the liability for accrued claims as of September 30, 2014, (in thousands): Claims Incurred Balance and Claims Balance Year October 01 Adjustments Paid September $ 1,461 $ 20,341 $ 19,802 $ 2, ,000 15,008 15,008 2, ,000 13,261 13,261 2, ,000 12,681 12,681 2, ,000 12,560 12,560 2,000 Dental The County maintains a self-insurance program for the payment of employee dental claims. The program provides for County contributions into a self-insurance fund that is managed by the County and its administrative agent. It is the County's policy to charge to expense payments made for claims incurred. Property, Casualty and General Liability In 1994, the County adopted an insurance program for property and casualty and general liability insurance. All county insurance policies and premiums are processed and paid from this fund, including many varied special insurance policies such as vehicle insurance, crime, environmental liability, volunteer accident, aviation, excess property coverage, inmate medical care, etc. Workers Compensation The County maintains a self-insurance program for the payment of workers' compensation claims. The program provides for County contributions into a self-insurance fund that is managed by the County and its administrative agent. It is the County's policy to charge to expense payments to be made for claims where such amounts are reasonably measurable and where liability is probable. Employee claims up to $750,000 per occurrence are paid 14. Insurance Programs (Concluded) from the assets of the self-insurance fund with amounts in excess of $750,000 per occurrence being paid from a reinsurance policy purchased by the County. The liability for unpaid claims has been estimated based on an actuarial study. The schedule below presents the changes in the liability for unpaid claims for the past five years (in thousands): Claims Incurred Balance and Claims Balance Year October 01 Adjustments Paid September $ 5,076 $ 400 $ 1,264 $ 4, ,212 1,600 1,074 4, ,738 1,819 1,313 5, ,244 (314) 1,430 3, , ,751 Of the $3,751,936 liability balance at September 30, 2014, $1,742,870 is estimated to be due within one year, and $2,009,066 is the long-term portion. Life, Long Term Disability, Short Term Disability and Voluntary Life The Life, Long Term Disability (LTD), Short Term Disability (STD) and Voluntary Life Internal Service Fund were established to facilitate the revenue collection and payments for these insurance coverages Countywide. Settled claims have not exceeded the commercial coverage in any of the past five fiscal years and there has not been a significant reduction in coverage from that of the previous fiscal year

124 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Pension Plans Multiple Employer Defined Benefit Retirement Plan All full-time employees of the County participate in the Florida Retirement System (the System). The System was created by the Florida Legislature and is a cost-sharing, multiple-employer defined benefit public retirement plan available to governmental units within the state of Florida. The System issues a publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to the Florida Retirement System, Division of Retirement, P.O. Box 9000, Tallahassee, Florida , by at: rep@dms.myflorida.com, or by calling (850) , or toll-free at (877) Since July 1, 2001, the Florida Retirement System has provided for vesting of benefits after six years of creditable service. Members initially enrolled on or after July 1, 2011, vest after eight years of creditable service. Early retirement or reduced retirement may be taken after a member is vested and is within 20 years of their normal retirement age at a reduced retirement benefit. Regular, Elected Officers, and Senior Management Service Special Risk Before July 1, 2011 On or After July 1, 2011 Before July 1, 2011 On or After July 1, 2011 Normal Retirement Requirements Vested with six years of service and age 62; or the age after 62 that the member becomes vested; or 30 years of service, regardless of age. Vested with eight years of service and age 65; or the age after 65 that the member becomes vested; or 33 years of service, regardless of age. Vested with six years of special risk service and age 55; or the age after 55 that the member becomes vested; or 25 years of service, consisting of both special risk service and up to four years of wartime military service, and age 52; or 25 years of special risk service, regardless of age; or 30 years of any creditable service, regardless of age. Vested with eight years of special risk service and age 60; or the age after 60 that the member becomes vested; or 30 years of special risk service, regardless of age; or 33 years of any creditable service, regardless of age. 15. Pension Plans (Concluded) Benefits and rates are determined by category as follows: Membership Category Benefit Calculation July 1, 2012 July 1, 2013 July 1, 2014 Regular 1.60% times year of service times average compensation (5 highest Employer % Employer % Employer % service year, 8 year if enrolled after Employee % Employee % Employee % July 1, 2011) if age 62 or 30 years of service at any age (age 65 or 33 years if enrolled after July 1, 2011) Senior 2.00% times year of service times Management average compensation (5 highest Employer % Employer % Employer % service years, 8 years if enrolled after Employee % Employee % Employee % July 1, 2011) if age 62 or 30 years of service at any age (age 65 or 33 years if enrolled after July 1, 2011) Special Risk 2.00% times year of service times average compensation (5 highest Employer % Employer % Employer % service years, 8 years if enrolled after Employee % Employee % Employee % July 1, 2011) if age 55 or 25 years of service at any age (age 60 or 30 years if enrolled after July 1, 2011) Elected 3.00% times year of service times Officers average compensation (5 highest Employeer % Employeer % Employeer % service years, 8 years if enrolled after Employee % Employee % Employee % 62 or 30 years July 1, 2011) if age of service at any age (age 65 or 33 years if enrolled after July 1, 2011) Included in the rate, the employer contributes 1.20% for a post-retirement health insurance subsidy. The System also provides disability and survivor's benefits. Benefits are established by State Statutes. The funding methods and determination of benefits payable are provided by various acts of the Florida Legislature. The County pays 100% of its required contributions under the plan. Effective July 1, 2011, all FRS members, excluding Deferred Retirement Option Program (DROP) members and re-employed retirees are required to contribute 3.00% of their salary to the System on a pre-tax basis. Employer contributed amounts were $15,595,485, $11,802,963, and $10,216,958 for fiscal years 2014, 2013 and 2012, respectively, equal to the required contribution for each year. FRS member contributions were $3,320,291, $3,204,003, and $3,208,695 for fiscal years 2014, 2013, and 2012 respectively. During the year ended September 30, 2014, the System held no securities issued by the County. Multiple Employer Defined Contribution Retirement Plan Effective July 2002, the System offered its members the FRS Investment Plan as a second retirement plan option. The FRS Investment Plan is a defined contribution plan funded in part by employer contributions that are established by law. The employers contribution is based on salary and FRS membership class, ranging from 3.30% for regular to 10.23% for Elected Officers. The employer s contribution rates are blended and apply for both defined benefit plan and the defined contribution plan. Participant contributions are 3.00% of their salary. Employees are vested after one year of service. Employees that do not elect a plan are automatically enrolled in the defined benefit plan. Participants of the defined benefit plan have one lifetime option of transferring the value of their plan to the FRS Investment Plan

125 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 B Post-Employment Benefits Other than Pension Plan Description Osceola County s Board of County Commissioners (the Board ) administers a single-employer defined benefit healthcare plan (the Plan ). In accordance with Section of the Florida Statutes, because Osceola County provides a medical plan to active employees of the County and their eligible dependents, the County is also required to provide retirees with the opportunity to participate in this plan. The Plan provides Medical/Prescription, Dental and Life benefits to both active and eligible retired employees. The post-employment benefits are extended to retirees and continued at the discretion of the Board, which reserves the right (subject to State Statute and any collective bargaining agreements) to change or terminate benefits and to change premium contributions required from retirees in the future as circumstances change. Eligibility for participation in the Plan is limited to Osceola County s current and retired employees and their eligible dependents that participate in and satisfy the Vesting, Disability, and Early or Normal Retirement provisions of the Florida Retirement System (FRS). At September 30, 2014, there were 2,171 active plan participants and 323 retired participants receiving benefits. Eligible retirees may choose among the same Medical Plan options available for active employees of the County. The Plan does not issue a publicly available financial report. Funding Policy Contribution rates are determined on an annual basis by the Board. In order to begin and maintain coverage, contributions are required from the retiree. For dependent coverage, the retiree is required to pay a premium as well. If any required contributions are not paid timely, the coverage for the retiree and/or the dependent(s) will cease. The table below summarizes the total monthly contribution amounts required from retirees and their spouses as of September 30, These rates went into effect on October 1, Coverage for children of retirees is available (until their limiting age). However, the relatively few children covered and the relatively short duration of their coverage results in costs that are not material in the long run. Monthly Premiums as of September 30, 2014 Non-Medicare Medicare Open Open Access in Access Humana Humana Coverage Network Plus Coverage HMO PPO Retiree $ $ Retiree $ - $ Plus 1 1, , Spouse Family 1, , NA NA NA In addition to the Health Insurance Subsidy paid by FRS, retired employees of Osceola County Sheriff s Office receive a subsidy of $6.34 per month for each credited year of service. This amount is limited to $ per month and in no event will the combined subsidy from FRS and the Sheriff s office exceed the total cost of health insurance. This subsidy ceases after the retiree dies and does not continue to the spouse. Members eligible for disability retirement are subject to the same premium requirements as regular retirees. An exception is made to law enforcement officers who have sustained catastrophic injuries in the line of duty. Premiums for such members and their dependents are paid by the County as prescribed by Section (2) (h) 1, Florida Statutes. The surviving spouse of a retiree is eligible to continue coverage subject to premium payments applicable to an individual retiree (not a spouse). 16. Post-Employment Benefits Other than Pension (Continued) In addition to the Health Insurance Subsidy paid by FRS, retired employees of Osceola County Sheriff s Office receive a subsidy of $6.34 per month for each credited year of service. This amount is limited to $ per month and in no event will the combined subsidy from FRS and the Sheriff s office exceed the total cost of health insurance. This subsidy ceases after the retiree dies and does not continue to the spouse. Members eligible for disability retirement are subject to the same premium requirements as regular retirees. An exception is made to law enforcement officers who have sustained catastrophic injuries in the line of duty. Premiums for such members and their dependents are paid by the County as prescribed by Section (2) (h) 1, Florida Statutes. The surviving spouse of a retiree is eligible to continue coverage subject to premium payments applicable to an individual retiree (not a spouse). Clerk of Tax Property Supervisor County Sheriff BOCC Courts Collector Appraiser of Elections Total Annual Required Contribution $ 1,785 $ 1,338 $ 186 $ 84 $ 58 $ 18 $ 3,469 Interest on Net OPEB Contribution Adjustment to Annual Required Contribution (485) (364) (51) (23) (16) (5) (944) Adjusted Annual OPEB Cost 1,797 1, ,490 Contributions made (433) (324) (45) (20) (14) (4) (840) Increase in Net OPEB Obligation 1,364 1, ,650 Net OPEB Obligation - Beginning of Year 8,822 10,251 1, ,440 Net OPEB Obligation - End of Year $ 10,186 $ 11,273 $ 1,254 $ 628 $ 573 $ 176 $ 24,090 Per Covered Active Employee (In Actual Whole Dollars) $ 3,240 $ 1,039 $ 1,039 $ 1,039 $ 1,039 $ 1,039 $ 1,597 As % of Expected Payroll 6.5% 2.4% 2.4% 2.4% 2.4% 2.4% 3.5% The County s annual OPEB cost, the percentage of annual expected employer contribution toward OPEB cost, and the net OPEB obligation for the current year and the preceding two years were as follows (in thousands): Employer Percentage Fiscal Annual Contributions of Annual Net Year OPEB toward the OPEB Cost OPEB Ended Cost OPED Cost Contributed Obligation 9/30/2012 $ 3,538 $ % $ 18,565 9/30/2013 3, % 21,440 9/30/2014 3, % 24,

126 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2014 OSCEOLA COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, Post-Employment Benefits Other than Pension (Concluded) Funded Status and Funding Progress The funded status of the plan as of July 1, 2013, the most recent actuarial valuation date, was as follows (in thousands): Actuarial accrued liability (AAL) $ 33,142 Actuarial value of plan assets - Unfunded actuarial accrued liability (UAAL) 33,142 Funded ratio (actuarial value of plan assets/aal) 0.0% Covered payroll (active plan members) 97,966 UAAL as a percentage of covered payroll 33.8% 17. Subsequent Events On February 19, 2015, Osceola County sold the Sales Tax Revenue Bonds, Series 2015A for the amount of $58,660,000. The Series 2015A are payable from and secured by a lien upon the funds distributed to the County from Local Government Half-Cent Sales Tax. The Series 2015A Bonds are being issued to provide funds to finance the costs of acquisition, construction and installation of a center for technology research and development, and related ancillary site and transportation improvements, to fund all or a portion of required reserves, if any, and to pay costs associated with the issuance of the Series 2015A Bonds. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment and termination, mortality, and the healthcare costs trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. B-52 Actuarial Methods and Assumptions Calculations for financial reporting purposes are based on the benefits provided under the terms of the substantive plan (the plan as understood by the employer and the plan members) in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Individual Entry Age Normal cost method Amortization method Level percentage of payroll (assumed rate of payroll growth is 4.0%) Amortization period (closed) 24 year Asset valuation method Fair value The actuarial assumptions are: Investment rate of return 4.5% Projected annual salaries increase 4.0% Inflation rate 3.0% Healthcare cost trend rate 8.5% for costs and 6% for premiums paid by employees, for the 2013 fiscal year, 8.0% for costs and 4.0% for premiums for fiscal year 2014, then 7.5% for both costs and premiums for fiscal year 2015, and decreasing ½% each subsequent year until reaching the ultimate value of 5%

127 B-53 THIS PAGE INTENTIONALLY LEFT BLANK REQUIRED SUPPLEMENTARY INFORMATION 84 85

128 OSCEOLA COUNTY, FLORIDA OPEB SCHEDULE OF FUNDING PROGRESS September 30, 2014 (In thousands) Actuarial Valuation Date Actuarial Value of Assets (a) Actuarial Accrued Liability (AAL) - Unfunded AAL Entry Age (b) (UAAL) (b-a) Funded Ratio (a/b) Covered Payroll (c) UAAL as a Percentage of Covered Payroll ((b-a)/c) B-54 7/1/2009 $0 $39,678 $39, % $110, % 7/1/2011 $0 $31,559 $31, % $96, % 7/1/2013 $0 $33,141 $33, % $97, % OPEB SCHEDULE OF EMPLOYER CONTRIBUTIONS September 30, 2014 (In thousands) Year Ended September Annual Required Contribution Percentage Contributed Annual OPEB Cost Percentage Contributed 2012 $3, % $3, % 2013 $3, % $3, % 2014 $3, % $3, % COMBINING AND INDIVIDUAL FUND STATEMENTS & SCHEDULES 86 87

129 OSCEOLA COUNTY, FLORIDA COMBINING BALANCE SHEET Nonmajor Governmental Funds September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Governmental Funds For the Year Ended September 30, 2014 (In thousands) B-55 Total Nonmajor Special Revenue Debt Service Capital Project Governmental Funds Funds Funds Funds ASSETS Cash and Investments $ 66,838 $ 45,992 $ 47,375 $ 160,205 Accounts Receivable, Net Due from Other Funds Due from Other Governments 4, ,154 8,421 Prepaid Items Inventories Total Assets $ 72,862 $ 46,017 $ 51,529 $ 170,408 LIABILITIES AND FUND BALANCES Liabilities Accounts Payable $ 1,088 $ - $ 2,227 $ 3,315 Accrued Liabilities ,208 Deposits 1, ,633 Due to Other Governments Unearned Revenue 204 1,029-1,233 Due to Other Funds 1, ,044 Total Liabilities 4,451 1,029 2,998 8,478 Fund Balances Nonspendable Restricted 61,254 44,953 48, ,738 Committed 6, ,296 Assigned Total Fund Balances 68,411 44,988 48, ,930 Total Liabilities and Fund Balances $ 72,862 $ 46,017 $ 51,529 $ 170,408 REVENUES Taxes Permits, Fees and Special Assessments Intergovernmental Charges for Services Fines and Forfeitures Interest Income Miscellaneous Total Revenues EXPENDITURES Current General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture/Recreation Court Related Debt Service Principal Interest Other Debt Service Costs Capital Projects Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending Total Nonmajor Special Revenue Debt Service Capital Project Governmental Funds Funds Funds Funds $ 14,353 $ 3,138 $ 24,728 $ 42,219 8, ,767 26,887 2,533-29,420 4, , ,011 1, ,714 57,129 6,517 25,090 88,736 3, ,734 3, ,419 6, ,070 16, ,005 14, ,283 5, ,941 6, ,286 2, ,290-16,590 1,389 17,979-20, , ,765 23,765 58,028 37,334 25, ,963 (899) (30,817) (511) (32,227) 10,444 30, ,137 (8,794) - (27,221) (36,015) 1,650 30,576 (27,104) 5, (241) (27,615) (27,105) 67,660 45,229 76, ,035 $ 68,411 $ 44,988 $ 48,531 $ 161,

130 B-56 Board of County Commissioners NONMAJOR SPECIAL REVENUE FUNDS Transportation Trust (102) - The Transportation Trust fund includes revenues and appropriations for transportation related expenditures such as construction and/or maintenance of roads, bridges, mass transit, and purchase of right-of-way. The funding sources include the 9th cent fuel tax (1 cent per gallon), the county fuel tax (1 cent per gallon), the local option fuel tax (6 cents per gallon), engineering fees, and transfers from the General Fund. Drug Abuse Treatment (103) - The Drug Abuse Treatment fund is authorized pursuant to Florida Statute for allocation to local substance abuse prevention, treatment or education programs, as designated by the Board of County Commissioners. Library District (107) - The Library District was created by County Ordinance 79-2, adopted on March 26, The fund accounts for the operation of six libraries, central services and support staff. The budget is funded primarily by voter approved ad valorem tax revenues. The Library District is a blended component unit of the County. Law Enforcement Trust (109) - Pursuant to Florida Statute , funds derived from forfeited property will be deposited in a special law enforcement trust established by the County Commissioners. The proceeds, along with interest, shall be used for school resource officers, crime prevention, safe neighborhood, drug abuse education and prevention programs, or for other law enforcement purposes including defraying costs of complex investigations, additional equipment or expertise, and providing matching funds to obtain federal grants. Funds are requested by the Sheriff from the Board of County Commissioners. The proceeds and interest may not be used to meet normal operating expenses of the law enforcement agency. State Housing Initiative Partnership (111) - The State Housing Initiative Partnership (S.H.I.P.) Program was established pursuant to Florida Statute and provides funding to local governments to assist eligible citizens to become homeowners. 911 Emergency Communications (112) The 911 Emergency Communications fund was established by County Ordinance in December Subsequently, the 2007 Florida Legislature passed the Emergency Communications Number E911 Act (Florida Statute ). The law requires local exchange carriers and wireless providers operating in Florida to collect a monthly fee from users. A portion of the fee is distributed to the county to fund the costs associated with providing emergency communications. Buenaventura Lakes (BVL) Municipal Services Benefit Unit (MSBU) (113) The Buenaventura Lakes (BVL) Municipal Benefit Unit is the largest municipal services benefit unit in Osceola County with approximately 26,000 residents. A full time staff of two provides support to the BVL community. Revenues are generated from special assessments levied upon the properties located in the MSBU. The assessment provides for a range of services (including but are not limited to street lighting, storm water management, landscape, and common area maintenance) to this community that lies in unincorporated Osceola County. Neighborhood Stabilization Program (114) - The Neighborhood Stabilization Program was created in fiscal year 2009 to track federal funds received for the Neighborhood Stabilization Program grant, as a result of the Housing and Economic Recovery Act of Funds from this program are used to purchase foreclosed homes or rehabilitate existing homes in the community. This includes Neighborhood Stabilization Program (114) and Neighborhood Stabilization Program 3 (122). Court Facilities (115) The Court Facilities fund provides for the maintenance and/or construction of state court facilities. County Ordinance authorized the imposition of a $30 surcharge on any noncriminal traffic infractions pursuant to Florida Statute (13)(a)(1) or for criminal violations listed in Florida Statute Board of County Commissioners (Continued) NONMAJOR SPECIAL REVENUE FUNDS (Continued) Library Endowment (117) The Library Endowment fund was established to account for endowment contributions made to the public library system. Homelessness Prevention (118) The Homelessness Prevention fund is a federally funded program, subcontracted to Osceola County by the State of Florida Department of Children and Families. The purpose of this program is to provide temporary assistance to homeless and at-risk households. Environmental Lands (124) The Environmental Lands Conservation Program (ELCP) was created by Ordinance to account for the acquisition and maintenance of environmentally significant lands as well as to support the department s staff. This includes Environmental Land Acquisition (124), Environmental Land Maintenance (125), and GO Bonds, Series 2010 (126). The budget is funded by voter approved ad valorem tax revenues. Court Related Technology (130) The Court Related Technology fund was established to administer the funds collected for court related technology, pursuant to Florida Statute 28.24(e), which authorizes the distribution to the County of a $2 service fee charged by the Clerk of the Circuit Court on recordings. Homestead Foreclosure Mediation (136) The Homestead Foreclosure Mediation fund was established in fiscal year 2010 pursuant to Administrative Order No signed in July by the Ninth Judicial Circuit Court. The Residential Mortgage Foreclosure Mediation (RMFM) program is mandatory mediation for homestead residential mortgage foreclosures. The budget is funded by a fee assessed on the foreclosing entity. Criminal Justice Training (139) The Criminal Justice Training fund was created to provide training to Criminal Justice personnel pursuant to Florida Statute (11) (c). The revenue source is a portion of the traffic fines levied by the state and county. Boating Improvement (141) The Boating Improvement fund accounts for the county portion of recreational vessel registration fees. Pursuant to Florida Statute the funds collected by the Tax Collector are distributed to the County for the purposes of providing recreational channel marking, public boat ramps and other improvement projects. Building (148) The Building fund was established in fiscal year to account for revenues and expenditures of the Building and Permitting Department. 192 Redevelopment Fund (149) The 192 Redevelopment Fund was established by County Ordinance and adopted in fiscal year The ordinances created the 192 Community Redevelopment Area (CRA). The CRA is funded by increment tax revenues received based on the taxable value of property within the redevelopment area. These funds will be used for community redevelopment purposes. Community Development Block Grant (151) The Community Development Block Grant fund was established in fiscal year to account for federal funds received for housing and community development. It primarily provides housing rehabilitation assistance and education. Municipal Services Taxing Units (152) - The Municipal Services Taxing Units fund was created pursuant to Florida Statute (1)(q) which authorizes the creation of Municipal Service Taxing Units (MSTU) to provide municipal services such as street lighting, water retention, common area landscaping and maintenance. Revenues are generated from ad valorem taxes levied on properties located in the MSTU

131 Board of County Commissioners (Concluded) NONMAJOR SPECIAL REVENUE FUNDS (Continued) Municipal Service Benefit Units (153) - The Municipal Service Benefit Units (MSBU) funds were established through the Local Improvement and Assessment Ordinance (#10-10), pursuant to Florida Statute (1)(q) which authorizes the creation of MSBUs to provide municipal services such as street lighting, water retention, common area landscaping and maintenance. Revenues are generated from special assessments levied upon the properties located in the MSBU. This includes Subdivision Pond Maintenance MSBU (128), Street Lighting Maintenance MSBU (129) and Municipal Services Benefit Units (153). Constitutional Gas Tax (154) - The Constitutional Gas Tax fund includes revenues and appropriations for transportation related debt service, resurfacing projects and other transportation related expenditures pursuant to Florida Statute (7). The major revenue source is the 2 cents tax per gallon on motor fuel. West 192 Redevelopment Area Municipal Services Benefit Unit (MSBU) (155) - The West 192 fund was established to fund the maintenance of roadway improvements along U.S. 192 within an area known as the County's tourist corridor. Revenues are generated from special assessments levied upon the properties within the West 192 Redevelopment Municipal Service Benefit Unit (MSBU). Federal and State Grant Fund (156) The Federal and State Grant fund was established in fiscal year to account for funds received from Federal and State programs and agencies. The grants received are utilized for a variety of purposes. Clerk of the Circuit Court NONMAJOR SPECIAL REVENUE FUNDS (Concluded) Public Records Modernization The Public Records Modernization fund accounts for special recording fees collected and required to be held in trust by the Clerk. The funds are used exclusively for equipment, personnel training, and technical assistance in modernizing the official record system, pursuant to Florida Statute 28.24(15) (d). Public Records Information Technology The Public Records Information Technology fund accounts for special recording fees collected and required to be held in trust by the Clerk. The funds are used exclusively for court related technology needs, pursuant to Florida Statute 28.24(12) (e). Supervisor of Elections Grants The Grant Special Revenue fund is used to account for all revenues and expenditures applicable to the grants of the Supervisor of Elections. Sheriff Special Revenue The Special Revenue fund accounts for a combination of special revenue funds which include Police Officer Training, Law Enforcement Trust Fund, Federal Forfeitures Fund, Justice Assistance Grants and Osceola County Investigative Bureau Training Fund. B-57 Intergovernmental Radio Communication (158) - The Intergovernmental Radio Communication fund accounts for revenues and expenditures to administer and maintain the County's radio communication system. Revenues are generated from traffic violations, transfers and contracts from other agencies and departments involved in the radio system. Section 8 Housing (168) - The Section 8 Housing fund was established in fiscal year to account for federal funds received for the Housing and Urban Development Section 8 program. The purpose of the program is to provide families with housing opportunities and education. Road Impact Fees (174) This fund was created to account for transportation impact fee revenues and expenditures within specific impact fee zones collected on developments that will have an effect on the County s transportation system. This includes Road Impact Fee Zone 1/Shared (174), Road Impact Fee Zone 2, 3, 4, 5, 6 ( ) and Road Impact Fee Poinciana Overlay (187). Fire Impact Fee (177) - The Fire Impact Fee fund was established in fiscal year to account for the revenues and expenditures of fire rescue impact fees for the purpose of providing growth-necessitated capital improvements to the fire rescue system pursuant to Ordinance Parks Impact Fee (178) - The Parks Impact Fee fund was established in fiscal year to account for the revenues and expenditures of parks and recreational facilities impact fees for the purpose of providing growth-necessitated capital improvements to the county park system pursuant to Ordinance Inmate Welfare (180) - The Inmate Welfare fund was established for services provided to the County's jail inmates utilizing revenue generated from the jail commissary sales and print shop. Pursuant to Florida Statute (9)(d), the Director of Corrections has the final authority over the use of the funds, and is not required to comply with the County's fiscal procedures

132 OSCEOLA COUNTY, FLORIDA COMBINING BALANCE SHEET Nonmajor Special Revenue Funds September 30, 2014 (In thousands) B State Drug Law Housing Transportation Abuse Library Enforcement Initiative Trust Treatment District Trust Partnership ASSETS Cash and Investments $ 3,104 $ 20 $ 6,093 $ 226 $ 595 Accounts Receivable, Net Due from Other Funds Due from Other Governments 1, Prepaid Items Inventories Total Assets $ 5,620 $ 27 $ 6,190 $ 226 $ 595 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts Payable $ 218 $ - $ 137 $ - $ - Accrued Liabilities Deposits Due to Other Governments Unearned Revenue Due to Other Funds Total Liabilities Buenaventura Neighborhood Emergency Lakes Stabilization Court Library Homelessness Environmental Communications MSBU Program Facilities Endowment Prevention Lands $ 597 $ 121 $ 43 $ 9,527 $ 1 $ - $ 8, $ 1,383 $ 121 $ 54 $ 9,676 $ 1 $ 53 $ 8,050 $ - $ - $ 18 $ - $ - $ 2 $ Fund Balances Nonspendable Restricted Committed Total Fund Balances , , , , , , , , , ,009 Total Liabilities, Deferred Inflows of Resources and Fund Balance $ 5,620 $ 27 $ 6,190 $ 226 $ 595 $ 1,383 $ 121 $ 54 $ 9,676 $ 1 $ 53 $ 8,050 Continued 94 95

133 OSCEOLA COUNTY, FLORIDA COMBINING BALANCE SHEET Nonmajor Special Revenue Funds - Continued September 30, 2014 (In thousands) B Court Homestead Criminal Related Foreclosure Justice Boating Technology Mediation Training Improvement Building ASSETS Cash and Investments $ 1,361 $ 200 $ 34 $ 526 $ 7,003 Accounts Receivable, Net Due from Other Funds Due from Other Governments Prepaid Items Inventories Total Assets $ 1,420 $ 200 $ 42 $ 529 $ 7,004 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts Payable $ 169 $ 2 $ - $ 5 $ 14 Accrued Liabilities Deposits ,602 Due to Other Governments Unearned Revenue Due to Other Funds Total Liabilities ,711 Fund Balances Nonspendable Restricted 1, ,293 Committed Total Fund Balances 1, ,293 Total Liabilities, Deferred Inflows of Resources and Fund Balance $ 1,420 $ 200 $ 42 $ 529 $ 7, Community Municipal Municipal West 192 Federal Development Services Services Constitutional Redevelopment and 192 Block Taxing Benefit Gas Area State Redevelopment Grant Units Units Tax MSBU Grant $ 745 $ - $ 611 $ 721 $ 1,638 $ 2,193 $ $ 745 $ 12 $ 612 $ 721 $ 2,287 $ 2,230 $ 972 $ 3 $ - $ 55 $ 30 $ 40 $ 161 $ ,247 2, ,247 2,064 - $ 745 $ 12 $ 612 $ 721 $ 2,287 $ 2,230 $ 972 Continued 96 97

134 OSCEOLA COUNTY, FLORIDA COMBINING BALANCE SHEET Nonmajor Special Revenue Funds - Concluded September 30, 2014 (In thousands) B Intergovernmental Road Fire Parks Radio Section 8 Impact Impact Impact Communication Housing Fees Fee Fee ASSETS Cash and Investments $ 1,798 $ 899 $ 6,026 $ 2,246 $ 5,577 Accounts Receivable, Net Due from Other Funds Due from Other Governments Prepaid Items Inventories Total Assets $ 2,068 $ 1,110 $ 6,026 $ 2,246 $ 5,577 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts Payable $ 18 $ 7 $ - $ - $ 68 Accrued Liabilities Deposits Due to Other Governments Unearned Revenue Due to Other Funds Total Liabilities Total Public Nonmajor Public Records Supervisor Sheriff's Special Inmate Records Information of Elections Special Revenue Welfare Modernization Technology Grants Revenue Funds $ 194 $ 3,366 $ 868 $ - $ 2,487 $ 66, , $ 260 $ 3,366 $ 868 $ - $ 2,571 $ 72,862 $ 66 $ 17 $ - $ - $ 3 $ 1, , , ,451 Fund Balances Nonspendable Restricted Committed Total Fund Balances ,018 6,026 2,246 5,505 2, ,042 1,018 6,026 2,246 5, , ,419 61, , , ,419 68,411 Total Liabilities, Deferred Inflows of Resources and Fund Balance $ 2,068 $ 1,110 $ 6,026 $ 2,246 $ 5,577 $ 260 $ 3,366 $ 868 $ - $ 2,571 $ 72,

135 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Special Revenue Funds For the Year Ended September 30, 2014 (In thousands) B State Drug Law Housing Transportation Abuse Library Enforcement Intitiative Trust Treatment District Trust Partnership REVENUES Taxes $ 8,282 $ - $ 4,255 $ - $ - Permits, Fees and Special Assessments Intergovernmental 1, Charges for Services Fines and Forfeitures Interest Income Miscellaneous Total Revenues 10, , EXPENDITURES Current General Government Public Safety Physical Environment Transportation 11, Economic Environment Human Services Culture/Recreation - - 5, Court Related Total Expenditures 11,741-5, Excess (Deficiency) of Revenues Over (Under) Expenditures (1,387) 82 (1,149) 2 93 OTHER FINANCING SOURCES Transfers In 3, Transfers (Out) (1,553) (58) (548) (202) - Total Other Financing Sources (Uses) 1,944 (58) (515) (126) - Net Change in Fund Balances (1,664) (124) Buenaventura Neighborhood Emergency Lakes Stabilization Court Library Homelessness Environmental Communications MSBU Program Facilities Endowment Prevention Lands $ - $ - $ - $ - $ - $ - $ , , , , , ,789 1,206 (100) 11 1,555 (118) - (4,824) (1,956) (429) - (640) - - (147) (1,568) (429) - (640) - - (115) (362) (529) (118) - (4,939) Fund Balances - Beginning Fund Balances - Ending 4, , $ 5,103 $ 27 $ 6,049 $ 226 $ 592 1, , ,948 $ 1,383 $ 112 $ 34 $ 9,676 $ 1 $ 4 $ 8,

136 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Special Revenue Funds - Continued For the Year Ended September 30, 2014 (In thousands) B Court Homestead Criminal Related Foreclosure Justice Boating Technology Mediation Training Improvement Building REVENUES Taxes $ - $ - $ - $ - $ - Permits, Fees and Special Assessments ,091 Intergovernmental Charges for Services Fines and Forfeitures Interest Income Miscellaneous Total Revenues ,242 EXPENDITURES Current General Government Public Safety ,405 Physical Environment Transportation Economic Environment Human Services Culture/Recreation Court Related 1, Total Expenditures 1, ,464 Excess (Deficiency) of Revenues Over (Under) Expenditures (390) (44) 101 (98) 778 OTHER FINANCING SOURCES Transfers In Transfers (Out) (92) (37) (93) (4) (318) Total Other Financing Sources (Uses) (92) (37) (93) (4) (318) Net Change in Fund Balances (482) (81) 8 (102) Community Municipal Municipal West 192 Federal Development Services Services Constitutional Redevelpment and 192 Block Taxing Benefit Gas Area State Redevelopment Grant Units Units Tax MSBU Grant $ - $ - $ 986 $ - $ - $ - $ , , ,867-5, , ,875 1,786 5, , , , , , ,554 1, ,987 2,176 5,889 (69) - (17) 138 (112) (390) , (73) (152) (944) (65) (77) (72) (35) (77) (89) (425) - Fund Balances - Beginning Fund Balances - Ending 1, ,833 $ 1,235 $ 193 $ 16 $ 524 $ 5, ,593 2,489 - $ 736 $ - $ 549 $ 671 $ 2,247 $ 2,064 $

137 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Special Revenue Funds - Concluded For the Year Ended September 30, 2014 (In thousands) B Intergovernmental Road Fire Parks Radio Section 8 Impact Impact Impact Communication Housing Fees Fee Fee REVENUES Taxes $ - $ - $ - $ - $ - Permits, Fees and Special Assessments ,672 Intergovernmental - 10, Charges for Services Fines and Forfeitures Interest Income Miscellaneous Total Revenues 1,539 10, ,706 EXPENDITURES Current General Government 1, Public Safety Physical Environment Transportation Economic Environment - 10, Human Services Culture/Recreation Court Related Total Expenditures 1,908 10, Excess (Deficiency) of Revenues Over (Under) Expenditures (369) ,523 OTHER FINANCING SOURCES Transfers In 626-2, Transfers (Out) (66) - (206) (3) (16) Total Other Financing Sources (Uses) 560-2,116 (3) (16) Net Change in Fund Balances , , Total Public Nonmajor Public Records Supervisor Sheriff's Special Inmate Records Information of Elections Special Revenue Welfare Modernization Technology Grants Revenue Funds $ - $ - $ - $ - $ - $ 14, , ,020 26, , , ,056 57, , , , , , , , , , (4) 594 (899) ,444 (26) (357) (656) - (76) (8,794) (26) (205) (656) , (121) (1) Fund Balances - Beginning Fund Balances - Ending 1, ,658 1,394 3,998 $ 2,042 $ 1,018 $ 6,026 $ 2,246 $ 5, , ,516 67,660 $ 194 $ 3,349 $ 868 $ - $ 2,419 $ 68,

138 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Transportation Trust For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Drug Abuse Treatment For the Year Ended September 30, 2014 (In thousands) B-64 Budget Actual Amounts Variance With Budget REVENUES Taxes $ 7,708 $ 8,282 $ 574 Permits, Fees and Special Assessments Intergovernmental 1,737 1, Charges for Services Fines and Forfeitures 40 4 (36) Interest Income Miscellaneous Total Revenues 9,549 10, EXPENDITURES Current Physical Environment Transportation 12,495 11, Total Expenditures 12,963 11,741 1,222 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,414) (1,387) 2,027 OTHER FINANCING SOURCES (USES) Transfers In 3,497 3,497 - Transfers (Out) (1,553) (1,553) - Total Other Financing Sources (Uses) 1,944 1,944 - REVENUES Fines and Forfeitures Total Revenues EXPENDITURES Current Total Expenditures Budget Actual Amounts $ 58 $ 82 $ Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers (Out) Total Other Financing Sources (Uses) Variance With Budget (58) (58) - (58) (58) - Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ 3 $ 27 $ 24 Net Change in Fund Balances (1,470) 557 2,027 Fund Balances - Beginning 4,546 4,546 - Fund Balances - Ending $ 3,076 $ 5,103 $ 2,

139 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Library District For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Law Enforcement Trust For the Year Ended September 30, 2014 (In thousands) B-65 Budget Actual Amounts Variance With Budget REVENUES Taxes $ 4,424 $ 4,255 $ (169) Intergovernmental (14) Charges for Services Fines and Forfeitures Interest Income Miscellaneous Total Revenues 4,926 4,816 (110) EXPENDITURES Current Culture/Recreation 6,332 5, Court Related (119) Total Expenditures 6,332 5, Excess (Deficiency) of Revenues Over (Under) Expenditures (1,406) (1,149) 257 Budget Actual Amounts Variance With Budget REVENUES Interest Income $ 1 $ 2 $ 1 Total Revenues EXPENDITURES Current Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In (24) Transfers (Out) (451) (202) 249 Total Other Financing Sources (Uses) (351) (126) 225 Net Change in Fund Balances (350) (124) 226 OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) (548) (548) - Total Other Financing Sources (Uses) (548) (515) 33 Net Change in Fund Balances (1,954) (1,664) 290 Fund Balances - Beginning Fund Balances - Ending $ - $ 226 $ 226 Fund Balances - Beginning 7,713 7,713 - Fund Balances - Ending $ 5,759 $ 6,049 $

140 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE State Housing Intitiative Partnership For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE 911 Emergency Communications For the Year Ended September 30, 2014 (In thousands) B-66 Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ 390 $ 412 $ 22 Charges for Services (6) Interest Income Miscellaneous Total Revenues EXPENDITURES Current Economic Environment Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (499) Net Change in Fund Balances (499) Fund Balances - Beginning Fund Balances - Ending $ - $ 592 $ 592 Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ 1,373 $ 1,194 $ (179) Charges for Services Interest Income Total Revenues 1,379 1,206 (173) EXPENDITURES Current Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures 1,379 1,206 (173) OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) (1,956) (1,956) - Total Other Financing Sources (Uses) (1,956) (1,568) 388 Net Change in Fund Balances (577) (362) 215 Fund Balances - Beginning 1,745 1,745 - Fund Balances - Ending $ 1,168 $ 1,383 $

141 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Buenaventura Lakes Municipal Services Benefit Unit For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Neighborhood Stabilization Program For the Year Ended September 30, 2014 (In thousands) B-67 REVENUES Total Revenues Budget Actual Amounts Variance With Budget $ - $ - $ - EXPENDITURES Current Physical Environment Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (212) (100) 112 OTHER FINANCING SOURCES (USES) Transfers (Out) (429) (429) - Total Other Financing Sources (Uses) (429) (429) - Net Change in Fund Balances (641) (529) 112 Fund Balances - Beginning Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ 1,217 $ 481 $ (736) Miscellaneous Total Revenues 1, (572) EXPENDITURES Current Human Services 1, Total Expenditures 1, Excess (Deficiency) of Revenues Over (Under) Expenditures (23) Net Change in Fund Balances (23) Fund Balances - Beginning Fund Balances - Ending $ - $ 34 $ 34 Fund Balances - Ending $ - $ 112 $

142 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Court Facilities For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Library Endowment For the Year Ended September 30, 2014 (In thousands) B-68 Budget Actual Amounts Variance With Budget REVENUES Charges for Services $ 2,060 $ 1,851 $ (209) Interest Income Total Revenues 2,086 1,907 (179) EXPENDITURES Current Court Related 1, ,276 Total Expenditures 1, ,276 Excess (Deficiency) of Revenues Over (Under) Expenditures 458 1,555 1,097 OTHER FINANCING SOURCES (USES) Transfers (Out) (640) (640) - Total Other Financing Sources (Uses) (640) (640) - Net Change in Fund Balances (182) 915 1,097 Budget Actual Amounts With Budget REVENUES Interest Income $ - $ 1 $ 1 Total Revenues EXPENDITURES Current Culture/Recreation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (119) (118) 1 Net Change in Fund Balances (119) (118) 1 Fund Balances - Beginning Fund Balances - Ending Variance $ - $ 1 $ 1 Fund Balances - Beginning Fund Balances - Ending 8,761 8,761 - $ 8,579 $ 9,676 $ 1,

143 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Homelessness Prevention For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Environmental Lands For the Year Ended September 30, 2014 (In thousands) B-69 Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ 1,185 $ 91 $ (1,094) Total Revenues 1, (1,094) EXPENDITURES Current Economic Environment 1, ,097 Total Expenditures 1, ,097 Excess (Deficiency) of Revenues Over (Under) Expenditures (3) - 3 Net Change in Fund Balances (3) - 3 Fund Balances - Beginning Fund Balances - Ending $ 1 $ 4 $ 3 Budget Actual Amounts Variance With Budget REVENUES Taxes $ 863 $ 830 $ (33) Intergovernmental Interest Income Miscellaneous Total Revenues EXPENDITURES Current Physical Environment 13,207 5,789 7,418 Total Expenditures 13,207 5,789 7,418 Excess (Deficiency) of Revenues Over (Under) Expenditures (12,315) (4,824) 7,491 OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) (152) (147) 5 Total Other Financing Sources (Uses) (152) (115) 37 Net Change in Fund Balances (12,467) (4,939) 7,528 Fund Balances - Beginning Fund Balances - Ending 12,948 12,948 - $ 481 $ 8,009 $ 7,

144 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Court Related Technology For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Homestead Foreclosure Mediation For the Year Ended September 30, 2014 (In thousands) B-70 Budget Actual Amounts Variance With Budget REVENUES Charges for Services $ 749 $ 690 $ (59) Interest Income Total Revenues (54) EXPENDITURES Current Court Related 1,177 1, Total Expenditures 1,177 1, Excess (Deficiency) of Revenues Over (Under) Expenditures (423) (390) 33 OTHER FINANCING SOURCES (USES) Transfers (Out) (92) (92) - Total Other Financing Sources (Uses) (92) (92) - Net Change in Fund Balances (515) (482) 33 Budget Actual Amounts Variance With Budget REVENUES Charges for Services $ 167 $ 118 $ (49) Interest Total Revenues (48) EXPENDITURES Current Court Related Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (27) (44) (17) OTHER FINANCING SOURCES (USES) Transfers (Out) (37) (37) - Total Other Financing Sources (Uses) (37) (37) - Net Change in Fund Balances (64) (81) (17) Fund Balances - Beginning 1,717 1,717 - Fund Balances - Beginning Fund Balances - Ending $ 1,202 $ 1,235 $ 33 Fund Balances - Ending $ 210 $ 193 $ (17)

145 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Criminal Justice Training For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Boating Improvement For the Year Ended September 30, 2014 (In thousands) B-71 Budget Actual Amounts Variance With Budget REVENUES Fines and Forfeitures $ 94 $ 101 $ 7 Total Revenues EXPENDITURES Current Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers (Out) (97) (93) 4 Total Other Financing Sources (Uses) (97) (93) 4 Net Change in Fund Balances (3) 8 11 Fund Balances - Beginning Budget Actual Amounts Variance With Budget REVENUES Permits, Fees & Special Assessments $ 39 $ 37 $ (2) Interest Total Revenues (2) EXPENDITURES Current Culture/Recreation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (304) (98) 206 OTHER FINANCING SOURCES (USES) Transfers (Out) (4) (4) - Total Other Financing Sources (Uses) (4) (4) - Net Change in Fund Balances (308) (102) 206 Fund Balances - Ending $ 5 $ 16 $ 11 Fund Balances - Beginning Fund Balances - Ending $ 318 $ 524 $

146 B-72 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Building For the Year Ended September 30, 2014 (In thousands) Budget Actual Amounts Variance With Budget REVENUES Permits, Fees and Special Assessments $ 2,507 $ 3,091 $ 584 Charges for Services Fines and Forfeitures Interest Income Miscellaneous Total Revenues 2,595 3, EXPENDITURES Current General Government Public Safety 2,476 2, Total Expenditures 2,539 2, Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers (Out) (318) (318) - Total Other Financing Sources (Uses) (318) (318) - Net Change in Fund Balances (262) Fund Balances - Beginning 4,833 4,833 - OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE 192 Redevelopment For the Year Ended September 30, 2014 (In thousands) Budget Actual Amounts With Budget REVENUES Intergovernmental $ 993 $ - $ (993) Interest Income Total Revenues (991) EXPENDITURES Current General Government Economic Environment Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures 772 (69) (841) OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) Net Change in Fund Balances (81) Fund Balances - Beginning Increase (Decrease) in Reserve for Inventories Fund Balances - Ending Variance $ 817 $ 736 $ (81) Fund Balances - Ending $ 4,571 $ 5,293 $

147 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Community Development Block Grant For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Municipal Services Taxing Units For the Year Ended September 30, 2014 (In thousands) B-73 Budget Actual Amounts REVENUES Intergovernmental $ 2,389 $ 1,554 $ (835) Total Revenues 2,389 1,554 (835) EXPENDITURES Current Variance With Budget Economic Environment 2,261 1, Human Services Total Expenditures 2,389 1, Excess (Deficiency) of Revenues Over (Under) Expenditures Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ - $ - $ - Budget Actual Amounts Variance With Budget REVENUES Taxes $ 1,031 $ 986 $ (45) Interest Income Total Revenues 1, (37) EXPENDITURES Current General Government 1,508 1, Total Expenditures 1,508 1, Excess (Deficiency) of Revenues Over (Under) Expenditures (477) (17) 460 OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) (73) (73) - Total Other Financing Sources (Uses) (73) (72) 1 Net Change in Fund Balances (550) (89) 461 Fund Balances - Beginning Fund Balances - Ending $ 88 $ 549 $

148 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Municipal Services Benefit Units For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Constitutional Gas Tax For the Year Ended September 30, 2014 (In thousands) B-74 Budget Actual Amounts Variance With Budget REVENUES Permits, Fees and Special Assessments $ 883 $ 853 $ (30) Interest Income Miscellaneous 42 - (42) Total Revenues (66) EXPENDITURES Current General Government 1, Total Expenditures 1, Excess (Deficiency) of Revenues Over (Under) Expenditures (498) OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) Total Other Financing Sources (Uses) (156) (152) Net Change in Fund Balances (271) Fund Balances - Beginning Fund Balances - Ending $ 31 $ 671 $ 640 Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ 3,652 $ 3,867 $ 215 Interest Income Total Revenues 3,660 3, EXPENDITURES Current Transportation 5,148 3,987 1,161 Total Expenditures 5,148 3,987 1,161 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,488) (112) 1,376 OTHER FINANCING SOURCES (USES) Transfers In 1,710 1,710 - Transfers (Out) (1,631) (944) 687 Total Other Financing Sources (Uses) Net Change in Fund Balances (1,409) 654 2,063 Fund Balances - Beginning Fund Balances - Ending 1,593 1,593 - $ 184 $ 2,247 $ 2,

149 B-75 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE West 192 Redevelopment Area Municipal Services Benefit Unit For the Year Ended September 30, 2014 (In thousands) Budget Actual Amounts Variance With Budget REVENUES Permits, Fees and Special Assessments $ 1,626 $ 1,559 $ (67) Interest Income Miscellaneous Total Revenues 1,807 1,786 (21) EXPENDITURES Current Economic Environment 2,688 2, Total Expenditures 2,688 2, Excess (Deficiency) of Revenues Over (Under) Expenditures (881) (390) 491 OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) (65) (65) - Total Other Financing Sources (Uses) (65) (35) 30 Net Change in Fund Balances (946) (425) 521 Fund Balances - Beginning Fund Balances - Ending 2,489 2,489 - $ 1,543 $ 2,064 $ 521 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Federal and State Grant For the Year Ended September 30, 2014 (In thousands) Budget Actual Amounts With Budget REVENUES Intergovernmental $ 10,025 $ 5,966 $ (4,059) Total Revenues 10,025 5,966 (4,059) EXPENDITURES Current General Government Public Safety Transportation 2, ,363 Human Services 6,693 5,117 1,576 Court Related Total Expenditures 9,935 5,889 4,046 Excess (Deficiency) of Revenues Over (Under) Expenditures (13) OTHER FINANCING SOURCES (USES) Transfers (Out) (91) (77) 14 Total Other Financing Sources (Uses) (91) (77) 14 Net Change in Fund Balances (1) - 1 Fund Balances - Beginning Fund Balances - Ending Variance $ (1) $ - $

150 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Intergovernmental Radio Communication For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Section 8 Housing For the Year Ended September 30, 2014 (In thousands) B-76 Variance Budget Actual Amounts With Budget REVENUES Charges for Services $ 572 $ 572 $ - Fines and Forfeitures (12) Interest Income Miscellaneous Total Revenues 1,162 1, EXPENDITURES Current General Government 1,997 1, Total Expenditures 1,997 1, Excess (Deficiency) of Revenues Over (Under) Expenditures (835) (369) 466 OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) (66) (66) - Total Other Financing Sources (Uses) Budget Actual Amounts With Budget REVENUES Intergovernmental $ 8,790 $ 10,227 $ 1,437 Interest Miscellaneous Total Revenues 8,791 10,239 1,448 EXPENDITURES Current Economic Environment Total Expenditures Variance 9,684 10,114 (430) 9,684 10,114 (430) Excess (Deficiency) of Revenues Over (Under) Expenditures (893) 125 1,018 Net Change in Fund Balances (893) 125 1,018 Fund Balances - Beginning Fund Balances - Ending $ - $ 1,018 $ 1,018 Net Change in Fund Balances (275) Fund Balances - Beginning Fund Balances - Ending 1,851 1,851 - $ 1,576 $ 2,042 $

151 B-77 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Road Impact Fees For the Year Ended September 30, 2014 (In thousands) Variance Budget Actual Amounts With Budget REVENUES Permits, Fees & Special Assessments $ - $ 69 $ 69 Interest Miscellaneous Total Revenues EXPENDITURES Current Transportation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (430) OTHER FINANCING SOURCES (USES) Transfers In 2,322 2,322 - Transfers (Out) (206) (206) - Total Other Financing Sources (Uses) 2,116 2,116 - Net Change in Fund Balances 1,686 2, OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Fire Impact Fee For the Year Ended September 30, 2014 (In thousands) Budget Actual Amounts Variance With Budget REVENUES Permits, Fees and Special Assessments $ 135 $ 845 $ 710 Interest Income Total Revenues EXPENDITURES Current Public Safety 1-1 Total Expenditures 1-1 Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers (Out) (3) (3) - Total Other Financing Sources (Uses) (3) (3) - Net Change in Fund Balances Fund Balances - Beginning 3,658 3,658 - Fund Balances - Beginning 1,394 1,394 - Fund Balances - Ending $ 5,344 $ 6,026 $ 682 Fund Balances - Ending $ 1,529 $ 2,246 $

152 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Parks Impact Fee For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Inmate Welfare For the Year Ended September 30, 2014 (In thousands) Budget Actual Amounts Variance With Budget REVENUES Permits, Fees and Special Assessments $ 612 $ 1,672 $ 1,060 Interest Income Miscellaneous Total Revenues 625 1,706 1,081 EXPENDITURES Current Culture/Recreation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures 276 1,523 1,247 Budget Actual Amounts Variance With Budget REVENUES Charges for Services $ 59 $ 63 $ 4 Interest Income Miscellaneous (11) Total Revenues (7) EXPENDITURES Current Public Safety Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (25) B-78 OTHER FINANCING SOURCES (USES) Transfers (Out) (16) (16) - Total Other Financing Sources (Uses) (16) (16) - OTHER FINANCING SOURCES (USES) Transfers (Out) Total Other Financing Sources (Uses) (26) (26) - (26) (26) - Net Change in Fund Balances 260 1,507 1,247 Net Change in Fund Balances (51) Fund Balances - Beginning 3,998 3,998 - Fund Balances - Beginning Fund Balances - Ending $ 4,258 $ 5,505 $ 1,247 Fund Balances - Ending $ 128 $ 194 $

153 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Public Records Modernization For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Public Records Information Technology For the Year Ended September 30, 2014 (In thousands) B-79 Budget Actual Amounts Variance With Budget REVENUES Charges for Services $ - $ 595 $ 595 Interest Income Total Revenues EXPENDITURES Current Court Related (511) Total Expenditures (511) Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) - (357) (357) Total Other Financing Sources (Uses) - (205) (205) Budget Actual Amounts Variance With Budget REVENUES Charges for Services $ - $ 655 $ 655 Interest Income Total Revenues EXPENDITURES Current Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers (Out) - (656) (656) Total Other Financing Sources (Uses) - (656) (656) Net Change in Fund Balances - (1) (1) Net Change in Fund Balances - (121) (121) Fund Balances - Beginning Fund Balances - Beginning - 3,470 3,470 Fund Balances - Ending $ 869 $ 868 $ (1) Fund Balances - Ending $ - $ 3,349 $ 3,

154 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Supervisor of Elections Grants For the Year Ending September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Sheriff's Special Revenue For the Year Ended September 30, 2014 (In thousands) B-80 Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ - $ 28 $ 28 Interest Income Total Revenues EXPENDITURES Current General Government - 32 (32) Debt Service: Principal Interest Other Debt Service Costs Capital Outlay Total Expenditures - 32 (32) Excess (Deficiency) of Revenues Over (Under) Expenditures - (4) (4) OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) Net Change in Fund Balances Budget Actual Amounts Variance With Budget REVENUES Intergovernmental $ - $ 1,020 $ 1,020 Miscellaneous Total Revenues - 1,056 1,056 EXPENDITURES Current Public Safety (462) Total Expenditures (462) Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) - (76) (76) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending 1,516 1,516 - $ 1,516 $ 2,419 $ 903 Fund Balances - Beginning Fund Balances - Ending $ - $ - $

155 NONMAJOR DEBT SERVICE FUNDS Sales Tax Revenue Bonds This fund was established to account for payments of principal, interest and other debt service costs for the $48,735,000 Sales Tax Revenue Bonds, Series 2009 (202) and the $43,470,000 Sales Tax Revenue Refunding Bonds, Series 2010 (237). Taxable Tourist Development Tax Revenue Bonds - This fund accounts for payments of principal, interest and other debt service costs for the $12,565,000 Taxable Tourist Development Tax (Fifth Cent) Revenue Bonds, Series 2012 (RIDA Conference Center Phase One Project) (204). West 192 MSBU Special Assessment Bonds - This fund was established to account for payments of principal, interest and other debt service costs for the $4,415,000 Special Assessments Bonds, Series 2003 (210). THIS PAGE INTENTIONALLY LEFT BLANK Limited General Obligation Bonds - This fund accounts for payments of principal, interest and other debt service costs for the $15,295,000 Limited General Obligation Bonds, Series 2006 (234) and $24,295,000 Limited General Obligation Bonds, Series 2010 (238). These Bonds were issued to purchase environmentally significant land in the County for the Environmental Land Conservation Program (ELCP). Infrastructure Sales Surtax Revenue Bonds - This fund accounts for payments of principal, interest and other debt service costs for the $75,000,000 Infrastructure Sales Surtax Revenue Bonds, Series 2007 (235) and $29,500,000 Infrastructure Sales Surtax Revenue Refunding Bonds, Series 2011 (239). Capital Improvement Revenue Bonds - This fund accounts for payments of principal, interest and other debt service costs for the $132,250,000 Capital Improvement Revenue Bonds, Series 2009 A, B, C (236). B-81 Tourist Development Tax Revenue Bonds This fund accounts for payments of principal, interest and other debt service costs for the $74,790,000 Tourist Development Tax Revenue Refunding and Improvement Bonds, Series 2012 (240)

156 OSCEOLA COUNTY, FLORIDA COMBINING BALANCE SHEET Nonmajor Debt Service Funds September 30, 2014 (In thousands) B Taxable Tourist West 192 Limited Sales Tax Development MSBU Special General Revenue Tax Revenue Assessment Obligation Bonds Bonds Bonds Bonds ASSETS Cash and Investments $ 13,084 $ 1,651 $ 606 $ 3,173 Accounts Receivable, Net Due from Other Governments Total Assets $ 13,084 $ 1,670 $ 609 $ 3,176 LIABILITIES Unearned Revenue $ - $ - $ - $ - Total Liabilities Fund Balances Restricted 13,049 1, ,176 Assigned Total Fund Balances 13,084 1, ,176 Total Liabilities and Fund Balances $ 13,084 $ 1,670 $ 609 $ 3, Infrastructure Capital Tourist Total Sales Surtax Improvement Development Nonmajor Revenue Revenue Tax Revenue Debt Service Bonds Bonds Bonds Funds $ 8,047 $ 15,451 $ 3,980 $ 45, $ 8,047 $ 15,451 $ 3,980 $ 46,017 $ - $ 1,029 $ - $ 1,029-1,029-1,029 8,047 14,422 3,980 44, ,047 14,422 3,980 44,988 $ 8,047 $ 15,451 $ 3,980 $ 46,

157 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Nonmajor Debt Service Funds For the Year Ended September 30, 2014 (In thousands) B Taxable Tourist West 192 Limited Sales Tax Development MSBU Special General Revenue Tax Revenue Assessment Obligation Bonds Bonds Bonds Bonds REVENUES Taxes $ - $ - $ - $ 3,138 Permits, Fees and Special Assessments Intergovernmental Interest Income Total Revenues ,161 EXPENDITURES Debt Service Principal 3, ,030 Interest 3, ,208 Other Debt Service Costs Total Expenditures 7, ,239 Excess (Deficiency) of Revenues Over (Under) Expenditures (7,302) (627) 109 (78) OTHER FINANCING SOURCES (USES) Transfers In 6, Transfers (Out) Total Other Financing Sources (Uses) 6, Net Change in Fund Balances (437) (78) Infrastructure Capital Tourist Total Sales Surtax Improvement Development Nonmajor Revenue Revenue Tax Revenue Debt Service Bonds Bonds Bonds Funds $ - $ - $ - $ 3, , , , ,517 5,755 2,620 2,330 16,590 4,173 7,499 3,195 20, ,928 10,120 5,525 37,334 (9,899) (8,009) (5,011) (30,817) 10,021 7,984 5,020 30, ,021 7,984 5,020 30, (25) 9 (241) Fund Balances - Beginning Fund Balances - Ending 13,521 1, ,254 $ 13,084 $ 1,670 $ 609 $ 3,176 7,925 14,447 3,971 45,229 $ 8,047 $ 14,422 $ 3,980 $ 44,

158 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Sales Tax Revenue Bonds For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Taxable Tourist Development Tax Revenue Bonds For the Year Ended September 30, 2014 (In thousands) B-84 Budget Actual Amounts with Budget REVENUES Interest Income $ 5 $ 69 $ 64 Total Revenues EXPENDITURES Debt Service Principal Interest Other Debt Service Costs Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) 3,580 3,580-3,791 3, ,372 7,371 1 (7,367) (7,302) 65 6,827 6, ,827 6, Net Change in Fund Balances (540) (437) 103 Fund Balances - Beginning Fund Balances - Ending Variance 13,521 13,521 - $ 12,981 $ 13,084 $ 103 Budget Actual Amounts with Budget REVENUES Permits, Fees and Special Assessments $ 220 $ 294 $ 74 Interest Income Total Revenues EXPENDITURES Debt Service Principal Interest Other Debt Service Costs 1-1 Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) (709) (627) Net Change in Fund Balances (23) Fund Balances - Beginning Fund Balances - Ending Variance 1,611 1,611 - $ 1,588 $ 1,670 $

159 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE West 192 MSBU Special Assessment Bonds For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Limited General Obligation Bonds For the Year Ended September 30, 2014 (In thousands) B-85 Budget Actual Amounts with Budget REVENUES Permits, Fees and Special Assessments $ 314 $ 322 $ 8 Interest Income Total Revenues EXPENDITURES Debt Service Principal Interest Other Debt Service Costs Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures (10) Net Change in Fund Balances (10) Fund Balances - Beginning Variance Budget Actual Amounts with Budget REVENUES Taxes $ 3,262 $ 3,138 $ (124) Interest Income Total Revenues 3,262 3,161 (101) EXPENDITURES Debt Service Principal 2,030 2,030 - Interest 1,208 1,208 - Other Debt Service Costs Total Expenditures 3,239 3,239 - Excess (Deficiency) of Revenues Over (Under) Expenditures 23 (78) (101) Net Change in Fund Balances 23 (78) (101) Fund Balances - Beginning Variance 3,254 3,254 - Fund Balances - Ending $ 490 $ 609 $ 119 Fund Balances - Ending $ 3,277 $ 3,176 $ (101)

160 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Infrastructure Sales Surtax Revenue Bonds For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Capital Improvement Revenue Bonds For the Year Ended September 30, 2014 (In thousands) B-86 REVENUES Interest Income Total Revenues EXPENDITURES Debt Service Principal Interest Other Debt Service Costs Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) Budget Actual Amounts $ - $ 29 $ ,755 5,755-4,173 4, ,929 9,928 1 (9,929) (9,899) 30 10,021 10,021-10,021 10,021 - Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending Variance with Budget 7,925 7,925 - $ 8,017 $ 8,047 $ 30 REVENUES Intergovernmental Interest Income Total Revenues EXPENDITURES Debt Service Principal Interest Other Debt Service Costs Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) Budget Actual Amounts $ 2,110 $ 2,033 $ (77) ,120 2,111 (9) 2,620 2,620-7,499 7, ,120 10,120 - (8,000) (8,009) (9) 7,984 7,984-7,984 7,984 - Net Change in Fund Balances (16) (25) (9) Fund Balances - Beginning Fund Balances - Ending Variance with Budget 14,447 14,447 - $ 14,431 $ 14,422 $ (9)

161 B-87 Budget Actual Amounts with Budget REVENUES Intergovernmental $ 500 $ 500 $ - Interest Income Total Revenues EXPENDITURES Debt Service Principal 2,330 2,330 - Interest 3,195 3,195 - Total Expenditures 5,525 5,525 - Excess (Deficiency) of Revenues Over (Under) Expenditures (5,025) (5,011) 14 OTHER FINANCING SOURCES (USES) Transfers In Total Other Financing Sources (Uses) 5,020 5,020-5,020 5,020 - Net Change in Fund Balances (5) 9 14 Fund Balances - Beginning OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Tourist Development Tax Revenue Bonds For the Year Ended September 30, 2014 (In thousands) Variance 3,971 3,971 - NONMAJOR CAPITAL PROJECT FUNDS Sales Tax Revenue Bonds (302) - This fund was established to account for the acquisition, construction, and improvement of various properties and facilities of the County funded by the Sales Tax Revenue Bonds, Series Deficient Roads (305) This fund was established by the County s Ordinance in 2009 to recognize and reserve funds to be used for repairing deficiencies in roads that are ineligible for Impact Fee Revenue. Local Option Sales Tax (306) - This fund was established to account for projects funded by local infrastructure sales tax. In September 1990, local voters approved a one-cent sales tax for the County s infrastructure needs, which are included in the Capital Improvements Projects. In October 1999, voters approved an extension of the authority to collect this tax until the year Per Florida Statutes (2), the proceeds must be expended to finance, plan, and construct infrastructure; to acquire land for public recreation; or conservation or protection of natural resources. Capital Improvement Revenue Bonds (326, 327) - This fund was established to account for projects funded with the Capital Improvement Revenue Bonds, Series The net proceeds of these bonds were primarily used for transportation capital projects (326) and infrastructure and equipment capital projects (327). MAJOR CAPITAL PROJECT FUNDS General Capital Outlay (315) - This fund accounts for general capital projects in Osceola County. The primary source of revenue is transfers from General Fund and other governmental funds. Fund Balances - Ending $ 3,966 $ 3,980 $

162 OSCEOLA COUNTY, FLORIDA COMBINING BALANCE SHEET Nonmajor Capital Project Funds September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Nonmajor Capital Project Funds For the Year Ended September 30, 2014 (In thousands) B-88 ASSETS Cash and Investments Due from Other Governments Total Assets Total Sales Local Capital Nonmajor Tax Option Improvement Capital Revenue Deficient Sales Revenue Project Bonds Roads Tax Bonds Funds $ - $ 2,827 $ 27,508 $ 17,040 $ 47, , ,154 $ - $ 2,827 $ 31,646 $ 17,056 $ 51,529 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts Payable $ - $ - $ 535 $ 1,692 $ 2,227 Accrued Liabilities Total Liabilities ,314 2,998 Fund Balances Committed Restricted - 2,825 30,964 14,742 48,531 Total Fund Balances - 2,825 30,964 14,742 48,531 Total Liabilities, Deferrred Inflows of Resources and Fund Balances $ - $ 2,827 $ 31,646 $ 17,056 $ 51,529 REVENUES Taxes Interest Income Miscellaneous Total Revenues Total Sales Local Capital Nonmajor Tax Option Improvement Capital Revenue Deficient Sales Revenue Project Bonds Roads Tax Bonds Funds $ - $ - $ 24,728 $ - $ 24, , ,090 EXPENDITURES Debt Service Principal - - 1,389-1,389 Interest Capital Projects ,255 17,599 23,765 Total Expenditures ,091 17,599 25,601 Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) Total Other Financing Sources (Uses) (893) 7 17,799 (17,424) (511) (39) (102) (24,758) (2,322) (27,221) (39) (102) (24,641) (2,322) (27,104) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending (932) (95) (6,842) (19,746) (27,615) 932 2,920 37,806 34,488 76,146 $ - $ 2,825 $ 30,964 $ 14,742 $ 48,

163 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Sales Tax Revenue Bonds For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Deficient Roads For the Year Ended September 30, 2014 (In thousands) REVENUES Interest Income Total Revenues Budget Actual Amounts Variance with Budget $ - $ 6 $ REVENUES Interest Income Total Revenues Budget Actual Amounts Variance with Budget $ 13 $ 19 $ EXPENDITURES Capital Projects Total Expenditures EXPENDITURES Capital Projects Total Expenditures 2, ,818 2, ,818 Excess (Deficiency) of Revenues Over (Under) Expenditures (932) (893) 39 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,817) 7 2,824 B-89 OTHER FINANCING SOURCES (USES) Transfers (Out) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances - Beginning - (39) (39) - (39) (39) (932) (932) OTHER FINANCING SOURCES (USES) Transfers (Out) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances - Beginning (102) (102) - (102) (102) - (2,919) (95) 2,824 2,920 2,920 - Fund Balances - Ending $ - $ - $ - Fund Balances - Ending $ 1 $ 2,825 $ 2,

164 OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Local Option Sales Tax For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE Capital Improvement Revenue Bonds For the Year Ended September 30, 2014 (In thousands) B-90 REVENUES Taxes Interest Income Miscellaneous Total Revenues EXPENDITURES Debt Service Principal Interest Capital Projects Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers (Out) Total Other Financing Sources (Uses) Budget Actual Amounts Variance with Budget $ 23,510 $ 24,728 $ 1, ,628 24,890 1,262 1,389 1, ,546 5,255 16,291 23,382 7,091 16, ,799 17, (24,758) (24,758) - (24,641) (24,641) - REVENUES Interest Income Total Revenues EXPENDITURES Capital Projects Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers (Out) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending Budget Actual Amounts Variance with Budget $ 173 $ 175 $ ,337 17,599 14,738 32,337 17,599 14,738 (32,164) (17,424) 14,740 (2,322) (2,322) - (2,322) (2,322) - (34,486) (19,746) 14,740 34,488 34,488 - $ 2 $ 14,742 $ 14,740 Net Change in Fund Balances (24,395) (6,842) 17,553 Fund Balances - Beginning 37,806 37,806 - Fund Balances - Ending $ 13,411 $ 30,964 $ 17,

165 B-91 Original Final Actual Amounts REVENUES Interest Income $ 41 $ 41 $ 287 $ 246 Miscellaneous - 1,052 1,016 (36) Total Revenues 41 1,093 1, EXPENDITURES Capital Projects 54,138 63, ,557 Total Expenditures 54,138 63, ,557 Excess (Deficiency) of Revenues Over (Under) Expenditures (54,097) (62,884) ,767 OTHER FINANCING SOURCES (USES) Issuance of Debt 23,000 23,000 - (23,000) Transfers In Transfers (Out) - (2,044) (2,044) - Total Other Financing OSCEOLA COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE General Capital Outlay For the Year Ended September 30, 2014 (In thousands) Budgeted Amounts Variance with Final Budget Sources and (Uses) 23,000 21,207 (1,793) (23,000) INTERNAL SERVICE FUNDS Workers Compensation Self-Insurance (501) - In 1990, the County adopted a self-insurance program for Workers Compensation expenses. Workers compensation claims for the entire County including the Property Appraiser, Supervisor of Elections, Tax Collector and Clerk of the Court are paid from this fund. Property and Casualty Insurance (502) - In 1994, the County adopted an insurance program for property and casualty and general liability insurance. All County insurance premiums are processed and paid from this fund, including many varied special insurance policies such as vehicle insurance, crime, environmental liability, volunteer accident, aviation, excess property coverage, inmate medical care, etc. Dental Self-Insurance (503) - In 1990, the County adopted a dental self-insurance program. Dental claims for the entire County including the Property Appraiser, Supervisor of Elections and Tax Collector are paid out of this fund. Health Self-Insurance (504) - In 2000, this fund was established to account for health insurance costs. In fiscal year 2009 the County implemented a self-insurance program for health insurance. Health premiums and claims for the entire County including the Property Appraiser, Supervisor of Elections and Tax Collector are paid out of this fund. Disability and Life Insurance (505) - Long term disability (LTD), short-term disability (STD) and life insurance premiums for the entire County including the Property Appraiser, Supervisor of Elections and Tax Collector are paid out of this fund. Fleet Management (510) This fund was established in fiscal year 2009 to account for the operations and administration of the fleet maintenance and fuel activities. Sheriff s Office Health Self-Insurance - In fiscal year 2013 the Sheriff s Office established this fund to account for health insurance costs. Health premiums and claims for the Sheriff s Office are paid out of this fund. Net Change in Fund Balances (31,097) (41,677) (910) 40,767 Fund Balances - Beginning 44,931 44,931 44,931 - Fund Balances - Ending $ 13,834 $ 3,254 $ 44,021 $ 40,767 The notes to the financial statements are an integral part of this statement

166 OSCEOLA COUNTY, FLORIDA STATEMENT OF NET POSITION Internal Service Funds September 30, 2014 (In thousands) Workers Compensation Self- Property and Insurance Casualty Insurance Dental Self- Insurance Health Self- Insurance Disability and Life Insurance Fleet Management Sheriff's Office Health Self- Insurance Total B-92 ASSETS Current Assets Cash and Cash Equivalents $ 10,189 $ 445 $ 457 Accounts Receivable, Net Due from Other Funds Inventories Prepaid Items - 1,810 - Total Current Assets 10,204 2, Noncurrent Assets Capital Assets Buildings and Improvements Machinery and Equipment Less Accumulated Depreciation Total Noncurrent Assets Total Assets 10,204 2, LIABILITIES Current Liabilities Accounts Payable Accrued Liabilities Unearned Revenue Claims Payable 1, Compensated Absences Total Current Liabilities 1, Non-Current Liabilities Compensated Absences Claims Payable 2, Other Post Employment Benefits Total Non-Current Liabilities 2, Total Liabilities 3, NET POSITION Net Investment in Capital Assets Unrestricted 6,400 2, Total Net Position $ 6,400 $ 2,132 $ 343 $ 9,951 $ 596 $ 358 $ 2,171 $ 24, ,810 9, ,171 26, ,291-1, (1,137) - (1,137) , ,211 2,171 26, , , , , , ,190 2, , , ,579 19,471 $ 7,821 $ 582 $ 1,002 $ 1,579 $ 19,

167 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION Internal Service Funds For the Year Ended September 30, 2014 (In thousands) Workers Compensation Self- Insurance Property and Casualty Insurance Dental Self- Insurance Health Self- Disability and Life Insurance Insurance Fleet Management Sheriff's Office Health Self- Insurance Total B-93 OPERATING REVENUES Charges for Services Miscellaneous Total Operating Revenues OPERATING EXPENSES Personal Services Contracted Services Repairs and Maintenance Supplies Depreciation Insurance Utilities Claims Expense Miscellaneous Total Operating Expenses Operating Income (Loss) $ 3,059 $ 4,456 $ ,159 4, , , ,455 4, , (144) $ 14,391 $ 594 $ 3,021 $ 9,639 $ 35, , ,022 9,639 36, , ,077 1, ,455-1, , , , ,220 22, , ,225 8,297 32, (203) 1,342 3,179 NON-OPERATING REVENUES (EXPENSES) Interest Revenue Other Revenue (Expense) Total Non-Operating Revenues (Expenses) Income (Loss) Before Transfers Transfers In Transfers (Out) Change in Net Position Total Net Position - Beginning Total Net Position - Ending , (141) (22) 1, (163) 4,640 1, $ 6,400 $ 2,132 $ (7) - (7) 64 4 (5) (208) 1,343 3, (176) (27) (14) - (239) (222) 1,343 3,350 7, , ,509 $ 7,821 $ 582 $ 1,002 $ 1,579 $ 19,

168 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS Internal Service Funds For The Year Ended September 30, 2014 (In thousands) B Workers Compensation Self Property and Dental Self- Insurance Casualty Insurance Cash Flows from Operating Activities Receipts from Customers and Users $ 3,163 $ 4,465 $ 701 Payments to Suppliers (1,151) (3,781) (750) Payments to Employees (67) (247) (45) Net Cash Provided by (Used in) Operating Activities 1, (94) Cash Flows from Noncapital Financing Activities Transfers In Transfers (Out) - - (22) Net Cash Provided by (Used in) Noncapital Financing Activities - - (22) Cash Flows from Capital and Related Financing Activities Proceed from Disposition of Capital Assets Net Cash Used in Capital and Related Financing Activities Cash Flows from Investing Activities Interest Revenue Net Cash Provided by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents 2, (113) Cash and Cash Equivalents at Beginning of Year 8, Cash and Cash Equivalents at End of Year $ 10,189 $ 445 $ 457 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities Operating Income (Loss) $ 1,704 $ 289 $ (144) Depreciation Expense Change in Assets and Liabilities (Increase) Decrease in Accounts Receivable (1) - - (Increase) Decrease in Due from Other Governments (Increase) Decrease in Due from Other Funds (Increase) Decrease in Inventories (Increase) Decrease Prepaid Items Increase (Decrease) in Accounts Payable (25) 79 (4) Increase (Decrease) in Accrued Liabilities Increase (Decrease) in Due to Other Governments Increase (Decrease) in Due to Other Funds - (181) - Increase (Decrease) in Claims Payable Increase (Decrease) in Unearned Revenue Increase (Decrease) in Other Post Employment Benefits Increase (Decrease) in Compensated Absences Total Adjustments Net Cash Provided by (Used in) Operating Activities $ 1,945 $ 437 $ (94) Sheriff's Office Health Self- Disability and Health Insurance Life Insurance Fleet Management Self-Insurance Total $ 14,498 $ 594 $ 3,021 $ 9,639 $ 36,081 (14,297) (514) (2,453) (7,705) (30,651) (48) (40) (820) - (1,267) (252) 1,934 4, (176) (27) (14) - (239) 103 (27) (14) (260) 1,935 4,345 9, ,822 $ 9,951 $ 596 $ 358 $ 2,171 $ 24,167 $ 153 $ 38 $ (203) $ 1,342 $ 3, (1) (45) - (45) (23) - (134) - (107) (10) - - (10) (181) (49) $ 153 $ 40 $ (252) $ 1,934 $ 4,

169 AGENCY FUNDS Board of County Commissioners Kissimmee Impact Fee (606) - This fund was established in Fiscal Year 2009 to account for the portion of road impact fees collected and remitted by the City of Kissimmee, Florida, per an interlocal agreement. School Impact Fee (608) - To account for the collection of impact fees from residential housing construction and the distribution of those fees to the Osceola County School Board. Bond Agency (617) - To account for the disposition of cash bonds to be remitted to the Clerk of the Circuit Court. Inmate Agency (619) - To account for inmates' cash held by the Board during their incarceration. THIS PAGE INTENTIONALLY LEFT BLANK Sheriff Gaylord Palms Agency (621) This fund was established in Fiscal Year 2009 to account for the assessment fee remitted by Gaylord Palms Resort. To account for the collection and disbursement of cash bonds, fines and costs, individual deposits and suspense deposits. B-95 Clerk of the Circuit Court To account for the assets held by the Clerk of the Courts in a trustee capacity or as an agent for individuals, private organizations and/or other governmental units. Tax Collector To account for the collection and disbursement of general, delinquent and installment taxes, tags, titles and special assessment deposits

170 OSCEOLA COUNTY, FLORIDA COMBINING STATEMENT OF FIDUCIARY FUNDS NET POSITION Fiduciary Funds - Agency Funds September 30, 2014 (In thousands) Board of County Commissioners Kissimmee School Impact Impact Bond Inmate Fee Fee Agency Agency ASSETS Cash and Investments $ 1,155 $ 1,606 $ 36 $ 255 Accounts Receivable, Net Deposits Due from Other Governments Total Assets $ 1,155 $ 1,615 $ 36 $ 368 Clerk of the Circuit BOCC - Continued Sheriff Court Collector 621 Gaylord Palms Agency Agency Agency Agency Funds Funds Funds Total $ - $ 1,349 $ 12,668 $ 6,809 $ 23, ,561 2, $ - $ 1,349 $ 12,868 $ 9,370 $ 26,761 Tax B-96 LIABILITIES Accounts Payable $ - $ - $ - $ 130 Other Current Liabilities Due to Other Governments 1,155 1, Deposits Installment Tax Deposits Escrow Payable Total Liabilities $ 1,155 $ 1,615 $ 36 $ 368 $ - $ - $ - $ 755 $ ,190 6,549 11,541-1,318 10,678-11, ,043 2, $ - $ 1,349 $ 12,868 $ 9,370 $ 26,

171 OSCEOLA COUNTY, FLORIDA STATEMENT OF CHANGES IN NET POSITION AND LIABILITIES All Agency Funds For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA STATEMENT OF CHANGES IN NET POSITION AND LIABILITIES All Agency Funds - Continued For the Year Ended September 30, 2014 (In thousands) Board of County Commissioners Balance Balance October 1, September 30, 2013 Additions (Deductions) 2014 Board of County Commissioners (Concluded) Balance Balance October 1, September 30, 2013 Additions (Deductions) 2014 B-97 Kissimmee Impact Fee (606) ASSETS Cash and Investments $ 1,155 $ - $ - $ 1,155 Total Assets $ 1,155 $ - $ - $ 1,155 LIABILITIES Due to Other Governments $ 1,155 $ - $ - $ 1,155 Total Liabilities $ 1,155 $ - $ - $ 1,155 School Impact Fee (608) ASSETS Cash and Investments $ 1,623 $ 15,556 $ (15,573) $ 1,606 Due from Other Governments Total Assets $ 1,623 $ 15,565 $ (15,573) $ 1,615 LIABILITIES Accounts Payable $ - $ - $ - $ - Due to Other Governments 1,623 17,076 (17,084) 1,615 Total Liabilities $ 1,623 $ 17,076 $ (17,084) $ 1,615 Bond Agency (617) ASSETS Cash and Investments $ 112 $ 1,067 $ (1,143) $ 36 Accounts Receivable, Net 1 - (1) - Total Assets $ 113 $ 1,067 $ (1,144) $ 36 LIABILITIES Accounts Payable $ 1 $ - $ (1) $ - Other Current Liabilities 111 1,081 (1,157) 35 Due to Other Governments 1 18 (18) 1 Total Liabilities $ 113 $ 1,099 $ (1,176) $ 36 Inmate Agency (619) ASSETS Cash and Investments $ 137 $ 1,415 $ (1,297) $ 255 Due from Other Governments Total Assets $ 137 $ 1,528 $ (1,297) $ 368 LIABILITIES Accounts Payable Other Current Liabilities $ 137 $ 1,528 $ (1,427) $ 238 Total Liabilities $ 137 $ 1,658 $ (1,427) $ 368 Continued Gaylord Palms Agency (621) ASSETS Cash and Investments $ 3,068 $ - $ (3,068) $ - Total Assets $ 3,068 $ - $ (3,068) $ - Sheriff LIABILITIES Deposits $ 3,068 $ - $ (3,068) $ - Total Liabilities $ 3,068 $ - $ (3,068) $ - Confiscations ASSETS Cash $ 401 $ 625 $ - $ 1,026 Total Assets $ 401 $ 625 $ - $ 1,026 LIABILITIES Deposits $ 401 $ 625 $ - $ 1,026 Total Liabilities $ 401 $ 625 $ - $ 1,026 Individual/Suspense ASSETS Cash $ 34 $ 433 $ (422) $ 45 Total Assets $ 34 $ 433 $ (422) $ 45 LIABILITIES Deposits $ 34 $ - $ (19) $ 15 Due to Other Governments (410) 30 Total Liabilities $ 34 $ 440 $ (429) $ 45 Events Fund ASSETS Cash $ 217 $ 60 $ (84) $ 193 Total Assets $ 217 $ 60 $ (84) $ 193 Continued

172 OSCEOLA COUNTY, FLORIDA STATEMENT OF CHANGES IN NET POSITION AND LIABILITIES All Agency Funds - Continued For the Year Ended September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA STATEMENT OF CHANGES IN NET POSITION AND LIABILITIES All Agency Funds - Continued For the Year Ended September 30, 2014 (In thousands) Sheriff (Continued) Balance Balance October 1, September 30, 2013 Additions (Deductions) 2014 Sheriff (Concluded) Balance Balance October 1, September 30, 2013 Additions (Deductions) 2014 B-98 Events Fund (Concluded) LIABILITIES Deposits $ 216 $ - $ (24) $ 192 Due to Other Governments 1 73 (73) 1 Total Liabilities $ 217 $ 73 $ (97) $ 193 Victim's Assistance Fund ASSETS Cash $ 24 $ - $ (1) $ 23 Total Assets $ 24 $ - $ (1) $ 23 LIABILITIES Deposits $ 24 $ - $ (1) $ 23 Total Liabilities $ 24 $ - $ (1) $ 23 Explorer's Fund ASSETS Cash $ 5 $ 135 $ (120) $ 20 Total Assets $ 5 $ 135 $ (120) $ 20 LIABILITIES Deposits $ 5 $ 129 $ (114) $ 20 Total Liabilities $ 5 $ 129 $ (114) $ 20 Adventure Camp ASSETS Cash $ 28 $ 23 $ (20) $ 31 Total Assets $ 28 $ 23 $ (20) $ 31 LIABILITIES Deposits $ 28 $ 5 $ (2) $ 31 Total Liabilities $ 28 $ 5 $ (2) $ 31 EP Murphy Golf ASSETS Cash $ - $ 18 $ (9) $ 9 Total Assets $ - $ 18 $ (9) $ 9 Continued EP Murphy Golf (Concluded) LIABILITIES Deposits $ - $ 18 $ (9) $ 9 Total Liabilities $ - $ 18 $ (9) $ 9 Sheriff's Posse ASSETS Cash $ 1 $ 1 $ - $ 2 Total Assets $ 1 $ 1 $ - $ 2 LIABILITIES Deposits $ 1 $ 1 $ - $ 2 Total Liabilities $ 1 $ 1 $ - $ 2 Clerk of the Circuit Court Recording Agency Fund ASSETS Cash and Investments $ 2,106 $ 49,664 $ (46,693) $ 5,077 Due from other governments Accounts Receivable, Net 48 17,948 (17,875) 121 Total Assets $ 2,154 $ 67,620 $ (64,568) $ 5,206 LIABILITIES Due to Other Governments $ 833 $ 38,580 $ (38,499) $ 914 Deposits 1,321 15,498 (12,527) 4,292 Total Liabilities $ 2,154 $ 54,078 $ (51,026) $ 5,206 Fine and Forfeiture Agency Fund ASSETS Cash and Investments $ 1,424 $ 17,737 $ (17,774) $ 1,387 Accounts Receivable, Net 31 4,310 (4,301) 40 Total Assets $ 1,455 $ 22,047 $ (22,075) $ 1,427 LIABILITIES Due to Other Governments $ 747 $ 11,059 $ (10,900) $ 906 Deposits 708 7,085 (7,272) 521 Total Liabilities $ 1,455 $ 18,144 $ (18,172) $ 1,427 Continued

173 Clerk of the Circuit Court (Concluded) OSCEOLA COUNTY, FLORIDA STATEMENT OF CHANGES IN NET POSITION AND LIABILITIES All Agency Funds - Continued For the Year Ended September 30, 2014 (In thousands) Balance Balance October 1, September 30, 2013 Additions (Deductions) 2014 Tax Collector OSCEOLA COUNTY, FLORIDA STATEMENT OF CHANGES IN NET POSITION AND LIABILITIES All Agency Funds - Concluded For the Year Ended September 30, 2014 (In thousands) Balance Balance October 1, September 30, 2013 Additions (Deductions) 2014 B-99 County Circuit/Civil Agency Fund ASSETS Cash and Investments $ 226 $ 5,758 $ (5,653) $ 331 Accounts Receivable, Net 46 4,445 (4,475) 16 Total Assets $ 272 $ 10,203 $ (10,128) $ 347 LIABILITIES Due to Other Governments $ 230 $ 2,855 $ (2,883) $ 202 Deposits (52) 145 Total Liabilities $ 272 $ 3,010 $ (2,935) $ 347 Bond Holding Agency Fund ASSETS Cash and Investments $ 282 $ 1,135 $ (1,044) $ 373 Deposits (120) 1 Total Assets $ 393 $ 1,145 $ (1,164) $ 374 LIABILITIES Due to Other Governments $ - $ 32 $ - $ 32 Deposits 393 2,033 (2,084) 342 Total Liabilities $ 393 $ 2,065 $ (2,084) $ 374 Tax Deeds Agency Fund ASSETS Cash and Investments $ 1,751 $ 2,846 $ (4,569) $ 28 Total Assets $ 1,751 $ 2,846 $ (4,569) $ 28 LIABILITIES Due to Other Governments $ - $ 28 $ - $ 28 Deposits 1,751 4,639 (6,390) - Total Liabilities $ 1,751 $ 4,667 $ (6,390) $ 28 Other Civil Agency Fund ASSETS Cash and Investments $ 19,806 $ 48,194 $ (62,528) $ 5,472 Accounts Receivable, Net (14) 14 Total Assets $ 19,824 $ 48,204 $ (62,542) $ 5,486 LIABILITIES Due to Other Governments $ 131 $ 2,941 $ (2,964) $ 108 Deposits 19,693 48,979 (63,294) 5,378 Total Liabilities $ 19,824 $ 51,920 $ (66,258) $ 5,486 Continued Tax Agency Fund ASSETS Cash and Investments $ 4,823 $ 421,805 $ (420,305) $ 6,323 Accounts Receivable, Net 2, ,554 Due from Other Governments (767) - Total Assets $ 7,927 $ 422,022 $ (421,072) $ 8,877 LIABILITIES Accounts Payable $ 489 $ 34,415 $ (34,152) $ 752 Due to Other Governments 5, ,586 (398,002) 6,059 Installment Tax Deposits 1,925 4,433 (4,315) 2,043 Escrow Payable 38 1,144 (1,159) 23 Total Liabilities $ 7,927 $ 438,578 $ (437,628) $ 8,877 DMV Agency Fund ASSETS Cash and Investments $ 480 $ 31,375 $ (31,369) $ 486 Accounts Receivable, Net (52) 7 Total Assets $ 490 $ 31,424 $ (31,421) $ 493 DMV Agency Fund LIABILITIES Accounts Payable $ 2 $ 53 $ (52) $ 3 Due to Other Governments ,271 (31,269) 490 Total Liabilities $ 490 $ 31,324 $ (31,321) $ 493 Total - All Funds ASSETS Cash and Investments $ 37,703 $ 597,847 $ (611,672) $ 23,878 Accounts Receivable, Net 2,491 26,979 (26,718) 2,752 Due from Other Governments (767) 130 Deposits (120) 1 Total Assets $ 41,072 $ 624,966 $ (639,277) $ 26,761 LIABILITIES Accounts Payable $ 492 $ 34,598 $ (34,205) $ 885 Other Current Liabilities 248 2,609 (2,584) 273 Due to Other Governments 10, ,959 (502,102) 11,541 Deposits 27,685 79,167 (94,856) 11,996 Installment Tax Deposits 1,925 4,433 (4,315) 2,043 Escrow Payable 38 1,144 (1,159) 23 Total Liabilities $ 41,072 $ 624,910 $ (639,221) $ 26,

174 THIS PAGE INTENTIONALLY LEFT BLANK DEBT SERVICE REQUIREMENTS B

175 OSCEOLA COUNTY, FLORIDA REVENUE BONDS SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA REVENUE BONDS SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) TOTAL DEBT SERVICE REQUIREMENT - ALL FUNDS GOVERNMENTAL BONDS ENTERPRISE BONDS B-101 Fiscal Principal Total Debt Year Amount Interest Service 2015 $ 20,850 $ 22,966 $ 43, ,710 23,038 48, ,080 22,120 49, ,010 21,120 48, ,210 20,074 48, ,944 19,144 49, ,380 18,161 49, ,865 17,114 49, ,443 16,021 50, ,324 14,869 51, ,183 15,174 43, ,285 14,643 27, ,786 14,165 24, ,221 13,544 24, ,936 13,089 25, ,709 12,606 25, ,483 12,058 25, ,275 11,475 25, ,167 10,853 26, ,615 10,265 22, ,971 9,459 22, ,589 8,683 20, ,174 7,924 20, ,758 7,154 19, ,410 6,315 19, ,821 5,518 16, ,371 5,070 8, ,583 4,847 8, ,876 4,643 7, ,830 1,712 7, ,140 1,390 7, ,465 1,051 7, , , , ,923 Totals $ 555,794 $ 387,170 $ 942,964 Fiscal Principal Total Debt Principal Total Debt Year Amount Interest Service Amount Interest Service 2015 $ 17,140 $ 20,138 $ 37,278 $ 3,710 $ 2,828 $ 6, ,800 19,450 37,250 7,910 3,588 11, ,530 18,710 37,240 8,550 3,410 11, ,275 17,902 37,177 7,735 3,218 10, ,145 17,031 37,176 8,065 3,043 11, ,010 16,147 37,157 8,934 2,997 11, ,900 15,205 37,105 9,480 2,956 12, ,880 14,184 37,064 9,985 2,930 12, ,940 13,106 37,046 10,503 2,915 13, ,355 11,957 37,312 10,969 2,912 13, ,550 10,678 37,228 1,633 4,496 6, ,285 9,664 22,949-4,979 4, ,575 9,047 19, ,118 5, ,050 8,467 19, ,077 5, ,530 7,860 19, ,229 5, ,050 7,222 19, ,384 6, ,585 6,551 19, ,507 6, ,115 5,845 18,960 1,160 5,630 6, ,705 5,102 18,807 1,462 5,751 7, ,825 4,386 15,211 1,790 5,879 7, ,135 3,706 14,841 1,836 5,753 7, ,645 3,049 12,694 1,944 5,634 7, ,115 2,413 12,528 2,059 5,511 7, ,610 1,746 12,356 2,148 5,408 7, ,130 1,046 12,176 2,280 5,269 7, , ,798 2,421 5,120 7, ,546 4,988 7, ,703 4,819 7, ,876 4,643 7, ,830 1,712 7, ,140 1,390 7, ,465 1,051 7, , , , ,923 Totals $ 405,985 $ 251,120 $ 657,105 $ 149,809 $ 136,050 $ 285,

176 B-102 A. Governmental Bonds OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $15,295,000 Limited General Obligation Bonds, Series 2006 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ % $ 459 $ 1, % 430 1, % 399 1, % 366 1, % 331 1, % 294 1, % 255 1, % 214 1, , % 170 1, , % 124 1, , % 76 1, , % 26 1,171 Totals $ 10,950 $ 3,144 $ 14,094 $24,295,000 Limited General Obligation Bonds, Series 2010 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ 1, % $ 665 $ 2, , % 609 2, , % 550 2, , % 488 2, , % 432 2, , % 382 2, , % 332 2, , % 279 2, , % 225 2, , % 167 2, , % 103 2, , % 35 2,045 Totals $ 20,400 $ 4,267 $ 24,667 OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $75,000,000 Infrastructure Sales Surtax Revenue Bonds, Series 2007 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ 3, % $ 2,717 $ 6, , % 2,540 6, , % 2,356 6, , % 2,163 6, , % 1,962 6, , % 1,773 6, , % 1,570 6, , % 1,335 6, , % 1,089 6, , % , , % ,106 Totals $ 57,235 $ 18,479 $ 75,714 $29,500,000 Infrastructure Sales Surtax Revenue Refunding Bonds, Series 2011 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ 2, % $ 1,227 $ 3, , % 1,125 3, , % 996 3, , % 861 3, , % 716 3, , % 564 3, , % 414 3, , % 256 3, , % 85 3,685 Totals $ 27,045 $ 6,244 $ 33,

177 OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $48,735,000 Sales Tax Revenue Bonds, Series 2009 OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $43,470,000 Sales Tax Revenue Refunding Bonds, Series 2010 B-103 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ % $ 2,202 $ 3, , % 2,167 3, , % 2,125 3, , % 2,077 3, , % 2,030 3, , % 1,978 3, , % 1,922 3, , % 1,870 3, , % 1,814 3, , % 1,753 3, , % 1,684 3, , % 1,607 3, , % 1,526 3, , % 1,441 3, , % 1,351 3, , % 1,254 3, , % 1,150 3, , % 1,039 3, , % 923 3, , % 801 3, , % 671 3, , % 535 3, , % 392 3, , % 241 3, , % 82 3,187 Totals $ 45,045 $ 34,635 $ 79,680 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ 2, % $ 1,482 $ 4, , % 1,400 4, , % 1,316 4, , % 1,214 4, , % 1,094 4, , % 970 4, , % 825 4, , % 656 4, , % 479 4, , % 294 4, , % 100 4,080 Totals $ 35,610 $ 9,830 $ 45,

178 OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $12,565,000 Tourist Development Tax (Fifth Cent) Revenue Bonds, Series 2012, (Rida Conference Center Phase One Project) OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $74,790,000 Tourist Development Tax Revenue Refunding and Improvement Bonds, Series 2012 B-104 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ % $ 724 $ % % % % % % % % % % % % % % % % % % % % % % % % % % % Totals $ 12,235 $ 13,482 $ 25,717 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ 2, % $ 3,136 $ 5, , % 3,052 5, , % 2,952 5, , % 2,835 5, , % 2,699 5, , % 2,557 5, , % 2,407 5, , % 2,250 5, , % 2,085 5, , % 1,912 5, , % 1,730 5, , % 1,559 5, , % 1,399 5, , % 1,233 5, , % 1,061 5, , % 881 5, , % 695 5, , % 500 5, , % 295 5, , % 143 1, , % 49 1,989 Totals $ 72,460 $ 35,430 $ 107,

179 OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $132,250,000 Capital Improvements Revenue Bonds, Series 2009 A, B, & C OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) $4,415,000 West 192 Redevelopment Area Municipal Service Benefit Unit Special Assessment Bonds (Phase IIC), Series 2003 B-105 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ 2, % $ 7,385 $ 10, , % 7,272 10, , % 7,173 10, , % 7,067 10, , % 6,951 10, , % 6,828 10, , % 6,694 10, , % 6,555 10, , % 6,409 10, , % 6,253 10, , % 6,038 10, , % 5,763 9, , % 5,476 9, , % 5,177 9, , % 4,864 9, , % 4,538 9, , % 4,195 9, , % 3,834 9, , % 3,454 9, , % 3,056 8, , % 2,641 8, , % 2,207 8, , % 1,753 8, , % 1,279 8, , % 783 8, , % 265 7,890 Totals $ 122,330 $ 123,910 $ 246,240 Fiscal Principal Interest Total Debt Year Due 11/1 Rate Interest Service 2015 $ % $ 141 $ % % % % % % % % % % % % % % % % % % % Totals $ 2,675 $ 1,699 $ 4,

180 OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) OSCEOLA COUNTY, FLORIDA SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) B-106 B. Enterprise Bonds $80,100,000 Transportation Improvement Refunding Bonds (Osceola Parkway Project), Series 2014 Fiscal Principal Interest Total Debt Year Due 4/1 Rate Interest Service 2015 $ 3, % $ 1,011 $ 4, , % 1,719 9, , % 1,541 10, , % 1,349 9, , % 1,174 9, , % 993 9, , % 807 9, , % 616 9, , % 419 9, , % 213 9,683 Totals $ 80,100 $ 9,842 $ 89,942 $69,709,000 Poinciana Parkway Series 2014 Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ - $ - $ 1,817 $ 1, ,869 1, ,869 1, ,869 1, ,869 1, % 2,004 2, % 2,149 3, , % 2,314 3, , % 2,496 3, , % 2,699 4, , % 4,496 6, ,979 4, % 5,118 5, % 5,077 5, % 5,229 5, % 5,384 6, % 5,507 6, , % 5,630 6, , % 5,751 7, , % 5,879 7, , % 5,753 7, , % 5,634 7, , % 5,511 7, , % 5,408 7, , % 5,269 7, , % 5,120 7, , % 4,988 7, , % 4,819 7, , % 4,643 7, , % 1,712 7, , % 1,390 7, , % 1,051 7, , % 672 8, , % 233 8,923 Totals $ 69,709 $ 126,208 $ 195,

181 SCHEDULE OF DEBT SERVICE REQUIREMENTS September 30, 2014 (In thousands) C. Other Long Term Debt Concurrency Management Agreement Fiscal Principal Total Debt Year Due 10/1 Interest Service 2015 $ 613 $ 206 $ Totals $ 4,152 $ 762 $ 4,914 B-107 The Wilder Companies/Loop Note Fiscal Principal Total Debt Year Due 10/1 Interest Service 2015 $ 480 $ 19 $ 499 $ 480 $ 19 $ 499 $20,000,000 State Infrastructure Bank Loan 2014 SECTION 8 FINANCIAL DATA SCHEDULE Fiscal Principal Interest Total Debt Year Due 10/1 Rate Interest Service 2015 $ % $ 25 $ % , % 129 1, % % % Totals $ 2,725 $ 297 $ 3,

182 B-108 OSCEOLA COUNTY, FLORIDA SECTION 8 FINANCIAL DATA SCHEDULE September 30, 2014 Section 8 Line Rental Item Voucher Number Account Description Program ASSETS Current Assets Cash 111 Cash -Unrestricted $ 899, Total Cash 899,103 Accounts and Notes Receivables: 121 Accounts Receivable-PHA Projects 167, Accounts Receivable-Tenants 43, Allowance for Doubtful Accounts (43,529) 120 Total Receivables, Net of Allowances for Uncollectibles 167, Total Current Assets 1,066, Total Assets $ 1,066,406 LIABILITIES AND EQUITY LIABILITIES Current Liabilities 312 Accounts Payable Less than 90 Days $ 13, Accrued Wage/Payroll Taxes Payable 9, Unearned Revenues 25, Total Current Liiabilities 47, Total Liabilities 47,978 EQUITY Contributed Capital 512 Unrestricted Net Position 1,018, Total Equity/Net Assets/Position 1,018, Total Liabilites and Equity $ 1,066,406 OSCEOLA COUNTY, FLORIDA SECTION 8 FINANCIAL DATA SCHEDULE - (Concluded) September 30, 2014 Section 8 Line Rental Item Voucher Number Account Description Program REVENUE 706 HUD PHA Operating Grants $ 1,264, Investment Income - Unrestricted 1, Fraoud Recovery 11, Other Revenue 8,962, Total Revenue 10,239,378 EXPENSES Administrative 911 Administrative Salaries 331, Advertising and Marketing 4, Employee Benefit Contributions - Administrative 140, Office Expenses 32, Travel 6, Other 52, Total Operating -Administrative 567, Ordinary Maintenance and Operations- Materials and Labor 4, Ordinary Maintenance and Operations- Contracts 1, Total Maintenance 5, Worksmen's Compensation 2, Total Insruance Premium 2, Other General Expenses 5, Total Operating Expenses 581, Excess of Operating Revenue Over Operating Expenses 9,657, Housing Assistance Payment 1,164, HAP Portabiltiy-In 8,367, Total Expenses $ 10,113, Excess of Total Revenue Over Total Expenses $ 125,456 MEMO Account Information 1103 Beginning Equity $ 892, Administrative Fee Equity $ 1,030, Housing Assistance Payments Equity $ (12,088) 1119 Unit Months Available 2, Number of Units Months Leased 2,

183 THIS PAGE INTENTIONALLY LEFT BLANK (UNAUDITED) FINANCIAL TRENDS INFORMATION B-109 The Financial Trends Information schedules contain trend information to help users understand and assess how Osceola County s financial position has changed over time

184 Schedule 1 Osceola County, Florida Net Position by Component Last Ten Fiscal Years (In thousands) (accrual basis of accounting) Governmental Activities Invested in Capital Assets $ 488,086 $ 529,874 $ 546,200 $ 620,515 $ 667,782 $ 681,081 Restricted 200, , , , , ,809 Unrestricted 53,509 55,725 66,726 61,311 41,024 74,502 Total Governmental Activities Net Position 741, , , , ,515 1,026, $ 692,212 $ 700,150 $ 794,806 $ 821, , , , , , , , ,752 1,038,216 1,060,486 1,115,914 1,164,881 B-110 Business-type Activities Invested in Capital Assets 7,839 7,378 8,051 8,755 8,674 9,818 Restricted ,612 Unrestricted 2,860 (3,645) 1,211 5,189 9,384 5,077 Total Business-Type Activities Net Position 10,699 3,733 9,262 13,944 18,058 21,507 Primary Government Net Investment in Capital Assets 495, , , , , ,899 Restricted 200, , , , , ,809 Unrestricted 56,369 52,080 67,937 66,500 50,408 79,579 Total Government Net Position $ 752,414 $ 812,891 $ 912,790 $ 968,328 $ 1,005,573 $ 1,047,899 11,776 13,866 16,288 24,795 4,697 5,582 6,076 1,723 10,134 8,753 13,980 14,389 26,607 28,201 36,344 40, , , , , , , , , , , , ,864 $ 1,064,823 $ 1,088,687 $ 1,152,258 $ 1,205,

185 Schedule 2 Osceola County, Florida Changes in Net Position, Last Ten Fiscal Years (In thousands) (accrual basis of accounting) Schedule 2 Osceola County, Florida Changes in Net Position, Last Ten Fiscal Years (In thousands) (accrual basis of accounting) B Expenses Governmental Activities General Government $ 53,571 $ 68,718 $ 96,662 $ 109,275 $ 106,929 $ 55,303 $ 63,560 $ 55,373 $ 50,144 $ 46,642 Public Safety 90, , , , , , , , , ,134 Physical Environment 14,011 3,959 2,501 3,345 2,738 2,621 1,785 2,076 1,989 4,066 Transportation 30,499 31,071 38,739 41,616 36,421 32,854 38,217 31,981 30,967 29,570 Economic Environment 32,102 39,693 22,134 19,787 22,916 23,501 27,203 30,242 28,120 32,258 Human Services 11,632 17,140 18,846 29,141 12,772 15,474 20,047 14,369 13,487 15,967 Culture and Recreation 17,352 22,749 25,598 22,544 22,090 21,705 20,527 20,775 20,431 24,846 Court Related 9,186 9,698 11,121 16,331 25,066 20,421 20,252 19,004 19,469 21,015 Interest and Fiscal Charges 8,198 11,050 12,221 13,759 15,312 22,639 22,889 23,166 26,786 20,020 Other Debt Service Charges Total Governmental Activities Expenses 267, , , , , , , , , ,518 Business-Type Activities Environmental Services 11,781 26,935 13,085 15,399 15,352 12,956 14,538 13,281 2,827 12,789 Water Treatment Parkway 9,110 12,282 13,071 10,722 9,277 10,559 10,561 9,746 9,801 24,319 Total Business-Type Activities Expenses 20,892 39,217 26,156 26,121 24,629 23,515 25,099 23,027 12,628 37,108 Total Primary Government Expenses 288, , , , , , , , , ,626 Program Revenues Governmental Activities Charges for Services General Government 25,885 20,846 63,638 72,373 65,575 15,989 10,284 11,453 11,818 13,736 Public Safety 21,851 40,138 31,424 35,382 35,966 32,355 32,805 32,108 33,339 35,718 Physical Environment , ,003 1,419 1,569 1,651 Transportation 33,817 3,566 21,461 22,616 11,962 5,389 5, Economic Environment 1,589 2,689 3, ,525 2,718 2, Human Services 1,544 1, Culture and Recreation 3,057 3,043 4,140 5,379 4,394 3,910 3,991 3,938 4,857 5,390 Court-Related 16,662 15,399 18,922 2,685 3,796 7,993 8,237 7,972 9,248 8,530 Operating Grants and Contributions: General Government , , Public Safety 988 1, ,530 2,480 2,028 1,381 3,193 3,148 3,291 Physical Environment , ,897 1, Transportation - 1, , Economic Environment 10,564 13, ,385 8,161 19,983 12,985 13,565 12,193 Human Services 9, ,373 6, , Culture and Recreation 1, Court-Related ,574 8,016 7,915 8,995 10,064 Capital Grants and Contributions General Government ,078 1, , Public Safety , ,020 Physical Environment - - 2, Transportation - 24,485 5, ,449 15,502 8,902 14,004 4,755 30,600 Economic Environment - 4, Human Services ,468 5,065 Culture and Recreation Interest ,200 2,206 2,206 2,110 2,032 Total Governmental Activities Program Revenue $ 129,128 $ 136,704 $ 169,186 $ 155,493 $ 146,018 $ 114,629 $ 113,443 $ 102,546 $ 98,130 $ 132, Business-Type Activities Charges for Services Environmental Services $ 12,481 $ 15,817 $ 18,041 $ 17,735 $ 16,603 $ 16,934 $ 17,070 $ 17,365 $ 16,891 $ 18,152 Water Treatment Osceola Parkway 7,097 11,531 11,330 10,812 10,460 10,699 11,172 11,677 12,225 15,142 Operating Grants and Contributions Environmental Services - 1, Capital Grants and Contributions Osceola Parkway Total Business-Type Activities Program Revenues 19,580 29,087 29,371 28,547 27,063 27,633 28,553 29,042 29,116 33,294 Total Primary Government Program Revenues 148, , , , , , , , , ,514 Net (Expense)/Revenue Governmental Activities (138,432) (173,665) (178,939) (227,269) (230,288) (217,233) (236,622) (226,867) (229,230) (208,298) Business-Type Activities (1,312) (10,130) 3,215 2,426 2,434 4,118 3,454 6,015 16,488 (3,814) Total Primary Government Net Expense (139,744) (183,795) (175,724) (224,843) (227,854) (213,115) (233,168) (220,852) (212,742) (212,112) General Revenues and Other Changes in Net Position Governmental Activities General Revenues Property Taxes 92, , , , , , , , , ,320 Sales Taxes 38,855 37,143 32,603 36,773 33,259 33,381 34,907 36,384 38,416 41,481 Gasoline Taxes 8,472 12,669 8,485 13,246 12,995 12,889 12,552 13,017 13,889 14,002 Public Service Taxes 8,035 9,098 9,323 9,561 9,779 10,957 12,179 11,135 11,756 12,728 Communication Service Tax 5,780 6,457 7,160 7,022 6,348 5,993 5,647 5,943 6,078 6,108 Franchise Fees Resort Tax 32,044 33,269 34,199 36,665 31,175 30,727 32,105 34,209 37,661 40,583 State Revenue Sharing 11,083 5,469 5,481 4,654 4,941 5,058 5,179 5,355 5,727 6,195 Interest Revenue 5,762 14,019 22,287 15,548 7,557 5,386 3,191 3, ,169 Contracted Revenue Gain (Loss) on Sale of Capital Asset Insurance Claims Reimbursement 2, Other 5,095 9, ,847 3,277 4,332 4,246 8,056 Transfers 642 (968) 466 (1,125) (1,116) (1,411) (1,427) 4,676 8,382 (8,377) Total Governmental Activities 212, , , , , , , , , ,265 Business-Type Activities Public Service Taxes 1, Gas Taxes - 1,375 1, Franchise Fees Interest Revenue ,405 1, Insurance Claims Reimbursement Other Transfers (642) 967 (466) 1,125 1,116 1,411 1,427 (4,676) (8,382) 8,377 Total Business-Type Activities 1,226 3,164 2,314 2,257 1,681 1,755 1,646 (4,421) (8,345) 8,377 Total Primary Government 213, , , , , , , , , ,642 Change in Net Position Governmental Activities 73,676 67,443 94,370 50,855 33,130 46,555 11,824 22,270 26,097 48,967 Business-Type Activities (86) (6,966) 5,529 4,683 4,115 5,873 5,100 1,594 8,143 4,563 Total Primary Government $ 73,590 $ 60,477 $ 99,899 $ 55,538 $ 37,245 $ 52,428 $ 16,924 $ 23,864 $ 34,240 $ 53,

186 Schedule 3 Osceola County, Florida Fund Balances, Governmental Funds Last Ten Fiscal Years (In thousands (modified accrual basis of accounting) General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund $ 2,118 $ 2,832 $ 1,691 $ 1,405 $ 8,695 37,981 43,616 57,264 61,138 51, $ 40,099 $ 46,448 $ 58,955 $ 62,543 $ 60, $ 8,652 $ - $ - $ - $ - 63, ,613 1, ,413 1,954 2,043 2,358-4,474 7,426 12,865 22,799-28,556 17,720 4, ,647 49,249 56,251 55,280 $ 72,613 $ 88,703 $ 77,555 $ 76,231 $ 80,827 B-112 All Other Governmental Funds Reserved $ 75,612 $ 76,110 $ 22,733 $ 29,235 $ 30,056 Unreserved, Reported In Special Revenue Funds 132, , , , ,338 Capital Projects Funds ,047 36,670 54,521 Nonspendable Restricted Committed Assigned Total All Other Governmental Funds $ 207,660 $ 232,760 $ 296,833 $ 279,467 $ 283,915 $ 44,955 $ - $ - $ - $ - 213, , ,105 11,142 10,814 10, , , , ,363-50,980 50,056 73,407 70, $ 379,467 $ 342,582 $ 347,232 $ 337,961 $ 315,516 Note: Beginning in fiscal year 2011, fund balance classifications have been revised due to the implementation of GASB

187 Schedule 4 Osceola County, Florida Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (In thousands) (modified accrual basis of accounting) B Revenues Taxes $ 172,699 $ 193,649 $ 233,814 $ 238,303 $ 233,545 $ 232,344 $ 219,677 $ 211,711 $ 215,678 $ 226,126 Permit Fees and Special Assessments 29,902 38,725 39,837 36,089 43,418 34,243 34,189 30,498 30,834 35,281 Intergovernmental 54,373 47,718 44,867 43,547 40,993 67,392 74,161 69, ,483 66,439 Charges for Services 57,959 56,570 68,654 66,492 43,355 33,176 24,591 23,439 23,794 26,495 Fines and Forfeitures 15,676 18, ,622 1,892 3,635 6,357 5,396 2,179 Interest 5,379 13,278 21,294 14,925 7,209 5,155 3,031 3, ,001 Miscellaneous 6,083 9,651 9,780 8,335 4,355 3,758 3,845 2,200 4,777 9,115 Total Revenues 342, , , , , , , , , ,636 Expenditures Current General Government 55,168 69,846 69,347 75,266 61,670 54,969 46,327 44,851 91,431 50,087 Public Safety 89, , , , , , , , , ,303 Physical Environment 13,907 3,826 2,411 23,261 4,987 2,337 10,780 3,549 3,044 7,211 Transportation 23,861 43,279 56,729 34,440 64,780 44,712 50,482 34,734 25,693 23,852 Economic Environment 36,694 42,545 22,044 19,600 22,805 23,187 26,902 34,006 31,930 33,021 Human Services 11,706 17,013 18,862 28,998 12,416 15,065 19,693 14,032 15,024 15,736 Culture and Recreation 16,238 21,944 23,852 20,722 27,705 21,800 17,757 20,331 21,732 21,079 Court Related 7,582 8,014 9,774 16,052 23,340 18,365 18,067 16,975 17,822 19,792 Capital Projects 15,852 35,818 54,112 56,956 47,753 74,372 26,494 51,197 24,969 24,185 Debt Service Principal 13,479 8,849 10,823 17,250 14,758 64,661 14,994 87,593 20,086 18,548 Interest 11,687 11,202 11,405 13,693 13,738 19,051 22,607 23,880 20,942 21,246 Bond Issuance Cost , Other Debt Service Costs , (Total Expenditures) (295,962) (365,839) (401,808) (430,205) (427,257) (473,099) (387,507) (460,572) (408,502) (378,063) Excess (deficiency) of Revenues over (under) Expenditures 46,109 12,157 16,862 (22,195) (52,760) (95,139) (24,378) (113,798) (23,943) (9,427) Other Financing Sources (Uses): Insurance Claims Reimbursement 2, Issuance of Refunding Bonds , Original Issue Discount (214) - - Premium - - 4, , Payment to Bond Escrow Agent - - (13,711) (32,480) - - Issuance of Debt - 20,213 61,935 10,000 56, , , Bond Issue Costs - (281) Bond Premium , Loan Proceeds Contribution Payment to Escrow Agent Transfers to Other Governments - - (4,152) Transfers in 77,650 41,063 62, ,917 97, ,461 77,117 96, ,365 60,444 Transfers (out) (77,008) (42,031) (62,266) (133,822) (98,677) (124,138) (73,534) (90,918) (115,017) (68,866) Other Financing Sources (Uses) 3,160 18,964 61,852 8,095 55, ,038 3, ,300 13,348 (8,422) (UNAUDITED) REVENUE CAPACITY INFORMATION The Revenue Capacity Information schedules present information to help the reader understand and assess Osceola County s ability to generate revenues through real property and other taxes. Net Change in Fund Balances $ 49,269 $ 31,121 $ 78,714 $ (14,100) $ 2,319 $ 107,899 $ (20,795) $ (6,498) $ (10,595) $ (17,849) Debt Service as a Percentage of Noncapital Expenditures 8.8% 5.5% 6.6% 8.4% 9.0% 22.9% 11.7% 29.4% 11.5% 12.0%

188 Schedule 5 Osceola County, Florida Assessed Value and Actual Value of Taxable Property (1)(2)(3)(4) Last Ten Fiscal Years (In thousands) Centrally Assessed Real Property Personal Property Property (3) Total Total B-114 Fiscal Assessed Estimated Assessed Estimated Assessed Estimated Year Value (4) Actual Value Value (4) Actual Value Value Actual Value 2005 $ 12,259,605 $ 12,986,870 $ 1,326,423 $ 1,405,109 $ 6,182 $ 6, ,717,778 15,283,259 1,420,128 1,474,692 3,790 3, ,226,914 22,154,342 1,570,993 1,720,693 4,562 4, ,673,342 25,228,366 1,652,151 1,689,316 4,495 4, ,464,364 24,562,614 1,510,465 1,516,531 3,785 3, ,971,753 19,832,923 1,531,250 1,520,606 4,129 4, ,573,745 16,673,788 1,473,806 1,482,702 3,677 3, ,288,985 15,942,633 1,356,605 1,414,604 4,083 4, ,075,763 15,970,088 1,387,049 1,469,332 4,184 4, ,668,183 16,739,512 1,403,246 1,499,194 4,365 4,663 Notes: (1) Osceola County Property Appraiser (2) State of Florida, Department of Revenue, Property Valuations and Tax Data (3) Centrally assessed property consists of railroad and telegraph systems which are assessed by the State of Florida. (4) Florida.com Property Tax Data Portal Assessed Estimated Direct Value (4) Actual Value Tax Rate $ 13,592,210 $ 14,398, ,141,696 16,761, ,802,469 23,880, ,329,988 26,922, ,978,614 26,082, ,507,132 21,357, ,051,228 18,160, ,649,673 17,361, ,466,996 17,443, ,075,794 18,243,

189 B-115 Schedule 6 Osceola County, Florida Direct and Overlapping Property Tax Rates (1) Last Ten Fiscal Years (rate per $1,000 of assessed v Direct Rates Basic Rate Library Environmental Land Overlapping Rates City of Kissimmee City of St. Cloud Osceola School District So. Fl. Water Mgmt. Dist St. Johns River Wtr Mgmt Everglades Construction Okeechobee Basin EMS MSTU Alamo Estates Amberley Park Anorada Ashley Oaks Ashley Reserve Ashton Park Ashton Place Bellalago Blackstone Landing Ph Brighton Landings Ph Brighton Place Canoe Creek Estates Cornelius Place Country Crossing Country Green Eagle Bay Emerald Lakes Fish Lake Fryer Oaks Hamilton's Reserve Hammock Point Hammock Trails Henry J Avenue Heritage Key Villas Hickory Hollow Hidden Heights Trail Hidden Pines Hunters Ridge Hyde Park I-HOP Indian Creek Indian Pointe Indian Ridge Indian Ridge Villas Indian Wells Intercession City Isle of Bellalago Johnson's Landing Schedule 6 Osceola County, Florida Direct and Overlapping Property Tax Rates (1) Last Ten Fiscal Years (rate per $1,000 of assessed v Kings Crest Kings Crest Woods Kissimmee Isles Legacy Park Lindfields Little Creek Ph Live Oak Springs Lost Lake Estates Malibu Estates Monica Terrace Moreland Estates Narcoossee Half Acres Neptune Pointe Neptune Shores North Shore Village Oak Pointe Orange Vista Parkway Plaza Pebble Point Pine Grove Estates Pleasant Hill Lakes Quail Ridge Quail Wood Raintree Regal Bay Regal Oak Shore Unit Remington Reserves at Pleasant Hill Rolling Hills Estates Royal Oaks Phase I Royal Oaks Phases II-V Sailfish Court Saratoga Park Shadow Oaks Silver Lake Estates Southport Bay Steeple Chase St. James' Park The Oaks Turnberry Reserve Vacation Villas Villagio Whispering Oaks Wilderness Windmill Point Windward Cay Winners Park Wren Drive Note: (1) The Property Tax Rate is based on tax years and applies to the tax year preceding the fiscal year

190 Schedule 7 Osceola County, Florida Principal Property Tax Payers, Current Year and Nine Years Prior (In thousands) Schedule 8 Osceola County, Florida Property Tax Levies and Collections Last Ten Fiscal Years (In thousands) B-116 Taxpayer Taxable Percentage of Taxable Percentage of Assessed Total Taxable Assessed Total Taxable Value Rank Assessed Value Value Rank Assessed Value Westgate Properties/Resorts/Towers $ 774, % The Walt Disney Company 587, % 515, % Lando Resorts Corp. 385, % 149, % Duke Energy Florida LLC. 282, % Star Island/Vacation Break/Wyndham 267, % Tempus Palms International 256, % 234, % G. P. Limited Partnership 251, % 229, % Silver Lake Resort 110, % 72, % Omni-Championsgate Resort Hotel LLC 105, % 108, % Osceola Regional Hospital Inc 98, % 103, % Genon Florida LP 84, % Florida Gas Transmission Co 66, % Lowes Home Centers Inc. 65, % 92, % Embarq Florida Inc/Sprint 60, % 119, % Orlando Resort Development Gorup, Inc. 60, % 60, % Walmart Stores/Sams Club 58, % 70, % Metropolitan Life Insurance Co. 52, % Timescape Resorts LLC 48, % Adventist Health System Sunbelt Inc 47, % IH2 Prop FL LP/IH3 Prop FL LPIH4 Prop FL LP 41, % Central Florida Investment , % Fairfield Communities Inc , % Florida Power Corporation , % Reliant Energy Osceola, LLC , % Avatar Properties, Inc , % Ginn-LA /Reunion , % Celebration World Resort Ltd , % First Continental Corp , % O.P. Realty Partners, LLC , % Collected within the Fiscal Year of the Levy Taxes Levied Collections in Fiscal for the Percentage Subsequent Percentage Year Fiscal Year Amount of Levy Years Amount of Levy 2005 $ 96,573 $ 92, % $ 429 $ 92, % , , % , % , , % , % , , % , % , , % , % , , % , % , , % , % , , % , % , , % , % , , % , % Source: Osceola County Property Appraiser and Florida Department of Revenue Total Collections to Date Total taxable assessed value twenty largest taxpayers 3,705, % 3,188, % Total taxable assessed value all other taxpayers 13,370, % 11,529, % Total taxable assessed value $ 17,075, % $ 14,717, % all taxpayers Source: Osceola County Property Appraiser

191 THIS PAGE INTENTIONALLY LEFT BLANK (UNAUDITED) DEBT CAPACITY INFORMATION B-117 The Debt Capacity Information schedules present information to help the reader understand and assess Osceola County s debt burden and its ability to issue additional debt in the future

192 Schedule 9 Osceola County, Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years (In thousands, except Per Capita) Schedule 10 Osceola County, Florida Ratios of General Bonded Debt Outstanding Last Nine Fiscal Years (In thousands except for Per Capita) Governmental-Type Activities Busineess-Type Activities Limited General Special Other Other Total Percentage Fiscal Obligation Revenue Assessment Long Term Revenue Capital Long Term Primary of Personal Per Year Bonds (1) Bonds Bonds Liabilities Bonds Lease Liabilities Government Income (2) Capita (2) ,200 18,805 9, , , % 1, , ,775 18,350 13, , , % 1,429 Limited General Obligation Bonds Percentage of Estimated Actual Fiscal Value of Taxable Per Year Series 2006 (1) Series 2010 (2) Total Property (3) Capita 2006 $ 15,295 $ - $ 15, % $ 62 B , ,450 15,965 12, , , % 1, , ,780 7,995 21, , , % 1, , ,236 5,500 19, , , % 1, , ,641 4,885 8,816 99, , % 2, , ,831 4,320 7,816 95, , % 1, , ,455 2,885 16,050 91, , % 1, , ,445 2,750 14,072 87, ,392 n/a 1, , ,960 2,675 12, ,809-2, ,633 n/a 1, ,295-15, % ,740-14, % ,165-14, % ,570 24,295 37, % ,950 24,295 37, % ,310 23,035 35, % ,645 21,735 33, % 116 Notes: Details regarding the County's outstanding debt can be found in the notes to the financial statements. (1) Limited General Obligation Bonds, Series 2006, issued July 26, 2006, Series 2010 issued August 26, (2) U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Accounts. Notes: ,950 20,400 31, % 106 Details regarding the County's outstanding debt can be found in the Notes to Financial Statements. (1) Limited General Obligation Bonds, Series 2006, were issued July 26, (2) Limited General Obligation Bonds, Series 2010, were issued August 26, (3) Source: State of Florida, Department of Revenue, Division of Ad Valorem Tax

193 Schedule 11 Osceola County, Florida Pledged-Revenue Coverage Last Ten Fiscal Years (In thousands) Schedule 11 (continued) Osceola County, Florida Pledged-Revenue Coverage Last Ten Fiscal Years (In thousands) B-119 Governmental-Type Activities Half-Cent Sales Tax Bonds Half-Cent Net Fiscal Sales Tax Interest Available Debt Service Year Revenue Revenue Revenue Principal Interest Coverage 2005 $ 14,621 $ 30 $ 14,651 $ 1,620 $ 2, , ,542 1,690 2, , ,455 1,760 2, , ,409 1,840 2, , ,793 1,925 2, , ,845 2,010 4, , ,390 1,100 4, , ,913 3,390 3, , ,657 3,480 3, , ,824 3,580 3, Note: Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements. Governmental-Type Activities Infrastructure Sales Tax Bonds Infrastructure Net Fiscal Sales Tax Interest Available Debt Service Year Revenue Revenue Revenue Principal Interest Coverage 2005 $ 24,235 $ 21 $ 24,256 $ 1,815 $ 2, , ,734 1,870 2, , ,437 1,930 2, , ,569 1,990 5, , ,549 4,710 5, , ,692 4,895 5, , ,610 5,105 5, , ,573 5,320 4, , ,787 5,550 4, , ,758 5,755 4, Note: Details regarding the County's outstanding debt can be found in the Notes to the Financial Staements

194 Schedule 11 (continued) Osceola County, Florida Pledged-Revenue Coverage Last Ten Fiscal Years (In thousands) Schedule 11 (continued) Osceola County, Florida Pledged-Revenue Coverage Last Ten Fiscal Years (In thousands) B-120 Governmental-Type Activities Capital Improvement Bonds Comm- Public unications Gross Service Service Non-Ad Net Fiscal Tax Tax Valorem Interest Available Debt Service Year Revenue Revenue Revenue Revenue Revenue Principal Interest Coverage 2005 n/a n/a $ 125,573 $ 71 $ 125,644 $ 6,205 $ n/a n/a 129, , n/a n/a 107, , n/a n/a 100, , n/a n/a 84, , (1) 10,957 5,993 81, , , (2) 12,179 5,647 73, ,176 2,365 5, (2) 11,135 5,943 n/a 78 17,156 2,420 5, (2) 11,756 6,078 n/a 23 17,857 2,515 5, (3) 12,727 6,108 n/a 78 18,913 2,620 5, Governmental-Type Activities Tourist Development Tax Bonds Gross 2nd Gross - 4th Cent 5th Cent Tourist Tourist RIDA Net Fiscal Development Development Special Interest Available Debt Service Year Tax Revenue Tax Revenue Assessments Revenue Revenue Principal Interest Coverage 2005 $ 16,027 n/a n/a $ 27 $ 16,054 $ 920 $ 3, ,635 n/a n/a 56 16,691 1,360 3, ,099 n/a n/a 71 17,170 1,400 3, ,332 n/a n/a 65 18,397 1,445 3, ,587 n/a n/a 21 15,608 1,490 3, ,363 n/a n/a 28 15,391 1,545 3, ,052 n/a n/a 12 16,064 1,845 3, ,105 5, ,041 1,670 4, ,830 6, ,398 1,870 2, ,291 6, ,372 2,530 3, Note: Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements. Notes: (1) Interest payment is presented net of federal subsidy of $1.096 million. (2) Interest payment is presented net of federal subsidy of $2.206 million. (3) Interest payment is presented net of federal subsidy of $2.032 million. Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements

195 Schedule 11 (continued) Osceola County, Florida Pledged-Revenue Coverage Last Ten Fiscal Years (In thousands) Schedule 11 (concluded) Osceola County, Florida Pledged-Revenue Coverage Last Ten Fiscal Years (In thousands) B-121 Governmental-Type Activities West 192 Special Assessment Bonds Capital Special Net Fiscal Assessment Interest Available Debt Service Year Revenue Revenue Revenue Principal Interest Coverage 2005 $ 1,798 $ 111 $ 1,909 $ 365 $ 1, , , , , , , ,950 7, , ,464 2, , , , Note: Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements. Business-Type Activities Transportation Improvement Bonds Payments Gross from Less Net Fiscal Toll Osceola Interest Operating Available Debt Service Year Revenue County Revenue Expense Revenue Principal Interest Coverage 2005 $ 11,310 $ 1,375 $ 159 $ (2,139) $ 10,705 $ 1,200 $ 4, ,461 1, (2,316) 10,819 1,515 4, ,265 1, (2,311) 10,714 1,740 4, ,787 1, (2,090) 10,278 2,150 4, ,447 1, (2,613) 9,250 2,210 4, ,699 1, (2,472) 9,638 2,920 4, ,172 1, (2,341) 10,228 3,380 4, ,677 1, (2,196) 10,869 3,875 4, ,225 1,375 4 (2,244) 11,360 4,200 4, , (6,546) 8,098 5,125 4, Notes: Operating expenses do not include interest, depreciation, amortization expenses or payments to Reedy Creek and transfers to general fund are included. Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements

196 Schedule 12 Osceola County, Florida Historical Population Distribution Factors for Infrastructure Sales Surtax Revenues Last Ten Fiscal Years Schedule 13 Osceola County, Florida Historical Infrastructure Sales Surtax Revenues Last Ten Fiscal Years (In thousands) Fiscal Osceola City of City of School District of Year County Kissimmee St. Cloud Osceola County Fiscal Year Infrastructure Sales Surtax Revenues Percentage Change B % 18.2% 8.1% 10.0% % 15.0% 6.7% 25.0% % 15.0% 6.8% 25.0% % 14.3% 7.2% 25.0% % 14.0% 7.1% 25.0% % 13.7% 7.3% 25.0% % 13.7% 7.3% 25.0% % 13.7% 7.3% 25.0% % 13.5% 8.0% 25.0% % 13.3% 8.2% 25.0% 2005 $ 24, % 2006 (1) 21, % , % , % , % , % , % , % , % , % Source: Florida Department of Revenue Notes: (1) Commencing January 1, 2006, the distribution factor for the School District of Osceola County increased from 10% to 25%. See the table entitled "Oseola County, Florida Historical Population Distribution Factors." Schedule

197 Schedule 14 Osceola County Florida West 192 Redevelopment Area Municipal Services Benefit Unit, Phase IIC Description of Real Property Schedule 15 Osceola County, Florida West 192 Redevelopment Area Municipal Service Benefit Unit, Phase IIC Top Property Owners by Taxable Value B-123 The Phase IIC Project was constructed and installed in the portion of the West 192 Municipal Services Benefit Unit (MSBU), which runs from State Road 535 east to Hoagland Boulevard and Airport Road. For non-residential property lying within the boundaries of the Phase IIC benefit area, the County determined which nonresidential property benefited by the project. It consists primarily of businesses and attractions catering to the tourist trade, including hotels and motels, rental units and other lodging establishments (including timeshares), shopping centers, recreational businesses and other businesses. Additional information regarding the nature and value of the commercial property within the Phase IIC Benefit Area is set forth below. Department of Revenue Use Code (1) Automotive/Service Stations Hotels/Motels Offices Parking Lots/Mobile Home Parks Recreational Businesses (2) Rental Property (3) Restaurants Shopping Centers Timeshares Vacant Commercial Property (4) Warehouse/Manufacturing Percentage Number Percentage Average Highest Total of Total of of Total Assessed Assessed Assessed Assessed Parcels Parcels Value Value Value Value % $ 516,483 $ 861,800 $ 3,098, % % 1,233,080 8,088,200 38,225, % % 231, ,900 1,389, % % 1,913,651 10,779,200 15,309, % % 1,807,371 8,144,900 12,651, % 1, % 122, , ,824, % % 608,553 1,143,100 10,345, % % 1,632,515 8,543,800 55,505, % % 9,880,467 23,243,800 29,641, % % 256,155 5,444,400 24,078, % % 780, ,500 4,685, % 1, % $ 332,755, % Percentage Number Sum of of Total of Taxable Taxable Owner Parcels Value Value O P Realty Partners LLC 1 $ 23,243, % Siesta Lago LLC 1 10,779, % Ramco HHF Kissimmee LLC 4 9,337, % Saratoga Resort Villas LLC 4 9,133, % Wal-Mart Stores East LP 2 8,544, % Midevil Times Florida Inc 5 8,145, % Target Corp T ,920, % Len Ot Holdings LLC 2 7,337, % Sams East Inc 2 6,101, % Club Sevilla Condo Assoc 1 5,865, % Kissimmee Value Outlet Shops 1 3,387, % Maingate East Development Inc 1 2,962, % HTN Holdings LLC 2 2,720, % 192 Flea Market Outlet Inc 1 2,152, % Shan Motel Co 1 2,095, % Central Florida Investments Inc 4 2,047, % City of Kissimmee C/O Hoagland Partners 1 2,010, % Kwon Byung Hak 1 1,890, % Osceola Mini-Storage Trust 2 1,782, % Satisfaction Corp 1 1,690, % 38 $ 119,149, % Notes: (1) (2) (3) (4) "Business Use" is determined by using the Property Appraiser's Department of Revenue Use Codes as assigned to each parcel, and may not always reflect actual business activity on the parcel. "Recreational Businesses" include theaters / auditoriums and tourist attractions. "Rental Property" was identified through occupational licensing of short-term rental property. "Vacant Commercial Property" includes undeveloped property zoned for commercial use

198 THIS PAGE INTENTIONALLY LEFT BLANK (UNAUDITED) DEMOGRAPHIC AND ECONOMIC INFORMATION B-124 The Demographic and Economic Information schedules offer information to help users understand Osceola County s socioeconomic environment and to facilitate comparisons of financial statement information over time and among governments

199 Schedule 16 Osceola County, Florida Demographic and Economic Statistics Last Ten Calendar Years Schedule 17 Osceola County, Florida Principal Employers Current Year and Ten Years Prior B-125 Per Personal Capita Income (4) Personal Median School Unemployment Year Population (1) (in thousands) Income (4) Age (2) Enrollment (3) Rate (4) ,926 $ 5,410,239 $ 23, , % ,259 5,959,508 24, , % ,283 6,447,184 24, , % ,609 6,773,082 25, , % ,618 6,814,171 25, , % ,685 7,053,527 26, , % ,163 7,503,530 27, , % ,866 7,851,188 27, , % ,361 $ 8,065,185 27,019 n/a 57, % ,553 n/a n/a , % Notes: (1) For the years prior to 2010, the source is the U.S. Department of Commerce, Bureau of Economic Analysis For 2010 forward the source for population is estimated by the U.S. Census Bureau & the University of Florida, Bureau of Economic and Business Research (2) Florida Statistical Abstract, Bureau of Economic Research, University of Florida is the source for years 2005 and earlier (3) Osceola County School District (4) Percentage of Percentage of Total County Total County Employer Employees Rank Employment Employees Rank Employment Osceola County Public Schools 6, % 4,323 1 n/a Walt Disney World 3, % 1,450 3 n/a Wal-Mart Stores, Inc. 2, % - - n/a Gaylord Palms Resort and 1, % - - n/a Osceola County Board of County Comission 3, % 1,563 2 n/a Osceola Regional Medical Center 1, % n/a Publix Supermarkets 1, % - - n/a Florida Hospital Celebration/Kissimmee 2, % 1,504 5/6 n/a McLane/Suneast Incorporate % - - n/a Omni ChampionsGate Resort % - - n/a Total Largest Employers 24, % 9,362 Total All Other Employers 55,976 n/a Total Employment 80,558 9,362 Sources: Florida Department of Economic Opportunity (DEO) ChooseOsceola Economic Development Osceola County CAFR - Fiscal Year

200 Schedule 18 Osceola County, Florida Total Property Value, Commercial Construction Value, and Residential Construction Value Last Ten Years ( In thousands except Number of Units) Schedule 19 Osceola County, Florida Tourist Statistical Data Estimated Number of Overnight Visitors and Mode of Transportation Last Ten Years (In thousands) B-126 Total Commercial January Property Construction Number of 01 Value (1) Value (2)(3) Units Value 2005 $ 16,141,696 $ 375,940 7,443 $ 974, ,802, ,536 6,420 1,183, ,362, ,737 2, , ,978, , , ,507, ,352 1, , ,093, ,630 1,168 83, ,738,209 69, , ,447, ,729 1, , ,099,425 45,422 1, , ,197,033 89,953 2, ,176 Notes: (1) Source: Osceola County Property Appraiser (2) Source: Osceola County Building Department (3) Estimate for Unincorporated Osceola County, Florida Residential Construction (2) Air Auto Train/Bus Total Year (1) Visitors Visitors Visitors Visitors ,666 2, , % ,658 2, , % ,803 2, , % ,862 2, , % ,296 2, , % ,297 2, , % ,555 2, , % ,746 2, , % ,709 3, , % ,876 3, , % Notes: (1) Data is on calendar year basis. Source: Experience Kissimmee % Change

201 THIS PAGE INTENTIONALLY LEFT BLANK (UNAUDITED) OPERATING INFORMATION B-127 The Operating Information schedules contain data to help users understand Osceola County s operations and resources as well as to provide a context for understanding and assessing its economic condition

202 Schedule 20 Osceola County, Florida Full Time Equivalent County Government Employees by Function/Program Last Ten Fiscal Years Schedule 21 Osceola County, Florida Operating Indicators by Function/Program Last Ten Fiscal Years Fiscal Year B-128 Fiscal General Public Physical Economic Human Culture and Court Year Government Safety Environment Transportation Environment Services Recreation Related Total , , , , , , , (1) 416 1, , , , , ,222 Note: (1) Beginning with fiscal year 2012 total includes Constitutional Officers. Data for Constitutional Officers was not available in prior years. Contitutional Offices are as follow: Sources: Osceola County Sheriff's Office Osceola County Tax Collector's Office Osceola County Supervisor of Elections Osceola County Clerk of the Court Osceola County Property Appraiser Function/Program General Government Building Department (1) Number of Residential Permits 4,954 4,156 2, ,122 1,168 1,457 2,282 3,039 3,491 Number of Commercial Permits , ,130 Public Safety Fire Protection (2) Emergency Responses 24,150 23,896 22,568 20,097 19,491 21,125 22,735 22,939 23,864 24,268 Inspections 1,604 5,539 16,086 8,642 6,208 2,018 3,142 4,252 4,478 3,924 Corrections (3) Average Daily Inmate Population ,149 1,137 1, Osceola County Sheriff (4) Number of 911 Calls answered (estimated) n/a 308, , , , , , , , ,316 Human Services (5) Section 8 Housing Osceola Vouchers Portable Vouchers ,097 Transportation (6) Lane Miles Maintained ,171 2,172 2,173 2,194 Culture and Recreation (7) Park Sites Maintained Library Books Circulated 789, ,373 1,071,161 1,183,150 1,348,724 1,384,754 1,409,896 1,238,513 1,238,207 1,165,553 Notes: (1) Building Department - Permit Plus System, Osceola County (2) Fire Rescue & Emergency Medical Services Department, Osceola County (3) Corrections Department, Osceola County (4) Osceola County Sheriff Finance Department (5) Section 8 Department, Osceola County (6) Public Works Department, Osceola County (7) Osceola County Government

203 Schedule 22 Osceola County, Florida Capital Asset Statistics by Function/Program Last Ten Fiscal Years Schedule 23 Osceola County, Florida Insurance Coverage September 30, 2014 B-129 Fiscal Year Function/Program Public Safety (1) Fire Department Fire Stations Sheriff: Stations Patrol Units Transportation (2) Miles of Streets Paved Miles Unpaved Miles Culture and Recreation Parks and Recreation Parks (3) Boat Ramps Stadium Soccer Complex Softball Complex Tennis Courts Racquet Ball Courts Community Centers Libraries Nature Center Workers' Compensation Self-funded Workers' Compensation Excess $1,000,000 per Occurance ($750,000 Self-Insured Retention) Workers' Compensation (Volunteers) Self-funded Accident Policy (Volunteers ) $10,000 General Liablity $1,000, ($100,000 SIR) $5,000,000 General Aggregate $3,000,000 Products / Completed Operations Aggregate Property $75,000,000 Per Occrrence / $500,000 Deductible Public Entity Employee Benefit Plans Administrative Liability - Claims Made Cover $1,000,000 Each Employee Limit/$3, Aggregate Limit $100,000 SIR - Each Employee Retention Loss & Loss Expense Public Entity Law Enforcement Liability $1,000,000 Each Wrongful Act Limit / $2,000,000 Aggregate Limit $100,000 SIR - Each Wrongful Act Public Entity Management Liability $1,000,000 Each Wrongful Act / $2,000,000 Aggegate Limit $100,000 SIR Each Wrongful Act Public Entity Employment Practices Liability $2,000,000 Each Wrongful Employment Practices Offense Limit / $3,000,000 Aggregate Limit $100,000 SIR - Each Wrongful Act Umbrella Excess Liability $5,000,000 ($10,000 Retained Limit Any One Occurrence or Offense) Automoblie Liability Comprehensive Collision Money and Securities, Per Occurrence Employee Fidelity Electronic Data Equipment Emergency Care Services EMT's and Paramedics (covered under County's General Liability coverage) Services for Contracted Physicians Serving as Medical Directors, Jail and Emergency Services-Separate Policies Law Enforcement/Firefighters Death Benefits $6,000,000 Combined Single Limit $100,000 Deductible $10,000 deductible $10,000 deductible $250,000,Varies by Location, $10,000 deductible $1,000,000 $1,000 Deductible $1,000,000 per Occurrence $5,000,000 Excess Coverage $1,000,000 Each Claim / $3,000,000 Aggregate Limit $25,000 Each Claim Deductible $68,889/$68,889/$195,618 per State Statute Notes: (1) Emergency Management, Osceola County (2) (3) Public Works Department, Osceola County Parks Department and Natural Resources Department, Osceola County Jail Nurses Medical Professional Liability - Claims Made $2,000,000 Each Claim / $4,000,000 Aggregate $0 Deductible Inmate Medical Care - Excess Policy Accident Policy - Community Corrections Environmental Liability, Including Above and Underground Tanks Passenger Boat Liability $40,000 Retention/$250,000 Limits $10,000 $1,000,000 ($10,000 Deductible) $1,000,000 (2,500 Deductible) Health Insurance Health Insurance Excess Dental Insurance Self-funded Claims in Excess of $250,000 per Covered Insured Source: Osceola County Risk Management

204 Schedule 24 Osceola County, Florida Miscellaneous Statistics 2014 B-130 Area in square miles 1,506 Government Facilities and Services Sheriff's Protection Number of Sheriff Personnel and Officers (1) 631 Facilities and Services not Included in the Reporting Entity Education (2) K-12 students 58,798 Elementary Schools 24 Middle Schools 8 High Schools 8 Multi-Level Schools 19 Alternative Programs and Adult Education 7 Higher Education Institutions (3) 5 Hospitals (4) Hospitals 5 Transportation Airports - Orlando International Airport (MCO)and Kissimmee Gateway Airport (ISM) 2 Bus Service - Lynx Local and Regional Bus Service 1 COMPLIANCE SECTION Notes: (1) Osceola County Sheriff Finance Department (2) School District, Osceola County, Florida (3) Economic Development Department, Osceola County (4) Kissimmee, Florida

205 Honorable Board of County Commissioners Osceola County, Florida Compliance and Other Matters B-131 INDEPENDENT AUDITOR S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Board of County Commissioners Osceola County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of governmental activities, the businesstype activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Osceola County, Florida (the County ) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the County s basic financial statements and have issued our report thereon dated March 13, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the County s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County s internal control. Accordingly, we do not express an opinion on the effectiveness of the County s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. As part of obtaining reasonable assurance about whether the County s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We have issued a management letter to the Board of County Commissioners, Osceola County, Florida, dated March 13, 2015, presenting certain required disclosures and comments pursuant to the Rules of the Auditor General, Chapter Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. MOORE STEPHENS LOVELACE, P.A. Certified Public Accountants Orlando, Florida March 13,

206 Honorable Board of County Commissioners Osceola County, Florida B-132 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND CHAPTER , RULES OF THE AUDITOR GENERAL Honorable Board of County Commissioners Osceola County, Florida Report on Compliance for Each Major Federal Program and State Project We have audited the compliance of Osceola County, Florida (the County ) with the types of compliance requirements described in the U.S. Office of Management and Budget ( OMB ) Circular A-133 Compliance Supplement and the requirements described in the Department of Financial Services State Projects Compliance Supplement that could have a direct and material effect on each of its major federal programs and major state projects for the year ended September 30, The County s major federal programs and state projects are identified in the summary of auditor s results section of the accompanying Schedule of Findings and Questioned Costs. Management Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs and state projects. Auditor s Responsibility Our responsibility is to express an opinion on the County s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter , Rules of the Auditor General. Those standards, OMB Circular A-133, and Chapter , Rules of the Auditor General, require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or major state project identified in the accompanying schedule of findings and questioned costs occurred. An audit includes examining, on a test basis, evidence about the County s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of the County s compliance. Opinion on Each Major Federal Program and State Project In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and major state projects for the year ended September 30, Report on Internal Control over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit, we considered the County s internal control over compliance with requirements that could have a direct and material effect on a major federal program or major state project in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133 and Chapter , Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133 and Chapter , Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards and State Financial Assistance We have audited the basic financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the County s basic financial statements. We issued our report thereon dated March 13, 2015, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County s basic financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance is presented for the purposes of additional analysis, as required by OMB Circular A-133, Chapter 69I-5, Schedule of Expenditures of State Financial Assistance, Rules of the Department of Financial Services, and Chapter , Rules of the Auditor General, and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit

207 Honorable Board of County Commissioners Osceola County, Florida of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements taken as a whole. MOORE STEPHENS LOVELACE, P.A. Certified Public Accountants Orlando, Florida March 13, 2015 CFDA/ Federal/State Agency, Pass-through Entity, Federal CSFA Contract/Grant Federal/State Payments to Program/State Project Number Number Expenditures Subrecipients Federal Awards U.S. Department of Housing and Urban Development Community Development Block Grant Community Development Block Grant B-11-UC $ 240,246 $ 240, B-12-UC , , B-13-UC , ,749 Community Development Block Grant Neighborhood Stabilization Program (NSP3) B-11-UN ,667 - Program Total 2,056, ,640 Passed Through Florida Department of Economic Opportunity Community Development Block Grant Small Cities Program Neighborhood Stabilization Program (NSP1) DB-4X F19 193,470 - U.S. Department of Housing and Urban Development Passed through Florida Department of Children & Families Emergency Solutions Grant U.S. Department of Housing and Urban Development Shelter Plus Care OSCEOLA COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE As of September 30, GPZ05 43, FL0376C4H ,242 - ARRA - Homeless Prevention & Rapid Re-Housing Program GFZ27 2,364 - B-133 U.S. Department of Housing and Urban Development Section 8 Housing Choice Voucher Program - Housing N/A 1,250,704 - Section 8 Housing Choice Voucher Program - Portables N/A 8,863,217 - Program Total 10,113,921 - Total U.S. Department of Housing and Urban Development 12,454, ,640 U.S. Department of Justice Enhancing Adult Drug Court Services, Coordination and Treatment DC-BX ,746 - Passed through Florida Office of the Attorney General Victims of Crime Act (VOCA) V ,500 - State Criminal Aliens Assistance Program (SCAAP) AP-BX ,000 - U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Assistance - JAG Program Cluster Direct Awards Edward Byrne Memorial Justice Assistance Grant Program DJ-BX ,365 - Edward Byrne Memorial Justice Assistance Grant Program DJ-BX ,294 12,700 Edward Byrne Memorial Justice Assistance Grant Program DJ-BX ,973 - Edward Byrne Memorial Justice Assistance Grant Program DJ-BX ,692 9,200 Passed Through the Florida Department of Law Enforcement OCIB Sheriff's Office JAGC-OSCE-5-D7-19,292 19,292 Healing Tree JAGC-OSCE-5-E ,093 23,093 Sheriff- Crime Event JAGC-OSCE-3-E ,245 48,245 Outpatient Treatment- Transition House JAGC-OSCE-5-E Juvenile Drug Court JAGC-OSCE-1-E ,875 - Intensive Outpatient - Reentry Total JAG Program Cluster JAGC-OSCE-2E ,592 17, , ,772 Federal Forfeiture Program FL ,800 - (Osceola County Sheriff's Office) Total U.S. Department of Justice 347, ,772 Continued

208 B-134 OSCEOLA COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE As of September 30, 2014 CFDA/ Federal/State Agency, Pass-through Entity, Federal CSFA Contract/Grant Federal/State Payments to Program/State Project Number Number Expenditures Subrecipients U.S. Department of Transportation, Federal Highway Administration passed through Florida Department of Transportation Doverplum Avenue $ 440,000 $ - Alcohol Impaired Driving Countermeasures Incentives Grants ARA19 150,000 - Total U.S. Department of Transportation 590,000 - U.S. Election Assistance Commission, Passed Through the Florida Department of State, Division of Elections Help America Vote Act (Osceola County Supervisor of Elections) ,404 - U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration, Substance Abuse and Treatment Enhancing Adult Drug Court Services, Coordination and Treatment H79TI ,813 - Health Resources and Services Administration Passed Through the Florida Department of Health Health Department Construction Grant C8ACS ,064,841 - Administration for Children and Families, Office of Child Support Enforcement Passed through the Florida Department of Revenue Child Support Enforcement (Osceola County Clerk of Court) CD ,661 - Total U.S. Department of Health and Human Services 5,937,315 - U.S. Department of Homeland Security Passed through Florida Division of Emergency Management Emergency Management Preparedness Grant (EMPG) FY FG-1M ,164 - Emergency Management Preparedness Grant (EMPG) FY FG-4D ,794 Community Emergency Response Team (CERT) CI 6,966 - Program Total 85,924 - Passed through Florida Division of Emergency Management Homeland Security Issue DS-L Homeland Security Issue DS-C ,263 - Homeland Security Issue DS ,778 - Program Total 40,723 - U.S. Department of Homeland Security, Federal Emergency Management Agency passed through the Orange County Sheriff's Office Urban Area Securities Initiative (Osceola County Sheriff's Office) DS ,275 - Total U.S. Department of Homeland Security 166,922 - OSCEOLA COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE As of September 30, 2014 CFDA/ Federal/State Agency, Pass-through Entity, Federal CSFA Contract/Grant Federal/State Payments to Program/State Project Number Number Expenditures Subrecipients State Financial Assistance Florida Division of Emergency Management Emergency Management Preparedness Assistance (EMPA) FY BG $ 88,141 $ - Emergency Management Preparedness Assistance (EMPA) FY BG ,883 - Program Total 108,024 Hazard Analysis (FY13) CP ,707 - Total Florida Division of Emergency Management 111,731 - Florida Department of Agriculture and Consumer Services Mosquito Control ,456 - Florida Department of State State Aid to Libraries ST ,732 - Florida Housing Finance Corporation Statewide Housing Initiatives Program (SHIP) N/A 405,238 - State Infrastructure Bank Loan Agreement Poinciana Parkway Florida Department of Children and Families Criminal Justice, Mental Health and Substance Abuse Reinvestment Florida Department of Health Emergency Medical Services (EMS) Grant ARC81 4,164, LHZ24 83,661 66, C ,233 32,314 TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 5,075,581 $ 98,475 Note 1: Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance includes the federal and state grant activity of Osceola County, Florida, and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of State, Local Governments, and Nonprofit Organizations, Chapter , Florida Statutes, and Rule 69I (I)(f), F.A.C. Therefore, amounts presented in this schedule may differ from amounts presented in, or used in, the preparation of the basic financial statements. Executive Office of the President- Office of National Drug Control Policy Passed through the U.S. Drug Enforcement Agency High Intensity Drug Trafficking Areas (Osceola County Sheriff's Office) G12CF0006A High Intensity Drug Trafficking Areas (Osceola County Sheriff's Office) G13CF0006A 46,064 - High Intensity Drug Trafficking Areas (Osceola County Sheriff's Office) G14CF0006A 74,375 - Program Total 120,550 - TOTAL EXPENDITURES OF FEDERAL AWARDS $ 19,644,005 $ 1,013,

209 OSCEOLA COUNTY, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended September 30, 2014 OSCEOLA COUNTY, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) For the Year Ended September 30, 2014 B-135 SECTION I - SUMMARY OF INDEPENDENT AUDITOR S RESULTS Financial Statements Type of Auditor s Report Issued: Internal control over financial reporting: Unmodified Opinion Significant deficiency(ies) identified? Yes X None reported Material weakness(es) identified? Yes X No Noncompliance material to financial statements noted? Yes X No Federal Awards and State Financial Assistance Internal control over major Federal programs and State projects: Significant deficiency(ies) identified? Yes X None reported Material weakness(es) identified? Yes X No Type of auditor s report issued on compliance for major Federal programs and State projects: Unmodified Opinion Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133? Yes X No Identification of Major Federal Programs and State Projects: CFDA Numbers Name of Federal Programs Section 8 Housing Choice Voucher Program Enhancing Adult Drug Court Services, Coordination and Treatment Child Support Enforcement CSFA Numbers Name of State Projects Statewide Housing Initiatives Program (SHIP) Poinciana Parkway Dollar threshold used to distinguish between Type A and Type B programs: Federal $589,320 State $300,000 Auditee qualified as low-risk auditee? X Yes No SECTION II - FINANCIAL STATEMENT FINDINGS SECTION None reported. SECTION III - FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FINDINGS AND QUESTIONED COSTS SECTION Federal None reported. State None reported. SECTION IV - PRIOR-YEAR AUDIT FINDINGS Federal None reported. State None reported

210 INDEPENDENT AUDITOR S MANAGEMENT LETTER INDEPENDENT ACCOUNTANT S REPORT Honorable Board of County Commissioners Osceola County, Florida B-136 Honorable Board of County Commissioners Osceola County, Florida We have examined Osceola County, Florida s (the County ) compliance with the requirements of Section , Florida Statutes, during the year ended September 30, Management is responsible for the County s compliance with those requirements. Our responsibility is to express an opinion on the County s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the County s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the County s compliance with specified requirements. In our opinion, the County complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, MOORE STEPHENS LOVELACE, P.A. Certified Public Accountants Orlando, Florida March 13, 2015 Report on the Financial Statements We have audited the financial statements of Osceola County, Florida (the County ), as of and for the fiscal year ended September 30, 2014, and have issued our report thereon dated March 13, Auditor s Responsibility We conducted our audit in accordance with auditing standards generally accepted in United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.55, Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards, Independent Auditor s Report on Compliance for Each Major Federal Program and State Project and on Internal Control over Compliance and Report on Schedule of Expenditures of Federal Awards and State Financial Assistance in Accordance with OMB Circular A-133 and Chapter , Rules of the Auditor General; Schedule of Findings and Questioned Costs; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports and schedule, which are dated March 13, 2015, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective action has been taken to address finding and recommendation made in the preceding annual financial audit report. Official Title and Legal Authority Section (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The legal authority is disclosed in the notes to the financial statements. Financial Condition Section (1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not the County has met one or more of the conditions described in Section (1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the County did not meet any of the conditions describe in Section (1), Florida Statutes

211 Honorable Board of County Commissioners Osceola County, Florida B-137 Pursuant to Sections (1)(i)5.c. and (8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management s responsibility to monitor the County s financial condition, and our financial condition assessment was based, in part, on representations made by management and the review of financial information provided by same. Annual Financial Report Section (1)(i)5.b., Rules of the Auditor General, requires that we report the result of our determination as to whether the annual financial report for the County for the fiscal year ended September 30, 2014, filed with the Florida Department of Financial Services pursuant to Section (1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, In connection with our audit, we determined that these two reports were in agreement. Other Matters Section (1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section (1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, federal and other granting agencies, and applicable management, and is not intended to be, and should not be, used by anyone other than these specified parties. [THIS PAGE INTENTIONALLY LEFT BLANK] MOORE STEPHENS LOVELACE, P.A. Certified Public Accountants Orlando, Florida March 13,

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213 APPENDIX C FORM OF THE RESOLUTION

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215 TABLE OF CONTENTS OSCEOLA COUNTY, FLORIDA SECTION SECTION SECTION SECTION SECTION ARTICLE I GENERAL DEFINITIONS. 1 AUTHORITY FOR RESOLUTION. 12 RESOLUTION TO CONSTITUTE CONTRACT. 12 FINDINGS. 12 REFUNDING OF THE REFUNDED BONDS. 13 ARTICLE II C-1 SALES TAX REVENUE REFUNDING BOND RESOLUTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS AUTHORIZATION OF BONDS. AUTHORIZATION AND DESCRIPTION OF SERIES 1993 BONDS.... APPLICATION OF SERIES 1993 BOND PROCEEDS. EXECUTION OF BONDS. AUTHENTICATION. TEMPORARY BONDS. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER FORM OF BONDS ARTICLE III ADOPTED DECEMBER 16, 1993 SECTION SECTION SECTION SECTION SECTION REDEMPTION OF BONDS PRIVILEGE OF REDEMPTION. SELECTION OF BONDS TO BE REDEEMED NOTICE OF REDEMPTION. REDEMPTION OF PORTIONS OF BONDS. PAYMENT OF REDEEMED BONDS ARTICLE IV SECTION SECTION SECTION SECTION SECTION SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF BONDS NOT TO BE INDEBTEDNESS OF ISSUER. SECURITY FOR BONDS. CONSTRUCTION FUND. FUNDS AND ACCOUNTS. FLOW OF FUNDS i

216 SECTION SECTION SECTION REBATE FUND. INVESTMENTS SEPARATE ACCOUNTS ARTICLE VIII MISCELLANEOUS ARTICLE V SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS, AND COVENANTS OF ISSUER SECTION SUBORDINATED INDEBTEDNESS. SECTION ISSUANCE OF ADDITIONAL BONDS. SECTION BOND ANTICIPATION NOTES. SECTION NO IMPAIRMENT. SECTION COLLECTION OF SALES TAX REVENUES. SECTION ACCESSION OF SUBORDINATED INDEBTEDNESS TO PARITY STATUS WITH BONDS. 47 SECTION BOOKS AND RECORDS. 47 SECTION ANNUAL AUDIT. 47 SECTION NO IMPAIRMENT. SECTION COVENANTS WITH CREDIT BANKS AND INSURERS SECTION 5.1l. FEDERAL INCOME TAX COVENANTS; TAXABLE BONDS SECTION 8. Ole SECTION SECTION SECTION SECTION SECTION DEFEASANCE... CAPITAL APPRECIATION BONDS. SALE OF BONDS. SEVERABILITY OF INVALID PROVISIONS. REPEAL OF INCONSISTENT RESOLUTIONS. EFFECTIVE DATE C-2 ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.0l. EVENTS OF DEFAULT. SECTION REMEDIES SECTION DIRECTIONS TO TRUSTEE AS TO REMEDIAL PROCEEDINGS. 51 SECTION REMEDIES CUMULATIVE. SECTION WAIVER OF DEFAULT. 52 SECTION APPLICATION OF MONEYS AFTER DEFAULT. 52 SECTION CONTROL BY INSURER ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT. 54 SECTION SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS' AND INSURER'S CONSENT.. 55 SECTION AMENDMENT WITH CONSENT OF INSURER ONLY. 56 SECTION NOTICE TO RATING AGENCIES ii iii

217 C-3 RESOLUTION A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA, AUTHORIZING THE REFUNDING OF THE COUNTY'S OUTSTANDING SALES TAX REVENUE BONDS, SERIES 1989; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $6,345,000 PRINCIPAL AMOUNT OF SALES TAX REVENUE REFUNDING BONDS, SERIES 1993 IN ORDER TO PROVIDE FUNDS FOR THE PRINCIPAL PURPOSE OF REFUNDING SUCH SERIES 1989 BONDS; PLEDGING THE MONEYS RECEIVED BY THE COUNTY FROM THE LOCAL GOVERNMENT HALF-CENT SALES TAX TO SECURE PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, AND INTEREST ON THE SERIES 1993 BONDS, AS WELL AS ANY OTHER BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SAID BONDS; PROVIDING FOR THE ISSUANCE OF ADDITIONAL BONDS; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA: ARTICLE I GENERAL SECTION DEFINITIONS. When used in this Resolution, the following terms shall have the followil}g meanings, unless the context clearly otherwise requires: "Accreted Value" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Date next preceding the date of computation or the date of computation if an Interest Date, such interest to accrue at a rate not exceeding the legal rate, compounded semiannually, plus, with respect to matters related to the payment upon redemption or acceleration of the Capital Appreciation Bonds, if such date of computation shall not be an Interest Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Date and the Accreted Value as of the immediately succeeding Interest Date, calculated based on the assumption that Accreted Value accrues during any semi-annual period in equal daily amounts on the basis of a 360-day year. "Act" shall mean Chapter 212, Florida statutes, Chapter 218, Part VI, Florida statutes, Chapter 125, Florida statutes and other applicable provisions of law. "Additional Bonds" shall mean the obligations (including, but not limited to, bond anticipation notes or other similar short-term indebtedness) issued at any time under the provisions of section 5.02 hereof on a parity with the Series 1993 Bonds. "Amortization Installment" shall mean an amount designated as such by Supplemental Resolution of the Issuer and established with respect to the Term Bonds. "Annual Debt Service" shall mean, at any time, the aggregate amount in the then current Fiscal Year of (1) interest required to be paid on the outstanding Bonds during such Fiscal Year, except to the extent that such interest is to be paid from deposits in the Interest Account made from Bond proceeds, (2) principal of Outstanding Serial Bonds maturing in such Fiscal Year, and (3) the Amortization Installments designated with respect to such Fiscal Year. For purposes of this definition, all amounts payable on a Capital Appreciation Bond shall be considered a principal payment due in the year of its maturity or date of redemption by Amortization Installment. "Authorized Investments" shall mean any of the following, if and to the extent that the same are at the time legal for investment of funds of the Issuer: (A) Direct obligations of the United states of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United states of America, provided, that the full faith and credit of the united states of 'America must be pledged to any such direct obligation or guarantee ("Direct Obligations"). (B) Direct Obligations and fully guaranteed certificates of beneficial interest of the Export-Import Bank of the United states; consolidated debt obligations and letter of credit-backed issues of the Federal Home Loan Banks; participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation ("FHLMCS"); debentures of the Federal Housing Administration; mortgage-backed securities (except stripped mortgage securities which are valued greater than par on the portion of unpaid principal) and senior debt obligations of the Federal National Mortgage Association ("FNMAs"); participation certificates of the General Services Administration; guaranteed mortgage-backed securities and guaranteed participation certificates of the government National Mortgage Association ("GNMAs"); guaranteed 2

218 C-4 participation certificates and guaranteed pool certificates of the Small Business Administration; debt obligations and letter of credit-backed issues of the Student Loan Marketing Association; local authority bonds of the U.S. Department of Housing & Urban Development; guaranteed Title XI financings of the U.S. Maritime Administration; guaranteed transit bonds of the Washington Metropolitan Area Transit Authority; Resolution Funding Corporation securities. (C) Direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "Aft or better by Standard & Poor's Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "An or better by Moody's Investors Service and "An or better by Standard & Poor's Corporation. (D) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, "P-llt by Moody's Investors Service and ItA-l" or better by Standard & Poor's Corporation. (E) Federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in each case having maturities of not more than 365 days) of any domestic bank including a branch office of a foreign bank which branch office is located in the United States, provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such bank, which, at the time of purchase, has a short-term "Bank Oepositll rating of "P-l" by Moody's Investors Service and a "Short Term CD" rating of "A-ln or better by Standard & Poor's Corporation. (F) Deposits of any bank or savings and loan association which has combined capital, surplus and undivided profits of not less than $3 million, provided such deposits are continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. (G) Investments in money-market funds rated "AAAm" or "AAAn\ G" by Standard & Poor's Corporation. (H) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "P-llt or "A3" or better by Moody's 3 Investors Service, and "A-1" or "A-If or better by Standard & Poor's Corporation, provided: a. a master repurchase agreement or specific written repurchase agreement governs the transaction; and b. the securities are held free and clear of any lien by the Issuer or an independent third party acting solely as agent ("Agent") for the Issuer, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by the Insurer, and the Issuer shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Issuer; and c. a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R et seq. or 31 C.F.R et seq. in such securities is created for the benefit of the Issuer; and d. the repurchase agreement has a term of 180 days or less, and the Issuer or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored wi thin two business days of such valuation; and e. the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103%. (I) Certificates of deposit or time or demand deposits with a "qualified public depository" (as defined in section (12),.Florida Statutes) secured in the manner required by Chapter 280, Florida statutes. (J) Units of Participation in the Local Government surplus Funds Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes, or any similar common trust fund which is established pursuant to law as a legal depository of public moneys. "Authorized Issuer Officer, II shall mean the Chairman, the County Manager, the Clerk (if different from the County Manager) or their designee (s), and when used in reference to any act or document also means any other person authorized by resolution of the Issuer to perform such act or sign such document. "Bond Amortization Account" shall mean the separate account in the Debt Service Fund established pursuant to Section 4.04 hereof. 4

219 C-5 "Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A., or any other attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political SUbdivisions, and duly admitted to practice law before the highest court of any state of the United states of America. "Bond Insurance Policy" shall mean, with respect to the Series 1993 Bonds, the municipal bond new issue insurance policy issued by Financial Guaranty Insurance Company, guaranteeing the payment, when due, of the principal of and interest on the Series 1993 Bonds as provided therein and in accordance with the provisions of the Supplemental Resolution providing for certain details with respect to the Series 1993 Bonds. With respect to any other Series of Bonds, "Bond Insurance policy" shall mean the municipal bond new issue insurance policy or policies issued by an Insurer guaranteeing the payment of the principal of and interest on any portion of such Series of Bonds. "Bondholder" or "Holder" or "holder" or any similar term, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any outstanding Bond or Bonds as provided in the registration books of the Issuer. "Bonds" shall mean the Series 1993 Bonds, together with any Additional Bonds issued pursuant to this Resolution and any Subordinated Indebtedness which accedes to the status of Bonds pursuant to section 5.04 hereof. "capi tal Appreciation Bonds" shall mean those Bonds so designated by Supplemental Resolution of the Issuer, which may be either Serial Bonds or Term Bonds and which shall bear interest payable at maturity or redemption. In the case, of capital Appreciation Bonds that are convertible to Bonds with interest payable prior to maturity or prior to redemption of such Bonds, such Bonds shall be considered Capital Appreciation Bonds only.during the period of time prior to such conversion. "Chairman" shall mean the Chairman of the Board of County Commissioners of the Issuer, and such other person as may be duly authorized to act on his or her behalf. "Clerk" shall mean the Clerk of the Board of county Commissioners of the Issuer which, as of the date hereof, is the County Manager, or such other person as may be duly authorized to act on his or her behalf. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. "construction Fund" shall mean the Osceola County, Florida Sales Tax Revenue Refunding Bonds Construction Fund established pursuant to section 4.03 hereof. "cost" or "costs", when used in connection with a Project, shall, to the extent permitted by the Act, mean (1) the Issuer's cost of physical construction; (2) costs of acquisition by or for the Issuer of such Project; (3) costs of land and interests therein and the cost of the Issuer incidental to such acquisition; (4) the cost of any indemnity and surety bonds and premiums for insurance during construction; (5) all interest due to be paid on the Bonds and other obligations relating to the Project during, and if deemed advisable by the Issuer for up to one year after the end of, the construction period of such Project; (6) engineering, legal, financial and other consultant fees and expenses; (7) costs and expenses of the financing incurred during, and if deemed advisable by the Issuer for up to one year after the end of, the construction period for such Project, including audits, fees and expenses of any Paying Agent, Registrar, Credit Bank or depository; (8) payments, when due (whether at the maturity of principal or the due date of interest or upon redemption) on any indebtedness of the Issuer (other than the Bonds) incurred for such Project; (9) costs of machinery or equipment required by the Issuer for the commencement of operation of such Project; and (10) any other costs properly attributable to such construction or acquisition or to the issuance of the Bonds which finance such Project, as determined by generally accepted accounting principles and may include reimbursement to the Issuer for any such items of Cost paid by the Issuer in anticipation of the issuance of the Bonds. Any Supplemental Resolution may provide for additional items to be included in the aforesaid Costs. "county Manager" means the chief executive officer of Osceola County, or his or her designee. "credi t Bank" shall mean as to any particular Series of Bonds, -the Person (other than an Insurer) providing a letter of credit, a line of credit or another credit or liquidity enhancement facility, as designated in the Supplemental Resolution providing for the issuance of such Bonds. "Credit Facility" shall mean as to any particular Series of Bonds, a letter of credit, a line of credit or another credit or liquidi ty enhancement facility (other than an insurance pol icy issued by an Insurer), as approved in the Supplemental Resolution providing for the issuance of such Bonds. "Debt Service Fund" shall mean the Osceola County, Florida Sales Tax Revenue Bonds Debt Service Fund established pursuant to section 4.04 hereof. 5 6

220 C-6 "Escrow Aqent" shall mean the bank or trust company to be selected by the Issuer by Supplemental Resolution adopted prior to the issuance of the Series 1993 Bonds to act as escrow agent under the Escrow Deposit Agreement. "Escrow Deposit Aqreement" shall mean that certain Escrow Deposit Aqreement to be executed by and between the Issuer and the Escrow Agent prior to the issuance of the Series 1993 Bonds, for the purpose of providing for payment of the Refunded Bonds, the form and execution of such Escrow Deposit Agreement to be authorized by Supplemental Resolution of the Issuer to be adopted prior to the issuance of the Series 1993 Bonds. "Financial Guaranty" shall mean Financial Guaranty Insurance Company, a New York stock insurance company, or any successor thereto. "Fiscal Year" shall mean the period commencing on october 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Fitch Investors Services" shall mean Fitch Investors Services, and any assigns or successors thereto. "Insurer" shall mean, with respect to the Series 1993 Bonds, Financial Guaranty and with respect to any other Series of Bonds, such Person as shall be insuring or guaranteeing the payment of principal of and interest on such Series of Bonds, when due. "Interest Account" shall mean the separate account in the Debt Service Fund established pursuant to section 4.04 hereof. "Interest Date" shall be such date or dates for the payment of interest on a Series of Bonds as shall be provided by Supplemental Resolution. "Issuer" or "county" shall mean Osceola County, Florida. "Maximum Annual Debt Service" shall mean the largest aggregate amount of the Annual Debt Service becoming due in any Fiscal Year in which Bonds are outstanding, excluding all Fiscal Years which shall have ended prior to the Fiscal Year in which the Maximum Annual Debt Service shall at any time be computed. "Maximum Interest Rate" shall mean, with respect to any particular variable rate Bonds, a numerical rate of interest, which shall be set forth in the Supplemental Resolution of the Issuer delineating the details of such Bonds, that shall be the maximum rate of interest such Bonds may at any particular time bear in the future in accordance with the terms of such Supplemental Resolution. 7 "xoody's" or "Moody's Investors Service" shall mean Moody's Investors service, and any assigns or successors thereto. "outstanding", when used with reference to Bonds and as of any particular date, shall describe all Bonds theretofore and thereupon being authenticated and delivered except, (1) any Bond in lieu of which another Bond or other Bonds have been issued under agreement to replace lost, mutilated or destroyed Bonds, (2) any Bond surrendered by the Holder thereof in exchange for another Bond or other Bonds under sections 2.06 and 2.08 hereof, (3) Bonds deemed to have been paid pursuant to Section 8.01 hereof, and (4) Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity. "Paying Agent" shall mean for each Series of Bonds any paying agent for such Series of Bonds appointed by or pursuant to this Resolution and its successor or assigns, and any other Person which may at any time be substituted in its place pursuant to this Resolution. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Pledged Funds" shall mean (1) the Sales Tax Revenues and (2) until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof, in the funds and accounts established hereunder except as for (A) the Unrestricted Revenue Account, (B) the Rebate Fund and (e) moneys which are deposited in a separate subaccount created in the Reserve Account for a particular Ser ies of Bonds, in which case the moneys on deposit in such subaccount shall be pledged solely for the payment of the Series of Bonds for which it was established. "Prerefunded Obligations" shall mean any bonds or other obligations of any state of the United states of America or of any. agency, instrumentality or local governmental unit of any such state (1) which are (A) not callable prior to maturity or (B) as to which irrevocable instructions have been given to the fiduciary for such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (2) which are fully secured as to principal, redemption premium, if any, and interest by a fund consisting only of cash or Federal Securities, secured in the manner set forth in Section 8.01 hereof, which fund may be applied only to the payment of such principal of, redemption premium, if any, and interest on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as the case may be, (3) as to which the principal of and interest on the Federal Securities, which have been deposited in such fund along with any cash on deposit in such fund, are sufficient, as verified by an 8

221 C-7 independent certified public accountant, to pay principal of, redemption premium, if any, and interest on the bonds or other obligations on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in clause (1) above, and (4) which are rated in the highest rating category of Standard & Poor's Corporation, Fitch Investors Services or Moody's Investors Service. "principal Account" shall mean the separate account in the Debt Service Fund established pursuant to Section 4.04 hereof. "project" shall mean the acquisition, construction and improvement of such properties and facilities as may be financed by the Sales Tax Revenues pursuant to the Act. The description of each Project shall be set forth in the Supplemental Resolution authorizing the issuance of Bonds which shall finance the acquisition and construction of such Project. "Rebate Fund" shall mean the Rebate Fund established pursuant to section 4.04 hereof. "Redemption Price" shall mean, wi th respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or this Resolution. "Refunded Bonds" shall mean, the Issuer's outstanding Sales Tax Refunding Revenue Bonds, Series 1989, dated February 1, "Refunded Bonds Resolution" means the Resolution adopted by the Issuer on January 25, 1989 authorizing the issuance of the Refunded Bonds. "Refunding securities" shall mean the united states Obligations and the Prerefunded Obligations. "Registrar" shall mean for each Series of Bonds any registrar for such Series of Bonds appointed by or pursuant to this Resolution and its successors and assigns, and any other Person which may at any time be SUbstituted in its place pursuant to this Resolution. "Reserve Account" shall mean the separate account in the Debt Service Fund established pursuant to section 4.04 hereof. "Reserve Account Insurance Policy" shall mean an insurance policy or surety bond deposited in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to section 4.05 (A) (4) hereof. "Reserve Account Letter of Credit" shall mean an unconditional irrevocable letter of credit or line of credit or 9 other credit facility (other than a Reserve Account Insurance Policy) deposited in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to section 4.05 (A) (4 ) hereof. "Reserve Account Requirement" shall mean, as of any date of calculation for the Reserve Account, an amount equal to the lesser of (1) Maximum Annual Debt Service for all Outstanding Bonds, or (2) 125% of the average annual debt service for all outstanding Bonds, or (3) 10% of the proceeds of all outstanding Bonds (calculated as of the date of issuance thereof); provided, however, that a lesser or greater amount may be provided by Supplemental Resolution of the Issuer if approved by Bond Counsel as being the maximum amount which may be funded from proceeds of the Bonds without any of the Bonds being considered "arbitrage bonds" within the meaning of the Code. In computing the Reserve Account Requirement in respect of Bonds that constitute variable rate indebtness, such variable rate indebtedness shall be assumed to bear interest at (1) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Bond Buyer 25 Bond Revenue Index (or comparable index if no longer published) plus fifty (50) basis points, or (2) if interest is not so excludable, the interest rate on direct u.s. treasury obligations with comparable maturities plus fifty (50) basis points. "Resolution" shall mean this Resolution, as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. "Restricted Revenue Account" shall mean the separate account in the Revenue Fund established pursuant to Section 4.04 hereof. "Revenue Fund" shall mean the Osceola County, Florida Sales Tax Revenue Fund established pursuant to Section 4.04 hereof. "Sales Tax Revenues" shall mean the proceeds of the local government half-cent sales tax distributed to the Issuer from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in, Part VI, Chapter 218, Florida Statutes, as amended and, only to the extent provided by Supplemental Resolution of the Issuer, any additional sales tax revenues distributed to the Issuer pursuant to the Act. "serial Bonds" shall mean all of the Bonds other than the Term Bonds. "Series" shall mean all the Bonds delivered on original issuance in a simultaneous transaction and identified pursuant to Sections 2.01 and 2.02 hereof or a Supplemental Resolution authorizing the issuance by the Issuer of such Bonds as a separate 10

222 C-8 Series, regardless of variations in maturity, interest rate, Amortization Installments or other provisions. "Series 1993 Bonds" shall mean the Issuer's Sales Tax Revenue Refunding Bonds, series 1993, authorized pursuant to Section 2.02 hereof. "Standard' Poor's" or "Standard' Poor's corporation" shall mean Standard and Poor's corporation, and any assigns and successors thereto. "State" shall mean the State of Florida. "Su']:)ordinated Indebtedness" shall mean that indebtedness of the Issuer, with a lien on the Pledged Funds subordinate and junior to the Bonds, issued in accordance with the provisions of section 5.01 hereof. "Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution enacted and becoming effective in accordance with the terms of sections 7.01, 7.02 and 7.03 hereof. "Taxable Bond" shall mean any Bond which states, in the body thereof, that the interest income thereon is includable in the gross income of the Holder thereof for federal income taxation purposes or that such interest is subject to federal income taxation. "Term Bonds" shall mean those Bonds which shall be designated as Term Bonds hereby or by Supplemental Resolution of the Issuer and which are subj ect to mandatory redemption by Amortization Installment. "united States obligations" shall mean obligations described in paragraphs (A) and (B) of the definition of "Authorized. Investments". "united states obligations" shall also include direct obligations of the United states Treasury which have been stripped by the U.s. Treasury, CATS, TIGRS and similar securities and obligations of agencies described in this definition; provided such obligations do not permit redemption prior to maturity at the option of the obligor. "Unrestricted Revenue Account" shall mean the separate account in the Revenue Fund established pursuant to Section 4.04 hereof. The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. 11 Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. SECTION AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act. SECTION RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Bonds and any Credit Bank and Insurer and shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Bonds and any Credi t Bank and Insurer. The pledge made in this Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of said Bonds and for the benefit, protection and security of any Credit Bank and Insurer. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION FINDINGS. It is hereby ascertained, determined and,declared: (A) That the Issuer deems it desirable and in the best interests of the Issuer to refund the Refunded Bonds in order to achieve debt service savings. (B) That the Refunded Bonds shall be refunded with a portion of proceeds of the Series 1993 Bonds issued pursuant to this.resolution in the manner set forth herein and in the Escrow Deposit Agreement. For the payment and refunding of said Refunded Bonds, the Issuer shall, as provided herein, deposit part of the proceeds derived from the sale of the Issuer's Series 1993 Bonds in a special escrow deposit trust fund to purchase Refunding Securities which shall be sufficient, together with investment earnings therefrom and any other sums deposited therein or investment income therefrom, to pay the Refunded Bonds as the same become due and payable or are redeemed prior to maturity, all as provided herein and in the Escrow Deposit Agreement. Subsequent to the defeasance of the Refunded Bonds I the Refunded Bonds shall no longer be payable from or be secured by any portion of the Pledged Funds. (C) That upon issuance of the Series 1993 Bonds the Pledged Funds shall not be pledged or encumbered in any manner other than with respect to the Series

223 C-9 (D) That the estimated Pledged Funds will be sufficient to pay the principal of and interest on the series 1993 Bonds to be issued pursuant to this Resolution, as the same become due, and all other payments provided for in this Resolution. (E) That the principal of and interest on the Bonds to be issued pursuant to this Resolution, and all other payments provided for in this Resolution will be paid solely from the Pledged Funds; and the ad valorem taxing power of the Issuer will never be necessary or authorized to pay the principal of and interest on the Bonds to be issued pursuant to this Resolution and, except as otherwise provided herein, the Bonds shall not constitute a lien upon any property of the Issuer. SECTION REFUNDING OF THE REFUNDED BONOS. The Issuer does hereby authorize the advance refunding of the Refunded Bonds in accordance with the provisions hereof, of the Escrow Deposit Agreement and of the Refunded Bonds Resolution. 13 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OP BONDS SECTION AUTHORIZATION OP BONDS. This Resolution creates an issue of Bonds of the Issuer to be designated as "Osceola County, Florida, Sales Tax Revenue Bonds" which may be issued in one or more Series as hereinafter provided. The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act or by law. The Bonds may, if and when authorized by the Issuer pursuant to this Resolution, be issued in one or more Series, with such further appropriate particular designations added to or incorporated in such title for the Bonds of any particular Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not exceeding the maximum rate permi tted by law; and shall be payable in lawful money of the United states of America on such dates; all as determined by Supplemental Resolution of the Issuer. The Bonds shall be issued in such denominations and such form, whether coupon or registered; shall be dated such date; shall bear such numbers; shall be payable at such place or places i shall contain such redemption provisions; shall have such Paying Agents and Registrars; shall mature in such years and amounts; and the proceeds shall be used in such manner; all as determined by. Supplemental Resolution of the Issuer in accordance with the provisions of the Act. The Issuer may issue Bonds which may be secured by a Credit Facility or by a Bond Insurance Policy of an Insurer all as shall be determined by Supplemental Resolution of the Issuer. SECTION AUTHORIZATION AND DESCRIPTION OF SERIES 1993 BONDS. A Series of Bonds entitled to the benefit, protection and security of this Resolution is hereby authorized in the aggregate principal amount of not exceeding $6,345,000 for the principal purpose of providing funds to refund the Refunded Bonds. Such Series of Bonds shall be designated as, and shall be distinguished from the Bonds of all other Series by the title, "Osceola County, Florida, Sales Tax Revenue Refunding Bonds, Series 1993"; provided the Issuer may change such designation in the event that the total amount of Series 1993 Bonds authorized herein are not issued in a 14

224 C-10 simultaneous transaction or in the event the Bonds are not issued in the 1993 calendar year. The Series 1993 Bonds shall be dated as of the first day of the month in which occurs the delivery of the Series 1993 Bonds to the purchaser or purchasers thereof or such other date as may be set forth by Supplemental Resolution of the Issuer; shall be issued as fully registered Bonds; shall be numbered consecutively from one upward in order of maturity preceded by the letter "R"; shall be in such denominations and shall bear interest at a rate or rates not exceeding the maximum rate permitted by law, payable in such manner and on such dates; shall consist of such amounts of Serial Bonds, Term Bonds, Variable Rate Bonds, current Interest Bonds and Capital Appreciation Bonds; maturing in such amounts and in such years not exceeding such period as may be permitted by the Act at the time of issuance; shall be payable in such place or places; shall have such Paying Agents and Registrars; and shall contain such redemption provisions; all as the Issuer shall provide hereafter by Supplemental Resolution. The principal of, Accreted Value or Redemption price, if applicable, on the Series 1993 Bonds are payable upon presentation and surrender of the Series 1993 Bonds at the office of the Paying Agent. Interest payable on any Series 1993 Bond which constitutes a Current Interest Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or, unless otherwise provided by Supplemental Resolution, at the prior written request and expense of such Holder, by bank wire transfer for the account of such Holder designated in any such request. All payments of principal of or Redemption Price, if applicable, and interest on the Series 1993 Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private "debts. SECTXON APPLICATION OF SERIES 1993 BOND PROCEEDS. Except as otherwise provided by Supplemental Resolution of the Issuer, the proceeds derived from the sale of the Series 1993 Bonds, including accrued interest and premium, if any, and certain amounts on deposit in the funds and accounts established under the Refunded Bonds Resolution for the Refunded Bonds shall, simultaneously with the delivery of the Series 1993 Bonds to the purchaser or purchasers thereof, be applied by the Issuer as follows: (A) Accrued interest shall be deposited in the Interest Account and shall be used only for the purpose of paying the interest which shall thereafter become due on the Series 1993 Bonds. 15 (B) An amount of the proceeds of the Series 1993 Bonds shall be deposited with the Escrow Agent which, together with any other amounts transferred to the Escrow Agent for such purpose, shall be sufficient, and with investment earnings on the Refunding Securities purchased therewith, to pay all of the principal of and interest on the Refunded Bonds. (C) A sufficient amount of Series 1993 Bond proceeds, if any, shall be deposited in the Reserve Account or subaccount if so established pursuant to Supplemental Resolution, which, together with (i) any moneys and securities on deposit therein, (ii) any Reserve Account Insurance Policies and/or Reserve Account Letters of Credit obtained in accordance with section 4.05(A)(4) hereof, and (iii) any proceeds of the Refunded Bonds and the investment earnings thereon which are on deposi t in the Reserve Account established for the Refunded Bonds pursuant to the Refunded Bonds Resolution and transferred to the Reserve Account, or subaccount, upon delivery of the Series 1993 Bonds, shall equal the Reserve Account Requirement for the Series 1993 Bonds. (D) A sufficient amount of the Series 1993 Bond proceeds shall be applied to the payment of the premiums of the Bond Insurance Policy and any Reserve Account Insurance Policy or Reserve Account Letter of Credit applicable to the Series 1993 Bonds or reserves established therefor and to the payment of costs and expenses relating to the issuance of the Series 1993 Bonds. Such amount or any portion thereof may, at the option of the Issuer, be deposited in and disbursed from the Construction Fund. SECTION EXECUTION OF BONDS. The Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of the Chairman and the official seal of the Issuer shall be imprinted thereon, attested and countersigned with the manual or facsimile signature of the Clerk. In case anyone or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to be such 'officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond shall hold the proper office of the Issuer, although at the date of such Bond such person may not have held such office or may not have been so authorized. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered. 16

225 C-11 SECTION AUTHENTICATION. No Bond of any Series shall be secured hereunder or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be manually endorsed on such Bond a certificate of authentication by the Registrar or such other entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The form of such certificate shall be substantially in the form provided in section 2.09 hereof. SECTION TEMPORARY BONDS. until the definitive Bonds of any Series are prepared, the Issuer may execute, in the same manner as is provided in Section 2.04, and deliver, upon authentication by the Registrar pursuant to section 2.05 hereof, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer by subsequent resolution, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and execute definitive Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Registrar. SECTION BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the -Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and SUbstitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and SUbstitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds so surrendered or otherwise substituted shall be cancelled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a SUbstitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. 17 Any such duplicate Bonds issued pursuant to this Section 2.07 shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on the Pledged Funds to the same extent as all other Bonds issued hereunder. SECTION INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series and maturity of any other authorized denominations. The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform commercial Code of the State of Florida, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Bonds. Each Bond shall be transferable only upon the books of the Issuer, at the office of the Registrar I under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by his attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or his duly authorized attorney. Upon the transfer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the. Issuer may deem and treat the Person in whose name any outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither the Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the Paying Agent in respect to any Series of Bonds, shall forthwith (A) following the fifteenth day prior to an interest payment date for such Series; (B) following the fifteenth day next preceding the 18

226 C-12 date of first mailing of notice of redemption of any Bonds of such Series; and (C) at any other time as reasonably requested by the Paying Agent of such Series, certify and furnish to such Paying Agent the names, addresses and holdings of Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check to the Holder entitled thereto or may, in lieu thereof, upon the request and at the expense of such Holder, transmit such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall cause to be issued Bonds and the Registrar shall authenticate and deliver such Bonds in accordance with the provisions of this Resolution. Execution of Bonds by the Chairman and the Clerk for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the series of which such Bonds are a part. All Bonds surrendered in any such exchanges or transfers shall be held by the Registrar in safekeeping until directed by the Issuer to be destroyed or returned by the Registrar. For every such exchange or transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or transfer of Bonds of any Series during the fifteen (1S) days next preceding an Interest Date on the Bonds of such Series (other than capital Appreciation Bonds and Variable Rate Bonds), or, in the case of any proposed redemption of Bonds of such Series, then, for the Bonds subject to redemption, during the fifteen (15) days next. preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. The Issuer may elect to issue any Bonds as uncertificated registered public obligations (not represented by instruments),.commonly known as book-entry obligations, provided it shall establish a system of registration therefor by Supplemental Resolution. SECTION FORK OF BONDS. The text of the Bonds, except for Capital Appreciation Bonds and Variable Rate Bonds, the form of which shall be provided by Supplemental Resolution of the Issuer, shall be in substantially the following form with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Chairman prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by the Chairman's execution of the Bonds and the Issuer's delivery of the Bonds to the purchaser or purchasers thereof): No. R- Interest Rate ---_% Registered Holder: Principal Amount: UNITED STATES OF AMERICA STATE OF FLORIDA OSCEOLA COUNTY, FLORIDA SALES TAX REVENUE [REFUNDING] BOND, SERIES Maturity Date Date of Original Issue $ CUSIP DOW ALL KEN BY TRESE PRESENTS, that Osceola County, a political subdivision of the state of Florida (the "Issuer"), for value received, hereby promises to pay, solely from the Pledged Funds hereinafter described, to the Registered Holder identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, the Principal Amount identified above and to pay interest on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum identified above on and of each year commencing until such Principal Amount shall have been paid, except as the provisions hereinafter set forth with respect to redemption prior to maturity may be or become applicable hereto. Such Principal Amount and interest and the premium, if any, on.this Bond are payable in any coin or currency of the United states of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Such Principal Amount and the premium, if any I on this Bond, are payable, upon presentation and surrender hereof, at the designated office of,,, as Paying Agent. Payment of each installment of interest shall be made to the person in whose name this Bond shall be registered on the registration books of the Issuer maintained by,,, as Registrar, at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date and shall be paid by a check or draft of such Paying Agent mailed to such Registered Holder at the address appearing on such registration books or, at the prior written request and 19 20

227 C-13 expense of such Registered Holder, by bank wire transfer for the account of such Holder designated in such request. This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $ (the "Bonds") of like date, tenor and effect, except as to maturity date, interest rate, denomination and number, issued for the purpose of ~ ~ ~ ~~ ~~ ~, in and for the Issuer, under the authority of and in full compliance with the constitution and laws of the state of Florida, particularly, Chapter 125, Florida statutes, Chapter 212, Florida statutes, Chapter 218, Part VI, Florida statutes, and other applicable provisions of law (collectively, the "Act"), and a resolution duly adopted by the Issuer on December 16, 1993, as supplemented (the "Resolution ll ), and is subject to all the terms and conditions of the Resolution. This Bond and the interest hereon are payable solely from and secured by a lien upon and a pledge of (1) the proceeds of the local government half-cent sales tax distributed to the Issuer from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in, Part VI of Chapter 218, Florida statutes, as amended (but only to the extent provided by supplemental resolution of the Issuer in the event any amendment now or hereafter enacted expands the amount of sales tax distributed pursuant to said section ), and other applicable provisions of law, and (2) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in certain of the funds and accounts established by the Resolution, all in the manner and to the extent described in the Resolution (collectively, the "Pledged Funds"). It is expressly agreed by the Registered Holder of this Bond that the full faith and credit of the Issuer, the state of Florida, or any political subdivision or agency thereof, are not pledged to the payment of the principal of, premium, if any, and interest on this Bond and that such Holder shall never have the right to.require or compel the exercise of any taxing power of the Issuer, the state of Florida, or any political subdivision or agency thereof, to the payment of such principal, premium, if any, and interest. This Bond and the obligation evidenced hereby shall not constitute a lien upon any property of the Issuer, but shall constitute a lien only on, and shall be payable solely from, the Pledged Funds. The Issuer may issue additional obligations on parity with the Bonds in accordance with the terms of the Resolution. Neither the members of the Issuer nor any person executing this Bond shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH ON THE FRONT SIDE HEREOF. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Reqistrar. :IN W:ITNESS WHEREOP, the Board of County commissioners of Osceola county, Florida has issued this Bond and has caused the same to be executed by the manual or facsimile signature of its chairman, and by the manual or facsimile signature of its Clerk of the Board of County Commissioners and its official seal or a facsimile thereof to be affixed or reproduced hereon, all as of the Date of Original Issuance. (SEAL) OSCEOLA COUNTY, FLOR:IDA Chairman Clerk of the Board of County Commissioners 21 22

228 C-14 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the Issue described in the within-mentioned Resolution. DATE OF AUTHENTICATION: Registrar By: Authorized Signatory (Provisions on Reverse Side of Bond) The transfer of this Bond is registrable in accordance with the terms of the Resolution only upon the books of the Issuer kept for that purpose at the principal corporate trust office of the Registrar by the Registered Holder hereof in person or by his attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Registrar duly executed by the Registered Holder or his attorney duly authorized in writing, and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor, and upon the payment of the charges, if any, therein prescribed. For every such exchange or registration of transfer, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or registration of transfer. The Bonds are issuable in the form of fully registered Bonds in the denomination of $5,000 and any integral multiple thereof, not exceeding the aggregate principal amount of the Bonds. The Issuer, the Registrar and any Paying Agent may treat the Registered Holder of this Bond as the absolute owner hereof for all purposes, whether or not this Bond shall be overdue, and shall not be affected by any notice to the contrary. The Issuer and the Registrar shall not be obligated to make any exchange or transfer of the Bonds during the fifteen (15) days next preceding an interest payment date or, in the case of any proposed redemption of the Bonds, then, for the Bonds subject to redemption, during the fifteen (15) days next preceding the date of the first mailing of notice of such redemption. (INSERT REDEMPTION PROVISIONS) 23 Redemption of this Bond under the preceding paragraphs shall be made as provided in the Resolution upon notice given by first class mail sent at least thirty (30) days prior to the redemption date to the Registered Holder hereof at the address shown on the registration books maintained by the Registrar; provided, however, that failure to mail notice to the Registered Holder hereof, or any defect therein, shall not affect the validity of the proceedings for redemption of other Bonds as to which no such failure or defect has occurred. In the event that less than the full principal amount hereof shall have been called for redemption, the Registered Holder hereof shall surrender this Bond in exchange for one or more Bonds in an aggregate principal amount equal to the unredeemed portion of principal, as provided in the Resolution. Reference to the Resolution and any and all resolutions supplemental thereto and modifications and amendments thereof and to the Act is made for a description of the pledge and covenants 24

229 securing this Bond, the nature, manner and extent of enforcement of such pledge and covenants, and the rights, duties, immunities and obligations of the Issuer. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, in regular and due form and time as required by the laws and Constitution of the state of Florida applicable thereto, and that the issuance of the Bonds does not violate any constitutional or statutory limitations or provisions. ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto Insert Social security or other Identifying Number of Assignee (Name and Address of Assignee) the within Bond and does hereby irrevocably constitute and appoint as attorneys to register the transfer of the said Bond on the books kept for registration thereof with full power of substitution in the premises. C-15 Dated: Signature guaranteed: NOTICE: Signature must be guaranteed by an institution which is a participant in the Securities Transfer Agent 'Medallion Program (STAMP) or similar program. NOTICE: The signature to this assignment must correspond with the name of the Registered Holder as it appears upon the face of the within Bond in every particular, wi thout alteration or enlargement or any change whatever and the Social Security or other identifying number of such assignee must be supplied

230 C-16 The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM TEN ENT as tenants in common as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT (Cust. ) CUstodian for under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in list above. 27 ARTICLE III REDEMPTION OF BONDS SECTION PRIVILEGE OF REDEMPTION. The terms of this Article III shall apply to redemption of Bonds other than Capital Appreciation Bonds or Variable Rate Bonds. The terms and provisions relating to redemption of Capital Appreciation Bonds and Variable Rate Bonds shall be provided by Supplemental Resolution. SECTION SELECTION OF BONDS TO BE REDEEMED. The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The Issuer shall, at least forty-five (45) days and not more than sixty (60) days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar) notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Bonds of a single maturity, the partic~lar Bonds or portions of Bonds to be redeemed shall be selected not more than sixty (60) days and not less than forty-five (45) days prior to the redemption date by the Registrar from the outstanding Bonds of the maturity or maturities designated by the Issuer or by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof. If less than all of the outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. SECTION NOTICE OF REDEMPTION. Notice of such. redemption, which shall specify the Bond or Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the Issuer, and (A) shall be filed with the Paying Agents of such Bonds and CB) shall be mailed first class, postage prepaid, at least thirty (30) days and not more than sixty (60) days prior to the redemption date to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of the date of mailing of such notice. Failure to mail notice to the Holders of the Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Bonds as to which no such failure or defect has occurred. Each notice of redemption shall state: (1) the CUSIP numbers of all Bonds being redeemed, (2) the original issue date of such Bonds, (3) the maturity date and rate of interest borne by each 28

231 C-17 Bond being redeemed, (4) the redemption date, (5) the Redemption Price, (6) the date on which s~ch notice is mailed, (7) if less than all outstanding Bonds are to be redeemed, the certif icate number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (8) that on such redemption date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof in the case of Bonds to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable, (9) that the Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price at the designated office of the Registrar at an address specified, and (10) unless sufficient funds have been set aside by the Issuer for such purpose prior to the mailing of the notice of redemption, that such redemption is conditioned upon the deposit of sufficient funds for such purpose on or prior to the date set for redemption; and provided, further, that such notice and the redemption set forth therein may be subject to the satisfaction of one or more additional conditions set forth therein. Within sixty (60) days of the date of redemption, the Registrar shall give a second notice of redemption by mailing another copy of the redemption notice to the registered Holders of Bonds called for redemption but which have not been presented for payment within thirty (30) days after the date set for redemption. In addition to the mailing of the notice described above, each notice of redemption and payment of the redemption price shall meet the following requirement; provided, however, the failure to provide such further notice of redemption or to comply with the terms of this paragraph shall not in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed above: Each further notice of redemption shall be sent by certified mail or overnight delivery service or telecopy to all registered securities depositories then in the business of holding SUbstantial amounts of obligations of types comprising the Bonds (such depositories now being The Depository Trust Company, New York, New York,Midwest Securities Trust Company, Chicago, Illinois and Philadelphia Depository Trust Company, Philadelphia, Pennsylvania) and to four or more national information services which disseminate notices of prepayment or redemption of obligations such as the Bonds (such information services now being Financial Information, Inc.'s "Daily Called Bond Service," "Jersey City, New Jersey, Kenny Information Services "Called Bond Service," New York, New York, Moody's "Municipal and Government," New York, New York and Standard & Poor's "Called Bond Record," New York, New York). 29 SECTION REDEMPTION OF PORTIONS OF BONDS. Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to the Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and maturity, and of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. SECTION 3. OS. PAYMENT OF REDEEMED BONDS. Notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. Each check or other transfer of funds issued by the Paying Agent to pay the Redemption Price of Bonds being redeemed shall bear the CUSIP number or numbers of such Bonds and identify the payments applicable to each CUSIP number. All Bonds which have been redeemed shall be cancelled by the Registrar and shall not be reissued. 30

232 C-18 ARTICLB IV SBCURITY, SPBCIAL FONDS AND APPLICATION THERBOF SBCTION BONDS NOT TO BB INDBBTBDNBSS OF ISSUBR. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of any constitutional or statutory provision, but shall be special obligations of the Issuer, payable solely from and secured by a lien upon and pledge of the Pledged Funds in accordance with the terms of this Resolution. No Holder of any Bond or any Credit Bank or Insurer shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond, or be entitled to payment of such Bond from any moneys of the Issuer except from the Pledged Funds in the manner provided herein. SBCTION SBCURITY FOR BONDS. Except as otherwise provided herein, the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Funds; provided, however, a Series of Bonds may be further secured by a Credit Facility or Bond Insurance Policy of an Insurer in addition to the security provided herein; and provided further that a Series of Bonds may be secured independently of any other Series of Bonds by the establishment of a separate subaccount in the Reserve Account for such Series of Bonds. The lien upon and pledge of the Sales Tax Revenues is superior to all other liens and pledges upon the Sales Tax Revenues. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds in accordance with the provisions hereof. The Pledged Funds shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties 'having claims of any kind in tort, contract or otherwise against the Issuer. SECTION CONSTRUCTION FUND. The Issuer covenants and agrees to establish a special fund in a bank, trust company or other entity in the state of Florida, which is eligible under the laws of such state to receive funds of the Issuer, to be known as the "The Osceola County, Florida, Sales Tax Revenue Bonds Construction Fund," which shall be used only for payment of the Cost of the Projects. Moneys in the Construction Fund, until applied in payment of any item of the Cost of a Project in the manner hereinafter provided, shall be held in trust by the Issuer and shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. 31 The Issuer shall establish within the Construction Fund a separate account for each Project, the cost of which is to be paid in whole or in part out of the Construction Fund. The Issuer covenants that the acquisition, construction and installation of each Project will be completed without delay and in accordance with sound engineering practices. The Issuer shall make disbursements or payments from the Construction Fund to pay the cost of a Project upon the filing with the Clerk of documents and/or certificates signed by an Authorized Issuer Officer, stating with respect to each disbursement or payment to be made: (A) the item number of the payment, (B) the name and address of the Person to whom payment is due, ec) the amount to be paid, (D) the Construction Fund account from which payment is to be made, ee) the purpose, by general classification, for which payment is to be made, and (F) that {1} each obligation, item of cost or expense mentioned therein has been properly incurred, is in payment of a part of the Cost of a Project and is a proper charge against the account of the Construction Fund from which payment is to be made and has not been the basis of any previous disbursement or payment, or (2) each obligation, item of cost or expense mentioned therein has been paid by the Issuer, is a reimbursement of a part of the Cost of a Project, is a proper charge against the account of the Construction Fund from which payment is to be made, has not been theretofore reimbursed to the Issuer or otherwise been the basis of any previous disbursement or payment and the Issuer is entitled to reimbursement thereof. The Clerk shall retain all such certificates of the Authorized Issuer Officers for five (5) years from the dates of such documents and/or certificates. The Clerk shall make available the, documents and/or certificates at all reasonable times for inspection by any Holder of any of the Bonds or the agent or representative of any Holder of any of the Bonds. Notwithstanding any of the other provisions of this section 4.03, to the extent that other moneys are not available therefor, amounts in,an account of the Construction Fund with respect to any -Series of Bonds shall be applied to the payment of principal and interest on such Bonds when due. The date of completion of acquisition and construction of a Project shall be determined by an Authorized Issuer Officer. Promptly after the date of the completion of a Project, and after paying or making provisions for the payment of all unpaid items of the Cost of such Project, the Issuer shall deposit in the following order of priority any balance of moneys remaining in the Construction Fund in (A) another account of the Construction Fund for which the Authorized Issuer Officer has stated that there are insufficient moneys present to pay the Cost of the related Project (including, without limitation, the 1988 Project), (B) the Reserve Account to the extent of a deficiency therein, and (C) such other fund or account established hereunder as shall be determined by the Issuer, provided the Issuer has received an opinion of Bond Counsel 32

233 C-19 to the effect that such transfer shall not adversely affect the exclusion, if any, of interest on the Bonds from gross income for purposes of federal income taxation. SECTION FUNDS AND ACCOUNTS. The Issuer covenants and agrees to establish special funds to be known as the "Osceola County, Florida, Sales Tax Revenue Bonds Revenue Fund," the "Osceola County, Florida, Sales Tax Revenue Bonds Debt Service Fund" and the "Osceola County, Florida, Sales Tax Revenue Bonds Rebate Fund." The Issuer shall maintain in the Revenue Fund two accounts: the "Restricted Revenue Account" and the "Unrestricted Revenue Account... The Issuer shall maintain in the Debt Service Fund four accounts: the "Interest Account," the "principal Account, " the "Bond Amortization Account," and the "Reserve Account." Moneys in the aforementioned funds and accounts, other than the Rebate Fund and the Unrestricted Revenue Account, until applied in accordance with the provisions hereof, shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. The Issuer may at any time and from time to time appoint one or more depositaries to hold, for the benefit of the Bondholders, anyone or more of the funds, accounts and subaccounts established hereby. Such depository or depositaries shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from each of such funds and accounts as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the Issuer and its agent and employees. Any such depositary shall be a bank or trust company duly authorized to exercise corporate trust powers and subject to examination by federal or state authority, of good standing, and having a combined capital, surplus and undivided profits aggregating not less than fifty million dollars ($50,000,000). SECTION FLOW OF FUNDS. (A) Promptly upon receipt from "the State, the Issuer shall deposit the Sales Tax Revenues into the Restricted Revenue Account. The moneys in the Restricted Revenue Account shall be disbursed on or before the third day prior to the end of each month, commencing in the month immediately following delivery of any of the Bonds to the purchasers thereof, or such later date as hereinafter provided, in the following manner and in the following order of priority: (l) Interest Account. There shall be deposited to the Interest Account an amount which shall be sufficient to pay (a) one-sixth (1/6) of the interest becoming due on all Bonds Outstanding (except as to Capital Appreciation Bonds) on the next succeeding Interest Date, plus (b) any deposits to the Interest Account which have previously become due and the Issuer did not make; provided however, that the Issuer may elect to make all or any part of such deposit from any other lawfully available funds and shall receive a credit equal to the amount of such other funds actually deposited in the Interest Account. Moneys in the Interest Account shall be used to pay interest on the Bonds as and when the same become due, whether by redemption or otherwise, and for no other purpose. In the event the first interest payment date for a Series of Bonds shall occur either more or less than six months after the actual date of such Series, then the deposits required by this paragraph shall be adjusted so that the Issuer shall make equal monthly deposits to the Interest Account in an aggregate amount SUfficient to pay the interest coming due on such Series of Bonds on said first interest payment date. The Issuer shall adjust the amount of the deposits into the Interest Account not later than the month immediately preceding any Interest Date so as to provide sufficient moneys in the Interest Account to pay the interest on all Bonds outstanding coming due on such Interest Date. No further deposi t need 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 Date. (2) principal Account. Commencing in the month which is one (l) year prior to the first principal payment date, there shall be deposited to the Principal Account an amount which shall be sufficient to pay (a) one-twelfth (1/12) of the principal on Serial Bonds outstanding next due, plus (b) any deposits to the Principal Account which have previously become due and which the Issuer did not make; provided however, that the Issuer may elect to make all or any part of such deposit from any other lawfully available funds and shall receive a credit equal to the amount of such other funds actually deposited in the Principal Account. Moneys in the Principal Account shall be used to pay the principal of the Bonds as and when the same shall mature, and for no other purpose. Serial Capital Appreciation Bonds shall be payable from the Principal Account in the year in which such Bonds mature and.monthly deposits or credits into the principal Account shall commence in the month which is one year prior to the date on which such Bonds mature. In the event the first principal payment date for a Series of Bonds shall occur less than 12 months after the dated date of such Series, then the deposits required by this paragraph shall be adjusted so that the Issuer shall make equal monthly deposits to the Principal Account in an aggregate amount sufficient to pay the principal coming due on such Series of Bonds on said first principal payment date. The Issuer shall adjust the amount of the deposits into the Principal Account not later than the month immediately preceding any principal payment date so as to provide sufficient moneys in the Principal Account to pay the principal of all Serial Bonds outstanding coming due on such principal payment date. No further deposit need be made to the Principal Account when the moneys therein are equal to the 33 34

234 C-20 principal coming due on the outstanding Bonds on the next succeeding principal payment date. (3) Bond Amortization Account. Commencing in the month which is one year prior to any Amortization Installment due date, there shall be deposited to the Bond Amortization Account an amount which shall be sufficient to pay (a) one-twelfth (1/12) of the Amortization Installments of all Bonds outstanding next due, plus (b) any deposits to the Bond Amortization Account which have previously become due and which the Issuer did not make; provided however, that the Issuer may elect to make all or any part of such deposit from any other lawfully available funds and shall receive a credit equal to the amount of such other funds actually deposited in the Bond Amortization Account. Honeys in the Bond Amortization Account shall be used to purchase or redeem Term Bonds in the manner herein provided, and for no other purpose. In the event the first Amortization Installment due date for a Series of Bonds shall occur less than 12 months after the dated date of such Series of Bonds, then the deposi ts required by this paragraph shall be adjusted so that the Issuer shall make equal monthly deposits to the Bond Amortization Account in an aggregate amount sufficient to pay the Amortization Installment coming due on such Series of Bonds on said first Amortization Installment due date. The Issuer shall adjust the amount of the deposit into the Bond Amortization Account not later than the month immediately preceding any date for payment of an Amortization Installment so as to provide sufficient moneys in the Bond Amortization Account to pay the Amortization Installments on the Bonds coming due on such date. No further deposi t need be made to the Bond Amortization Account when the moneys therein are equal to the Amortization Installments coming due on the outstanding Bonds on the next succeeding Amortization Installment due date. Payments to the Bond Amortization Account shall be on a parity with payments to the Principal Account. Amounts accumulated in the Bond Amortization Account wi th respect to any Amortization Installment (together with amounts "accumulated in the Interest Account with respect to interest, if any, on the Term Bonds for which such Amortization Installment was established) may be applied by the Issuer, 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 at a price not exceeding par plus accrued interest, or (b) to the redemption at the applicable Redemption Prices of such Term Bonds, if then redeemable by their terms at a price not exceeding par plus accrued interest. The applicable Redemption Price (or principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be deemed to constitute part of the Bond Amortization Account until such Amortization Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the sixtieth (60th) day preceding the due date of any such Amortization Installment, the Issuer shall proceed to call 35 for redemption on such due date, by causing notice to be given as provided in Section 3.03 hereof, 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 Issuer shall payout of the Bond Amortization Account and the Interest Account to the appropriate Paying Agents, 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 Agents to such redemption (or payment). All expenses in connection with the purchase or redemption of Term Bonds shall be paid by the Issuer from the Restricted Revenue Fund. ( 4) Reserve Account. There shall be deposited to the Reserve Account an amount which would enable the Issuer to restore the funds on deposit in the Reserve Account to an amount equal to the Reserve Account Requirement applicable thereto whether such shortfall was caused by decreased market value or withdrawal (whether from cash or a Reserve Account Insurance Policy or Reserve Account Letter of credit). All such deficiencies in the Reserve Account must be made up no later than 12 months from the date such deficiencies first occurred. On or prior to each principal payment date and Interest Date for the Bonds, moneys in the Reserve Account shall be applied by the Issuer to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds to the extent moneys in the Interest Account, the Principal Account and the Bond Amortization Account shall be insufficient for such purpose. Whenever there shall be surplus moneys in the Reserve Account by reason of a decrease in the Reserve Account Requirement or as a result of a deposit in the Reserve Account Letter of Credit or a Reserve Account Insurance Policy, such surplus moneys shall be deposited by the Issuer into the Unrestricted Revenue Account. The Issuer shall inform each Insurer and Credit Bank of any draw upon the Reserve Account for purposes of paying the principal of and.interest on the Bonds. Upon the issuance of any Series of Bonds under the terms, limitations and conditions as herein provided, the Issuer shall fund the Reserve Account in an amount at least equal to the Reserve Account Requirement. Such required amount may be paid in full or in part from the proceeds of such Series of Bonds or may be accumulated in equal monthly payments to the Reserve Account over a period of months from the date of issuance of such Series of Bonds, which shall not exceed the greater of (a) twelve (12) months, or (b) the number of months for which interest on such Series of Bonds has been capitalized, as determined by Supplemental Resolution. In the event moneys in the Reserve Account are accumulated as provided above, (i) the amount in said Reserve Account on the date of delivery of the Additional Bonds shall not be less than the Reserve Account Requirement on all Bonds outstanding (excluding the Additional Bonds) on such date, and (ii) the incremental difference between the Reserve Account Requirement 36

235 C-21 on all Bonds outstanding (excluding the Additional Bonds) on the date of delivery of the Additional Bonds and the Reserve Account Requirement on all such Bonds and the Additional Bonds shall be at least fifty percent (50%) funded upon delivery of the Additional Bonds. Notwithstanding the foregoing provisions, in lieu of the required deposits into the Reserve Account, the Issuer may cause to be deposited into the Reserve Account a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for the benefit of the Bondholders in an amount equal to the difference between the Reserve Account Requirement applicable thereto and the sums then on deposit in the Reserve Account, if any. The Issuer may also substitute a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for cash on deposit in the Reserve Account upon compliance with the terms of this section 4.05(A)(4). Such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall be payable to the paying Agent (upon the giving of notice as required thereunder) on any principal payment date or Interest Date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to this Resolution and available for such purpose. A Reserve Account Insurance Policy issued to the Paying Agent, as agent of the Bondholders, by a company licensed to issue an insurance policy guaranteeing the timely payment of debt service on the Bonds (a IImunicipal bond insurer tf ) may be deposited in the Reserve Account to meet the Reserve Account Requirement if the claims-paying ability of the issuer thereof shall be rated at least llaaa" by Standard & Poor's Corporation or at least "Aaa" by Moody's Investors Service. A Reserve Account Insurance policy issued to the Paying Agent, as agent of the Bondholders, by an entity other than a municipal bond insurer, may be deposited in the Reserve Account to meet the Reserve Account Requirement if the form and substance of such Reserve Account Insurance Policy and the issuer thereof shall be approved by the Insurer. A Reserve Account Letter of Credit issued to the Paying Agent, as agent of the Bondholders, by a bank may be deposited in the Reserve Account to meet the Reserve Account Requirement if the issuer thereof is rated at least "AA" by Standard & Poor's Corporation. The Reserve Account Letter of Credit shall be payable in one or more draws upon presentation by the beneficiary of a sight draft accompanied by its certificate that it then holds insufficient funds to make a required payment of principal or interest on the Bonds. The draws shall be payable within two days of presentation of the sight draft. The Reserve Account Letter of Credit shall be for a te~m of not less than three years. The issuer of the Reserve Account Letter of Credit shall be required to notify the Issuer and the Paying Agent, not later than 30 months prior to the stated expiration date of the Reserve Account Letter of Credit, as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice 37 indicates that the expiration date shall not be extended, the Issuer shall deposit in the Reserve Account an amount sufficient to cause the cash or Authorized Investments on deposit in the Reserve Account, together with any other Reserve Account Insurance Policies and Reserve Account Letters of Credit, to equal the Reserve Account Requirement on all outstanding Bonds, such deposit to be paid in equal installments on at least a semiannual basis over the remaining term of the Reserve Account Letter of credit, unless the Reserve Account Letter of Credit is replaced by a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit meeting the requirements of this section 4.05(B) (4). The Reserve Account Letter of Credit shall permit a draw in full not less than two weeks prior to the expiration or termination of such Reserve Account Letter of Credit if the Reserve Account Letter of Credit has not been replaced or renewed. The Paying Agent shall draw upon the Reserve Account Letter of Credit prior to its expiration or termination unless an acceptable replacement is in place or the Reserve Account is fully funded in its required amount. The use of any Reserve Account Insurance Policy or Reserve Account Letter of Credit pursuant to this section 4.05(B) (4) shall be subject to receipt of an opinion of counsel acceptable to the Insurer in form and substance satisfactory to the Insurer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the issuer of such Reserve Account Insurance Policy or Reserve Account Letter of Credit is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Insurer. In addition, the use of a Reserve Account Letter of Credit shall be subject to receipt of an opinion of counsel acceptable to the Insurer in form and substance satisfactory to the Insurer to the effect that payments under such Reserve Account Letter of Credit would not constitute avoidable preferences under section 547 of the united states Bankruptcy Code or similar state laws with avoidable preference provisions in the event of the filing of a petition for -relief under the united states Bankruptcy Code or similar state laws by or against the issuer of the Bonds (or any other account party under the Reserve Account Letter of Credit). The obligation to reimburse the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit for any fees or expenses or claims or draws upon such Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be subordinate to the payment of debt service on the Bonds. The right of the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Account, and, subject to the second succeeding sentence of this paragraph, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Account. Each Reserve Account Insurance policy and Reserve Account Letter of Credit shall 38

236 C-22 provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the issuer of the Reserve Account Insurance Policy or Reserve Account Letter of Credit to reimbursement will be further subordinated to cash replenishment of the Reserve Account to an amount equal to the difference between the full original amount available under the Reserve Account Insurance Policy or Reserve Account Letter of Credit and the amount then available for further draws or claims. In the event (a) the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit becomes insolvent, or (b) the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit defaults in its payment obligations thereunder, or (c) the claimspaying ability of the issuer of the Reserve Account Insurance Policy falls below "AAA" by Standard & Poor's Corporation or "Aaa" by Moody's Investors Service, or (d) the rating of the issuer of Reserve Account Letter of Credit falls below "AA" by Standard & Poor's Corporation, the obligation to reimburse the issuer of such Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be subordinate to the cash replenishment of the Reserve Account. In the event (a) the revolving reinstatement feature described in the preceding paragraph is suspended or terminated, or (b) the rating of the claims-paying ability of the issuer of the Reserve Account Insurance Policy falls below "AAA" by Standard & Poor's corporation or "Aaa" by Moody's Investors Service, or (c) the rating of the issuer of the Reserve Account Letter of Credit falls below "AA" by Standard & Poor's corporation, the Issuer shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or Authorized Investments on deposit in the Reserve Account to equal the Reserve Account Requirement on all outstanding Bonds, such amount to be paid over the ensuing five years in equal installments deposited at least semiannually or (ii) replace such Reserve Account Insurance Policy or Reserve Account Insurance "Letter of Credit with a Reserve Account Insurance Policy or Reserve Account Letter of Credit meeting the requirements provided herein within six months of such occurrence. In the event (a) the rating of the claims-paying ability of the issuer of the Reserve Account Insurance Policy falls below "A", or (b) the rating of the issuer of the Reserve Account Letter of Credit falls below "A", or (c) the issuer of the Reserve Account Insurance policy or Reserve Account Letter of Credit defaults in its payment obligations hereunder, or (d) the issuer of the Reserve Account Insurance Policy or Reserve Account Letter of Credit becomes insolvent, the Issuer shall either (i) deposit into the Reserve Account an amount SUfficient to cause the cash or Authorized Investments on deposit in the Reserve Account to equal the Reserve Account Requirement on all outstanding Bonds, such amount to be paid over the ensuing year in equal installments on at least a monthly basis, or (ii) replace such instrument with a Reserve Account Insurance Policy or Reserve 39 Account Letter of Credit meeting the requirements provided herein within six months of such occurrence. The amount available for draws or claims under the Reserve Account Insurance Policy or Reserve Account Letter of Credit may be reduced by the amount of cash or Authorized Investments deposited in the Reserve Account. Cash on deposit in the Reserve Account shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Account Insurance Policy or Reserve Account Letter of Credit. If and to the extent that more than one Reserve Account Insurance Policy or Reserve Account Letter of Credi t is deposited in the Reserve Account, drawings thereunder and repayments of costs associated therewith shall be made on a pro rata basis, calculated by reference to the maximum amounts available thereunder. If a disbursement is made from a Reserve Account Insurance policy and/or Reserve Account Letter of Credit provided pursuant to this section 4.05(B)(4), the Issuer shall reinstate the maximum limits of such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit immediately following such disbursement from.moneys received in accordance with the provisions of this section 4.05(B) (4). If three (3) days prior to an interest payment or redemption date, the Issuer shall determine that a deficiency exists in the amount of moneys available to pay in accordance with the terms hereof interest and/or principal due on the Bonds on such date, the Issuer shall immediately notify (A) the issuer of the applicable Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit, and (B) the Insurer, if any, of the amount of such deficiency and the date on which such payment is due, and shall take all action to cause such Issuer or Insurer to provide moneys SUfficient to pay all amounts due on such interest payment date. The Issuer may evidence its obligation to reimburse the issuer of any Reserve Account Letter of Credit or Reserve Account Insurance Policy by executing and delivering to such issuer a promissory note therefor, provided, however, any such note (a) shall not be a general obligation of the Issuer the payment of which is secured by the full faith and credit or taxing power of the Issuer, and (b) shall be payable solely from the Pledged Funds in the manner provided herein. Any consent or approval of any Insurer described in this Section 4.05(B) (4) shall be required only so long as there are outstanding Bonds secured by a Bond Insurance Policy issued by such Insurer which is in full force and effect and the commitments of which have been honored by such Insurer. The term "Paying Agent" as used in this Section 4.05(B) (4) may include one or more Paying Agents for the outstanding Bonds. 40

237 C-23 If any Reserve Account Letter of Credit or Reserve Account Insurance Policy shall terminate prior to the stated expiration date thereof, the Issuer agrees that it shall fund the Reserve Account over a period not to exceed sixty (60) months during which it shall make consecutive equal monthly payments in order that the amount on deposit in the Reserve Account shall equal the Reserve Account Requirement; provided, the Issuer may obtain a new Reserve Account Letter of Credit or a new Reserve Account Insurance Policy in lieu of making the payments required by this paragraph. Whenever the amount of cash in the Reserve Account, together with the other amounts in the Debt Service Fund, are sufficient to fully pay all outstanding Bonds in accordance with their terms (including principal or applicable Redemption Price and interest thereon), the funds on deposit in the Reserve Account may be transferred to the other Accounts of the Debt Service Fund for the payment of the Bonds. The Issuer may also establish a separate subaccount in the Reserve Account for any Series of Bonds and provide a pledge of such subaccount to the payment of such Series of Bonds apart from the pledge provided herein and, with respect to the Series 1993 Bonds, the Issuer shall establish such a subaccount. To the extent a Series of Bonds is secured separately by a subaccount of the Reserve Account, the Holders of such Bonds shall not be secured by any other moneys in the Reserve Account. Moneys in a separate subaccount of the Reserve Account shall be maintained at the Reserve Account Requirement applicable to such Series of Bonds secured by the subaccount unless otherwise provided by Supplemental Resolution. Moneys shall be deposited to the separate subaccounts in the Reserve Account on a pro-rata basis. In the event the Issuer shall maintain a Reserve Account Insurance Policy or Reserve Account Letter of Credit and moneys in such subaccount, the moneys shall be used prior to making any disbursements under such Reserve Account Insurance Policy or Reserve Account Letter of Credit. (5) Unrestricted Revenue Account. The balance of any moneys after the deposits required by sections 4.05(A} (1) through 4.05(A)(4) hereof, may be transferred, at the discretion of the Issuer, to the Unrestricted Revenue Account or any other appropriate fund or account of the Issuer and may be used for any lawful purpose. (B) The Issuer agrees that moneys in the Interest Account, the Principal Account. and the Bond Amortization Account shall be used to pay the principal of or Redemption Price, if applicable, and interest on the Bonds only to the extent that such moneys are permitted to be used for such purpose by the Act. The Issuer shall employ such accounting procedures as shall be necessary to insure compliance with the Act. 41 (C) The Issuer, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the Issuer's ability to pay the principal or interest or Redemption Price coming due on such principal payment date on the Bonds not so purchased or redeemed. (D) At least two (2) Business Oays prior to the date established for payment of any principal of or Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw from the appropriate account of the Debt Service Fund sufficient moneys to pay such princi.pal or Redemption Price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. ee) In the event the Issuer shall issue a series of Bonds secured by a Credit Facility, the Issuer may establish such separate subaccounts in the Interest Account, the Principal Account and the Bond Amortization Account to provide for payment of the principal of and interest on such series; provided one Series of Bonds shall not have preference in payment from Pledged Funds over any other Series of Bonds. The Issuer may also deposit moneys in such subaccounts at such other times and in such other amounts from those provided in this Section 4.05 as shall be necessary to pay the principal of and interest on such Bonds as the same shall become due, all as provided by the Supplemental Resolution authorizing such Bonds. In the case of Bonds secured by a Credit Facility, amounts on deposit in any subaccounts established for such Bonds may be applied as provided in the applicable Supplemental Resolution to reimburse the Credit Bank for amounts drawn under such Credit Facility to pay the principal of or Redemption Price, if applicable, and interest on such Bonds or to pay the purchase price of any such Bonds which are tendered by the Holders thereof for payment. (F) The Issuer agrees that at the time of issuing any Variable Rate Bonds it shall establish the Maximum Interest Rate with respect thereto and a maximum interest rate with respect to amounts owed to the Credit Bank which provides liquidity for such Bonds. Any Credit Bank which provides a Credit Facility for liquidity purposes must be rated in the highest short-term rating category assigned by Standard & Poor's Corporation or Moody's Investors Service. Any accelerated principal payments due to a Credit Bank or any interest due in excess of the interest rate on the Variable Rate Bonds to the Credit Bank must be subordinate to the payment of the debt service on the Bonds. SECTION REBATE FUND. Amounts on deposit in the Rebate Fund shall be held in trust by the Issuer and used solely to make required rebates to the united States (except to the extent the same may be transferred to the Issuer) and the Bondholders shall 42

238 C-24 have no right to have the same applied for debt service on the Bonds. For any Series of Bonds for which the rebate requirements of Section 148(f) of the Code are applicable, the Issuer agrees to undertake all actions required of it in its arbitrage certificate related to such Series of Bonds, including, but not limited to: CA) making a determination in accordance with the Code of the amount required to be deposited in the Rebate Fundi (B) depositing the amount determined in clause CA) above into the Rebate Fundi (C) paying on the dates and in the manner required by the Code to the United states Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United states Treasury; and (D) keeping such records of the determinations made pursuant to this section 4.06 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds of the Bonds. The provisions of the above-described arbitrage certificate may be amended without the consent of any Holder, Credit Bank or Insurer from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. SECTION INVESTMENTS. Moneys on deposit in the Construction Fund, the Restricted Revenue Account and the Debt Service Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Construction Fund, the Restricted Revenue Account and the Debt Service Fund, other than the Reserve Account, may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed for the purposes of such fund or account; provided, that moneys on deposit in the Interest Account representing accrued or capitalized interest shall only be invested in the obligations specified in paragraph (A) of the definition of "Authorized Investments. If Moneys on deposit in the Reserve Account may be invested or reinvested in Authorized Investments which shall mature no later than five (5) years from the date of investment. All investments in the Reserve Account shall be valued at least semiannually by the Issuer at the market value thereof, exclusive of accrued interest. In the event of a deficiency in any fund or account resulting from a decline in market value, such deficiency shall be restored by the Issuer from first available Sales Tax Revenues after satisfying all of the requirements of Section 4.05 (A) (1) through (4) not later than the next succeeding valuation date. 43 Any and all income received by the Issuer from the investment of moneys in each account of the Construction Fund, the Interest Account, the Restricted Revenue Account and the Reserve Account (to the extent such income and the other amounts in the Reserve Account does not exceed the Reserve Account Requirement applicable thereto), shall be retained in such respective Fund or Account. Any and all income received by the Issuer from the investment of moneys in the Reserve Account (only to the extent such income and other amounts in the Reserve Account exceed the Reserve Account Requirement), the Principal Account and the Bond Amortization Account shall be deposited in the Restricted Revenue Account. Nothing contained in this Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the united states. SECTION SEPARATE ACCOUNTS. The moneys required to be accounted for in each of the foregoing funds, accounts and subaccounts established herein may be deposited in a single, nonexclusive bank account, and funds allocated to the various funds, accounts and subaccounts established herein 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, accounts and subaccounts as herein provided. The designation and establishment of the various funds, accounts and subaccounts in and by this Resolution shall not be construed to 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. 44

239 C-25 ARTICLE V SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS, AND COVENANTS OF ISSUER SECTION SUBORDINATED INDEBTEDNESS. The Issuer will not issue any other obligations, except under the conditions and in the manner provided herein, payable from the Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon. The Issuer may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Pledged Funds created by this Resolution. The Issuer shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to Section 5.02 hereof. The Issuer agrees to pay promptly any Subordinated Indebtedness as the same shall become due. SECTION ISSUANCE OF ADDITIONAL BONDS. No Additional Bonds, payable on a parity with the Bonds then outstanding pursuant to this Resolution, shall be issued except upon the conditions and in the manner herein provided. The Issuer may issue" one or more Series of Additional Bonds for anyone or more of the following purposes: financing the Cost of a Project, or the completion thereof, or refunding any or all outstanding Bonds or of any Subordinated Indebtedness of the Issuer. No such Additional Bonds shall be issued unless (1) no Event of Default (as specified in Section 6.01 hereof) shall have,occurred and be continuing hereunder and (2) the following conditions are complied with: (A) Except as otherwise provided in Section 5.02(0) hereof, there shall have been obtained and filed with the Issuer a statement of an Authorized Issuer Officer: (1) stating that he or she has examined the books and records of the Issuer relating to the Sales Tax Revenues which have been received by the Issuer for deposit to the Restricted Revenue Account; (2) setting forth the amount of such Sales Tax Revenues during any twelve (12) consecutive months designated by the Issuer within the eighteen (18) months immediately preceding the date of delivery of such Additional Bonds with respect to which such statement is made; and (3) stating that the amount of such Sales Tax Revenues received during the aforementioned 12-month period equals at least (i) 1.35 times the Maximum Annual Debt Service on all Bonds then outstanding 45 and such Additional Bonds with respect to which such statement is made and (ii) 1.00 times any amounts due and owing pursuant to a Reserve Account Letter of Credi t or Reserve Account Insurance Policy. (B) For the purpose of determining the Maximum Annual Debt Service under section 5.02(A) hereof, the interest rate on additional parity variable Rate Bonds then proposed to be issued and on outstanding Variable Rate Bonds shall be deemed to be the lesser of (1) the interest rate for 30-year revenue bonds published by The Bond Buyer no more than two weeks prior to the sale of the additional parity variable Rate Bonds, or (2) the Maximum Interest Rate; provided, however, that so long as the Series 1993 Bonds remain outstanding such interest rate shall be deemed to be the Haximum Interest Rate. (C) Addi tional Bonds shall be deemed to have been issued pursuant to this Resolution the same as the outstanding Bonds, and all of the other covenants and other provisions of this Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to this Resolution. Except as provided in sections 4.02 and 4.05 hereof, all Bonds, regardless of the time or times of their issuance, shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bonds over any other; provided, however, that the Issuer shall include a provision in any Supplemental Resolution authorizing the issuance of Variable Rate Bonds pursuant to this Section 5.02 that in the event the principal thereof is accelerated due to such Bonds being held by the issuer of a Credit Facility, the lien of any accelerated debt due and owing such Credit Facility issuer on the Pledged Funds shall be subordinate in all respects to the pledge of the Pledged Funds created by this Resolution. (D) In the event any Additional Bonds are issued for the 'purpose of refunding any Bonds then outstanding, the conditions of Section 5.02 hereof shall not apply, provided that the issuance of such Additional Bonds shall result in a reduction of aggregate debt service. The conditions of Section 5.02(A) hereof shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of this paragraph. SECTION BOND ANTICIPATION NOTES. The Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsistent with this Resolution, as shall be provided by resolution of the Issuer. SECTION NO IMPAIRMENT. The pledging of the Pledged Funds in the manner provided herein shall not be subject to repeal, 46

240 C-26 modification or impairment by any subsequent ordinance, resolution or other proceedings of the Board of county Commissioners. SECTION COLLECTION OF SALES TAX REVENUES. The Issuer covenants to do all things necessary on its part to maintain its eligibility to participate in the distribution of funds from the Local Government Half-Cent Sales Tax Clearing Trust Fund required by the Act including, without limitation, meeting the eligibility requirements for revenue sharing as specified in section , Florida Statutes, or any successor provision of law. The Issuer will proceed diligently to perform legally and effectively all steps required on its part in the levy and collection of the Sales Tax Revenues and shall exercise all legally available remedies to enforce such collections now or hereafter available under state law. SECTION ACCESSION OF SUBORDINATED INDEBTEDNESS TO PARITY STATUS WITH BONDS. The Issuer may provide for the accession of Subordinated Indebtedness to the status of complete parity with the Bonds, if (A) the Issuer shall meet all the requirements imposed upon the issuance of Additional Bonds by Section 5.02 hereof, assuming, for purposes of said requirements, that such Subordinated Indebtedness shall be Additional Bonds, and (B) the Reserve Account, upon such accession, shall contain an amount equal to the Reserve Account Requirement in accordance with Section 4.05 (A) (4) hereof. If the aforementioned conditions are satisfied, the Subordinated Indebtedness shall be deemed to have been issued pursuant to this Resolution the same as the outstanding Bonds, and such Subordinated Indebtedness shall be considered Bonds for all purposes provided in this Resolution. SECTION BOORS AND RECORDS. The Issuer will keep books and records of the receipt of the Sales Tax Revenues in accordance with generally accepted accounting principles, and any Credit Bank, Insurer, or Holder or Holders of Bonds shall have the right at all reasonable times to inspect the records, accounts and data of the 'Issuer relating thereto. SECTION ANNUAL AUDIT. The Issuer shall, immediately after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by either (i) a recognized independent certified public accountant or recognized independent firm of certified public accountants or (ii) the Auditor General of the State of Florida, and shall require that such report on the annual financial statements be in accordance with applicable law. The annual financial statement shall contain, but not be limited to, the statements required by generally accepted accounting principles applicable to governmental units and the following: CA) the amount of the Sales Tax Revenues recei ved in the preceding Fiscal Year; (B) the principal amount of all Bonds issued, paid, purchased or redeemed; and (C) the amount on deposit in the Reserve Account as of the last valuation date. Within 180 days of the 47 close of the preceding Fiscal Year, a copy of the audited financial statements for each Fiscal Year shall be furnished to each Credit Bank or Insurer and shall be available for inspection to any Bondholder upon prior reasonable notice. The Issuer shall be permitted to make a reasonable charge for furnishing such audited financial statements to any Bondholder. SECTION NO IMPAIRMENT. The Issuer has full power and authority to irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Bonds. The pledge of such Pledged Funds, in the manner provided herein, shall not be subject to repeal, modification or impairment by any subsequent resolution or other proceedings of the Issuer or by any subsequent act of the Legislature of the state of Florida, unless the Issuer shall have provided, or such Legislature shall have made immediately available to the Issuer, such additional or supplemental funds which shall be sufficient to retire such Bonds and the interest thereon in accordance with their terms. SECTION COVENANTS WITH CREDIT BANKS AND INSURERS. The Issuer may make such covenants as it may, in its sole discretion, determine to be appropriate with any Insurer, Credit Bank or other financial institution that shall agree to insure or to provide for Bonds of anyone or more Series credit or liquidity support that shall enhance the security or the value of such Bonds. Such covenants may be set forth in the applicable Supplemental Resolution and shall be binding on the Issuer, the Registrar, the Paying Agent and all the Holders of Bonds the same as if such covenants were set forth in full in this Resolution. SECTION FEDERAL INCOME TAX COVENANTS; TAXABLE BONDS. (A) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds), that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become includable in gross income for purposes of federal income taxation. (B) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series of Bonds to be "arbitrage bonds" within the meaning of the Code and neither the Issuer nor any other Person shall do any act or fail to do any act which would cause the interest on such Series of Bonds to become includable in gross income for purposes of federal income taxation. ec) The Issuer hereby covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from gross income for purposes of federal 48

241 C-27 income taxation I including, in particular, the payment of any amount required to be rebated to the U. S Treasury pursuant to the Code. (D) The Issuer may, if it so elects, issue one or more series of TaxaQle Bonds the interest on which is (or may be) includable in the gross income of the Holder thereof for federal income taxation purposes, so long as each Bond of such series states in the body thereof that interest payable thereon is (or may be) subject to federal income taxation and provided that the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or become subject to federal income taxation. The covenants set forth in paragraphs (A), (B) and (e) above shall not apply to any Taxable Bonds. 49 ARTICLE VI DEFAULTS AND REMEDIES SECTION EVENTS OF DEFAULT. The following events shall each constitute an "Event of Default": CA) Defaul t shall be made in the payment of the principal of, Amortization Installment, redemption premium or interest on any Bond when due. In determining whether an Event of Default shall have occurred pursuant to this section 6.01 CA), amounts paid or payable under a Bond Insurance Policy shall not be taken into consideration. (B) Default shall be made in the payment of the fees due any provider of a Reserve Account Insurance policy or Reserve Account Letter of Credit within five (5) days of the due date thereof. (C) There shall occur the dissolution or liquidation of the Issuer, or the filing by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bankruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a recei ver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted. (D) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on the part of the Issuer to be performed, and such default shall continue. for a period of thirty (30) days after written notice of such default shall have been received from the Holders of not less than twenty-five percent (25%) of the aggregate principal- amount of Bonds outstanding or the Insurer of such amount of Bonds or any Credit Bank. Notwithstanding the foregoing, the Issuer shall not be deemed in dafault hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes curative action and diligently pursues such action until the default has been corrected; provided, however, no such curative action shall be taken by the Issuer without first obtaining the Insurer's prior written approval. SEC'l'ION REMEDIES. Any Holder of Bonds issued under the provisions of this Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent 50

242 C-28 jurisdiction, protect and enforce any and all rights under the Laws of the state of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof; provided, however, that no Holder, trustee or receiver shall have the right to declare the Bonds immediately due and payable. The Holder or Holders of Bonds in an aggregate principal amount of not less than twenty-five per cent (25%) of the Bonds then outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution wi th authori ty to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder. After the appointment of the first trustee hereunder, no further trustees may be appointed; however, the holders of a majority in aggregate principal amount of all the Bonds then outstanding may remove the trustee initially appointed and appoint a successor and subsequent successors at any time. The Issuer, Paying Agent or any trustee or receiver appointed with respect to the Series 1993 Bonds shall immediately notify the Insurer of the occurrence of any Event of Default described in Sections 6.01(A) or (B) of which such person is knowledgeable. The Issuer, Paying Agent or any trustee or receiver appointed with respect to the Series 1993 Bonds shall notify the Insurer within thirty (30) days of receiving knowledge of any other Event of 'Default. SECTION DIRECTIONS TO TRUSTEE AS TO REMEDIAL PROCEEDINGS. The Holders of a majority in principal amount of the Bonds then outstanding (or any Insurer insuring any then outstanding Bonds) have the right, by an instrument or concurrent instruments in writing executed and delivered to the trustee, to direct the method and place of conducting all remedial proceedings to be taken by the trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions hereof, and that the trustee shall have the right to decline to follow any such direction which in the opinion of the trustee would be unjustly prejudicial to Holders of Bonds not parties to such direction. Neither the Paying Agent nor any applicable trustee or receiver shall consider the Bond Insurance Policy when determining whether the Bondholders' rights are adversely affected by actions taken pursuant to the terms and provisions of this Resolution. If the Insurer has not failed to comply with its payment obligations under its Bond Insurance Policy it shall be included as a party in interest in such remedial proceedings and shall be entitled to (i) notify the Issuer, the Paying Agent or applicable trustee or receiver of the occurrence of an Event of Default and (ii) request any applicable trustee or receiver to intervene in judicial proceedings that affect the Series 1993 Bonds or security therefor. SECT:tON REMEDIES CUKULAT:tVE. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION WAIVER OF DEFAULT. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by this Section 6.05 to the Bondholders may be exercised from time to time, and as often as. may be deemed expedient. No Event of Default may be waived without the consent of each Insurer, which has honored all its Obligations under its bond insurance policy. SECTION APPLICATION OF HONEYS AFTER DEFAULT. If an Event of Default shall happen and shall not have been remedied, the Issuer or a trustee or receiver appointed for the purpose shall apply all Pledged Funds (except as for amounts in the subaccounts, if any, of the Reserve Account which shall be applied to the 'payment of the Series of Bonds for which they were established) as follows and in the following order: (A) To the payment of the reasonable and proper charges, expenses and liabilities of the trustee or receiver, Registrar and Paying Agent hereunder; and (B) To the payment of the interest and principal or Redemption Price, if applicable, then due on the Bonds (provided such payments are made in accordance with applicable law), as follows; (1) Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be applied: 51 52

243 C-29 PXRST: to the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference; SECOND: to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due at maturity or upon mandatory redemption prior to maturi ty (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of section 8.01 of this Resolution), in the order of their due dates, with interest upon such Bonds from the respective dates upon which they became due, and, if the amount available shall not be SUfficient to pay in full Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference; and THXRD: to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provisions of this Resolution. (2) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, with interest thereon as aforesaid, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons -entitled thereto without any discrimination or preference. SECTXON CONTROL BY XNSURER. Upon the occurrence and continuance of an Event of Default, each Insurer, if such Insurer has not defaulted on a payment obligation under its Bond Insurance Policy, shall be deemed to be the sole holder of the Bonds it shall insure and shall be entitled to direct and control the enforcement of all rights and remedies with respect to such Bonds, including any waiver of an Event of Default but excluding the requirement of providing notice to Bondholders of an Event of Default. ARTiCLE Vii SUPPLEMENTAL RESOLUTIONS SECTION SUPPLEMENTAL RESOLUTION WiTHOUT BONDHOLDERS' CONSENT. The Issuer, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes: CA) To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder. (B) To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution other conditions, limitations and restrictions thereafter to be observed. (D) To add to the covenants and agreements of the Issuer in this Resolution other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power herein reserved to or conferred upon the Issuer. CE) To specify and determine the matters and things referred to in Sections 2.01, 2.02, 2.09 or 4.07 hereof, and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the first delivery of such Bonds. (F) To authorize Projects or to change or modify the description of or any project. (G) To specify and determine matters necessary or desirable for the issuance of Capital Appreciation Bonds or Variable Rate Bonds. (H) To provide for the establishment of a separate subaccount or subaccounts in the Reserve Account which shall independently secure one or more Series of Bonds issued hereunder. (I) To revise the procedures provided in Section 4.05(A)(4) hereof pursuant to which moneys are drawn on a Reserve Account Insurance Policy or Reserve Account Letter of Credit and moneys are reimbursed to the provider of such Policy or Letter of Credit

244 C-30 (J) To make any other change that, in the opinion of the Issuer, would not materially adversely affect the security for the Bonds. SECTION SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS' AND INSURER'S CONSENT. Subject to the terms and provisions contained in this Sect~on 7.02 and sections 7.01 and 7.03 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then outstanding or the Insurer or Insurers of not less than a majority in aggregate principal amount of Bonds Outstanding (if the Bonds, at the time of the hereafter described amendment, shall be rated by the rating agencies which shall have rated the Bonds at the time such Bonds were insured no lower than the ratings assigned thereto by such rating agencies on the date of being insured) shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any specified Series or maturity remain outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be outstanding for the purpose of any calculation of outstanding Bonds under this Section Any Supplemental Resolution which is adopted in accordance with the provisions of this section 7.02 shall also require the written consent of the Insurer (so long as such Insurer has not defaulted on its payment Obligations under its Bond Insurance Policy) of any Bonds Which are outstanding at the time such Supplemental Resolution shall take effect. No Supplemental Resolution may be approved or adopted which shall permit or require (A) an extension of the maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the Redemption Price or the rate of interest thereon, (C) the creation of a lien upon or a pledge of the Pledged Funds, other than the lien and pledge created by this Resolution or any other lien or pledge permitted hereunder, which adversely affects any Bondholders, (D) a preference or priority of any Bond or Bonds over any other Bond or Bonds (except as to the establishment of separate subaccounts in the Reserve Account provided in section 4.05(A) (4) hereof), or ee) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making necessary the approval by Bondholders or the Insurer of the adoption of any Supplemental Resolution as authorized in section 7.01 hereof. If at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 7.02, an Authorized Issuer Officer shall cause the 55 Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books and to all Insurers of Bonds outstanding. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Issuer and the Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this section 7.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section Whenever the Issuer shall receive an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then outstanding, which instrument or instruments shall refer to the proposed supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds outstanding at the time of the adoption of such supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking.any action pursuant to the provisions thereof. Upon the adoption of any Supplemental Resolution pursuant to the provisions of this section 7.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and all Holders of Bonds then outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. SECTION AMENDMENT WITH CONSENT OF INSURER ONLY. If all of the Bonds outstanding hereunder are insured as to payment of principal and interest by an Insurer or Insurers, and the Bonds, at the time of the hereinafter described amendment, shall be rated by the rating agencies which shall have rated the Bonds at the time such Bonds were insured no lower than the ratings assigned thereto by such rating agencies on the date of being insured, the Issuer 56

245 C-31 may enact one or more Supplemental Resolutions amending all or any part of Articles I, II, III, IV, V and VI hereof with the written consent of said Insurer or Insurers and the acknowledgment by said Insurer or Insurers that its insurance or guaranty policy will remain in full force and effect. The consent of the Holders of any Bonds shall not be necessary. The foregoing right of amendment, however, does not apply to any amendment to section 5.11 hereof with respect to the exclusion, if applicable, of interest on said Bonds from gross income for purposes of Federal income taxation nor may any such amendment deprive the Holders of any Bond of the right to p.ayment of the Bonds from, and their lien on, the Pledged Funds. Upon receipt of evidence of such consent of the Insurer or Insurers as aforesaid, the Issuer may adopt such Supplemental Resolution. After the adoption by the Issuer of such Supplemental Resolution, notice thereof shall be mailed in the same manner as notice of an amendment under Section 7.02 hereof. SECTION NOTICE TO RATING AGENCIES. At least fifteen (15) days prior to the effective date of any supplemental Resolution, the Issuer shall provide each rating agency which has assigned ratings then in effect to any Bonds affected by the provisions of such Supplemental Resolution wi th a copy of such Supplemental Resolution. 57 ARTICLE VIII KISCELLANEOUS SECTION DEFEASANCE. If (i) the Issuer shall payor cause to be paid or there shall otherwise be paid to the Holders of any Series of Bonds the principal or Redemption Price, if applicable, and interest due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, (ii) the Issuer shall pay all amounts owing to any issuer of a Reserve Account Letter of Credit or Reserve Account Insurance Policy and all amounts owing to any Insurer and (iii) all provisions regarding any amounts to be rebated to the united states government have been complied with, then the pledge of the Pledged Funds, and all covenants, agreements and other obligations of the Issuer to the holders of such Bonds, shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to the Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. Any Bonds or interest installments appertaining thereto, whether at or prior to the maturity or redemption date of such Bonds, shall be deemed to have been paid within the meaning of this section 8.01 if (A) in case any such Bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (B) there shall have been deposited in irrevocable trust with a banking institution or trust company by or on behalf of the Issuer either moneys in an amount which shall be sufficient, or Refunding securities verified by an independent certified public accountant to be in such amount that the principal of and the interest on which when due will provide 'moneys which, together with the moneys, if any, deposited with such banking institution or trust company at the same time shall be sufficient, to pay the principal of or Redemption" Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be. Except as hereafter provided, neither the Refunding Securities nor any moneys so deposited with such banking institution or trust company nor any moneys received by such bank or trust company on account of principal of or Redemption Price, if applicable, or interest on said Refunding Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or Redemption price, if applicable, of the Bonds for the payment or redemption of which they were deposited and the interest accruing thereon to the date of maturity or redemption; provided, however, the Issuer may SUbstitute new 58

246 C-32 Refunding securities and moneys for the deposited Refunding Securities and moneys if the new Refunding securities and moneys are sufficient to pay the principal of or Redemption Price, if applicable, and interest on the refunded Bonds. For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or the redemption date thereof, as the case may be, by the deposit of moneys, or specified Refunding securities and moneys, if any, in accordance with this section 8.01, the interest to come due on such Variable Rate Bonds on or prior to the maturity or redemption date thereof, as the case may be, shall be calculated at the Maximum Interest Rate; provided, however, that if on any date, as a result of such Variable Rate Bonds having borne interest at less than the Maximum Interest Rate for any period, the total amount of moneys and specified Refunding Securities on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds in order to satisfy this Section 8.01, such excess shall be paid to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Resolution. In the event the Bonds for which moneys are to be deposited for the payment thereof in accordance with this section 8.01 are not by their terms subject to redemption within the next succeeding sixty (60) days, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this Section 8.01 of moneys or Refunding Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this section 8.01 and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of or Redemption price, if applicable, and interest on said Bonds. Failure to provide said notice shall not affect the Bonds being deemed to have been paid in accordance with the provisions of this section Nothing herein shall be deemed to require the Issuer to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption. In the event that the principal of or Redemption Price, if applicable, and interest due on the Bonds shall be paid by an Insurer or Insurers, such Bonds shall remain Outstanding, shall not be defeased and shall not be considered paid by the Issuer, and the pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the Bondholders shall continue to exist and such Insurer or Insurers shall be subrogated to the rights of such Bondholders. 59 SECTION CAPITAL APPRECIATION BONDS. For the. purposes of (A) receiving payment of the Redemption Price if a capital Appreciation Bond is redeemed prior to maturity, or (B) receiving payment of a Capital Appreciation Bond if the principal of all Bonds becomes due and payable under the provisions of this Resolution, or (C) computing the amount of Bonds held by the Holder of a capital Appreciation Bond in giving to the Issuer or any trustee or receiver appointed to represent the Bondholders any notice, consent, request or demand pursuant to this Resolution for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. SECTION SALE OF BONDS. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law. SECTION SEVERABILITY OF INVALID PROVISIONS. If anyone or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder. SECTION REPEAL OF INCONSISTENT RESOLUTIONS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. DULY ADOPTED in special session this 16th day of December, (SEAL) ATTEST: ~r~~ County commissioners ~6 FLORIDA Chairman 60

247 C-33 SUPPLEMENTAL BOND RESOLUTION NO. ag., 101 R. A RESOLUTION SUPPLEMENTING AND AMENDING IN CERTAIN RESPECTS THE SALES TAX REVENUE REFUNDING BOND RESOLUTION ADOPTED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA ON DECEMBER 16, 1993 BY AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $52,500,000 IN AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE BONDS, SERIES 2008 IN ORDER TO PROVIDE FUNDS FOR TRANSPORTATION RIGHT-OF-WAYS AND STORMWATER FACILITIES, THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF AN EMERGENCY OPERATIONS CENTER, ACQUISITION OF FIREFIGHTING EQUIPMENT INCLUDING VEHICLES AND THE ACQUISITION OF CERTAIN REAL PROPERTY; PROVIDING CERTAIN TERMS AND DETAILS OF SUCH BONDS, INCLUDING AUTHORIZING A DELEGATED NEGOTIATED SALE OF SAID BONDS AND THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT WITH RESPECT THERETO; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF A FINAL OFFICIAL STATEMENT WITH RESPECT THERETO; APPROVING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE CERTIFICATE; AUTHORIZING MUNICIPAL BOND INSURANCE FOR ALL OR A PORTION OF THE BONDS; ESTABLISHING A DEBT SERVICE RESERVE SUBACCOUNT FOR THE BONDS; MODIFYING THE DEFINITION OF SALES TAX REVENUES; MAKING CERTAIN REPRESENTATIONS AND COVENANTS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; PROVIDING GENERAL AUTHORITY AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA: SECTION 1. FINDINGS. It is hereby found and detennined that: (A) On December 16, 1993, Osceola County, Florida (the "Issuer") duly adopted its Sales Tax Revenue Refunding Bond Resolution (as supplemented and amended, the "Resolution") authorizing the issuance of $6,345,000 aggregate principal amount of its Sales Tax Revenue Refunding Bonds, Series 1993 (the "Series 1993 Bonds"), for the purposes described therein, including, without limitation, for the purpose of advance refunding its Sales Tax Refunding Revenue Bonds, Series (B) The Resolution provides for the issuance of Additional Bonds (as defined in the Resolution), payable on a parity with the then Outstanding Bonds upon meeting certain requirements set forth in the Resolution. (C) On June 17, 1999 the Issuer issued an additional $54,435,000 aggregate principal amount of its Sales Tax Revenue Bonds, Series 1999 (the "Series 1999 Bonds") for the principal purpose of paying the cost of acquisition and construction of a new courthouse complex and improvements to its administrative facilities. (D) The Issuer now deems it to be in its best interest to issue its not exceeding $52,500,000 Sales Tax Revenue Bonds, Series 2008 (the "Series 2008 Bonds") for the principal purpose of the acquisition, construction, expansion and improvements of transportation right-of-ways and stonnwater facilities, the acquisition, construction and installation of an emergency operations center, the acquisition of firefighting equipment including vehicles and the acquisition of approximately one-half acre of real property contiguous to the County's Administrative Building and Courthouse (the "2008 Project"). The 2008 Project is more particularly described in Exhibit A attached hereto. (E) All covenants, pledges and conditions in the Resolution shall be applicable to the Series 2008 Bonds herein authorized and said Series 2008 Bonds shall be on a parity with and shall rank: equally as to lien on and source and security for payment from the Pledged Funds (as defined in the Resolution) with the Outstanding Series 1993 Bonds and Series 1999 Bonds, and shall constitute "Bonds" within the meaning of the Resolution; provided, that each of such Series of Bonds are separately secured by separate Reserve Account Subaccounts established for each Series in accordance with Section 4.05(A)( 4) of the Resolution. (F) The Issuer is not in default in perfonning any of the covenants, agreements or obligations under the Resolution and all payments required by the Resolution to be made to the funds and accounts established by the Resolution have been made to the full extent required to date. 2

248 C-34 (G) The principal of and interest on the Series 2008 Bonds and all required sinking fund, reserve and other payments shall be limited obligations of the Issuer, payable solely from the Pledged Funds in the manner provided in the Resolution. The Series 2008 Bonds shall not constitute a general obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State of Florida, or any political subdivision or agency thereof, within the meaning of any constitutional or statutory provisions. Neither the State of Florida, nor any political subdivision or agency thereof, including the Issuer, shall be obligated (1) to exercise its ad valorem taxing power in any form on any real or personal property of or in the Issuer to pay the principal of the Series 2008 Bonds, the interest thereon, or other costs incidental thereto, or (2) to pay the same from any other funds of the Issuer except from the Pledged Funds in the manner provided herein and in the Resolution. (H) Due to the current and potential volatility of the market for tax-exempt obligations such as the Series 2008 Bonds and the complexity of the transactions relating to such Series 2008 Bonds, it is in the best interest of the Issuer to sell the Series 2008 Bonds by a delegated negotiated sale, allowing the Issuer to enter the market at the most advantageous time, rather than at a specified advertised date, thereby permitting the Issuer to obtain the best possible price and interest rate for the Series 2008 Bonds. (1) The Issuer anticipates receiving a favorable offer to purchase the Series 2008 Bonds from Fifth Third Securities, Inc. and the other underwriters named in the Bond Purchase Contract referred to below (collectively, the "Underwriter"), all within the parameters set forth in Section 6 hereof. (J) Inasmuch as the Issuer desires to sell the Series 2008 Bonds at the most advantageous time and not wait for a scheduled meeting of the Board of County Commissioners of Osceola County, Florida (the "Board"), so long as the herein described parameters are met, the Issuer hereby determines to delegate the award and sale of the Series 2008 Bonds to the Chairman of the Board within such parameters, and, in his absence or unavailability, to the Vice-Chairman of the Board and the County Manager; (K) The Resolution provides that the Series 2008 Bonds shall mature on such dates and in such amounts, shall bear such rates of interest, shall be payable in such places and shall be subject to such redemption provisions as shall be determined by Supplemental Resolution adopted by the Issuer; and it is now appropriate that the Issuer determine such terms and details. SECTION 2. DEFINITIONS. When used in this Supplemental Resolution, the terms defined in the Resolution shall have the meanings therein stated, except as such definitions shall be hereinafter amended and defmed. 3 SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION. This Supplemental Resolution is enacted pursuant to the provisions of the Resolution and the Act. SECTION 4. AUTHORIZATION OF THE 2008 PROJECT. The Issuer hereby authorizes the acquisition, construction and equipping of the 2008 Project and the fmancing of a portion of the Cost thereof with the proceeds of the Series 2008 Bonds. SECTIONS. DESCRIPTION OF THE SERIES 2008 BONDS. The Issuer has hereby determined pursuant to the Resolution to issue a Series of Bonds in the aggregate principal amount of not exceeding $52,500,000 to be known as the "Osceola County, Florida Sales Tax Revenue Bonds, Series 2008," for the purposes of providing moneys to (i) fund the acquisition, construction and installation of the 2008 Project, (ii) fund required reserves for the Series 2008 Bonds, and (iii) pay costs associated with the issuance of the Series 2008 Bonds, including, if determined to be cost effective in accordance with the provisions hereof, the purchase of a Bond Insurance Policy, all in accordance with Section 2.01 and 5.02 of the Resolution and Section 6 of this Supplemental Resolution. The exact initial aggregate principal amount of Series 2008 Bonds to be issued shall be determined by the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager in accordance with Section 6 hereof, provided such initial aggregate principal amount does not exceed $52,500,000. Said Series 2008 Bonds shall be dated their date of delivery (or other date as may be set forth in the Bond Purchase Contract), shall be issued in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letter "R," shall be substantially in the form set forth in the Resolution, shall bear interest from their dated date, payable semi-annually, on October I and Aprill of each year (the "Interest Dates"), commencing on April 1, 2009, or such later date as provided in the Bond Purchase Contract. In the event that the Series 2008 Bonds are not issued in calendar year 2008, the Series designation and project reference may be changed by the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager to the Series 2009 Bonds and the 2009 Project, respectively. In such event, all references herein to the Series 2008 Bonds and the 2008 Project shall be deemed to be references to Series 2009 Bonds and the 2009 Project, respectively. The principal of, or Redemption Price, if applicable, on the Series 2008 Bonds are payable upon presentation and surrender of the Series 2008 Bonds at the office of the Paying Agent and Registrar for the Series 2008 Bonds. Interest payable on any Series 2008 Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date 4

249 C-35 which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or at the prior written request and expense of such Holder, by bank wire transfer for the account of such Holder. All payments of principal of or Redemption Price, if applicable, and interest on the Series 2008 Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The Series 2008 Bonds shall bear interest at such rates and yields, shall mature on October 1 of each of the years and in the principal amounts corresponding to such years, and shall have such redemption provisions as determined by the Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, subject to the conditions set forth in Section 6 hereof. All of the terms of the Series 2008 Bonds will be included in a Bond Purchase Contract, which shall be in substantially the form attached hereto and made a part hereof as Exhibit B (the "Bond Purchase Contract"). The Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are each hereby authorized to execute the Bond Purchase Contract in substantially the form attached hereto as Exhibit B with such modifications as he deems appropriate upon satisfaction of the conditions described in Section 6 hereof. SECTION 6. CONDITIONS TO ACCEPTANCE OF PURCHASE AGREEMENT. The Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, shall not execute and deliver the Purchase Agreement until such time as all of the following conditions have been satisfied: (A) Receipt by the Chairman, or in his absence or unavailability, the Vice Chairman or the County Manager, of a written offer to purchase the Series 2008 Bonds by the Underwriter substantially in the form of the Bond Purchase Contract attached hereto as Exhibit B, said offer to provide for, among other things, (i) not exceeding $52,500,000 initial aggregate principal amount of Series 2008 Bonds, (ii) an underwriting discount (including management fee and all expenses) not in excess of 0.60% of the par amount of the Series 2008 Bonds, (iii) a true interest cost of not more than 6.75% per annum, (iv) the maturities of the Series 2008 Bonds, with the final maturity being not later than October 1, 2040 and (v) whether the Series 2008 Bonds are being sold with or without a Bond Insurance Policy and whether such insurance applies to all or a portion of the Series 2008 Bonds. The determination of whether the Series 2008 Bonds are sold with or without such insurance products shall be made based upon the advice of Public Financial Management, Inc., the Issuer's Financial Advisor, and the Underwriter, which advice shall be based upon a determination of whether or not the payment of the premiums for such insurance is cost effective to the Issuer given then current market conditions for obligations such as the Series 2008 Bonds. 5 (B) With respect to any redemption terms for the Series 2008 Bonds, the first call date may be no later than October 1, 2020 and no call premium may exceed 2% of the par amount of that portion of the Series 2008 Bonds to be redeemed; provided, however, that the Issuer may issue noncallable Series 2008 Bonds in the event the Underwriter and the Issuer's Financial Advisor advise the Issuer that it is in its best interest to issue noncallable Series 2008 Bonds. Term Bonds may be established with such Amortization Installments as the Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, deem appropriate and as set forth in the Bond Purchase Contract. (C) Receipt by the Chairman, or in his absence or unavailability, the Vice Chairman or the County Manager, of a disclosure statement and a truth-in-bonding statement of the Underwriter with the accepted bid complying with Section , Florida Statutes. Upon satisfaction of all of the requirements set forth in this Section 6, the Chairman, or in his absence or unavailability the Vice-Chairman and the County Manager, are each authorized to execute and deliver the Bond Purchase Contract containing terms complying with the provisions of this Section 6 and the Series 2008 Bonds shall be sold to the Underwriter pursuant to the provisions of such Bond Purchase Contract, such execution and delivery to constitute conclusive evidence of the satisfaction of the requirements set forth in this Section 6. SECTION 7. FULL BOOK-ENTRY. Notwithstanding the provisions set forth in Section 2.08 of the Resolution, the Series 2008 Bonds shall be initially issued in the form of a separate single certificated fully registered Series 2008 Bond for each of the maturities of the Series 2008 Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). Except as provided in Section 2.08 of the Resolution, all of the outstanding Series 2008 Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., all payments of principal on the Series 2008 Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Series 2008 Bonds, upon presentation of the Series 2008 Bonds to be paid, to the Paying Agent. With respect to Series 2008 Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the DTC book-entry program (the "Participants"). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation with respect to (A) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest on the Series 6

250 C Bonds, (B) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Series 2008 Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder, as shown in the registration books kept by the Registrar, of any amount with respect to principal of, redemption premium, if any, or interest on the Series 2008 Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal, redemption premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of, redemption premium, if any, and interest on of the Series 2008 Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal, redemption premium, if any, and interest on the Series 2008 Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal, redemption premium, if any, and interest pursuant to the provisions of the Resolution. Upon delivery by DTC to the Issuer of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to transfers during the 15 days next preceding an Interest Date or mailing of notice of redemption, the words "Cede & Co." in this Supplemental Resolution shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent. Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation of the requirement that all of the Outstanding Series 2008 Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Series 2008 Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book-entry only system is burdensome to the Issuer, the Series 2008 Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names Holders shall designate, in accordance with the provisions of this Supplemental Resolution. In such event, the Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Series 2008 Bonds of like principal amount and maturity, in denominations of $5,000 or any integral multiple thereof to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book-entry only system is discontinued, the provisions set forth in the Blanket Letter of Representation previously executed by the Issuer and delivered to DTC in order to induce DTC to act as securities depository for all issues by the Issuer, including the Series 2008 Bonds and shall apply to the payment of principal of and interest on the Series 2008 Bonds. SECTION 8. SECURITY FOR SERIES 2008 BONDS. Neither the Series 2008 Bonds nor the interest thereon shall be or constitute a general indebtedness of the Issuer within the meaning of any constitutional or statutory provision or limitation, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Funds in the manner provided herein and in the Resolution. The Holder of any Series 2008 Bond shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation in any fonn of any property therein for payment thereof, or be entitled to payment of such principal and interest from any other funds of the Issuer, except from the Pledged Funds in the manner provided in the Resolution. Until payment has been provided for as pennitted in the Resolution, the payment of the principal of and interest on the Series 2008 Bonds shall be secured forthwith equally and ratably with the Series 1993 Bonds, the Series 1999 Bonds and any Additional Bonds issued under the Resolution by an irrevocable lien on the Pledged Funds, and the Issuer does hereby irrevocably pledge and grant a lien upon such Pledged Funds to the payment of the principal of and interest on the Series 2008 Bonds, the reserves therefor, and for all other required payment, all in accordance with the terms hereof. SECTION 9. APPLICATION OF SERIES 2008 BOND PROCEEDS. The proceeds derived from the sale of the Series 2008 Bonds shall be applied by the Issuer simultaneously with the delivery thereof as follows: (A) An amount equal to any accrued or capitalized interest shall be deposited to the Interest Account of the Debt Service Fund established under the Resolution and shall be used to pay interest on the Series 2008 Bonds on the first Interest Date(s) applicable thereto. (B) A sufficient amount of the Series 2008 Bond proceeds shall be deposited in the Construction Fund established under the Resolution and shall be used to pay the costs and expenses of the 2008 Project. 7 8

251 C-37 (C) An amount of the Series 2008 Bond proceeds equal to the Reserve Requirement for the Series 2008 Bonds shall be deposited in the Series 2008 Reserve Account Subaccount established pursuant to Section 13(A) hereof. (D) The remaining moneys shall be used to pay costs and expenses in connection with the preparation, issuance and sale of the Series 2008 Bonds, including, without limitation, the fees and expenses of accountants, attorneys and financial advisors, and the premiums for any Bond Insurance Policy. SECTION 10. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of a Preliminary Official Statement in substantially the form attached hereto as Exhibit C in connection with offering the Series 2008 Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, the Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager, are each hereby authorized to approve such insertions, changes and modifications. The Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are each hereby authorized to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12(b) under the Securities Exchange Act of 1934 (the "SEC Rule") in the form as mailed. Execution of a certificate by the Chairman, Vice-Chairman or County Manager deeming the Preliminary Official Statement "final" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. SECTION 11. OFFICIAL STATEMENT; CONTINUING DISCLOSURE CERTIFICATE. (A) Subject in all respects with the satisfaction of the conditions set forth in Section 6 hereof, the execution and delivery of an Official Statement to be dated the dated date of the Bond Purchase Contract, which shall be in substantially the form of the Preliminary Official Statement with such changes as are necessary to reflect the final terms of the Series 2008 Bonds, be and the same hereby is approved. The Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are hereby authorized and directed to execute and deliver said Official Statement in the name and on behalf of the Issuer, and thereupon to cause such Official Statement t6 be delivered to the Underwriter with such changes, amendments, modifications, omissions and additions as may be approved by the Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman, or in his absence or unavailability, the Vice Chairman and the County Manager, and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2008 Bonds to the public. Execution by the Chairman or the Vice-Chairman and the County Manager of the 9 Official Statement shall be deemed to be conclusive evidence of approval of such changes. (B) In order to enable the Underwriter to comply with the provisions of SEC Rule 15c2-12 relating to secondary market disclosure, the Chairman, or in his absence or unavailability, the Vice-Chairman and County Manager, are each hereby authorized and directed to execute and deliver the Continuing Disclosure Certificate in the name and on behalf of the Issuer substantially in the form attached hereto as Exhibit D with such changes, amendments, omissions and additions as shall be approved by the Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, his execution and delivery thereof being conclusive evidence of such approval. SECTION 12. APPOINTMENT OF PAYING AGENT AND REGISTRAR. TD Bank, National Association, Jacksonville, Florida, is hereby designated Registrar and Paying Agent for the Series 2008 Bonds. The Chairman, or in his absence or unavailability, the Vice-Chairman and the Clerk are hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 12 and by the Resolution. SECTION 13. CREATION OF SERIES 2008 RESERVE ACCOUNT SUBACCOUNT. (A) There is hereby established within the Reserve Account a separate subaccount entitled "Osceola County, Florida Sales Tax Revenue Bonds, Series 2008 Reserve Account Subaccount" (the "Series 2008 Reserve Account Subaccount"). The Issuer shall hold the Series 2008 Reserve Account Subaccount as a separate trust account solely for the benefit and securing only the payment of debt service on the Series 2008 Bonds in accordance with Section 4.05(A)(4) of the Resolution. (B) The Series 2008 Bond proceeds which shall be on deposit in the Series 2008 Reserve Account Subaccount upon delivery of the Series 2008 Bonds shall be in an amount equal to the Reserve Account Requirement for the Series 2008 Bonds. For purposes of such calculation (i) the calculation shall be based solely on the proceeds of and debt service on the Series 2008 Bonds and (ii) the average annual debt service on the Series 2008 Bonds shall be calculated by the Issuer's Financial Advisor and the Underwriter in accordance with prevailing industry standards. SECTION 14. MUNICIPAL BOND INSURANCE; PROVISIONS RELATING TO BOND INSURANCE POLICY; PROVISIONS IN EFFECT DURING TERM OF BOND INSURANCE POLICY. (A) The Issuer has received a commitment for municipal bond insurance from Assured Guaranty Corp. ("Assured Guaranty") to issue its municipal bond insurance policy (the "2008 Financial Guaranty Insurance Policy") insuring all or a portion of the scheduled principal of and interest on the Series 2008 Bonds (the Series 2008 Bonds so insured shall be referred to in this 10

252 C-38 Section 14 as the "Insured Series 2008 Bonds"). The Issuer hereby accepts said commitment and authorizes the Chairman, or in his absence or unavailability, the Vice Chairman and the County Manager to execute and deliver any documents which may be necessary to evidence the same. If the 2008 Financial Guaranty Insurance Policy is issued in accordance with the terms hereof, Assured Guaranty, or any successor thereto or assignee thereof, shall be deemed to be an "Insurer" and the 2008 Financial Guaranty Insurance Policy shall be deemed a "Bond Insurance Policy" for all purposes of the Resolution in connection with the Insured Series 2008 Bonds. (B) In the event the Issuer determines it is in its best interest to purchase the 2008 Financial Guaranty Insurance Policy, the following provisions relating to the 2008 Financial Guaranty Insurance Policy and certain other provisions of the Resolution shall apply to the Insured Series 2008 Bonds secured by the 2008 Financial Guaranty Insurance Policy so long as such 2008 Financial Guaranty Insurance Policy is in full force and effect, Assured Guaranty has honored all obligations thereunder and any Insured Series 2008 Bonds secured by the 2008 Financial Guaranty Insurance Policy shall remain Outstanding, and the following provisions shall govern, notwithstanding anything to the contrary set forth in the Resolution: 1. Notices and Other Information. (a) Any notice that is required to be given to holders of the Insured Series 2008 Bonds (the "Insured Series 2008 Bondholders"), nationally recognized municipal securities infonnation repositories or state information depositories pursuant to Rule 15c2-12(b) (5) adopted by the Securities and Exchange Commission or to the Paying Agent pursuant to the Resolution shall also be provided to Assured Guaranty, simultaneously with the sending of such notices. In addition, to the extent that the Issuer has entered into a continuing disclosure agreement with respect to the Insured Series 2008 Bonds, an information furnished pursuant to such agreement shall also be provided to Assured Guaranty, simultaneously with the furnishing of such information. All notices required to be given to Assured Guaranty shall be in writing and shall be sent by registered or certified mail addressed to Assured Guaranty Corp., 1325 Avenue of the Americas, New York, New York 10019, Attention: General Counsel, with a copy to Assured Guaranty, Attention: Risk Management Department - Public Finance Surveillance. (b) Assured Guaranty shall have the right to receive such additional information as it may reasonably request. 11 (c) The Issuer will permit Assured Guaranty to discuss the affairs, finances and accounts of the Issuer or any information Assured Guaranty may reasonably request regarding the security for the Insured Series 2008 Bonds with appropriate officers of the Issuer, and will use best efforts to enable Assured Guaranty to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice. (d) The Paying Agent shall notify Assured Guaranty of any failure of the Issuer to provide notices, certificates and other information under the Resolution. 2. Defeasance. In the event that the principal and/or interest due on the Insured Series 2008 Bonds shall be paid by Assured Guaranty pursuant to the 2008 Financial Guaranty Insurance Policy, the Insured Series 2008 Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Series 2008 Bonds. In addition, Assured Guaranty will require the following items: a. An opinion of counsel that the defeasance will not adversely impact the exclusion from gross income for federal income tax purposes of interest on the Insured Series 2008 Bonds or refunded bonds. b. An escrow agreement and an opinion of counsel regarding the validity and enforceability of the escrow agreement. c. The escrow agreement shall provide that: (i) Any substitution of securities shall require a verification by an independent certified public accountant and the prior written consent of Assured Guaranty. (ii) The Issuer will not exercise any optional redemption of Insured Series 2008 Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such 12

253 C-39 reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition of any such redemption there shall be provided to Assured Guaranty a verification of an independent certified public accountant as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following such redemption. (iii) The Issuer shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of Assured Guaranty. 3. Paying Agent. a. Assured Guaranty shall receive prior written notice of any name change of the Paying Agent or the removal, resignation or termination of the Paying Agent. b. No removal, resignation or termination of the Paying Agent shall take effect until a successor, acceptable to Assured Guaranty, shall be appointed. c. The Paying Agent may be removed at any time, at the request of Assured Guaranty, for any breach of its obligations under the Resolution. 4. Amendments and Supplements. With respect to amendments or supplements to the Resolution, which do not require the consent of the Bondholders, Assured Guaranty must be given prior written notice of any such amendments or supplements. With respect to amendments or supplements to the Resolution, which require the consent of the Insured Series 2008 Bondholders, Assured Guaranty's prior written consent is required. Any amendments or supplements to the Resolution, which are consented to by Assured Guaranty, shall be sent to the rating agencies that have assigned a rating to the Insured Series 2008 Bonds. Notwithstanding any other provision hereof, in determining whether the rights of Insured Series 2008 Bondholders will be adversely affected by any action taken pursuant to the terms and provisions hereof, the Paying Agent shall consider the effect on the Insured Series 2008 Bondholders as if there were no 2008 Financial Guaranty Insurance Policy. 5. Assured Guaranty as Third Party Beneficiary. Assured Guaranty is explicitly recognized as being a third party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. 6. Control Rights. Assured Guaranty shall be deemed to be the holder of all of the Insured Series 2008 Bonds for purposes of (i) exercising all remedies and rights with respect to the Insured Series 2008 Bonds and directing the Paying Agent to take actions or for any other purposes following an Event of Default, and (ii) granting any consent, direction or approval or taking any action permitted by or required hereunder by the holders of such Insured Series 2008 Bonds. Anything hereof to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, Assured Guaranty shall be entitled to control and direct the enforcement of all rights and remedies granted to the Insured Series 2008 Bondholders or the Paying Agent for the benefit of the Insured Series 2008 Bondholders under the Resolution. 7. Consent Rights of Assured Guaranty. a. Any provision hereof expressly recognizing or granting rights in or to Assured Guaranty may not be amended in any manner that affects the rights of Assured Guaranty thereunder without the prior written consent of Assured Guaranty. b. Wherever the Resolution requires the consent of Insured Series 2008 Bondholders, Assured Guaranty's consent shall also be required. c. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to Assured Guaranty. In the event of any reorganization or liquidation, Assured Guaranty shall have the right to vote on behalf of all Insured Series 2008 Bondholders. 8. Payment Procedure Under the Policy. a. At least two (2) Business Days prior to each payment date of the Insured Series 2008 Bonds, the Paying Agent will determine whether there will be sufficient funds to pay all principal of and interest on the Insured Series 2008 Bonds due on the related payment date and shall immediately notify Assured Guaranty or its designee on the same Business Day by telephone or electronic mail, confirmed in writing by registered or certified mail, of the amount of any deficiency. Such notice shall specify the amount of the anticipated deficiency, the Insured Series 2008 Bonds to which such deficiency is applicable and whether such Insured Series 2008 Bonds will be deficient as to principal or interest or both. If the deficiency 13 14

254 C-40 is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify Assured Guaranty or its designee. b. The Registrar, shall after giving notice to Assured Guaranty as provided above, make available to Assured Guaranty and, at Assured Guaranty's direction, to any fiscal agent, the registration books of the Issuer maintained by the Registrar and all records relating to the funds maintained hereunder. c. The Paying Agent shall provide Assured Guaranty and any fiscal agent with a list of registered owners of Insured Series 2008 Bonds entitled to receive principal or interest payments from Assured Guaranty under the terms of the 2008 Financial Guaranty Insurance Policy, and shall make arrangements with Assured Guaranty, the fiscal agent or another designee of Assured Guaranty to (i) mail checks or drafts to the registered owners of Insured Series 2008 Bonds entitled to receive full or partial interest payments from Assured Guaranty and (ii) pay principal upon Insured Series 2008 Bonds surrendered to Assured Guaranty, the fiscal agent or another designee of Assured Guaranty by the registered owners of Insured Series 2008 Bonds entitled to receive full or partial principal payments from Assured Guaranty. d. The Paying Agent, shall, at the time it provides notice to Assured Guaranty of any deficiency pursuant to paragraph 1. above, notify registered owners of Insured Series 2008 Bonds entitled to receive the payment of principal or interest thereon from Assured Guaranty (i) as to such deficiency and its entitlement to receive principal or interest, as applicable, (ii) that Assured Guaranty will remit to them all or a part of the interest payments due on the related payment date upon proof of its entitlement thereto and delivery to Assured Guaranty or any Fiscal Agent, in form satisfactory to Assured Guaranty, of an appropriate assignment of the registered owner's right to payment, (iii) that, if they are entitled to receive partial payment of principal from Assured Guaranty, they must surrender the related Insured Series 2008 Bonds for payment first to the Paying Agent, which will note on such Insured Series 2008 Bonds the portion of the principal paid by the Paying Agent and second to Assured Guaranty or its designee, together with the an appropriate assignment, in form satisfactory to Assured Guaranty, to permit ownership of such Insured Series 2008 Bonds to be registered in the name of Assured Guaranty, which will then pay the unpaid portion of principal, and (iv) that, if they are entitled to receive full payment of principal from Assured Guaranty, they must surrender the related Insured Series 2008 Bonds for payment to 15 Assured Guaranty or its designee, rather than the Paying Agent, together with an appropriate assignment, in a form satisfactory to Assured Guaranty, to permit ownership of such Insured Series 2008 Bonds to be registered in the name of Assured Guaranty. e. In addition, if the Paying Agent has notice that any holder of the Insured Series 2008 Bonds has been required to disgorge payments of principal or interest on the Insured Series 2008 Bonds previously due for payment pursuant to a final non-appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify Assured Guaranty or its designee of such fact by telephone or electronic notice, confirmed in writing by registered or certified mail. f. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for holders of the Insured Series 2008 Bonds as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Insured Series 2008 Bonds, the Paying Agent shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holders in any legal proceeding related to the payment of such interest and an assignment to Assured Guaranty of the claims for interest to which such deficiency relates and which are paid by Assured Guaranty, (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the 2008 Financial Guaranty Insurance Policy payment from Assured Guaranty with respect to the claims for interest so assigned, and (c) disburse the same to such respective holders; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Insured Series 2008 Bonds, the Paying Agent shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holder in any legal proceeding related to the payment of such principal and an assignment to Assured Guaranty of the Insured Series 2008 Bond surrendered to Assured Guaranty in an amount equal to the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment 16

255 C-41 shall be delivered only if payment from Assured Guaranty is received), (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the 2008 Financial Guaranty Insurance Policy payment therefore from Assured Guaranty, and ( c) disburse the same to such holders. g. Payments with respect to claims for interest on and principal of Insured Series 2008 Bonds disbursed by the Paying Agent from proceeds of the 2008 Financial Guaranty Insurance Policy shall not be considered to discharge the obligation of the Issuer with respect to such Insured Series 2008 Bonds, and such Insured Series 2008 Bonds shall remain Outstanding for all purposes, shall not be defeased or otherwise satisfied and shall not be considered paid by the Issuer, and Assured Guaranty shall become the owner of such unpaid Insured Series 2008 Bond and claims for the interest in accordance with the tenor of the assignment made hereunder; and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Series 2008 Bonds. h. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of Assured Guaranty that: (i) they recognize that to the extent Assured Guaranty makes payments directly or indirectly (e.g., by paying through the Paying Agent), on account of principal of or interest on the Insured Series 2008 Bonds, Assured Guaranty will be subrogated to the rights of such holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in the Resolution and the Insured Series 2008 Bonds; and (ii) they will accordingly pay to Assured Guaranty the amount of such principal and interest, with interest thereon as provided in the Resolution and the Insured Series 2008 Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Insured Series Bonds to holders, and will otherwise treat Assured Guaranty as the owner of such rights to the amount of such principal and interest. i. Assured Guaranty shall be entitled to pay principal or interest on the Insured Series 2008 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such tenus are defined in the 2008 Financial Guaranty Insurance Policy) and any amounts due on the Insured Series 2008 Bonds as a result of acceleration of the maturity thereof in accordance hereof, whether or not Assured Guaranty has received a Notice (as defmed in the 2008 Financial Guaranty Insurance Policy) of Nonpayment or a claim upon the 2008 Financial Guaranty Insurance Policy. j. In addition, Assured Guaranty shall to the extent it makes any payment of principal or interest on the Insured Series 2008 Bonds become subrogated to the rights of the recipients of such payments in accordance with the terms of the 2008 Financial Guaranty Insurance Policy, and to evidence such subrogation (i) in the case of claims for interest, the Registrar shall note Assured Guaranty's rights as subrogee on the registration books of the Issuer maintained by the Registrar, upon receipt of proof of payment of interest thereon to the registered holders of the Insured Series 2008 Bonds, and (ii) in the case of claims for principal, the Registrar, if any, shall not Assured Guaranty's rights as subrogee on the registration books of the Issuer maintained by the Registrar, upon surrender of the Insured Series 2008 Bonds together with receipt of proof of payment of principal thereof. k. The Issuer hereby agrees to payor reimburse Assured Guaranty, to the extent permitted by law, (A) for all amounts paid by Assured Guaranty under the terms of the 2008 Financial Guaranty Insurance Policy, and (B) any and all charges, fees, costs and expenses which Assured Guaranty may reasonably payor incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (i) any accounts established to facilitate payments under the 2008 Financial Guaranty Insurance Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Resolution or any other financing document including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the Issuer or any affiliate thereof) relating to the Resolution, any party hereof or the transaction contemplated by the Resolution, (iii) the foreclosure against, sale or other disposition of any collateral securing any 18

256 C-42 obligations under the Resolution, or the pursuit of any remedies hereunder, to the extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, or (iv) any amendment, waiver or other action with respect to, or related to, the Resolution whether or not executed or completed; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of Assured Guaranty spent in connection with the actions described in clauses (ii) - (iv) above. In addition, Assured Guaranty reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Resolution. The Issuer will pay interest on the amounts owed in this paragraph from the date of any payment due or paid, at the per annum rate of interest publicly announced from time to time by JP Morgan Chase Bank, National Association at its principal office in New York, New York as its prime lending rate (any change in such prime rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank, National Association) plus 3% per annum (the "Reimbursement Rate"). The Reimbursement Rate shall be calculated on the basis of the actual number of days elapsed over a 360-day year. In the event JPMorgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank, as Assured Guaranty shall specify. 1. In addition to any and all rights of reimbursement, subrogation and any other rights pursuant hereto or under law or in equity, the Issuer agrees to payor reimburse Assured Guaranty, to the extent permitted by law, any and all charges, fees, costs, claims, losses, liabilities (including penalties), judgments, demands, damages, and expenses which Assured Guaranty or its officers, directors, shareholders, employees, agents and each Person, if any, who controls Assured Guaranty within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, may reasonably payor incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of any nature in connection with, in respect of or relating to the transactions contemplated by the Resolution by reason of: (i) any omission or action (other than of or by Assured Guaranty or the Underwriter) in connection with the offering, issuance, sale, remarketing or delivery of the Insured Series 2008 Bonds; (ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft committed by any commissioner, director, officer, employee or agent of the Issuer in connection with any transaction arising from or relating to the Resolution; (iii) the violation by the Issuer of any law, rule or regulation, or any judgment, order or decree applicable to it; (iv) the breach by the Issuer of any representation, warranty or covenant under the Resolution or the occurrence, in respect of the Issuer, under the Resolution of any Event of Default or any event which, with the giving of notice or lapse of time or both, would constitute any Event of Default; or (v) any untrue statement or alleged untrue statement of a material fact contained in any official statement relating to the Insured Series 2008 Bonds, if any, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such claims arise out of or are based upon any untrue statement or omission in information included in an official statement, if any, and furnished by the Underwriter, DTC or by Assured Guaranty in writing expressly for use therein. 9. No Purchase by Issuer. Without the prior written consent of Assured Guaranty, no Bonds shall be purchased by the Issuer, or any affiliate thereof, in lieu of redemption, unless such Bonds are redeemed, defeased or cancelled. 10. Reporting Requirements. The Issuer shall furnish to Assured Guaranty: a. The fiscal budget of the Issuer within thirty (30) days after adoption of such budget. b. Annual audits of the Issuer prepared by an independent certified public accountant, together with a certificate of the Issuer stating that no Event of Default has occurred or is continuing under the Resolution, within 270 days of the completion of the Issuer's Fiscal Year. c. Prior to issuing any Additional Bonds, any disclosure document or financing agreement pertaining to such Additional Bonds, which disclosure document or financing agreement shall include, without 19

257 C-43 limitation, the applicable maturity schedule, interest rate or rates, redemption and security provisions pertaining to any Additional Bonds. d. Within 30 days following any litigation or investigation that may have a material adverse affect on the fmancial position of the Issuer, notice of such litigation. 11. Interest Rate Exchange Agreements. Notwithstanding any provisions of the Resolution to the contrary, any interest rate exchange agreement, payable from and secured by the Pledged Funds ("Interest Rate Exchange Agreement") entered into by the Issuer, shall meet the following conditions: (i) the Interest Rate Exchange Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or ( c) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Interest Rate Exchange Agreement shall not contain any leverage element or multiplier component greater than I.Ox unless there is a matching hedge arrangement which effectively off-sets the exposure from any such element or component. Unless otherwise consented to in writing by Assured Guaranty, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate in debt service on the Insured Series 2008 Bonds and on any debt on parity with the Insured Series 2008 Bonds. The Issuer shall not terminate any such Interest Rate Exchange Agreement unless it demonstrates to the satisfaction of Assured Guaranty prior to the payment of any such termination amount that such payment will not cause the Issuer to be in default under the Resolution, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Interest Rate Exchange Agreement must have a rating of at least "A-" and "A3" by Standard & Poor's and Moody's. If the counterparty or guarantor's rating falls below "A_" or "A3" by either Standard & Poor's or Moody's, the counterparty or guarantor shall execute a credit support annex to the Interest Rate Exchange Agreement, which credit support annex shall be acceptable to Assured Guaranty. If the counterparty or the guarantor's long-term unsecured rating falls below "Baal II or "BBB+" by either Moody's or Standard & Poor's, a replacement counterparty or guarantor, acceptable to Assured Guaranty, shall be required. SECTION 15. AMENDMENT TO DEFINITION OF SALES TAX REVENUES. The definition of "Sales Tax Revenues" set forth in Article I of the Master Resolution is hereby amended and restated in its entirety to read as follows: "'Sales Tax Revenues' shall mean the funds distributed to the Issuer from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in, Part VI, Chapter 218, Florida Statutes, as 21 amended and, to the extent provided by Supplemental Resolution of the Issuer, any additional funds distributed to the Issuer pursuant to the Act." SECTION 16. GENERAL AUTHORITY. The members of the Board, the Chairman, the Vice-Chairman, the County Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Supplemental Resolution, the Resolution, the Official Statement or the Bond Purchase Contract or desirable or consistent with the requirements hereof or the Resolution, the Official Statement or the Bond Purchase Contract for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Series 2008 Bonds, the Resolution, the Official Statement and the Bond Purchase Contract and each member, employee, attorney and officer of the Issuer, the Chairman, the Vice-Chairman, the County Manager and the Clerk is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. For purposes of this Supplemental Resolution, the term "Chairman" shall include the Vice-Chairman and the term "Clerk" shall include any designated Deputy Clerk. SECTION 17. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Series 2008 Bonds. SECTION 18. CONFLICTS; RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Resolution and all the terms and provisions thereof are and shall remain in full force and effect; provided, however, that in the event of a conflict between the terms of this Supplemental Resolution and the Resolution, the terms of this Supplemental Resolution shall govern. SECTION 19. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. 22

258 Resolution duly adopted this 8 th day of December, BOARD OF COUNTY COMMISSIONERS OSCEOLA COUNTY, FLORIDA By: EXHIBIT A DESCRIPTION OF 2008 PROJECT 1. Acquisition of approximately 400 acres of right-of-way and stormwater management ponds for the purpose of extending and improving the County's transportation system through six major development of regional impact projects in east Osceola County, bordering Lake Tohopekaliga. 2. Acquisition, construction and installation of facilities for an emergency operations center. 3. Purchase of two firefighting ladder trucks and ancillary equipment. 4. Acquisition of approximately one-half acre of real property contiguous to the County's Administrative Building and Courthouse. C-44 23

259 SUPPLEMENTAL BOND RESOLUTION NO R SECTION 1. FINDINGS. It is hereby found and determined that: C-45 A RESOLUTION SUPPLEMENTING IN CERTAIN RESPECTS THE SALES TAX REVENUE REFUNDING BOND RESOLUTION ADOPTED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA ON DECEMBER 16, 1993 (AS HERETOFORE SUPPLEMENTED AND AMENDED) BY AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $49,900,000 IN AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE REFUNDING BONDS, SERIES 2009A IN ORDER TO PROVIDE FUNDS SUFFICIENT TO CURRENTLY REFUND ALL OF THE COUNTY'S OUTSTANDING SALES TAX REVENUE BONDS, SERIES 1999, FUND ANY NECESSARY RESERVES AND PAY ALL OR A PORTION OF THE COSTS ASSOCIATED WITH THE ISSUANCE OF THE SERIES 2009A BONDS; PROVIDING CERTAIN TERMS AND DETAILS OF SUCH BONDS, INCLUDING AUTHORIZING A DELEGATED NEGOTIATED SALE OF SAID BONDS AND THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT WITH RESPECT THERETO; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF A FINAL OFFICIAL STATEMENT WITH RESPECT THERETO; APPROVING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE CERTIFICATE; AUTHORIZING MUNICIPAL BOND INSURANCE FOR ALL OR A PORTION OF THE BONDS; ESTABLISHING A DEBT SERVICE RESERVE SUBACCOUNT FOR THE BONDS; MAKING CERTAIN REPRESENTATIONS AND COVENANTS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; PROVIDING GENERAL AUTHORITY AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA: (A) On December 16, 1993, Osceola County, Florida (the "Issuer") duly adopted its Sales Tax Revenue Refunding Bond Resolution (as heretofore supplemented and amended, the "Resolution") authorizing the issuance of $6,345,000 aggregate principal amount of its Sales Tax Revenue Refunding Bonds, Series 1993 (the "Series 1993 Bonds"), for the principal purpose of advance refunding its Sales Tax Refunding Revenue Bonds, Series The Series 1993 Bonds have been paid in full. (B) The Resolution provides for the issuance of Additional Bonds (as defmed in the Resolution), payable on a parity with the then Outstanding Bonds upon meeting certain requirements set forth in the Resolution. (C) On June 17, 1999, the Issuer issued an additional $54,435,000 aggregate principal amount of its Sales Tax Revenue Bonds, Series 1999 (the "Series 1999 Bonds") for the principal purpose of paying the cost of the acquisition and construction of a new courthouse complex and improvements to its administrative facilities. $43,330,000 of the Series 1999 Bonds are Outstanding. (D) On January 27, 2009 the Issuer, issued an additional $48,735,000 aggregate principal amount of its Sales Tax Revenue Bonds, Series 2009 (the "Series 2009 Bonds") for the principal purpose of paying the cost of the acquisition, construction, expansion and improvements of transportation right-of-ways and stormwater facilities, the acquisition, construction and installation of an emergency operations center, the acquisition of frrefighting equipment including vehicles and the acquisition of approximately one-half acre of real property contiguous to the County's Administrative Building and Courthouse. All of the Series 2009 Bonds are Outstanding. (E) The Issuer now deems it to be in its best interest to issue its not exceeding $49,900,000 Sales Tax Revenue Refunding Bonds, Series 2009A (the "Series 2009A Bonds") for the principal purpose of currently refunding all of the Outstanding Series 1999 Bonds. (F) All covenants, pledges and conditions in the Resolution shall be applicable to the Series 2009A Bonds herein authorized, and said Series 2009A Bonds shall be on a parity with and shall rank equally as to lien on and source and security for payment from the Pledged Funds (as defined in the Resolution) with the Outstanding Series 2009 Bonds, and shall constitute "Bonds" within the meaning of the Resolution; provided, that each of such Series of Bonds are separately secured by separate Reserve Account Subaccounts established for each Series in accordance with Section 4.05(A)(4) of the Resolution. 2

260 C-46 (G) The Issuer is not in default in performing any of the covenants, agreements or obligations under the Resolution and all payments required by the Resolution to be made to the funds and accounts established by the Resolution have been made to the full extent required to date. (H) The principal of and interest on the Series 2009A Bonds and al1 required sinking fund, reserve and other payments shall be limited obligations of the Issuer, payable solely from the Pledged Funds in the manner provided in the Resolution. The Series 2009A Bonds shall not constitute a general obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State of Florida, or any political subdivision or agency thereof, within the meaning of any constitutional or statutory provisions. Neither the State of Florida, nor any political subdivision or agency thereof, including the Issuer, shall be obligated (1) to exercise its ad valorem taxing power in any form on any real or personal property of or in the Issuer to pay the principal of the Series 2009A Bonds, the interest thereon, or other costs incidental thereto, or (2) to pay the same from any other funds of the Issuer except from the Pledged Funds in the manner provided herein and in the Resolution. (1) Due to the current and potential volatility of the market for tax-exempt obligations such as the Series 2009A Bonds and the complexity of the transactions relating to such Series 2009A Bonds and the refunding of the Series 1999 Bonds, it is in the best interest of the Issuer to sell the Series 2009A Bonds by a delegated negotiated sale, allowing the Issuer to enter the market at the most advantageous time, rather than at a specified advertised date, thereby permitting the Issuer to obtain the best possible price and interest rate for the Series 2009A Bonds. (J) The Issuer anticipates receiving a favorable offer to purchase the Series 2009A Bonds from Citigroup Global Markets Inc. and the other underwriters named in the Bond Purchase Contract referred to below (collectively, the "Underwriter"), all within the parameters set forth in Section 6 hereof. (K) Inasmuch as the Issuer desires to sell the Series 2009A Bonds at the most advantageous time and not wait for a scheduled meeting of the Board of County Commissioners of Osceola County, Florida (the "Board"), so long as the herein described parameters are met, the Issuer hereby determines to delegate the award and sale of the Series 2009A Bonds to the (i) Chairman of the Board within such parameters, and, in his absence or unavailability, to the Vice-Chairman of the Board and (ii) the County Manager, or their designee(s) (each an "Authorized Issuer Officer"); (L) The Resolution provides that the Series 2009A Bonds shall mature on such dates and in such amounts, shall bear such rates of interest, shall be payable in such places and shall be subject to such redemption provisions as shall be determined by Supplemental Resolution adopted by the Issuer; and it is now appropriate that the Issuer determine such terms and details. SECTION 2. DEFINITIONS. When used in this Supplemental Resolution, the terms defined in the Resolution shall have the meanings therein stated,. except as such definitions shall be hereinafter amended and defined. SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION. This Supplemental Resolution is enacted pursuant to the provisions of the Resolution and the Act. SECTION 4. AUTHORIZATION OF THE REFUNDING OF THE SERIES 1999 BONDS. The Issuer hereby authorizes the refunding of the Series 1999 Bonds with the proceeds of the Series 2009A Bonds in accordance with the terms hereof and the Resolution. SECTION 5. DESCRIPTION OF THE SERIES 2009A BONDS. The Issuer has hereby determined pursuant to the Resolution to issue a Series of Bonds in the aggregate principal amount of not exceeding $49,900,000 to be known as the "Osceola County, Florida Sales Tax Revenue Refunding Bonds, Series 2009A," for the purposes of providing moneys to (i) currently refund all of the Outstanding Series 1999 Bonds, (ii) fund required reserves for the Series 2009A Bonds, and (iii) pay all or a portion of the costs associated with the issuance of the Series 2009A Bonds, including, if determined to be cost effective in accordance with the provisions hereof, the purchase of a Bond Insurance Policy, all in accordance with Section 2.01 and 5.02 of the Resolution and Section 6 of this Supplemental Resolution. The exact initial aggregate principal amount of Series 2009A Bonds to be issued shall be determined by an Authorized Issuer Officer in accordance with Section 6 hereof, provided such initial aggregate principal amount does not exceed $49,900,000. Said Series 2009A Bonds shall be dated their date of delivery (or other date as may be set forth in the Bond Purchase Contract), shall be issued in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letter "R, tr shall be substantially in the form set forth in the Resolution, shall bear interest from their dated date, payable semi-annually, on October 1 and Aprill of each year (the "Interest Dates"), commencing on April 1, 2010, or such later date as provided in the Bond Purchase Contract. In the event that the Series 2009A Bonds are not issued in calendar year 2009, the Series designation may be changed by an Authorized Issuer Officer to "Series 2010 Bonds." In such event, all references herein to the Series 2009A Bonds shall be deemed to be references to Series 2010 Bonds. 3 4

261 C-47 The principal of, or Redemption Price, if applicable, on the Series 2009A Bonds are payable upon presentation and surrender of the Series 2009A Bonds at the office of the Paying Agent and Registrar for the Series 2009A Bonds. Interest payable on any Series 2009A Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or at the prior written request and expense of such Holder, by bank wire transfer for the account of such Holder. All payments of principal of or Redemption Price, if applicable, and interest on the Series 2009A Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The Series 2009A Bonds shall bear interest at such rates and yields, shall mature on October 1 of each of the years and in the principal amounts corresponding to such years, and shall have such redemption provisions as determined by an Authorized Issuer Officer, subject to the conditions set forth in Section 6 hereof. All of the terms of the Series 2009A Bonds will be included in a Purchase Contract, which shall be in substantially the form attached hereto and made a part hereof as Exhibit A (the "Bond Purchase Contract"). Each Authorized Issuer Officer is hereby authorized to execute the Bond Purchase Contract in substantially the form attached hereto as Exhibit A with such modifications as he deems appropriate upon satisfaction of the conditions described in Section 6 hereof. SECTION 6. CONDITIONS TO ACCEPTANCE OF BOND PURCHASE CONTRACT. No Authorized Issuer Officer shall execute and deliver the Bond Purchase Contract until such time as all of the following conditions have been satisfied: (A) Receipt by an Authorized Issuer Officer of a written offer to purchase the Series 2009A Bonds by the Underwriter substantially in the form of the Bond Purchase Contract attached hereto as Exhibit A, said offer to provide for, among other things, (i) not exceeding $49,900,000 initia] aggregate principal amount of Series 2009A Bonds, (ii) an underwriting discount (including management fee and all expenses) not in excess of 0.55% of the par amount of the Series 2009A Bonds, (iii) a present value savings of not less than 3.0%, (iv) the maturities of the Series 2009A Bonds, with the fmal maturity being not later than October 1, 2024, (v) whether the Series 2009A Bonds are being sold with or without a Bond Insurance Policy and whether such insurance applies to all or a portion of the Series 2009A Bonds, and (vi) whether the Series 2009A Reserve Account Subaccount is being funded with the proceeds of the Series 2009A Bonds or a Reserve Account Insurance Policy or Reserve Account Letter of Credit. The determination of whether the Series 2009A Bonds are sold with or without a Bond Insurance Policy and the Series 2009 A Reserve Account Subaccount is funded with proceeds of the Series A Bonds or with a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be made based upon the advice of Public Financial Management, Inc., the Issuer's Financial Advisor, and the Underwriter, which advice shall be based upon a determination of whether or not the payment of the premiums for such fmandal guaranty product(s) is cost effective to the Issuer given then current market conditions for obligations such as the Series 2009A Bonds. (B) With respect to any redemption terms for the Series 2009A Bonds, the flist call date may be no later than October 1, 2019 and no call premium may exceed 1 % of the par amount of that portion of the Series 2009A Bonds to be redeemed; provided, however, that the Issuer may issue noncallable Series 2009A Bonds in the event the Underwriter and the Issuer's Financial Advisor advise the Issuer that it is in its best interest to issue noncallable Series 2009A Bonds. Term Bonds may be established with such Amortization Installments as an Authorized Issuer Officer deems appropriate and as set forth in the Bond Purchase Contract. (C) Receipt by an Authorized Issuer Officer of a disclosure statement and a truth-in-bonding statement of the Underwriter with the accepted bid complying with Section , Florida Statutes. Upon satisfaction of all of the requirements set forth in this Section 6, each Authorized Issuer Officer is authorized to execute and deliver the Bond Purchase Contract containing terms complying with the provisions of this Section 6 and the Series 2009A Bonds shall be sold to the Underwriter pursuant to the provisions of such Bond Purchase Contract, such execution and delivery to constitute conclusive evidence of the satisfaction of the requirements set forth in this Section 6. SECTION 7. FULL BOOK-ENTRY. Notwithstanding the provisions set forth in Section 2.08 of the Resolution, the Series 2009A Bonds shall be initially issued in the form of a separate single certificated fully registered Series 2009A Bond for each of the maturities of the Series 2009A Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company (ndtc n ). Except as provided in Section 2.08 of the Resolution, all of the outstanding Series 2009A Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., all payments of principal on the Series 2009A Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Series 2009 A Bonds, upon presentation of the Series 2009 A Bonds to be paid, to the Paying Agent. With respect to Series 2009A Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar 6

262 C-48 and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the DTC book-entry program (the "Participants"). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation with respect to (A) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest on the Series 2009A Bonds, (8) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Series 2009A Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder; as shown in the registration books kept by the Registrar, of any amount with respect to principal of, redemption premium, if any, or interest on the Series 2009A Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal, redemption premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of, redemption premium, if any, and interest on of the Series 2009A Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal, redemption premium, if any, and interest on the Series 2009A Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as.shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal, redemption premium, if any, and interest pursuant to the provisions of the Resolution. Upon delivery by DTC to the Issuer of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to transfers during the 15 days next preceding an Interest Date or mailing of notice of redemption, the words "Cede & Co." in this Supplemental Resolution shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent. Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation of the requirement that all of the Outstanding Series 2009A Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Series 2009A Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book-entry only system is burdensome to the Issuer, the Series 2009A Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names Holders shall designate, in accordance with the provisions of this Supplemental Resolution. In such event, the Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Series 2009A Bonds of like principal amount and maturity, in denominations of $5,000 or any integral multiple thereof to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book-entry only system is discontinued, the provisions set forth in the Blanket Letter of Representation previously executed by the Issuer and delivered to DTC in order to induce DTC to act as securities depository for all issues by the Issuer, including the Series 2009 A Bonds and shan apply to the payment of principal of and interest on the Series 2009A Bonds. SECTION 8. SECURITY FOR SERIES 2009A BONDS. Neither the Series 2009A Bonds nor the interest thereon shall be or constitute a general indebtedness of the Issuer within the meaning of any constitutional or statutory provision or limitation, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Funds in the manner provided herein and in the Resolution. The Holder of any Series 2009A Bond shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any property therein for payment thereof, or be entitled to payment of such principal and interest from any other funds of the Issuer, except from the Pledged Funds in the manner provided in the Resolution. Until payment has been provided for as permitted in the Resolution, the payment of the principal of and interest on the Series 2009A Bonds shall be secured forthwith equally and ratably with the Series 2009 Bonds and any Additional Bonds issued under the Resolution by an irrevocable lien on the Pledged Funds, and the Issuer does hereby irrevocably pledge and grant a lien upon such Pledged Funds to the payment of the principal of and interest on the Series 2009A Bonds, the reserves therefor, and for all other required payment, all in accordance with the terms hereof. SECTION 9. APPLICATION OF SERIES 2009A BOND PROCEEDS. The proceeds derived from the sale of the Series 2009A Bonds shall be applied by the Issuer simultaneously with the delivery thereof as follows: (A) An amount equal to any accrued or capitalized interest shall be deposited to the Interest Account of the Debt Service Fund established under the Resolution and shall be used to pay interest on the Series 2009A Bonds on the first Interest Date(s) applicable thereto. 7 8

263 C-49 (B) A sufficient amount of the Series 2009A Bond proceeds, together with any other available moneys provided by the Issuer, shal1 be deposited with the paying agent for the Series 1999 Bonds and shall be used to currently refund the Series 1999 Bonds on the first available call date (taking into consideration the mailing of notice of redemption in accordance with the provisions of the Resolution). (C) An amount of the Series 2009A Bond proceeds equal to the Reserve Requirement for the Series 2009A Bonds shall be deposited in the Series 2009A Reserve Account Subaccount established pursuant to Section 13(A) hereof or to pay for the cost of a Reserve Account Insurance Policy or Reserve Account Letter of Credit applicable thereto. (D) The remammg moneys shall be used to pay costs and expenses in connection with the preparation, issuance and sale of the Series 2009A Bonds, including, without limitation, the fees and expenses of accountants, attorneys and fmanciai advisors, and the premiums for any Bond Insurance Policy and/or Reserve Account Insurance Policy or Reserve Account Letter of Credit. SECTION 10. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of a Preliminary Official Statement in substantially the fonn attached hereto as Exhibit B in connection with offering the Series 2009A Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, each Authorized Issuer Officer is hereby authorized to approve such insertions, changes and modifications. Each Authorized Issuer Officer is hereby authorized to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12(b) under the Securities Exchange Act of 1934 (the "SEC Rule") in the fonn as mailed. Execution of a certificate by an Authorized Issuer Officer deeming the Preliminary Official Statement "fmal" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. SECTION 11. OFFICIAL STATEMENT; CONTINUING DISCLOSURE CERTIFICATE. (A) Subject in all respects with the satisfaction of the conditions set forth in Section 6 hereof, the execution and delivery of an Official Statement to be dated the dated date of the Bond Purchase Contract, which shall be in substantially the fonn of the Preliminary Official Statement with such changes as are necessary to reflect the fmal tenns of the Series 2009A Bonds, be and the same hereby is approved. Each Authorized Issuer Officer is hereby authorized and directed to execute and deliver said Official Statement in the name and on behalf of the Issuer, and thereupon to cause such Official Statement to be delivered to the Underwriter with such changes, amendments, modifications, omissions and additions as may be approved by an Authorized Issuer Officer. Said Official Statement, including any such changes, 9 amendments, modifications, omissions and additions as approved by an Authorized Issuer Officer, and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2009A Bonds to the public. Execution by an Authorized Issuer Officer of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. (B) In order to enable the Underwriter to comply with the provisions of SEC Rule lsc2-12 relating to secondary market disclosure, each Authorized Issuer Officer is hereby authorized and directed to execute and deliver the Continuing Disclosure Certificate in the name and on behalf of the Issuer substantially in the form attached hereto as Exhibit C with such changes, amendments, omissions and additions as shall be approved by an Authorized Issuer Officer, his execution and delivery thereof being conclusive evidence of such approval. SECTION 12. APPOINTMENT OF PAYING AGENT AND REGISTRAR. TD Bank, National Association, Jacksonville, Florida, is hereby designated Registrar and Paying Agent for the Series 2009A Bonds. Each Authorized Issuer Officer is hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 12 and by the Resolution. SECTION 13. CREATION OF SERIES 2009A RESERVE ACCOUNT SUBACCOUNT. (A) There is hereby established within the Reserve Account a separate subaccount entitled "Osceola County, Florida Sales Tax Revenue Refunding Bonds, Series 2009A Reserve Account Subaccount" (the "Series 2009A Reserve Account Subaccount"). The Issuer shall hold the Series 2009A Reserve Account Subaccount as a separate trust account solely for the benefit and securing only the payment of debt service on the Series 2009A Bonds in accordance with Section 4.05(A)(4) of the Resolution. (B) The Series 2009A Bond proceeds which shall be on deposit in the Series 2009A Reserve Account Subaccount upon delivery of the Series 2009A Bonds shall be in an amount equal to the Reserve Account Requirement for the Series 2009A Bonds. For purposes of such calculation (i) the calculation shall be based solely on the proceeds of and debt service on the Series 2009 A Bonds and (ii) the average annual debt service on the Series 2009A Bonds shall be calculated by the Issuer's Financial Advisor and the Underwriter in accordance with prevailing industry standards. As permitted by Section 4.0S(A)(4) of the Resolution, in lieu of depositing proceeds of the Series 2009A Bonds in the Series 2009 A Reserve Account Subaccount, the Issuer may deposit therein a Reserve Account Insurance Policy or Reserve Account Letter of Credit equal to the Reserve Account Requirement applicable thereto. Each Authorized Issuer Officer is hereby authorized to execute a fmancial guaranty agreement with the issuer of any such Reserve Account Insurance Policy or Reserve Account Letter of Credit upon the advice of the Financial Advisor, Bond Counsel and County Attorney. The payment of any obligations 10

264 C-50 of the Issuer under such an agreement shall be limited to the Pledged Funds in the manner and to the extent set forth in the Resolution. SECTION 14. MUNICIPAL BOND INSURANCE; PROVISIONS RELATING TO BOND INSURANCE POLICY; PROVISIONS IN EFFECT DURING TERM OF BOND INSURANCE POLICY. (A) The Issuer has received a commitment for municipal bond insurance from Assured Guaranty Corp. ("Assured Guarantyl1) to issue its municipal bond insurance policy (the tl2009a Financial Guaranty Insurance Policytl) insuring all or a portion of the scheduled principal of and interest on the Series 2009A Bonds (the Series 2009A Bonds so insured shall be referred to in this Section 14 as the "Insured Series 2009A Bonds"). The Issuer hereby accepts said commitment and authorizes each Authorized Issuer Officer to execute and deliver any documents which may be necessary to evidence the same. If the 2009A Financial Guaranty Insurance Policy is issued in accordance with the terms hereof, Assured Guaranty, or any successor thereto or assignee thereof, shall be deemed to be an If Insurer " and the 2009 A Financial Guaranty Insurance Policy shall be deemed a "Bond Insurance Policy" for all purposes of the Resolution in connection with the Insured Series 2009A Bonds. (B) In the event the Issuer determines it is in its best interest to purchase the 2009A Financial Guaranty Insurance Policy, the following provisions relating to the 2009A Financial Guaranty Insurance Policy and certain other provisions of the Resolution shall apply to the Insured Series 2009A Bonds secured by the 2009A Financial Guaranty Insurance Policy so long as such 2009A Financial Guaranty Insurance Policy is in full force and effect, Assured Guaranty has honored all obligations thereunder and any Insured Series 2009A Bonds secured by the 2009A Financial Guaranty Insurance Policy shall remain Outstanding, and the following provisions shall govern, notwithstanding anything to the contrary set forth in the Resolution (the provisions of (i) subsection (B)8. below being for the benefit of the Bondholders and Assured Guaranty and (ii) subsections (B)l. through 7. and 9. through 12. being for the sole benefit of Assured Guaranty, anyone of which may be waived by Assured Guaranty without the consent of Bondholders): 1. Notices and Other Information. (a) Any notice that is required to be given to holders of the Insured Series 2009A Bonds (the "Insured Series 2009A Bondholders"), nationally recognized municipal securities information repositories or state information depositories pursuant to Rule lsc2-12(b) (5) adopted by the Securities and Exchange Commission or to the Paying Agent pursuant to the Resolution shall also be provided to Assured Guaranty, simultaneously with the sending of such notices. In addition, to the extent that the Issuer 11 has entered into a continuing disclosure agreement with respect to the Insured Series 2009A Bonds, all infonnation furnished pursuant to such agreement shall also be provided to Assured Guaranty, simultaneously with the furnishing of such infonnation. All notices required to be given to Assured Guaranty shall be in writing and shall be sent by registered or certified mail, or personally delivered or telecopied to: Assured Guaranty Corp. 31 West 52 nd Street New York, New York Attn: Risk Management Department (Re: Policy No. ) Telecopy No.: 212/ Confinnation: 212/ riskmanagementdept@assuredguaranty.com (In each case in which notice or other communication refers to an Event of Default, a claim on the 2009 A Financial Guaranty Insurance Policy or any event with respect to which failure on the part of Assured Guaranty to respond shall be deemed to constitute consent or acceptance, then such demand, notice or other communication shall be marked to indicate "URGENT MA TERlAL ENCLOSED" and shall also be sent to the attention of the General Counsel at the same address and telecopy above and at generalcounsel@assuredguaranty.com.) (b) Assured Guaranty shall have the right to receive such additional information as it may reasonably request. (c) The Issuer will permit Assured Guaranty to discuss the affairs, finances and accounts of the Issuer or any infonnation Assured Guaranty may reasonably request regarding the security for the Insured Series 2009A Bonds with appropriate officers of the Issuer, and will use commercially reasonable efforts to enable Assured Guaranty to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice. (d) The Paying Agent shall notify Assured Guaranty of any failure of the Issuer to provide notices, certificates and other information under the Resolution. 12

265 C Defeasance. In the event that the principal and/or interest due on the Insured Series 2009A Bonds shall be paid by Assured Guaranty pursuant to the 2009A Financial Guaranty Insurance Policy, the Insured Series 2009A Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the registered owners shal1 continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Series 2009A Bonds. In addition, Assured Guaranty will require the following items: a. An opinion of counsel to the effect (i) that the defeasance will not adversely impact the exclusion from gross income for federal income tax purposes of interest on the Insured Series 2009A Bonds or refunded bonds and (ii) that the Insured Series 2009A Bonds are no longer Outstanding under the Resolution b. An escrow agreement and an opinion of counsel regarding the validity and enforceability of the escrow agreement. c. The escrow agreement shall provide that: 0) Any substitution of securities shall require a verification by an independent certified public accountant and the prior written consent of Assured Guaranty. (ii) The Issuer will not exercise any optional redemption of Insured Series 2009A Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition of any such redemption there shall be provided to Assured Guaranty a verification of an independent,certified public accountant as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following such redemption. (iii) The Issuer shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of Assured Guaranty. 3. Paying Agent. a. Assured Guaranty shall receive prior written notice of any name change of the Paying Agent or the removal, resignation or termination of the Paying Agent. b. No removal, resignation or termination of the Paying Agent shall take effect until a successor, acceptable to Assured Guaranty, shall be appointed. c. The Paying Agent may be removed at any time, at the request of Assured Guaranty, for any breach of its obligations under the Resolution. 4. Amendments and Supplements. With respect to amendments or supplements to the Resolution, which do not require the consent of the Bondholders, Assured Guaranty must be given prior written notice of any such amendments or supplements. With respect to amendments or supplements to the Resolution, which require the consent of the Insured Series 2009A Bondholders, Assured Guaranty's prior written consent is required. Any amendments or supplements to the Resolution, which are consented to by Assured Guaranty, shall be sent to the rating agencies that have assigned a rating to the Insured Series 2009A Bonds. Notwithstanding any other provision hereof, in determining whether the rights of Insured Series 2009A Bondholders will be adversely affected by any action taken pursuant to the terms and provisions hereof, the Paying Agent shall consider the effect on the Insured Series 2009A Bondholders as if there were no 2009A Financial Guaranty Insurance Policy. 5. Assured Guaranty as Third Party Beneficiary. Assured Guaranty is explicitly recognized as being a third party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. 6. Control Rights. Assured Guaranty shall be deemed to be the holder of all of the Insured Series 2009A Bonds for purposes of (i) exercising all remedies and rights with respect to the Insured Series 2009 A Bonds and directing the Paying Agent to take actions or for any other purposes following an Event of Default, and (ii) granting any consent, direction or approval or taking any action 13 14

266 C-52 pe1ti1itted by or required hereunder by the holders of such Insured Series 2009A Bonds. Anything hereof to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, Assured Guaranty shall be entitled to control and direct the enforcement of all rights and remedies granted to the Insured Series 2009A Bondholders or the Paying Agent for the benefit of the Insured Series 2009A Bondholders under the Resolution. 7. Consent Rights of Assured Guaranty. a. Any provision hereof expressly recognizing or granting rights in or to Assured Guaranty may not be amended in any manner that affects the rights of Assured Guaranty thereunder without the prior written consent of Assured Guaranty. b. Wherever the Resolution requires the consent of Insured Series 2009A Bondholders, Assured Guaranty's consent shall also be required. c. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to Assured Guaranty. In the event of any reorganization or liquidation, Assured Guaranty shall have the right to vote on behalf of all Insured Series 2009A Bondholders. 8. Payment Procedure Under the Policy. a. At least two (2) Business Days prior to each payment date of the Insured Series 2009 A Bonds, the Paying Agent will determine whether there will be sufficient funds to pay all principal of and interest on the Insured Series 2009 A Bonds due on the related payment date and shall. immediately notify Assured Guaranty or its designee on the same Business Day by telephone or electronic mail, confmned in writing by registered or certified mail, of the amount of any deficiency. Such notice shall specify the amount of the anticipated deficiency, the Insured Series 2009A Bonds to which such deficiency is applicable and whether such Insured Series 2009 A Bonds will be deficient as to principal or interest or both. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify Assured Guaranty or its designee. b. The Registrar, shall after giving notice to Assured Guaranty as provided above, make available to Assured Guaranty and, at Assured Guaranty's direction, to any fiscal agent, the registration books of the Issuer 15 maintained by the Registrar and all records relating to the funds maintained hereunder. c. The Paying Agent shall provide Assured Guaranty and any fiscal agent with a list of registered owners of Insured Series 2009 A Bonds entitled to receive principal or interest payments from Assured Guaranty under the terms of the 2009A Financial Guaranty Insurance Policy, and shall make arrangements with Assured Guaranty, the fiscal agent or another designee of Assured Guaranty to (i) mail checks or drafts to the registered owners of Insured Series 2009A Bonds entitled to receive full or partial interest payments from Assured Guaranty and (ii) pay principal upon Insured Series 2009A Bonds surrendered to Assured Guaranty, the fiscal agent or another designee of Assured Guaranty by the registered owners of Insured Series 2009A Bonds entitled to receive full or partial principal payments from Assured Guaranty. d. The Paying Agent, shall, at the time it provides notice to Assured Guaranty of any deficiency pursuant to paragraph 1. above, notify registered owners of Insured Series 2009A Bonds entitled to receive the payment of principal or interest thereon from Assured Guaranty (i) as to such deficiency and its entitlement to receive principal or interest, as applicable, (ii) that Assured Guaranty will remit to them all or a part of the interest payments due on the related payment date upon proof of its entitlement thereto and delivery to Assured Guaranty or any Fiscal Agent, in form satisfactory to Assured Guaranty, of an appropriate assignment of the registered owner's right to payment, (iii) that, if they are entitled to receive partial payment of principal from Assured Guaranty, they must surrender the related Insured Series 2009A Bonds for payment first to the Paying Agent, which will note on such Insured Series 2009 A Bonds the portion of the principal paid by the Paying Agent and second to Assured Guaranty or its designee, together with the an appropriate assignment, in form satisfactory to Assured Guaranty, to permit ownership of such Insured Series 2009A Bonds to be registered in the name of Assured Guaranty, which will then pay the unpaid portion of principal, and (iv) that, if they are entitled to receive full payment of principal from Assured Guaranty, they must surrender the related Insured Series 2009A Bonds for payment to Assured Guaranty or its designee, rather than the Paying Agent, together with an appropriate assignment, in a form satisfactory to Assured Guaranty, to permit ownership of such Insured Series 2009 A Bonds to be registered in the name of Assured Guaranty. 16

267 C-53 e. In addition, if the Paying Agent has notice that any holder of the Insured Series 2009A Bonds has been required to disgorge payments of principal or interest on the Insured Series 2009A Bonds previously due for payment pursuant to a final non-appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify Assured Guaranty or its designee of such fact by telephone or electronic notice, confirmed in writing by registered or certified mail. f. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for holders of the Insured Series 2009A Bonds as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Insured Series 2009A Bonds, the Paying Agent shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holders in any legal proceeding related to the payment of such interest and an assignment to Assured Guaranty of the claims for interest to which such deficiency relates and which are paid by Assured Guaranty, (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the 2009A Financial Guaranty Insurance Policy payment from Assured Guaranty with respect to the claims for interest so assigned, and (c) disburse the same to such respective holders; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Insured Series 2009A Bonds, the Paying Agent shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holder in any legal proceeding related to the payment of such principal and an assignment to Assured Guaranty of the Insured Series 2009A Bond surrendered to Assured Guaranty in an amount equal to the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from Assured Guaranty is received), (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the,2009a Financial Guaranty Insurance Policy payment therefore from Assured Guaranty, and (c) disburse the same to such holders. 17 g. Payments with respect to claims for interest on and principal of Insured Series 2009A Bonds disbursed by the Paying Agent from proceeds of the 2009A Financial Guaranty Insurance Policy shall not be considered to discharge the obligation of the Issuer with respect to such Insured Series 2009A Bonds, and such Insured Series 2009A Bonds shall remain Outstanding for all purposes, shall not be defeased or otherwise satisfied and shall not be considered paid by the Issuer, and Assured Guaranty shall become the owner of such unpaid Insured Series 2009A Bond and claims for the interest in accordance with the tenor of the assignment made hereunder; and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Series 2009A Bonds. h. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of Assured Guaranty that: (i) they recognize that to the extent Assured Guaranty makes payments directly or indirectly (e.g., by paying through the Paying Agent), on account of principal. of or interest on the Insured Series 2009A Bonds, Assured Guaranty will be subrogated to the rights of such holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in the Resolution and the Insured Series 2009A Bonds; and Oi) they will accordingly pay to Assured Guaranty the amount of such principal and interest, with interest thereon as provided in the Resolution and the Insured Series 2009A Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Insured Series 2009 A Bonds to holders, and will otherwise treat Assured Guaranty as the owner of such rights to the amount of such principal and interest. i. Assured Guaranty shall be entitled to pay principal or interest on the Insured Series 2009A Bonds that shall become Due for Payment but shab be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the 2009A Financial Guaranty Insurance Policy) and any 18

268 C-54 amounts due on the Insured Series 2009A Bonds as a result of acceleration of the maturity thereof in accordance hereof, whether or not Assured Guaranty has received a Notice (as defined in the 2009A Financial Guaranty Insurance Policy) of Nonpayment or a claim upon the 2009A Financial Guaranty Insurance Policy_ j. In addition, Assured Guaranty shall to the extent it makes any payment of principal or interest on the Insured Series 2009A Bonds become subrogated to the rights of the recipients of such payments in accordance with the terms of the 2009A Financial Guaranty Insurance Policy, and to evidence such subrogation (i) in the case of claims for interest, the Registrar shall note Assured Guaranty's rights as subrogee on the registration books of the Issuer maintained by the Registrar, upon receipt of proof of payment of interest thereon to the registered holders of the Insured Series 2009A Bonds, and (ii) in the case of claims for principal, the Registrar, if any, shall not Assured Guaranty's rights as subrogee on the registration books of the Issuer maintained by the Registrar, upon surrender of the Insured Series 2009A Bonds together with receipt of proof of payment of principal thereof. k. The Issuer hereby agrees to payor reimburse Assured Guaranty (A) for all amounts paid by Assured Guaranty under the terms of the 2009A Financial Guaranty Insurance Policy, and, to the extent permitted by law, (B) any and all charges, fees, costs and expenses which Assured Guaranty may reasonably payor incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (1) any accounts established to facilitate payments under the 2009A Financial Guaranty Insurance Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Resolution or any other fmancing document including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the Issuer or any affiliate thereof) relating to the Resolution, any party hereof or the transaction contemplated by the Resolution, (iii) the foreclosure against, sale or other disposition of any collateral securing any obligations under the Resolution, or the pursuit of any remedies hereunder, to the extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, or (iv) any amendment, waiver or other action with respect to, or related to, the Resolution whether or not executed or completed; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees 19 of Assured Guaranty spent in connection with the actions described in clauses (ii) - (iv) above. In addition, Assured Guaranty reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Resolution. The Issuer will pay interest on the amounts owed in this paragraph from the date of any payment due or paid, at the per annum rate of interest publicly announced from time to time by lp Morgan Chase Bank, National Association at its principal office in New York, New York as its prime lending rate (any change in such prime rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank, National Association) plus 3% per annum (the "Reimbursement Rate"). The Reimbursement Rate shall be calculated on the basis of the actual number of days elapsed over a 360-day year. In the event JPMorgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank, as Assured Guaranty shall specify. 1. In addition to any and all rights of reimbursement, subrogation and any other rights pursuant hereto or under law or in equity, the Issuer agrees to payor reimburse Assured Guaranty, to the extent permitted by law, any and all charges, fees, costs, claims, losses, liabilities (including penalties), judgments, demands, damages, and expenses which Assured Guaranty or its officers, directors, shareholders, employees, agents and each Person, if any, who controls Assured Guaranty within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, may reasonably payor incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of any nature in connection with, in respect of or relating to the transactions contemplated by the Resolution by reason of: (i) any omission or action (other than of or by Assured Guaranty or the Underwriter) in connection with the offering, issuance, sale, remarketing or delivery of the Insured Series 2009A Bonds; (ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft committed by any commissioner, director, officer, employee or agent of the Issuer in connection with any transaction arising from or relating to the Resolution; (iii) the violation by the Issuer of any law, rule or regulation, or any judgment, order or decree applicable to it; 20

269 C-55 (iv) the breach by the Issuer of any representation, warranty or covenant under the Resolution or the occurrence, in respect of the Issuer, under the Resolution of any Event of Default or any event which, with the giving of notice or lapse of time or both, would constitute any Event of Default; or (v) any untrue statement or alleged untrue statement of a material fact contained in any official statement relating to the Insured Series 2009A Bonds, if any, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such claims arise out of or are based upon any untrue statement or omission in information included in an official. statement, if any, and furnished by the Underwriter, DTC or by Assured Guaranty in writing expressly for use therein. 9. Reporting Requirements. The Issuer shall furnish to Assured Guaranty: a. The fiscal budget of the Issuer within thirty (30) days after adoption of such budget. b. Annual audits of the Issuer prepared by an independent certified public accountant, together with a certificate of the Issuer stating that no Event of Default has occurred or is continuing under the Resolution, within 270 days of the completion of the Issuer's Fiscal Year. c. Prior to issuing any Additional Bonds, any disclosure document or fmancing agreement pertaining to such Additional Bonds, which disclosure document or fmancing agreement shall include, without limitation, the applicable maturity schedule, interest rate or rates, redemption and security provisions pertaining to any Additional Bonds. d. Within 30 days following any litigation or investigation that may have a material adverse affect on the levy, collection or distribution of Sales Tax Revenues, notice of such litigation. 10. Interest Rate Exchange Agreements. Notwithstanding. any provisions of the Resolution to the contrary, any interest rate exchange agreement, payable from and secured by the Pledged Funds ("Interest Rate Exchange Agreement") entered into by the Issuer, shall meet the following conditions: (i) the Interest Rate Exchange Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or (c) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Interest Rate Exchange Agreement shall not contain any leverage element or multiplier component greater than l.ox unless there is a matching hedge arrangement which effectively off-sets the exposure from any such element or component. Unless otherwise consented to in writing by Assured Guaranty, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate in debt service on the Insured Series 2009A Bonds and on any debt on parity with the Insured Series 2009A Bonds. The Issuer shall not terminate any such Interest Rate Exchange Agreement unless it demonstrates to the satisfaction of Assured Guaranty prior to the payment of any such termination amount that such payment will not cause the Issuer to be in default under the Resolution, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Interest Rate Exchange Agreement must have a rating of at least "A_" and "A3" by Standard & Poor's and Moody's. If the counterparty or guarantor's rating falls below "A-" or "A3" by either Standard & Poor's or Moody's, the counterparty or guarantor shall execute a credit support annex to the Interest Rate Exchange Agreement, which credit support annex shall be acceptable to Assured Guaranty. If the counterparty or the guarantor's long-term unsecured rating falls below "Baal II or IIBBB+" by either Moody's or Standard & Poor's, a replacement counterparty or guarantor, acceptable to Assured Guaranty, shall be required. 11. Variable Rate Bonds. In connection with the issuance of any Variable Rate Bonds either (i) after giving effect to the issue of such Bonds the aggregate principal amount of Outstanding Variable Rate Bonds does not exceed 15% of the aggregate principal amount of all Outstanding Bonds as of the date of issue of such Variable Rate Bonds or (ii) the certificate delivered by the Issuer pursuant to Section 5.02(A) hereof with respect to the issuance of such Variable Rate Bonds states that the Sales Tax Revenues received during the applicable 12- month period equals at least 2.0 times the Maximum Annual Debt Service on all Bonds then Outstanding and such Additional Variable Rate Bonds (and any other Additional Bonds) for which such statement is made; provided, in no event shall the aggregate principal amount of Outstanding Variable Rate Bonds Outstanding at the time of issuance of such Variable Rate Bonds exceed 25% of all then Outstanding Bonds. SECTION 15. AMENDMENT TO SECTION (A)(4) OF THE MASTER RESOLUTION. Subject to the delivery of the 2009A Financial Guaranty Insurance Policy and the written consent of Assured Guaranty as Insurer of all of the Outstanding Bonds, Section 4.05(A)(4) of the Master Resolution is hereby amended and 21 22

270 C-56 restated in its entirety, effective as of the date of issuance of the Series 2009 A Bonds, but only with respect to the Series 2009A Bonds and any Additional Bonds issued after the date of issuance of the Series 2009A Bonds (such provisions shall not apply with respect to the Reserve Account Subaccount established in connection with the issuance of the Series 2009 Bonds), to read as follows: (4) Reserve Account. There shall be deposited to the Reserve Account an amount which would enable the Issuer to restore the funds on deposit in the Reserve Account to an amount equal to the Reserve Account Requirement applicable thereto whether such shortfall was caused by decreased market value or withdrawal (whether from cash or a Reserve Account Insurance Policy or Reserve Account Letter of Credit). All such deficiencies in the Reserve Account must be made up no later than 12 months from the date such deficiencies first occurred. On or prior to each principal payment date and Interest Date for the Bonds, moneys in the Reserve Account shall be applied by the Issuer to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds to the extent moneys in the Interest Account, the Principal Account and the Bond Amortization Account shall be insufficient for such purpose. Whenever there shall be surplus moneys in the Reserve Account by reason of a decrease in the Reserve Account Requirement or as a result of a deposit in the Reserve Account Letter of Credit or a Reserve Account Insurance Policy, such surplus moneys shall be deposited by the Issuer into the Restricted Revenue Account. The Issuer shall inform each Insurer and Credit Bank of any draw upon the Reserve Account for purposes of paying the principal of and interest on the Bonds. Upon the issuance of any Series of Bonds under the terms, limitations and conditions as herein provided, the Issuer shall fund the Reserve Account in an amount at least equal to the Reserve Account Requirement. Such required amount may be paid in full or in part from the proceeds of such Series of Bonds or may be accumulated in equal monthly payments to the Reserve Account over a period of months from the date of issuance of such Series of Bonds, which shall not exceed the greater of (a) twelve (12) months, or (b) the number of months for which interest on such Series of Bonds has been capitalized, as determined by Supplemental Resolution. In the event moneys in the Reserve Account are accumulated as provided above, (i) the amount in said Reserve Account on the date of delivery of the Additional Bonds shall not be less than the Reserve Account Requirement on all Bonds Outstanding (excluding the Additional Bonds) on such date, and (ii) the incremental difference between the Reserve Account Requirement on all Bonds Outstanding (excluding the Additional Bonds) on the date of delivery of the Additional Bonds and the Reserve Account Requirement on all such Bonds and the Additional Bonds shall be at least fifty percent (50%) funded upon delivery of the Additional Bonds. 23 Notwithstanding the foregoing provisions, in lieu of the required deposits into the Reserve Account, the Issuer may cause to be deposited into the Reserve Account a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for the benefit of the Bondholders in an amount equal to the difference between the Reserve Account Requirement applicable thereto and the sums then on deposit in the Reserve Account, if any. The Issuer may also substitute a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for cash on deposit in the Reserve Account upon compliance with the terms of this Section 4.05(A)(4). Such Reserve Account Insurance Policy andlor Reserve Account Letter of Credit shall be payable to the Paying Agent (upon the giving of notice as required thereunder) on any principal payment date or Interest Date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to this Resolution and available for such purpose. A Reserve Account Insurance Policy issued to the Paying Agent, as agent of the Bondholders, by a company licensed to issue an insurance policy or fmancial guaranty guaranteeing the timely payment of debt service on the Bonds (a "municipal bond insurer") may be deposited in the Reserve Account to meet the Reserve Account Requirement if the claims-paying ability of the issuer thereof on the date of delivery shall be rated at least "AA" by Standard & Poor's Corporation or at least "Aa" by Moody's Investors Service. A Reserve Account Insurance Policy issued to the Paying Agent, as agent of the Bondholders, by an entity other than a municipal bond insurer, may be deposited in the Reserve Account to meet the Reserve Account Requirement if the form and substance of such Reserve Account Insurance Policy and the issuer thereof shall be approved by the Insurer. A Reserve Account Letter of Credit issued to the Paying Agent, as agent of the Bondholders, by a bank may be deposited in the Reserve Account to meet the Reserve Account Requirement if the issuer thereof is rated at least "AA II by Standard & Poor's Corporation on the date of delivery. The Reserve Account Letter of Credit shall be payable in one or more draws upon presentation by the beneficiary of a sight draft accompanied by its certificate that it then holds insufficient funds to make a required payment of principal or interest on the Bonds. The draws shall be payable within two days of presentation of the sight draft. The Reserve Account Letter of Credit shall be for a term of not less than three years. The issuer of the Reserve Account Letter of Credit shall be required to notify the Issuer and the Paying Agent, not later than 30 months prior to the stated expiration date of the Reserve Account Letter of Credit, as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice indicates that the expiration date shall not be extended, the Issuer shall deposit in the Reserve Account an amount sufficient to cause the cash or Authorized Investments on deposit in the Reserve Account, together with any 24

271 C-57 other Reserve Account Insurance Policies and Reserve Account Letters of Credit, to equal the Reserve Account Requirement on all Outstanding Bonds, such deposit to be paid in equal installments on at least a semiannual basis over the remaining term of the Reserve Account Letter of Credit, unless the Reserve Account Letter of Credit is replaced by a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit meeting the requirements of this Section 4.05(B)( 4). The Reserve Account Letter of Credit shall permit a draw in full not less than two weeks prior to the expiration or termination of such Reserve Account Letter of Credit if the Reserve Account Letter of Credit has not been replaced or renewed. The Paying Agent shall draw upon the Reserve Account Letter of Credit prior to its expiration or termination unless an acceptable replacement is in place or the Reserve Account is fully funded in its required amount. The use of any Reserve Account Insurance Policy or Reserve Account Letter of Credit pursuant to this Section 4.05(B)(4) shall be subject to receipt of an opinion of counsel acceptable to the Insurer in form and substance satisfactory to the Insurer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the issuer of such Reserve Account Insurance Policy or Reserve Account Letter of Credit is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Insurer. In addition, the use of a Reserve Account Letter of Credit shall be subject to receipt of an opinion of counsel acceptable to the Insurer in form and substance satisfactory to the Insurer to the effect that payments under sucb Reserve Account Letter of Credit would not constitute avoidable preferences under Section 547 of the United States Bankruptcy Code or similar state laws with avoidable preference provisions in the event of the filing of a petition for relief under the United States Bankruptcy Code or similar state laws by or against the issuer of the Bonds (or any other account party under the Reserve Account Letter of Credit). The obligation to reimburse the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit for any fees or expenses or claims or draws upon such Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be subordinate to the payment of debt service on the Bonds. The right of the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Account, and, subject to the second succeeding sentence of this paragraph, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Account. Each Reserve Account Insurance Policy and Reserve Account Letter of Credit shall provide for a revolving feature under which the amount available thereunder 25 will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the issuer of the Reserve Account Insurance Policy or Reserve Account Letter of Credit to reimbursement will be further subordinated to cash replenishment of the Reserve Account to an amount equal to the difference between the full original amount available under the Reserve Account Insurance Policy or Reserve Account Letter of Credit and the amount then available for further draws or claims. In the event (a) the issuer of a Reserve Account Insurance Policy or Reserve Account, Letter of Credit becomes insolvent, or (b) the issuer of a Reserve Account Insurance Policy or Reserve Account Letter of Credit defaults in its payment obligations thereunder, the obligation to reimburse the issuer of such Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be subordinate to the cash replenishment of the Reserve Account. In the event (a) the revolving reinstatement feature described in the preceding paragraph is suspended or terminated, or (b) the issuer of the Reserve. Account Insurance Policy or Reserve Account Letter of Credit defaults in its payment obligations hereunder, or (c) the issuer of the Reserve Account Insurance Policy or Reserve Account Letter of Credit becomes insolvent, the Issuer shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or Authorized Investments on deposit in the Reserve Account to equal the Reserve Account Requirement on all Outstanding Bonds, such amount to be paid over the ensuing year in equal installments on at least a monthly basis, or (ii) replace such instrument with a Reserve Account Insurance Policy or Reserve Account Letter of Credit meeting the requirements provided herein within six months of such occurrence. The amount available for draws or claims under the Reserve Account Insurance Policy or Reserve Account Letter of Credit may be reduced by the amount of cash or Authorized Investments deposited in the Reserve Account. Cash on deposit in the Reserve Account shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Account Insurance Policy or Reserve Account Letter of Credit. If and to the extent that more than one Reserve Account Insurance Policy or Reserve Account Letter of Credit is deposited in the Reserve Account, drawings thereunder and repayments of costs associated therewith shall be made on a pro rata basis, calculated by reference to the maximum amounts available thereunder. If a disbursement is made from a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit provided pursuant to this Section 4.05(B)(4), the Issuer shall reinstate the maximum limits of such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit immediately following such 26

272 C-58 disbursement from moneys received in accordance with the provisions of this Section 4.05(B)(4). If three (3) days prior to an interest payment or redemption date, the Issuer shan determine that a deficiency exists in the amount of moneys available to pay in accordance with the terms hereof interest and/or principal due on the Bonds on such date, the Issuer shall immediately notify (A) the issuer of the applicable Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit, and (B) the Insurer, if any, of the amount of such deficiency and the date on which such payment is due, and shall take all action to cause such Issuer or Insurer to provide moneys sufficient to pay all amounts due on such interest payment date. The Issuer may evidence its obligation to reimburse the issuer of any Reserve Account Letter of Credit or Reserve Account Insurance Policy by executing and delivering to such issuer a promissory note therefor, provided, however, any such note (a) shall not be a general obligation of the Issuer the payment of which is secured by the full faith and credit or taxing power of the Issuer, and (b) shall be payable solely from the Pledged Funds in the manner provided herein. Any consent or approval of any Insurer described in this Section 4.05(B)(4) shall be required only so long as there are Outstanding Bonds secured by a Bond Insurance Policy issued by such Insurer which is in full force and effect and the commitments of which have been honored by such Insurer. The tenn "Paying Agent" as used in this Section 4.05(B)( 4) may include one or more Paying Agents for the Outstanding Bonds. If any Reserve Account Letter of Credit or Reserve Account Insurance Policy shall tenninate prior to the stated expiration date thereof, the Issuer agrees that it shall fund the Reserve Account over a period not to exceed sixty (60) months during which it shall make consecutive equal monthly payments in order that the amount on deposit in the Reserve Account shall equal the Reserve Account Requirement; provided, the Issuer may obtain a new Reserve Account Letter of Credit or a new Reserve Account Insurance Policy in lieu of making the payments required by this paragraph. Whenever the amount of cash in the Reserve Account, together with the other amounts in the Debt Service Fund, are sufficient to fully pay all Outstanding Bonds in accordance with their terms (including principal or applicable Redemption Price and interest thereon), the funds on deposit in the Reserve 27 Account may be transferred to the other Accounts of the Debt Service. Fund for the payment of the Bonds. The Issuer may also establish a separate subaccount in the Reserve Account for any Series of Bonds and provide a pledge of such subaccount to the payment of such Series of Bonds apart from the pledge provided herein. To the extent a Series of Bonds is secured separately by a subaccount of the Reserve Account, the Holders of such Bonds shall not be secured by any other moneys in the Reserve Account. Moneys in a separate subaccount of the Reserve Account shaii be maintained at the Reserve Account Requirement applicable to such Series of Bonds secured by the subaccount unless otherwise provided by Supplemental Resolution. Moneys shall be deposited to the separate subaccounts in the Reserve Account on a pro-rata basis. In the event the Issuer shall maintain a Reserve Account Insurance Policy or Reserve Account Letter of Credit and moneys in such subaccount, the moneys shall be used prior to making any disbursements under such Reserve Account Insurance Policy or Reserve Account Letter of Credit. SECTION 16. GENERAL AUTHORITY. The members of the Board, the Chairman, the Vice-Chainnan, the County Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer, including Bond Counsel, Disclosure Counsel and Financial Advisor, are hereby authorized to do all acts and things required of them by this Supplemental Resolution, the Resolution, the Official Statement or the Bond Purchase Contract or desirable or consistent with the requirements hereof or the Resolution, the Official Statement or the Bond Purchase Contract for the full punctual and complete performance of an the terms, covenants and agreements contained herein or in the Series 2009A Bonds, the Resolution, the Official Statement and the Bond Purchase Contract and each member, employee, attorney and officer of the Issuer, the Chamnan, the Vice-Chairman, the County Manager and the Clerk is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. SECTION 17. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void arid shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Series 2009A Bonds. SECTION 18. CONFLICTS; RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Resolution and all the terms and provisions thereof are and shall remain in full force and effect; provided, however, that in 28

273 C-59 the event of a conflict between the terms of this Supplemental Resolution and the Resolution, the terms of this Supplemental Resolution shall govern. SECTION 19. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. (SEAL) ATTEST: County Clerk This Resolution duly adopted this 2 nd day of November, BOARD OF COUNTY COMMISSIONERS OSCEOLA COUNTY, FLORIDA 29 SUPPLEMENTAL BOND RESOLUTION NO R A RESOLUTION SUPPLEMENTING IN CERTAIN RESPECTS THE SALES TAX REVENUE REFUNDING BOND RESOLUTION ADOPTED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA ON DECEMBER 16, 1993 (AS HERETOFORE SUPPLEMENTED AND AMENDED), BY AUTHORIZING THE ISSUANCE OF (A) NOT EXCEEDING $67,500,000 IN INITIAL AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE BONDS, SERIES 2015A IN ORDER TO PROVIDE FUNDS, TOGETHER WITH OTHER AVAILABLE MONEYS, FOR THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A TECHNOLOGY RESEARCH AND DEVELOPMENT CENTER, FUND ANY REQUIRED RESERVES AND PAY COSTS ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS AND (B) NOT EXCEEDING $47,500,000 IN INITIAL AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE REFUNDING BONDS, SERIES 2015B IN ORDER TO PROVIDE FUNDS FOR ADVANCE REFUNDING A PORTION OF THE COUNTY'S OUTSTANDING SALES TAX REVENUE BONDS, SERIES 2009, FUND ANY REQUIRED RESERVES AND PAY COSTS ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS; PROVIDING CERTAIN TERMS AND DETAILS OF SUCH BONDS, INCLUDING AUTHORIZING A DELEGATED NEGOTIATED SALE OF SAID BONDS AND THE EXECUTION AND DELIVERY OF ONE OR MORE PURCHASE CONTRACTS WITH RESPECT THERETO; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND THE EXECUTION, DELIVERY AND DISTRIBUTION OF ONE OR MORE FINAL OFFICIAL STATEMENTS WITH RESPECT THERETO; APPROVING THE EXECUTION AND DELIVERY OF ONE OR MORE CONTINUING DISCLOSURE CERTIFICATES; APPROVING THE EXECUTION OF AN ESCROW DEPOSIT AGREEMENT; APPOINTING AN ESCROW AGENT; AUTHORIZING MUNICIPAL BOND INSURANCE FOR ALL OR A PORTION OF THE BONDS IF DEEMED FINANCIALL Y BENEFICIAL;

274 C-60 ESTABLISHING ONE OR MORE DEBT SERVICE RESERVE ACCOUNT SUBACCOUNTS FOR THE BONDS; MAKING CERTAIN REPRESENTATIONS AND COVENANTS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; PROVIDING GENERAL AUTHORITY AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA: SECTION 1. FINDINGS. It is hereby found and determined that: (A) On December 16, 1993, Osceola County, Florida (the "Issuer") duly adopted its Sales Tax Revenue Refunding Bond Resolution (as supplemented and amended, the "Resolution") authorizing the issuance of $6,345,000 aggregate principal amount of its Sales Tax Revenue Refunding Bonds, Series 1993 (the "Series 1993 Bonds"), for the purposes described therein, including, without limitation, for the purpose of advance refunding its Sales Tax Refunding Revenue Bonds, Series The Series 1993 Bonds have been paid in full. (B) The Resolution provides for the issuance of Additional Bonds (as defined in the Resolution), payable on a parity with the then Outstanding Bonds upon meeting certain requirements set forth in the Resolution. (C) On June 17, 1999 the Issuer issued an additional $54,435,000 aggregate principal amount of its Sales Tax Revenue Bonds, Series 1999 (the "Series 1999 Bonds") for the principal purpose of paying the cost of acquisition and construction of a new courthouse complex and improvements to its administrative facilities. The Series 1999 Bonds have been refunded in full, as set forth below. (D) On January 27, 2009, the Issuer issued an additional $48,735,000 aggregate principal amount of its Sales Tax Revenue Bonds, Series 2009 (the "Series 2009 Bonds") for the principal purpose of the acquisition, construction, expansion and improvements of transportation right-of-ways and stormwater facilities, the acquisition, construction and installation of an emergency operations center, the acquisition of firefighting equipment including vehicles and the acquisition of approximately one-half acre of real property contiguous to the County's Administrative Building and Courthouse. The Series 2009 Bonds are presently Outstanding in the amount of $44,060,000. (E) On March 25, 2010, the Issuer issued an additional $43,470,000 aggregate principal amount of its Sales Tax Revenue Refunding Bonds, Series 2010 (the "Series 2010 Bonds") for the principal purpose of currently refunding the Series 1999 Bonds. The Series 2010 Bonds are presently Outstanding in the amount of $32,920,000. (F) The Issuer now deems it to be in its best interest to issue its not exceeding $67,500,000 Sales Tax Revenue Bonds, Series 2015A (the "Series 2015A Bonds") for the principal purpose of the acquisition, construction and equipping of a technology research and development center (the "2015 Project"). The 2015 Project is more particularly described in Exhibit A attached hereto. (G) In order to achieve debt service savings, it is the desire of the Issuer to refund a portion of the Series 2009 Bonds (the Series 2009 Bonds being refunded are herein referred to as the "Refunded Series 2009 Bonds" and the Series 2009 Bonds not constituting Refunded Series 2009 Bonds are herein referred to as the "Outstanding Series 2009 Bonds"). The particular Series 2009 Bonds to be refunded shall be determined by the County Manager or his designee upon the advice of Public Financial Management, Inc., the Issuer's Financial Advisor. (H) In order to provide for the refunding of the Refunded Series 2009 Bonds, the Issuer now deems it to be in its best interest to issue its not exceeding $47,500,000 Sales Tax Revenue Refunding Bonds, Series 2015B (the "Series 2015B Bonds," and together with the Series 2015A Bonds, the "Bonds"). (1) All covenants, pledges and conditions in the Resolution shall be applicable to the Bonds herein authorized and said Bonds shall be on a parity with and shall rank equally as to lien on and source and security for payment from the Pledged Funds (as defined in the Resolution) with the Outstanding Series 2009 Bonds and the Outstanding Series 2010 Bonds, and shall constitute "Bonds" within the meaning of the Resolution; provided, that the Outstanding Series 2009 Bonds and the Outstanding Series 2010 Bonds are separately secured by separate Reserve Account Sub accounts established for each of such Series in accordance with Section 4.05(A)(4) of the Resolution. (1) The Issuer is not in default in performing any of the covenants, agreements or obligations under the Resolution and all payments required by the Resolution to be made to the funds and accounts established by the Resolution have been made to the full extent required to date. (K) The principal of and interest on the Bonds and all required sinking fund, reserve and other payments shall be limited obligations of the Issuer, payable solely from the Pledged Funds in the manner provided in the Resolution. The Bonds shall not constitute a general obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State of Florida, or any political subdivision or agency thereof, within the meaning of any constitutional or statutory provisions. Neither the State of Florida, nor any political subdivision or agency thereof, including the Issuer, shall be obligated (1) to exercise its ad valorem taxing power in any form on any real or personal property of or in the Issuer to pay the principal of the Bonds, the interest thereon, or other costs incidental thereto, or (2) to pay the same from any other funds of the Issuer except from the Pledged Funds in the manner provided herein and in the Resolution. 2 3

275 C-61 (L) Due to the current and potential volatility of the market for tax-exempt obligations such as the Bonds and the complexity of the transactions relating to such Bonds, it is in the best interest of the Issuer to sell the Bonds by a delegated negotiated sale, allowing the Issuer to enter the market at the most advantageous time or times, rather than at a specified advertised date or dates, thereby permitting the Issuer to obtain the best possible price and interest rate for the Bonds. (M) The Issuer anticipates receiving a favorable offer to purchase each Series of the Bonds from Raymond James & Associates, Inc. and the other underwriters named in the Purchase Contract(s) referred to below (collectively, the "Underwriter"), all within the parameters set forth in Section 6 hereof. (N) Inasmuch as the Issuer desires to sell the Bonds at the most advantageous time and not wait for a scheduled meeting of the Board of County Commissioners of Osceola County, Florida (the "Board"), so long as the herein described parameters are met, the Issuer hereby determines to delegate the award and sale of the Bonds to the Chairman of the Board within such parameters, and, in his absence or unavailability, to the Vice-Chairman of the Board and the County Manager; (0) The Resolution provides that Additional Bonds such as the Bonds shall mature on such dates and in such amounts, shall bear such rates of interest, shall be payable in such places and shall be subject to such redemption provisions as shall be determined by a Supplemental Resolution adopted by the Issuer; and it is now appropriate that the Issuer determine such terms and details. SECTION 2. DEFINITIONS. When used in this Supplemental Resolution, the terms defined in the Resolution shall have the meanings therein stated, except as such definitions shall be hereinafter amended and defined. SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION. This Supplemental Resolution is enacted pursuant to the provisions of the Resolution and the Act. SECTION 4. AUTHORIZATION OF THE 2015 PROJECT AND THE REFUNDING OF THE REFUNDED SERIES 2009 BONDS. The Issuer hereby authorizes the (i) acquisition, construction and equipping of the 2015 Project and the financing of all or a portion of the Cost thereof with the proceeds of the Series 2015A Bonds and (ii) refunding of the Refunded Series 2009 Bonds in order to achieve debt savings with the proceeds of the Series 2015B Bonds. SECTION 5. DESCRIPTION OF THE BONDS. (A) The Issuer has hereby determined pursuant to the Resolution to issue a Series of Bonds in the aggregate principal amount of not exceeding $67,500,000 to be known as the "Osceola County, Florida Sales Tax Revenue Bonds, Series 20 15A," for the purposes of providing moneys, together with other available funds, to (i) fund all or a portion of the Cost of acquisition, construction and equipping of the 2015 Project, (ii) fund any required reserves for the Series 20 15A Bonds, and (iii) pay costs associated with the issuance of the Series 2015A Bonds, including, if determined to be cost effective in accordance with the provisions hereof, the purchase of a Bond Insurance Policy securing the Series 20 15A Bonds, all in accordance with Sections 2.01 and 5.02 of the Resolution and Section 6 of this Supplemental Resolution. The exact initial aggregate principal amount of Series 2015A Bonds to be issued shall be determined by the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager in accordance with Section 6 hereof, provided such initial aggregate principal amount does not exceed $67,500,000. Said Series 2015A Bonds shall be dated their date of delivery (or other date as may be set forth in the hereinafter defined Purchase Contract for the Series 2015A Bonds), shall be issued in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letters "AR," shall be substantially in the form set forth in the Resolution, shall bear interest from their dated date, payable semi-annually, on October I and April I of each year (the "Interest Dates"), commencing on April 1, 2015, or such later date as provided in the Purchase Contract for the Series 20 15A Bonds. (B) The Issuer has hereby determined pursuant to the Resolution to issue a Series of Bonds in the aggregate principal amount of not exceeding $47,500,000 to be known as the "Osceola County, Florida Sales Tax Revenue Refunding Bonds, Series 20 15B," for the purposes of providing moneys, together with other available funds, to (i) advance refund the Refunded Bonds, (ii) fund any required reserves for the Series 2015B Bonds, and (iii) pay costs associated with the issuance of the Series 2015B Bonds, including, if determined to be cost effective in accordance with the provisions hereof, the purchase of a Bond Insurance Policy securing the Series 20 15B Bonds, all in accordance with Sections 2.01 and 5.02 of the Resolution and Section 6 of this Supplemental Resolution. The exact initial aggregate principal amount of Series 2015B Bonds to be issued shall be determined by the Chairman, or in his absence or unavailability, the Vice Chairman or County Manager in accordance with Section 6 hereof, provided such initial aggregate principal amount does not exceed $47,500,000. Said Series 2015B Bonds shall be dated their date of delivery (or other date as may be set forth in the hereinafter defined Purchase Contract for the Series 2015B Bonds), shall be issued in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letters "BR," shall be substantially in the form set forth in the Resolution, shall bear interest from their dated date, payable semi-annually, on October I and April I of each year (the "Interest Dates"), commencing on April 1, 2015, or such later date as provided in the Purchase Contract for the Series 20 15B Bonds. (C) The principal of, or Redemption Price, if applicable, on the Bonds is payable upon presentation and surrender of the Bonds at the office of the Paying Agent 4 5

276 C-62 and Registrar for the Bonds. Interest payable on any Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or at the prior written request and expense of such Holder, by bank wire transfer for the account of such Holder. All payments of principal of or Redemption Price, if applicable, and interest on the Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. (D) The Bonds shall bear interest at such rates and yields, shall mature on October 1 of each of the years and in the principal amounts corresponding to such years, and shall have such redemption provisions as determined by the Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, subject to the conditions set forth in Section 6 hereof. All of the terms of the Bonds will be included in one or more Purchase Contracts, which shall be in substantially the form attached hereto and made a part hereof as Exhibit B (herein collectively referred to as the "Purchase Contract"). The Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are each hereby authorized to execute the Purchase Contract in substantially the form attached hereto as Exhibit B with such modifications as he deems appropriate upon satisfaction of the conditions described in Section 6 hereof. (E) In the event that the Series 2015A Bonds and the Series 2015B Bonds are not issued at the same time, the Chairman, or in his absence or unavailability, the Vice Chairman and the County Manager are each hereby authorized to execute and deliver separate Purchase Contracts related to each such Series. SECTION 6. CONDITIONS TO ACCEPTANCE OF PURCHASE CONTRACT(S). The Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, shall not execute and deliver the Purchase Contract until such time as all of the following conditions have been satisfied: (A) Receipt by the Chairman, or in his absence or unavailability, the Vice Chairman or the County Manager, of a written offer to purchase the Series 20 15A Bonds by the Underwriter substantially in the form of the Purchase Contract attached hereto as Exhibit B, said offer to provide for, among other things, (i) not exceeding $67,500,000 initial aggregate principal amount of Series 2015A Bonds, (ii) an underwriting discount (including management fee and all expenses) not in excess of 0.50% of the par amount of the Series 2015A Bonds, (iii) a true interest cost of not more than 5.00% per annum, (iv) the maturities of the Series 2015A Bonds, with the final maturity being not later than October 1, 2045, (v) whether the Series 2015A Bonds are being sold with or without a Bond Insurance Policy and whether such insurance applies to all or a portion of the Series 2015A Bonds and (vi) whether a Reserve Account subaccount shall be established to secure the Series 20 15A Bonds and whether any such subaccount will be funded with the proceeds of the Series 2015A Bonds or a Reserve Account Insurance Policy. The determination of whether all or any portion of the Series 2015A Bonds are sold with or without such insurance products shall be made based upon the advice of Public Financial Management, Inc., the Issuer's Financial Advisor, and the Underwriter, which advice shall be based upon a determination of whether or not the payment of the premiums for such insurance is cost effective to the Issuer given then current market conditions for obligations such as the Series 20 15A Bonds. (B) Receipt by the Chairman, or in his absence or unavailability, the Vice Chairman or the County Manager, of a written offer to purchase the Series 2015B Bonds by the Underwriter substantially in the form of the Purchase Contract attached hereto as Exhibit B, said offer to provide for, among other things, (i) not exceeding $47,500,000 initial aggregate principal amount of Series 2015B Bonds, (ii) a present value debt savings of at least five percent (5%) of the par amount of the Refunded Series 2009 Bonds, (iii) the maturities of the Series 2015B Bonds, with the final maturity being not later than October 1, 2038, (iv) whether all or any portion of the Series 2015B Bonds are being sold with or without a Bond Insurance Policy and whether such insurance applies to all or a portion of the Series 2015B Bonds and (v) whether a Reserve Account subaccount shall be established to secure the Series 2015B Bonds and whether any such subaccount will be funded with the proceeds of the Series 2015B Bonds or a Reserve Account Insurance Policy. The determination of whether all or any portion of the Series 2015B Bonds are sold with or without such insurance products shall be made based upon the advice of Public Financial Management, Inc., the Issuer's Financial Advisor, and the Underwriter, which advice shall be based upon a determination of whether or not the payment of the premiums for such insurance is cost effective to the Issuer given then current market conditions for obligations such as the Series 2015B Bonds. (C) With respect to any redemption terms for the Bonds, the first call date may be no later than October 1, 2025 and no call premium may exceed 1 % of the par amount of that portion of the Bonds to be redeemed; provided, however, that the Issuer may issue noncallable Bonds in the event the Underwriter and the Issuer's Financial Advisor advise the Issuer that it is in its best interest to issue noncallable Bonds. Term Bonds may be established with such Amortization Installments as the Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, deem appropriate and as set forth in the Purchase Contract. (D) Receipt by the Chairman, or in his absence or unavailability, the Vice Chairman or the County Manager, of a disclosure statement and a truth-in-bonding statement of the Underwriter with the accepted bid complying with Section , Florida Statutes. Upon satisfaction of all of the requirements set forth in this Section 6, the Chairman, or in his absence or unavailability the Vice-Chairman and the County Manager, are each authorized to execute and deliver the Purchase Contract containing 6 7

277 C-63 terms complying with the provisions of this Section 6 and the Bonds shall be sold to the Underwriter pursuant to the provisions of such Purchase Contract, such execution and delivery to constitute conclusive evidence of the satisfaction of the requirements set forth in this Section 6. In the event the Series 2015A Bonds and the Series 2015B Bonds are not issued at the same time, separate Purchase Contracts may be delivered for each Series of Bonds as provided in Section 5(E) hereof. SECTION 7. FULL BOOK-ENTRY. Notwithstanding the provisions set forth in Section 2.08 of the Resolution, the Bonds shall be initially issued in the form of a separate single certificated fully registered Bond for each of the maturities of the Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). Except as provided in Section 2.08 of the Resolution, all of the outstanding Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., and all payments of principal on the Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Bonds, upon presentation of the Bonds to be paid to the Paying Agent. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the DTC book-entry program (the "Participants"). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation with respect to (A) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest on the Bonds, (B) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder, as shown in the registration books kept by the Registrar, of any amount with respect to principal of, redemption premium, if any, or interest on the Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal, redemption premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of, redemption premium, if any, and interest on of the Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal, redemption premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal, redemption premium, if any, and interest pursuant to the provisions of the Resolution. Upon delivery by DTC to the Issuer of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to transfers during the 15 days next preceding an Interest Date or mailing of notice of redemption, the words "Cede & Co." in this Supplemental Resolution shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent. Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation of the requirement that all of the Outstanding Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book-entry only system is burdensome to the Issuer, the Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee ofdtc, but may be registered in whatever name or names Holders shall designate, in accordance with the provisions of this Supplemental Resolution. In such event, the Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Bonds of like principal amount and maturity, in denominations of $5,000 or any integral multiple thereof, to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book-entry only system is discontinued, the provisions set forth in the Blanket Letter of Representation previously executed by the Issuer and delivered to DTC in order to induce DTC to act as securities depository for all issues by the Issuer, including the Bonds, shall apply to the payment of principal of and interest on the Bonds. SECTION 8. SECURITY FOR THE BONDS. Neither the Bonds nor the interest thereon shall be or constitute a general indebtedness of the Issuer within the meaning of any constitutional or statutory provision or limitation, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Funds in the manner provided herein and in the Resolution. The Holder of any Bond shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any property therein for payment thereof, or be entitled to payment of such principal and interest from any other funds of the Issuer, except from the Pledged Funds in the manner provided in the Resolution. Until payment has been provided for as permitted in the Resolution, the payment of the principal of and interest on the Bonds shall be secured 8 9

278 C-64 forthwith equally and ratably with the Outstanding Series 2009 Bonds, the Outstanding Series 2010 Bonds and any Additional Bonds issued under the Resolution by an irrevocable lien on the Pledged Funds, and the Issuer does hereby irrevocably pledge and grant a lien upon such Pledged Funds to the payment of the principal of and interest on the Bonds, the reserves therefor, and for all other required payment, all in accordance with the terms hereof. SECTION 9. APPLICATION OF BOND PROCEEDS. (A) The proceeds derived from the sale of the Series 20 15A Bonds (par, plus/minus original issue premium/discount and less Underwriters' discount) shall be applied by the Issuer simultaneously with the delivery thereof as follows: (1) An amount equal to any accrued or capitalized interest shall be deposited to the Interest Account of the Debt Service Fund established under the Resolution and shall be used to pay interest on the Series 20 15A Bonds on the first Interest Date(s) applicable thereto. (2) A sufficient amount of the Series 2015A Bond proceeds shall be deposited in the Construction Fund established under the Resolution and shall be used to pay Costs of the 2015 Project. (3) If required, an amount of the Series 2015A Bond proceeds equal to the Reserve Requirement for the Series 2015A Bonds shall be deposited in the Reserve Account Subaccount established pursuant to Section 13(A) hereof. (4) The remaining moneys shall be used to pay costs and expenses in connection with the preparation, issuance and sale of the Series 2015A Bonds, including, without limitation, the fees and expenses of accountants, attorneys and financial advisors, and the premiums for any Bond Insurance Policy related to the Series 20 15A Bonds. (B) The proceeds derived from the sale of the Series 2015B Bonds (par, plus/minus original issue premium/discount and less Underwriters' discount) shall be applied by the Issuer simultaneously with the delivery thereof as follows: (I) An amount equal to any accrued interest shall be deposited to the Interest Account of the Debt Service Fund established under the Resolution and shall be used to pay interest on the Series 2015B Bonds on the first Interest Date(s) applicable thereto. (2) A sufficient amount of Series 2015B Bond proceeds, together with other legally available moneys of the Issuer, shall be deposited irrevocably in trust in the escrow deposit trust fund (the "Escrow Fund") established under the terms and provisions of the hereinafter defined Escrow Deposit Agreement, and other than a cash deposit, shall be invested in United States Treasury obligations in the manner set forth in such Escrow Deposit Agreement, which investments shall mature at such times and in such amounts which, together with such cash deposit, shall be sufficient to pay the principal of, Redemption Price, if applicable, and interest on the Refunded Series 2009 Bonds as the same mature and become due and payable or are redeemed prior to maturity. (3) If required, an amount of the Series 2015B Bond proceeds equal to the Reserve Requirement for the Series 2015B Bonds shall be deposited in the Reserve Account Subaccount established pursuant to Section 13(A) hereof. (4) The remaining moneys shall be used to pay costs and expenses in connection with the preparation, issuance and sale of the Series 2015B Bonds, including, without limitation, the fees and expenses of accountants, attorneys and financial advisors, and the premiums for any Bond Insurance Policy related to the Series 20 15B Bonds. SECTION 10. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of a Preliminary Official Statement in substantially the form attached hereto as Exhibit C in connection with offering the Bonds for sale. If, between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, the Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are each hereby authorized to approve such insertions, changes and modifications. The Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are each hereby authorized to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12(b) under the Securities Exchange Act of 1934 (the "SEC Rule") in the form as mailed. Execution of a certificate by the Chairman, Vice-Chairman or County Manager deeming the Preliminary Official Statement "final" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. In the event the Series 2015A Bonds and the Series 2015B Bonds are not issued at the same time, separate Preliminary Official Statements may be delivered for each Series. SECTION 11. OFFICIAL STATEMENT; CONTINUING DISCLOSURE CERTIFICATE. (A) Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the execution and delivery of an Official Statement to be dated the dated date of the Purchase Contract, which shall be in substantially the form of the Preliminary Official Statement with such changes as are necessary to reflect the final terms of the Bonds, be and the same hereby is approved. The Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager are hereby authorized and directed to execute and deliver said Official Statement in the name and on behalf of the Issuer, and thereupon to cause such Official Statement to be delivered to the Underwriter with such changes, amendments, 10 11

279 C-65 modifications, omissions and additions as may be approved by the Chairman, or in his absence or unavailability, the Vice-Chairman and the County Manager. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman, or in his absence or unavailability, the Vice Chairman and the County Manager, and the information contained therein are hereby authorized to be used in connection with the sale of the Bonds to the public. Execution by the Chairman or the Vice-Chairman and the County Manager of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. In the event the Series 2015A Bonds and the Series 2015B Bonds are not issued at the same time, separate Official Statements may be delivered for each Series. (B) In order to enable the Underwriter to comply with the provisions of SEC Rule 15c2-12 relating to secondary market disclosure, the Chairman, or in his absence or unavailability, the Vice-Chairman and County Manager are each hereby authorized and directed to execute and deliver the Continuing Disclosure Certificate in the name and on behalf of the Issuer substantially in the form attached hereto as Exhibit D with such changes, amendments, omissions and additions as shall be approved by the Chairman, or in his absence or unavailability, the Vice-Chairman or the County Manager, his execution and delivery thereof being conclusive evidence of such approval. In the event the Series 2015A Bonds and the Series 2015B Bonds are not issued at the same time, separate Continuing Disclosure Certificates may be delivered for each Series. SECTION 12. APPOINTMENT OF PAYING AGENT AND REGISTRAR. U.S. Bank National Association, Orlando, Florida, is hereby designated Registrar and Paying Agent for the Bonds. The Chairman, or in his absence or unavailability, the Vice-Chairman and the Clerk are hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 12 and by the Resolution. SECTION 13. AUTHORIZATION TO EXECUTE ESCROW DEPOSIT AGREEMENT AND APPOINTMENT OF ESCROW AGENT. The Issuer hereby authorizes and directs the Chairman, or in this absence or unavailability, the Vice Chairman, and the County Manager to execute an escrow deposit agreement related to the refunding of the Refunded Series 2009 Bonds (the "Escrow Deposit Agreement") and to deliver the Escrow Deposit Agreement, substantially in the form attached hereto as Exhibit E to TD Bank, National Association, Cherry Hill, New Jersey, which is hereby appointed as escrow agent thereunder (the "Escrow Agent"). All of the provisions of the Escrow Deposit Agreement when executed and delivered by the Issuer as authorized herein and when duly authorized, executed and delivered by the Escrow Agent, shall be deemed to be a part of this Supplemental Resolution as fully and to the same extent as if incorporated verbatim herein, and the Escrow Deposit Agreement shall be in substantially the form of the Escrow Deposit Agreement attached hereto as Exhibit E with such changes, amendments, modifications, omissions and additions, including the date of such Escrow Deposit Agreement, as may be approved by said Chairman, or in this absence or unavailability, the Vice-Chairman and the County Manager. Execution by the Chairman or Vice-Chairman and the County Manager of the Escrow Deposit Agreement shall be deemed to be conclusive evidence of approval of such changes. The Chairman or Vice Chairman, the County Manager, Counsel to the Issuer, Bond Counsel, the Issuer's Financial Advisor and the Escrow Agent are hereby authorized and directed to execute, deliver and file, as the case may be, all documents necessary to (i) purchase or subscribe to the Escrow Securities (as defined in the Escrow Deposit Agreement) on behalf of the Issuer and (ii) obtain a verification report from a firm of independent certified accountants verifying the sufficiency of the maturing interest and principal, plus any cash deposit, of the Escrow Securities to pay the maturing principal of, premium, if any, and interest on the Refunded Series 2009 Bonds. SECTION 14. CREATION OF RESERVE ACCOUNT SUBACCOUNT(S). (A) There is hereby established within the Reserve Account a separate subaccount entitled "Osceola County, Florida Sales Tax Revenue Bonds, Series 2015AIB Reserve Account Subaccount" (the "Series 2015AIB Reserve Account Subaccount"). The Issuer shall hold the Series 2015AIB Reserve Account Subaccount as a separate trust account solely for the benefit and securing only the payment of debt service on the Bonds in accordance with Section 4.05(A)(4) of the Resolution. Notwithstanding the foregoing, in the event that the Issuer, upon the advice of the Underwriter and Public Financial Management, Inc., the Issuer's Financial Advisor, determines in accordance with Section 4.05(A)(4) of the Resolution that a funded Reserve Account Subaccount is not required for one or both Series of the Bonds, then no Reserve Account Subaccount shall be established for such Series. (B) Except as otherwise provided in the last sentence of Section 14(A) above, the Bond proceeds which shall be on deposit in the Series 2015AIB Reserve Account Subaccount upon delivery of the Bonds shall be in an amount equal to the Reserve Account Requirement for the Bonds. For purposes of such calculation, (i) the calculation shall be based solely on the proceeds of and debt service on the Bonds and (ii) the average annual debt service on the Bonds shall be calculated by the Issuer's Financial Advisor and the Underwriter in accordance with prevailing industry standards. As permitted by Section 4.05(A)( 4) of the Resolution, in lieu of depositing proceeds of the Bonds in the Series 2015AIB Reserve Account Subaccount, the Issuer may deposit therein a Reserve Account Insurance Policy equal to the Reserve Account Requirement applicable thereto. Each Authorized Issuer Officer is hereby authorized to execute a financial guaranty agreement with the issuer of any such Reserve Account Insurance Policy upon the advice of the Financial Advisor, Bond Counsel and County Attorney. The payment of any obligations of the Issuer under such an agreement shall be limited to the Pledged Funds in the manner and to the extent set forth in the Resolution

280 C-66 (C) In the event that the Series 2015A Bonds and the Series 2015B Bonds are not issued at the same time, except as otherwise provided in the last sentence of Section 14(A) above, there shall be established within the Reserve Account a separate subaccount for each such Series, bearing the designation of only such Series and securing only the corresponding Series of Bonds. All other provisions of this Section 14 shall apply to each of such separate subaccounts. SECTION 15. MUNICIPAL BOND INSURANCE; PROVISIONS RELATING TO BOND INSURANCE POLICY; PROVISIONS IN EFFECT DURING TERM OF BOND INSURANCE POLICY. (A) Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, if the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager determines, upon the advice of the Financial Advisor, that any portion of the Series 2015A Bonds or the Series 2015B Bonds will be insured by a Bond Insurance Policy securing all or any portion of such series of Bonds, the Issuer hereby authorizes the payment of the principal of and interest on all or any portion of the (i) Series 2015A Bonds and/or (ii) Series 2015B Bonds to be insured pursuant to a Bond Insurance Policy or Bond Insurance Policies (herein collectively referred to as the "Bond Insurance Policy") to be issued by Build America Mutual Assurance Company ("BAM"). For purposes of the Resolution and this Supplemental Resolution, BAM shall constitute the "Insurer" of any insured Bonds (herein referred to as the "Insured Bonds"). The Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager, are each hereby authorized to execute such documents and instruments necessary to cause BAM to insure the Insured Bonds. The right to consent to amendments to the Resolution or any Supplemental Resolution affecting any of the Insured Bonds shall be vested in BAM rather than the Holders of the Insured Bonds, so long as BAM shall not be in default in the due and punctual performance of its payment obligations under the Bond Insurance Policy. (B) If the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager determines that any portion of the Bonds will be insured by the Bond Insurance Policy, payment for the premium for such insurance is hereby authorized from proceeds of the Insured Bonds and the provisions of this Section 15 and Exhibit F hereto shall apply with respect to the Insured Bonds. If the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager determines that none of the Bonds are to be insured and the Bond Insurance Policy is not issued in connection with the Bonds, the provisions of this Section 15 and Exhibit F hereto will be deemed null and void and will be of no force or effect. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, so long as the Bond Insurance Policy issued by BAM is in full force and effect and BAM has not defaulted in its payment obligations under the Bond Insurance Policy, the Issuer agrees to comply with the provisions contained in Exhibit F hereto with respect to the Insured Bonds, notwithstanding anything in the Resolution or Supplemental Resolution to the contrary. (C) Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, if the Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager determines, upon the advice of the Financial Advisor, to fund any Reserve Account subaccount established pursuant to Section 14 hereof with a reserve account insurance policy or policies or surety bond or bonds from BAM (collectively, the "Reserve Account Insurance Policy"), the Issuer shall deposit to the applicable Reserve Account subaccount the Reserve Account Insurance Policy, the face amount of which shall be determined by the Chairman, or in his absence or unavailability, the Vice Chairman or County Manager upon the advice of the Financial Advisor. The Chairman, or in his absence or unavailability, the Vice-Chairman or County Manager, is authorized to enter into a Reserve Account Insurance Policy agreement or agreements (the "Insurance Agreement") in order to cause BAM to issue such Reserve Account Insurance Policy. Execution by the Chairman, or in his absence or unavailability, the Vice Chairman or County Manager shall be deemed conclusive evidence of the approval of such Agreement. The provisions of any such Insurance Agreement, when executed and delivered, shall be incorporated herein by reference and to the extent there are any conflicts between the Insurance Agreement and the Resolution or this Supplemental Resolution, the provisions of the Insurance Agreement shall control. The prior execution by the Issuer of the commitments previously issued by BAM with respect to the Bond Insurance Policy and the Reserve Account Insurance Policy is hereby ratified and approved. SECTION 16. GENERAL AUTHORITY. The members of the Board, the Chairman, the Vice-Chairman, the County Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Supplemental Resolution, the Resolution, the Official Statement or the Purchase Contract or desirable or consistent with the requirements hereof or the Resolution, the Official Statement or the Purchase Contract for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Bonds, the Resolution, the Official Statement, the Purchase Contract and the Escrow Deposit Agreement, and each member, employee, attorney and officer of the Issuer, the Chairman, the Vice-Chairman, the County Manager and the Clerk is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. For purposes of this Supplemental Resolution, the term "Chairman" shall include the Vice-Chairman and the term "Clerk" shall include any designated Deputy Clerk. SECTION 17. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be 14 15

281 held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Bonds. SECTION 18. CONFLICTS; RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Resolution and all the terms and provisions thereof are and shall remain in full force and effect; provided, however, that in the event of a conflict between the terms of this Supplemental Resolution and the Resolution, the terms of this Supplemental Resolution shall govern. EXHIBIT A DESCRIPTION OF 2015 PROJECT Acquisition, construction and equipping of a technology research and development center, including necessary site work and specialized equipment for research and development, to be owned by the Issuer and leased to the University of Central Florida. SECTION 19. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. This Resolution duly adopted this 9th day of February, BOARD OF COUNTY COMMISSIONERS OSCEOLA COUNTY, FLORIDA C-67 By: ATTEST: ~---- County Clerk 16

282 EXHIBITB EXHIBITC FORM OF PURCHASE CONTRACT FORM OF PRELIMINARY OFFICIAL STATEMENT [Intentionally Omitted] [Intentionally Omitted] C-68

283 EXHIBITD EXHIBITE FORM OF CONTINUING DISCLOSURE CERTIFICATE FORM OF ESCROW DEPOSIT AGREEMENT [Intentionally Omitted] [Intentionally Omitted] C-69

284 C-70 EXHIBITF INSURANCE PROVISIONS FOR BUILD AMERICA MUTUAL ASSURANCE COMPANY Unless otherwise defined in this EXHIBIT F, capitalized terms used herein shall have the meanings ascribed thereto in the resolution to which it is attached or the Sales Tax Revenue Refunding Bond Resolution duly adopted by Osceola County, Florida (the "Issuer") on December 16, 1993, as supplemented and amended (the "Resolution"), unless the context indicates another meaning. (A) Notice and Other Information to be given to BAM. The Issuer will provide Build America Mutual Assurance Company ("BAM") with all notices and other information it is obligated to provide (l) under its Continuing Disclosure Certificate, and (2) to the holders of Insured Bonds or the Paying Agent under the Resolution. The notice address of BAM is: Build America Mutual Assurance Company, 1 World Financial Center, 27th Floor, 200 Liberty Street, New York, NY 10281, Attention: Surveillance, Re: Policy No., Telephone: (212) , Telecopier: (212) , notices@buildamerica.com. In each case in which notice or other communication refers to an event of default or a claim on the Bond Insurance Policy, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel at the same address and at claims@buildamerica.com or at Telecopier: (212) and shall be marked to indicate "URGENT MATERIAL ENCLOSED." (B) Defeasance. The investments in the defeasance escrow shall be limited to non-callable, direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, or otherwise be approved by BAM. At least five (5) Business Days prior to any defeasance, the Issuer shall deliver to BAM copies of an escrow agreement, opinions regarding the validity and enforceability of the escrow agreement, a verification report (a "Verification Report") of a nationally recognized independent financial analyst or firm of certified public accountants regarding sufficiency of the escrow and a defeasance legal opinion. Such opinions and Verification Report shall be addressed to BAM and shall be in form and substance satisfactory to BAM. In addition, the escrow agreement shall provide that: (1) Any substitution of securities shall require the delivery of a Verification Report, an opinion of bond counsel that such substitution will not adversely affect the exclusion (if interest on the Insured Bonds is excludable) from gross income of the holders of the Insured Bonds of the interest on the Insured Bonds for federal income tax purposes and the prior written consent of BAM. (2) The Issuer will not exercise any prior optional redemption ofinsured Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (a) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (b) as a condition to any such redemption there shall be provided to BAM a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following any such redemption. (3) The Issuer shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of BAM. (C) Paying Agent. (1) BAM shall receive prior written notice of any name change of the Paying Agent for the Insured Bonds or the resignation or removal of the Paying Agent. Any Paying Agent must be (a) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, (b) a state-chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets, or (c) otherwise approved by BAM in writing. (2) No removal, resignation or termination of the Paying Agent shall take effect until a successor, acceptable to BAM, shall be qualified and appointed. (D) Amendments, Supplements and Consents. Any amendment, supplement, modification to, or waiver of, the Resolution that requires the consent of holders of the Insured Bonds or adversely affects the rights or interests of BAM shall be subject to the prior written consent of BAM. The Issuer shall send copies of any such amendments or supplements to BAM and the rating agencies which have assigned a rating to the Insured Bonds. In addition to the consents above, the consent of BAM shall be required as noted below. (l) Consent of BAM in the Event of Insolvency. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to BAM in writing. In the event of any reorganization or liquidation of the Issuer, BAM shall have the right to vote on behalf of all holders of the Insured Bonds absent a continuing failure by BAM to make a payment under the Bond Insurance Policy. F-l F-2

285 C-71 (2) Consent of BAM Upon Default. Anything in the Resolution to the contrary notwithstanding, upon the occurrence and continuance of a default or an event of default under the Resolution, BAM shall be entitled to control and direct the enforcement of all rights and remedies granted to the holders of the Insured Bonds or the Paying Agent for the benefit of the holders of the Insured Bonds under the Resolution. Neither the Issuer nor the Paying Agent may waive any default or event of default without BAM's written consent. (3) BAM as Owner. Upon the occurrence and continuance of a default or an event of default under the Resolution, BAM shall be deemed to be the sole owner of the Insured Bonds for all purposes under the Resolution, including, without limitations, for purposes of exercising remedies and approving amendments. (4) Grace Period for Payment Defaults. No grace period shall be permitted for payment defaults on the Insured Bonds. No grace period for a covenant default shall exceed 30 days without the prior written consent of BAM. (5) Special Provisions for Insurer Default. If an Insurer Default (as defined below) shall occur and be continuing under the Bond Insurance Policy, then, notwithstanding anything in paragraphs (D)(l)-(4) above to the contrary, (a) if at any time prior to or following an Insurer Default, BAM has made payment under the Bond Insurance Policy, to the extent of such payment BAM shall be treated like any other holder of the Insured Bonds for all purposes, including giving of consents, and (b) if BAM has not made any payment under the Bond Insurance Policy, BAM shall have no further consent rights until the particular Insurer Default is no longer continuing or BAM makes a payment under the Bond Insurance Policy, in which event, the foregoing clause (a) shall control. For purposes of this paragraph (5), "Insurer Default" means: (i) BAM has failed to make any payment under the Bond Insurance Policy when due and owing in accordance with its terms; (ii) BAM shall (A) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (B) consent to the institution of or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party or for a substantial part of its property, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors, or (F) take action for the purpose of effecting any of the foregoing; or (iii) any state or federal agency or instrumentality shall order the suspension of payments on the Bond Insurance Policy or shall obtain an order or grant approval for the rehabilitation, liquidation, conservation or dissolution of BAM (including without limitation under the New York Insurance Law). (E) BAM As Third Party Beneficiary. BAM is recognized as and shall be deemed to be a third party beneficiary of the Resolution and may enforce the provisions of the Resolution as if it were a party thereto. (F) Payment Procedure Under the Bond Insurance Policy. In the event that principal and/or interest due on the Insured Bonds shall be paid by BAM pursuant to the Bond Insurance Policy, the Insured Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of BAM, and BAM shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Bonds. In the event that on the second (2nd) Business Day prior to any payment date on the Insured Bonds, the Issuer reasonably believes it shall not have sufficient moneys to pay all principal of and interest on the Insured Bonds due on such payment date, the Issuer shall immediately notify BAM or its designee on the same Business Day by telephone or electronic mail, of the amount of the expected deficiency. If any deficiency is made up in whole or in part prior to or on the payment date, the Issuer or the Paying shall so notify BAM or its designee. In addition, if the Paying Agent has notice that any holder of the Insured Bonds has been required to disgorge payments of principal of or interest on the Insured Bonds pursuant to a final, non-appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy law, then the Paying Agent shall notify BAM or its designee of such fact by telephone or electronic mail, or by overnight or other delivery service as to which a delivery receipt is signed by a person authorized to accept delivery on behalf of BAM. The Paying Agent shall irrevocably be designated, appointed, directed and authorized to act as attorney-in-fact for holders of the Insured Bonds as follows: (l) If there is a deficiency in amounts required to pay interest and/or principal on the Insured Bonds, the Paying Agent shall (a) execute and deliver to BAM, in form satisfactory to BAM, an instrument appointing BAM as agent and attorney-in-fact for such holders of the Insured Bonds in any legal proceeding related to the payment and assignment to BAM of the claims for interest on the Insured Bonds, (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from BAM with respect to the claims for interest so assigned, and (c) disburse the same to such respective holders; and F-3 F-4

286 C-72 (2) If there is a deficiency in amounts required to pay principal of the Insured Bonds, the Paying Agent shall (a) execute and deliver to BAM, in form satisfactory to BAM, an instrument appointing BAM as agent and attorney-in-fact for such holder of the Insured Bonds in any legal proceeding related to the payment of such principal and an assignment to BAM of the Insured Bonds surrendered to BAM, (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment therefore from BAM, and (c) disburse the same to such holders. The Paying Agent shall designate any portion of payment of principal on the Insured Bonds paid by BAM, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Insured Bonds registered to the then current holder, whether DTC or its nominee or otherwise, and shall issue a replacement Insured Bond to BAM, registered in the name directed by BAM, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Insured Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Insured Bond or the subrogation or assignment rights of BAM. Payments with respect to claims for interest on and principal of Insured Bonds disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the Issuer with respect to such Insured Bonds, and BAM shall become the owner of such unpaid Insured Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of the preceding paragraphs or otherwise. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent agree for the benefit of BAM that: (l) They recognize that to the extent BAM makes payments directly or indirectly (e.g., by paying through the Paying Agent), on account of principal of or interest on the Insured Bonds, BAM will be subrogated to the rights of such holders to receive the amount of such principal and interest from the Issuer, with interest thereon, as provided and solely from the sources stated in the transaction documents and the Insured Bonds; and (2) They will accordingly pay to BAM the amount of such principal and interest, with interest thereon as provided in the transaction documents and the Insured Bonds, but only from the sources and in the manner provided therein for the payment of principal of and interest on the Insured Bonds to holders, and will otherwise treat BAM as the owner of such rights to the amount of such principal and interest. (0) Additional Payments. The Issuer agrees unconditionally that it will payor reimburse BAM on demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that BAM may payor incur, including, but not limited to, fees and expenses of BAM's agents, attorneys, accountants, consultants, appraisers and auditors and reasonable costs of investigations, in connection with the administration (including waivers and consents, if any), enforcement, defense, exercise or preservation of any rights and remedies in respect of the Resolution ("Administrative Costs"). For purposes of the foregoing, costs and expenses shall include a reasonable allocation of compensation and overhead attributable to the time of employees of BAM spent in connection with the actions described in the preceding sentence. The Issuer agrees that failure to pay any Administrative Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate (as defined below), compounded semi-annually, from the date that payment is first due to BAM until the date BAM is paid in full. Notwithstanding anything herein to the contrary, the Issuer agrees to pay to BAM (1) a sum equal to the total of all amounts paid by BAM under the Bond Insurance Policy ("BAM Policy Payment"); and (2) interest on such BAM Policy Payments from the date paid by BAM until payment thereof in full by the Issuer, payable to BAM at the Late Payment Rate per annum (collectively, "BAM Reimbursement Amounts") compounded semi-annually. The Issuer hereby covenants and agrees that the BAM Reimbursement Amounts are secured by a lien on and pledge of the Pledged Funds and payable from such Pledged Funds on a parity with debt service due on the Insured Bonds. "Late Payment Rate" means the lesser of (1) the greater of (A) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank, N.A., at its principal office in The City of New York, New York, as its prime or base lending rate ("Prime Rate") (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank, N.A.) plus 3%, and (B) the then applicable highest rate of interest on the Insured Bonds, and (2) the maximum rate permissible under applicable usury or similar laws limiting interest rates. In the event JPMorgan Chase Bank, N.A., ceases to announce its Prime Rate, the Prime Rate shall be the prime or base lending rate of such other bank, banking association or trust company as BAM, in its sole and absolute discretion, shall designate. Interest at the Late Payment Rate on any amount owing to BAM shall be computed on the basis of the actual number of days elapsed in a year of360 days. (H) Exercise of Rights by BAM. The rights granted to BAM under the Resolution to request, consent to or direct any action are rights granted to BAM in consideration of its issuance of the Bond Insurance Policy. Any exercise by BAM of such rights is merely an exercise of the BAM's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the holders of the Insured Bonds and such action does not evidence any position of BAM, affirmative or F-5 F-6

287 C-73 negative, as to whether the consent of the holders of the Insured Bonds or any other person is required in addition to the consent of BAM. BAM shall be entitled to pay principal or interest on the Insured Bonds that shall become Due for Payment (as such terms are defined in the Bond Insurance Policy) but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Bond Insurance Policy) and any amounts due on the Insured Bonds as a result of acceleration of the maturity thereof in accordance with the Resolution, whether or not BAM has received a claim upon the Bond Insurance Policy. AMENDING BOND RESOLUTION NO R A RESOLUTION AMENDING IN CERTAIN RESPECTS AND REAFIRMING AND RATIFYING IN ALL OTHER RESPECTS A RESOLUTION ADOPTED BY THE BOARD OF COUNTY COMMISSIONERS ON FEBRUARY 9, 2015 AND ENTITLED: A RESOLUTION SUPPLEMENTING IN CERTAIN RESPECTS THE SALES TAX REVENUE REFUNDING BOND RESOLUTION ADOPTED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA ON DECEMBER 16, 1993 (AS HERETOFORE SUPPLEMENTED AND AMENDED), BY AUTHORIZING THE ISSUANCE OF (A) NOT EXCEEDING $67,500,000 IN INITIAL AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE BONDS, SERIES 2015A IN ORDER TO PROVIDE FUNDS, TOGETHER WITH OTHER AVAILABLE MONEYS, FOR THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A TECHNOLOGY RESEARCH AND DEVELOPMENT CENTER, FUND ANY REQUIRED RESERVES AND PAY COSTS ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS AND (B) NOT EXCEEDING $47,500,000 IN INITIAL AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE REFUNDING BONDS, SERIES 2015B IN ORDER TO PROVIDE FUNDS FOR ADVANCE REFUNDING A PORTION OF THE COUNTY'S OUTSTANDING SALES TAX REVENUE BONDS, SERIES 2009, FUND ANY REQUIRED RESERVES AND PAY COSTS ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS; PROVIDING CERTAIN TERMS AND DETAILS OF SUCH BONDS, INCLUDING AUTHORIZING A DELEGATED NEGOTIATED SALE OF SAID BONDS AND THE EXECUTION AND DELIVERY OF ONE OR MORE PURCHASE CONTRACTS WITH RESPECT THERETO; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND THE EXECUTION, DELIVERY AND DISTRIBUTION OF ONE OR MORE FINAL OFFICIAL STATEMENTS WITH RESPECT THERETO; APPROVING THE EXECUTION AND DRAFT #2: 2/5/ B2 F-7

288 C-74 DELIVERY OF ONE OR MORE CONTINUING DISCLOSURE CERTIFICATES; APPROVING THE EXECUTION OF AN ESCROW DEPOSIT AGREEMENT; APPOINTING AN ESCROW AGENT; AUTHORIZING MUNICIPAL BOND INSURANCE FOR ALL OR A PORTION OF THE BONDS IF DEEMED FINANCIALLY BENEFICIAL; ESTABLISHING ONE OR MORE DEBT SERVICE RESERVE ACCOUNT SUBACCOUNTS FOR THE BONDS; MAKING CERTAIN REPRESENTATIONS AND COVENANTS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; PROVIDING GENERAL AUTHORITY AND PROVIDING AN EFFECTIVE DATE; AMENDING THE DESIGNATION OF THE SERIES 2015B BONDS IN SAID RESOLUTION AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA: SECTION 1. FINDINGS. It is hereby found and determined that: (A) On February 9, 2015, Osceola County, Florida (the "Issuer") duly adopted Supplemental Bond Resolution No R (the "Supplemental Resolution") supplementing the Sales Tax Revenue Bond Resolution adopted by the Issuer on December 16, 1993 (the Master Indenture ), authorizing, among other things, the issuance of (1) not exceeding $67,500,000 in initial aggregate principal amount of Sales Tax Revenue Bonds, Series 2015A (the "Series 2015A Bonds") for the purposes described therein and (2) not exceeding $47,500,000 in initial aggregate principal amount of Sales Tax Revenue Refunding Bonds, Series 2015B (the "Series 2015B Bonds") for the purposes described therein, including without limitation, for the purpose of advance refunding a portion of its outstanding Sales Tax Revenue Bonds, Series (B) The Supplemental Resolution provides for the possibility that the Series 2015A Bonds and the Series 2015B Bonds would be issued at different times. On March 26, 2015, the Issuer issued the Series 2015A Bonds. Due to fluctuating market conditions at the time of issuance of the Series 2015A Bonds, the issuance of the Series 2015B Bonds did not meet the minimum refunding savings criteria established for the issuance of the Series 2015B Bonds in the Supplemental Resolution. Due to a change in market conditions (including the reduction of negative arbitrage in the refunding escrow), the refunding of all or a portion of the Issuer s Sales Tax Revenue Bonds, Series 2009 through the issuance of Sales Tax Revenue Refunding Bonds in 2016 may satisfy the minimum savings requirements set forth in the Supplemental Resolution. Since such Sales Tax Revenue Refunding Bonds will be issued in 2016, it is necessary to amend the 2 designation of the Series 2015B Bonds in the Supplemental Resolution to reflect the year of issuance and to reaffirm and ratify the other approvals of the Issuer set forth in the Supplemental Resolution related to the issuance of the Series 2015B Bonds. (C) The Issuer is not in default in performing any of the covenants, agreements or obligations under the Master Resolution and all payments required by the Master Resolution to be made to the funds and accounts established by the Master Resolution have been made to the full extent required to date. SECTION 2. DEFINITIONS. When used in this Amending Resolution, the terms defined in the Master Resolution or the Supplemental Resolution shall have the meanings therein stated, except as such definitions shall be hereinafter amended and defined. SECTION 3. AUTHORITY FOR THIS RESOLUTION. This Amending Resolution is enacted pursuant to the provisions of the Master Resolution and the Act. SECTION 4. AMENDMENT TO DESIGNATION OF SERIES 2015B BONDS; RATIFICATION OF OTHER TERMS OF SUPPLEMENTAL RESOLUTION. The Series 2015B Bonds, as authorized by the Supplemental Resolution, shall be designated as "Sales Tax Revenue Refunding Bonds, Series 2016A" or as such other designation set forth in the Purchase Contract related to such Series. All other terms of the Series 2015B Bonds and conditions as to the issuance of such Bonds as set forth in the Supplemental Resolution are hereby ratified and confirmed. SECTION 5. GENERAL AUTHORITY. The members of the Board, the Chairman, the Vice-Chairman, the County Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Amending Resolution or the Supplemental Resolution, or desirable or consistent with the requirements hereof or of the Supplemental Resolution, for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Resolution and each member, employee, attorney and officer of the Issuer, the Chairman, the Vice-Chairman, the County Manager and the Clerk is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder and under the Supplemental Resolution, as amended hereby. For purposes of this Amending Resolution, the term "Chairman" shall include the Vice-Chairman and the term "Clerk" shall include any designated Deputy Clerk. SECTION 6. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though 3

289 not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Supplemental Resolution. SECTION 7. CONFLICTS; SUPPLEMENTAL RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Supplemental Resolution and all the terms and provisions thereof are and shall remain in full force and effect; provided, however, that in the event of a conflict between the terms of this Amending Resolution and the Supplemental Resolution, the terms of this Amending Resolution shall govern. SECTION 8. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption. This Resolution duly adopted this 1st day of February, (SEAL) BOARD OF COUNTY COMMISSIONERS OSCEOLA COUNTY, FLORIDA C-75 By: Chairman [THIS PAGE INTENTIONALLY LEFT BLANK] ATTEST: County Clerk 4

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291 APPENDIX D FORM OF BOND COUNSEL OPINION

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293 APPENDIX D FORM OF OPINION OF NABORS, GIBLIN & NICKERSON, P.A. WITH RESPECT TO THE SERIES 2016A BONDS Upon delivery of the Series 2016A Bonds in definitive form, Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, proposes to render its opinion with respect to such Series 2016A Bonds in substantially the following form: (Closing Date) Board of County Commissioners of Osceola County, Florida Kissimmee, Florida Commissioners: We have examined a record of proceedings relating to the issuance of $39,465,000 Sales Tax Revenue Refunding Bonds, Series 2016A (the "Series 2016A Bonds") of Osceola County, Florida (the "County"). The Series 2016A Bonds are issued under the authority of the Laws of the State of Florida, including, particularly, Chapter 125, Florida Statutes, Chapter 212, Florida Statutes, Chapter 218, Part VI, Florida Statutes and other applicable provisions of law, and pursuant to a Sales Tax Revenue Refunding Bond Resolution duly adopted by the Board of County Commissioners of the County (the "Board") on December 16, 1993, as amended and supplemented from time to time, and particularly as supplemented by Supplemental Bond Resolution No R adopted by the Board on February 9, 2015, as amended by Supplemental Bond Resolution No R adopted by the Board on February 1, 2016 (collectively, the "Resolution"). The Series 2016A Bonds are dated and shall bear interest from their date of delivery, except as otherwise provided in the Resolution. The Series 2016A Bonds will mature on the dates and in the principal amounts and will bear interest at the respective rates per annum, as provided in the Resolution and set forth in the Purchase Contract executed in connection with the sale of the Series 2016A Bonds (the "Purchase Contract"). Interest on the Series 2016A Bonds shall be payable on each April 1 and October 1, commencing on October 1, The Series 2016A Bonds are subject to redemption prior to maturity in accordance with the Resolution and as set forth in the Purchase Contract. D-1

294 Board of County Commissioners of Osceola County, Florida Page 2 (Closing Date) The Series 2016A Bonds are issued for the principal purposes of (1) advance refunding the County's Sales Tax Revenue Bonds, Series 2009 maturing on and after October 1, 2019 (the "Refunded Bonds"), and (2) paying costs associated with the issuance of the Series 2016A Bonds, as more particularly described in the Resolution. Certain proceeds of the Series 2016A Bonds shall be deposited into an escrow deposit trust fund (the "Escrow Fund") established pursuant to the Escrow Deposit Agreement between the County and TD Bank, National Association, and invested in direct obligations of the United States of America (the "Escrow Securities"), such that the principal of and interest on said Escrow Securities shall be sufficient to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, as the same become due or are redeemed prior to maturity. As to questions of fact material to our opinion, we have relied upon the representations of the County contained in the Resolution and in the certified proceedings relating thereto and to the issuance of the Series 2016A Bonds and other certifications of public officials furnished to us in connection therewith, without undertaking to verify the same by independent investigation. Furthermore, we have assumed continuing compliance with the covenants and agreements contained in the Resolution. We have not undertaken an independent audit, examination, investigation or inspection of the matters described or contained in any agreements, documents, certificates, representations and opinions relating to the Series 2016A Bonds, and have relied solely on the facts, estimates and circumstances described and set forth therein. In our examination of the foregoing, we have assumed the genuineness of signatures on all documents and instruments, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. Based on the foregoing, under existing law, we are of the opinion that: 1. The County is a duly created and validly existing political subdivision of the State of Florida. 2. The County has the right and power under the Constitution and Laws of the State of Florida to adopt the Resolution and the Resolution has been duly and lawfully adopted by the County, is in full force and effect in accordance with its terms and is valid and binding upon the County and enforceable in accordance with its terms, and no other authorization for the Resolution is required. The Resolution creates the valid pledge which it purports to create of the Pledged Funds (as such term is defined in the Resolution), subject to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the Resolution. D-2

295 Board of County Commissioners of Osceola County, Florida Page 3 (Closing Date) 3. The County is duly authorized and entitled to issue the Series 2016A Bonds, and the Series 2016A Bonds have been duly and validly authorized and issued by the County in accordance with the Constitution and Laws of the State of Florida and the Resolution. The Series 2016A Bonds constitute valid and binding obligations of the County as provided in the Resolution and are enforceable in accordance with their terms and the terms of the Resolution and are entitled to the benefits of the Resolution and the laws pursuant to which they are issued. The Series 2016A Bonds shall be issued on parity under the Resolution with certain other Bonds (as defined in the Resolution) issued and outstanding under the Resolution, to the extent and except as provided in the Resolution. The Series 2016A Bonds do not constitute a general indebtedness of the County or the State of Florida or any agency, department or political subdivision thereof, or a pledge of the faith and credit of such entities, but are solely payable from the Pledged Funds in the manner and to the extent provided in the Resolution. No holder of the Series 2016A Bonds shall ever have the right to compel the exercise of any ad valorem taxing power of the County or the State of Florida or any political subdivision, agency or department thereof to pay the Series 2016A Bonds. 4. Under existing statutes, regulations, rulings and court decisions, the interest on the Series 2016A Bonds (a) is excluded from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, it should be noted that with respect to certain corporations, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the County comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Series 2016A Bonds in order that interest thereon be (or continues to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Series 2016A Bonds to be so included in gross income retroactive to the date of issuance of the Series 2016A Bonds. The County has covenanted in the Resolution to comply with all such requirements. Ownership of the Series 2016A Bonds may result in collateral federal tax consequences to certain taxpayers. We express no opinion regarding such federal tax consequences arising with respect to the Series 2016A Bonds. In rendering the opinions set forth above, we are relying upon (a) the arithmetical accuracy of certain computations included in schedules provided by Public Financial Management, Inc., relating to the computations of projected receipts of the Escrow Securities and any other amounts deposited in the Escrow Fund, of the adequacy of such projected receipts and other sums to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, and of the yield on the Series 2016A Bonds and on D-3

296 Board of County Commissioners of Osceola County, Florida Page 4 (Closing Date) the Escrow Securities, and (b) the verifications of the arithmetical accuracy of such computations by Robert Thomas, CPA, LLC. It should be noted that, except as may expressly be set forth in an opinion delivered by us to the underwriters for the Series 2016A Bonds on the date hereof (on which opinion only they may rely), we have not been engaged or undertaken to review (1) the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Series 2016A Bonds and we express no opinion relating thereto, or (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2016A Bonds and we express no opinion relating thereto. The opinions expressed in paragraphs 2 and 3 hereof are qualified to the extent that the enforceability of the Resolution and the Series 2016A Bonds may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles of equity. The opinions set forth herein are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the United States of America. The only opinions rendered hereby shall be those expressly stated as such herein, and no opinion shall be implied or inferred as a result of anything contained herein or omitted herefrom. This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. We have examined the form of the Series 2016A Bonds and, in our opinion, the form of the Series 2016A Bonds is regular and proper. Respectfully submitted, D-4

297 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE

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299 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by Osceola County, Florida (the "Issuer") in connection with the issuance of its $39,465,000 aggregate principal amount of the Osceola County, Florida Sales Tax Revenue Refunding Bonds, Series 2016A (the "Series 2016A Bonds"). The Series 2016A Bonds are being issued pursuant to the Sales Tax Revenue Refunding Bond Resolution adopted by the Board of County Commissioners of the Issuer (the "Board") on December 16, 1993, as amended and supplemented from time to time, as particularly amended by Resolution No R adopted by the Board on December 8, 2008 and Resolution No R adopted by the Board on November 2, 2009, and as particularly supplemented by Resolution No R adopted by the Board on February 9, 2015, as amended by Resolution No R adopted by the Board on February 1, 2016 (collectively, the "Resolution"). SECTION 1. PURPOSE OF THE DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders and Beneficial Owners (defined below) of the Series 2016A Bonds and in order to assist the Participating Underwriters in complying with the continuing disclosure requirements of the Rule (defined below). SECTION 2. DEFINITIONS. In addition to the definitions set forth in the Resolution which apply to any capitalized term used in this Disclosure Certificate, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2016A Bonds (including persons holding Series 2016A Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2016A Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access web portal of the MSRB, located at "Event of Bankruptcy" shall be considered to have occurred when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. E-1

300 "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Obligated Person" shall mean any person, including the Issuer, who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Series 2016A Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity or credit facilities). "Participating Underwriters" shall mean the original underwriters of the Series 2016A Bonds required to comply with the Rule in connection with the offering of the Series 2016A Bonds. "Repository" shall mean each entity authorized and approved by the Securities and Exchange Commission from time to time to act as a repository for purposes of complying with the Rule. As of the date hereof, the Repository recognized by the Securities and Exchange Commission for such purpose is the MSRB, which currently accepts continuing disclosure submissions through EMMA. "Rule" shall mean the continuing disclosure requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Florida. SECTION 3. PROVISION OF ANNUAL REPORTS. (a) The Issuer shall, or shall cause the Dissemination Agent to, by not later than April 30 th following the end of the prior fiscal year, beginning with the fiscal year ending September 30, 2015 with respect to the report for the fiscal year, provide to any Repository, in electronic format as prescribed by such Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date provided, further, in such event unaudited financial statements are required to be delivered as part of the Annual Report in accordance with Section 4(a) below. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) If on the fifteenth (15th) day prior to the annual filing date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Issuer by telephone and in writing (which may be by ) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 3(a). Upon such reminder, the Issuer shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Report no later than two (2) business days prior to the annual filing date, or (ii) instruct the Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Agreement, state the date by which the Annual Report for such year will be provided and instruct the Dissemination Agent that a failure to file has occurred and to immediately send a notice to the Repository in substantially the form attached as E-2

301 Exhibit A, accompanied by a cover sheet completed by the Dissemination Agent in the form set forth in Exhibit B. (c) The Dissemination Agent shall: (i) (ii) determine each year prior to the date for providing the Annual Report the name and address of any Repository; if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing any Repository to which it was provided; and (iii) if the Dissemination Agent has not received an Annual Report by 6:00 p.m. Eastern time on the annual filing date (or, if such annual filing date falls on a Saturday, Sunday or holiday, then the first business day thereafter) for the Annual Report, a failure to file shall have occurred and the Issuer irrevocably directs the Dissemination Agent to immediately send a notice to the Repository in substantially the form attached as Exhibit A without reference to the anticipated filing date for the Annual Report, accompanied by a cover sheet completed by the Dissemination Agent in the form set forth in Exhibit B. SECTION 4. CONTENT OF ANNUAL REPORTS. The Issuer's Annual Report shall contain or include by reference the following: (a) the audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement dated March 16, 2016 (the "Official Statement"), and the audited financial statements shall be filed in the same manner as the Annual Report when they become available; and (b) updates of information set forth in the Official Statement relating to the caption entitled "SALES TAX REVENUES" and "PRO-FORMA DEBT SERVICE COVERAGE." The information provided under Section 4(b) may be included by specific reference to documents, including official statements of debt issues of the Issuer or related public entities, which are available to the public on the Repository's Internet Web site or filed with the Securities and Exchange Commission. The Issuer reserves the right to modify from time to time the specific types of information provided in its Annual Report or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the Issuer; provided that the Issuer agrees that any such modification will be done in a manner consistent with the Rule. E-3

302 SECTION 5. REPORTING OF SIGNIFICANT EVENTS. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Series 2016A Bonds. Such notice shall be given in a timely manner not in excess of ten (10) business days after the occurrence of the event, with the exception of the event described in number 15 below, which notice shall be given in a timely manner: 1. principal and interest payment delinquencies; 2. non-payment related defaults, if material; 3. unscheduled draws on debt service reserves reflecting financial difficulties; 4. unscheduled draws on credit enhancements reflecting financial difficulties; 5. substitution of credit or liquidity providers, or their failure to perform; 6. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Series 2016A Bonds, or other material events affecting the tax status of the Series 2016A Bonds; 7. modifications to rights of the holders of the Series 2016A Bonds, if material; 8. Series 2016A Bond calls, if material, and tender offers; 9. defeasances; 10. release, substitution, or sale of property securing repayment of the Series 2016A Bonds, if material; 11. ratings changes; 12. an Event of Bankruptcy or similar event of an Obligated Person; 13. the consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. appointment of a successor or additional trustee or the change of name of a trustee, if material; and E-4

303 15. notice of any failure on the part of the Issuer to meet the requirements of Section 3 hereof. (b) The notice required to be given in paragraph 5(a) above shall be filed with any Repository, in electronic format as prescribed by such Repository. SECTION 6. IDENTIFYING INFORMATION. In accordance with the Rule, all disclosure filings submitted pursuant to this Disclosure Certificate to any Repository must be accompanied by identifying information as prescribed by the Repository. Such information may include, but not be limited to: (a) (b) (c) (d) (e) (f) the category of information being provided; the period covered by any annual financial information, financial statement or other financial information or operation data; the issues or specific securities to which such documents are related (including CUSIPs, issuer name, state, issue description/securities name, dated date, maturity date, and/or coupon rate); the name of any Obligated Person other than the Issuer; the name and date of the document being submitted; and contact information for the submitter. SECTION 7. TERMINATION OF REPORTING OBLIGATION. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2016A Bonds, so long as there is no remaining liability of the Issuer, or if the Rule is repealed or no longer in effect. If such termination occurs prior to the final maturity of the Series 2016A Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 8. DISSEMINATION AGENT. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Digital Assurance Certification, L.L.C. SECTION 9. AMENDMENT; WAIVER. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Series 2016A Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and E-5

304 (c) The amendment or waiver either (i) is approved by the holders or Beneficial Owners of the Series 2016A Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of holders or Beneficial Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or Beneficial Owners of the Series 2016A Bonds. Notwithstanding the foregoing, the Issuer shall have the right to adopt amendments to this Disclosure Certificate necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. DEFAULT. The continuing disclosure obligations of the Issuer set forth herein constitute a contract with the holders of the Series 2016A Bonds. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any holder or Beneficial Owner of the Series 2016A Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate; provided, however, the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with the provisions of this Disclosure Certificate shall be an action to compel performance. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution. [Remainder of page intentionally left blank] E-6

305 SECTION 12. DUTIES, IMMUNITIES AND LIABILITIES OF DISSEMINATION AGENT. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series 2016A Bonds. SECTION 13. BENEFICIARIES. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and holders and Beneficial Owners from time to time of the Series 2016A Bonds, and shall create no rights in any other person or entity. Dated as of April 21, 2016 OSCEOLA COUNTY, FLORIDA (SEAL) ATTEST: By: Name: Viviana Janer Title: Chairwoman, Board of County Commissioners By: Name: Donald S. Fisher Title: County Manager/Clerk to the Board of County Commissioners of Osceola County E-7

306 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Issuer: Obligated Person: Name(s) of Bond Issue(s): Date(s) of Issuance: Date(s) of Disclosure Agreement: CUSIP Number: NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate between the Issuer and Digital Assurance Certification, L.L.C., as Dissemination Agent. The Issuer has notified the Dissemination Agent that it anticipates that the Annual Report will be filed by. Dated: Digital Assurance Certification, L.L.C., as Dissemination Agent, on behalf of the Issuer cc: E-8

307 EXHIBIT B EVENT NOTICE COVER SHEET This cover sheet and accompanying "event notice" will be sent to the MSRB, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer s and/or Other Obligated Person s Name: Issuer s Six-Digit CUSIP Number: or Nine-Digit CUSIP Number(s) of the bonds to which this event notice relates: Number of pages attached: Description of Notice Events (Check One): 1. "Principal and interest payment delinquencies;" 2. "Non-Payment related defaults, if material;" 3. "Unscheduled draws on debt service reserves reflecting financial difficulties;" 4. "Unscheduled draws on credit enhancements reflecting financial difficulties;" 5. "Substitution of credit or liquidity providers, or their failure to perform;" 6. "Adverse tax opinions, IRS notices or events affecting the tax status of the security;" 7. "Modifications to rights of securities holders, if material;" 8. "Bond calls, if material;" 9. "Defeasances;" 10. "Release, substitution, or sale of property securing repayment of the securities, if material;" 11. "Rating changes;" 12. "Tender offers;" 13. "Bankruptcy, insolvency, receivership or similar event of the obligated person;" 14. "Merger, consolidation, or acquisition of the obligated person, if material;" and 15. "Appointment of a successor or additional trustee, or the change of name of a trustee, if material." Failure to provide annual financial information as required. I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Title: Date: Digital Assurance Certification, L.L.C. 390 N. Orange Avenue Suite 1750 Orlando, FL E-9

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312 OSCEOLA COUNTY, FLORIDA Sales Tax Revenue Refunding Bonds, Series 2016A