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Summary:Indian River County, Florida; General Obligation Very strong management In our opinion, Indian River County's management conditions are very strong with"strong"financial management practices under our FMA methodology,indicating practices are strong,well embedded, and likely sustainable. Highlights include management's: • Conservative budgetary assumptions with monthly budget-to-actual reports to the county board and expenditure adjustments made as necessary; • Five-year financial and capital improvement plans,updated at least annually;and • Formal general,transportation,and emergency services district reserve funds,as well as a general fund budget stabilization reserve. The county also has a formal investment policy. Very strong budgetary flexibility In our opinion,with available reserves at 50.9%of operating expenditures in fiscal 2013,budgetary flexibility is very strong.Unaudited fiscal 2014 results show a general fund surplus of slightly more than$2 million. Management believes it will produce another slight surplus in fiscal 2015.Therefore,we expect available fund balance to remain more than 30%of expenditures,which we view as a credit strength.We believe the county has the flexibility to raise taxes if financial pressure were to occur.The county has a 10-mill cap,and the millage rate was just 3.256 mills in fiscal 2014. Very strong liquidity What we consider very strong liquidity supports Indian River County's finances with available cash at 157%of total governmental funds expenditures and 31.3x DSC. Based on past debt issuances,including the frequency and type of debt issuance,we believe the county has exceptional access to capital markets to provide liquidity,if necessary. Adequate budgetary performance In our opinion,overall budgetary performance is adequate with deficits of 5%for the general fund and 7%for total governmental funds in fiscal 2013.Unaudited fiscal 2014 results show surpluses of 2.3%for the general fund and 0.9% for total governmental funds.The county does not currently have any additional debt plans.Management currently believes it will finish fiscal 2015 with a slight general fund surplus,and we recognize it is too early to project how the county will perform in total governmental funds. Very strong debt and contingent liabilities In our view,Indian River County's debt and contingent liabilities profile is very strong. Net direct debt is 22.2%of total governmental funds revenue,and debt service is 5%of total governmental funds expenditures.We consider principal debt amortization rapid with officials planning to retire approximately 96%over 10 years.In our opinion,the net-debt-to-market-value ratio is a low 0.9%,which we consider a positive credit factor. In fiscal 2013,the county contributed 100%of its annual required pension contribution.The combined annual pension and other postemployment benefits cost accounted for 6%of total governmental expenditures in fiscal 2013. Strong Institutional Framework We consider the Institutional Framework score for Florida counties strong. W WW.STANDARDANDPOORS.COM/RATINGSDIRECT DECEMBER 12,2014 3 I V7,1,53 1 3022929 O 23