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prior. Fitch notes that although this rate is higher than that of the State(8.7%) and nation(8.1%), 29 consecutive months of employment growth bodes well for the local economy. Home foreclosure rates continue to increase. However, due to the county's strict bill collection enforcement, delinquency rates are very low, and Fitch does not expect a significant impact to revenues. ABUNDANT WATER SUPPLY & SOUND INFRASTRUCTURE The county's water and sewer system provides services to a mostly residential customer base of approximately 44,500 water, and 26,000 sewer accounts as of 2012. There is no customer concentration, and despite recent economic and housing market weakness, the county's mostly residential customer base has been relatively stable. Water is supplied through various groundwater wells from the Floridan Aquifer, with treatment provided by one of two county-owned treatment facilities. The treatment plants have a combined 22.5 million gallons per day (mgd) of treatment capacity, which is more than sufficient to meet the system's average daily demand in 2012 of 8.6 mgd. Water use is regulated by the St. Johns Water Management District through a consumptive use permit that expires in 2031. Management believes current supply sources will be capable of meeting the county's long-term demand through at least 2030. Wastewater is treated at one of four regional treatment plants, with a combined current treatment capacity of 12.9 mgd. Average daily flow for the system is just 4.5 mgd, leaving plenty of treatment capacity to meet future growth. Effluent is treated to 100% re-use standards, and as a result the county does not expect to face significant capital or other regulator,, compliance costs related to numeric nutrient mandates for effluent discharged into local surface water. STRONG CURRENT&FUTURE FINANCIAL PROFILE The system's financial performance has been historically solid, with 2.Ox debt service coverage (DSC) consistently since 2009. The county's conservative management maintains this level of coverage despite continuously growing liquidity in an effort to guarantee available cash for unforeseen system needs. Unaudited results for fiscal 2012 show DSC of 2.1x, and Fitch and management predict DSC will stay around this level into the future. Operating expenses are forecasted to stay flat in the five year outlook, while revenues and unrestricted cash balances continue to grow. As such, liquidity is extremely strong, with the system ending fiscal 2012 with more than $38 million in unrestricted cash, equivalent to 887 days of operating expenses on hand. DEBT OUTLOOK POSITIVE The system's low debt profile is a credit strength. Debt per customer is just $650 in 2012, well below average compared to other similarly rated systems. Debt to net plant is also low at just 21%, and debt amortization is well above average with 100% of outstanding bonds retired within 15 years. With a modest $11.8 million capital program spread across the next four years, the county's debt profile is expected to improve even more than current levels. Furthermore, management has indicated that it will spend $15 million in cash to redeem a portion of its outstanding callable debt in 2015, reducing its overall burden going forward by 32%. LOW RATES GOOD FOR ECONOMIC RECOVERY The average residential customer bill of$60 for combined service assuming 7,000 gallons of use is affordable at 1.6% of median household income. Rates should stay competitive as the county has a very manageable capital program that is expected to be funded with cash and connection fees.Rates have not been raised since 1999, and though management has no plans to raise them in the financial forecast, it is entitled to do so per a rate resolution should the necessity arise. Contact: 49