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FitchRatings <br />FITCH AFFIRMS INDIAN RIVER COUNTY, FL WATER <br />& SEWER REVS AT 'AAA'; OUTLOOK STABLE <br />Fitch Ratings -Austin -22 December 2016: Fitch Ratings has affirmed the rating on the following <br />Indian River County, FL (the county) revenue bonds at 'AAA': <br />--$17.6 million water and sewer system revenue refunding bonds, series 2009. <br />The Rating Outlook is Stable. <br />SECURITY <br />The bonds are supported by the net revenues of the county's water and sewer system (the system). <br />KEY RATING DRIVERS <br />EXCELLENT FINANCIAL PROFILE: The system has produced over 2.0x debt service coverage <br />(DSC) for the past five years and has maintained excellent liquidity. Unaudited fiscal 2016 results <br />show 4.2x Fitch -calculated DSC and over $43 million in unrestricted available cash on hand <br />(approximately 870 days). <br />LIMITED CAPITAL NEEDS, LOW DEBT: The system's capital improvement program (CIP) is <br />limited and primarily addresses renewal and replacement (R&R) projects. Following the call of <br />certain debt obligations in 2015, debt levels are expected to decline further. <br />AFFORDABLE AND FLEXIBLE RATE STRUCTURE: The system has not had to increase rates <br />since 1999 due to low population growth and wide operating margins. Though it has no plans ta do <br />so in the foreseeable future, the system is authorized to impose consumer price index adjustments <br />if necessary. <br />STRONG AND CONSERVATIVE FINANCIAL PLANNING: Management has demonstrated <br />consistent financial and capital planning, and is conservative in their financial projections and <br />budgeting practices. <br />RATING SENSITIVITIES <br />MAINTENANCE OF STRONG FINANCIAL POSITION: Indian River County, Florida water <br />and sewer system's very strong underlying credit fundamentals, which include strong financial <br />performance, limited and rapidly amortizing debt and limited capital needs, support the 'AAA' <br />rating. A significant decline in one or more of these strong attributes could result in downward <br />rating pressure. <br />CREDIT PROFILE <br />Indian River County (Issuer Default Rating 'AAA') is located on Florida's central Atlantic coast <br />about 86 miles southeast of the city of Orlando. The county covers nearly 500 square miles and has <br />a population of nearly 148,000. The economy is supported by construction, manufacturing, health <br />care, tourism, educational services, retail, and distribution. <br />STRONG CURRENT AND FUTURE FINANCIAL PROFILE <br />P5 <br />