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FitchRatings Fitch Affirms Indian River County (FL)'s Spring Training Revs and IDR; Outlook Stable Fitch Ratings -New York -26 March 2019: Fitch Ratings has affirmed the following ratings on Indian River County, FL: —Long -Term Issuer Default Rating (IDR) at 'AAA'; —Approximately $5.7 million spring training facility revenue bonds, series 2001 at'AA+'. The Rating Outlook is Stable. SECURITY The spring training facility revenue bonds are limited obligations of the county, secured by a first lien on a statutory annual distribution of funds from the State of Florida general revenue fund for new or retained professional sports facilities, and proceeds from the fourth -cent tourist development tax (TDT) levied by the county and 86% of the local govemment half -cent sales tax distributed to the county by the state. The lien on the TDT and half - cent sales tax is automatically released as of April 1, 2021 (10 years before the final maturity date of the bonds of April 1, 2031). The bonds are additionally secured by a cash -funded reserve equal to maximum annual debt service (MADS). IDR ANALYTICAL CONCLUSION The 'AAA' IDR reflects the county's exceptional financial resilience including its superior budget flexibility and high reserves in relation to expected revenue volatility through the economic cycle. The rating also considers the county's very low long-term debt and retiree benefit liabilities. DEDICATED TAX ANALYTICAL CONCLUSION The 'AA+' rating on the spring training facility revenue bonds is based on Fitch's dedicated tax analysis and the structures resilience to pledged revenues through the economic cycle. Debt service coverage is currently very high and provides significant protection against historical revenue stress and declines via the Fitch Analytical Sensitivity Tool under a moderate economic downturn scenario. The rating also reflects Fitch's expectation that pledged revenues will not be leveraged to the 1.25x ABT, which could otherwise pressure the rating. Growth prospects for the TDT and half -cent sales tax are modest based upon expectations for population and economic growth within the county over time. Upon the release of the TDT and half -cent sales tax, the bonds will only be payable from the statutory payment from the state's general revenue fund, the creditworthiness of which Fitch views as equivalent to one -notch below the state IDR. Given the release of the TDT and half -cent sales tax prior to final maturity of the bonds, Fitch caps the rating at one -notch below the state IDR. The rating is also capped at the IDR on the county, as the pledged revenues do not meet the requirements set out in Fitch criteria for treatment as "pledged special revenue" under section 902(2) of the bankruptcy code and are not otherwise insulated from the operating risk of the county. (SEE BELOW FOR DEDICATED TAX ANALYSIS) Economic Summary Indian River County is located on the Atlantic coastline, approximately 135 miles north of Miami, and includes the cities of Vero Beach and Sebastian. The county's population has shown steady growth with a 2017 census estimate of 154,383, up almost 12% since 2010. IDR KEY RATING DRIVERS Revenue Framework: 'aa' Fitch expects revenues to rise at a slow pace but one that exceeds historical trends over the last decade, driven by growth in population and economic development. The county has considerable legal revenue raising ability with current millage rates well below the 10 -mill statutory limit. Expenditure Framework: 'aa' The county's pace of spending is expected to be in line with or marginally above revenue trends in the absence of policy action. Carrying costs for debt and retiree liabilities are moderately low despite recent large increases in contributions to the state -administered Florida Retirement System (FRS) the county participates in. Long -Term Liability Burden: 'aaa' County debt and pension benefit liabilities are very low, estimated at below 3% of personal income. Liabilities are expected to remain low based on the county's participation in FRS, absence of additional debt issuance plans and very rapid repayment of outstanding debt. Operating Performance: 'aaa' Fitch expects the county will continue to demonstrate a high level of financial resilience and gap -closing ability throughout economic cycles based on its high reserves, superior budget flexibility, and prudent financial management record. 6