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Operating Performance: 'aaa' factor assessment The county's reserves have remained very high during and after the great recession, benefitting from the county's superior budget flexibility. Fitch expects the county will continue to maintain solid operations and gap -closing ability through economic cycles. RATING SENSITIVITIES LONG-TERM LIABILITIES: The rating is sensitive to a significant growth in long-term liabilities relative to total spending. SPRING TRAINING FACILITY BONDS: The rating is sensitive to a material change in coverage resulting from additional leverage or a shift in the performance of pledged sales tax and/or TDT revenues. Furthermore, the rating is sensitive to changes in the credit quality of the state of Florida ('AAA' IDR with a Stable Outlook), with respect to pledged revenues related to the annual distribution of funds for professional sports facilities; due to the nature of this pledge, the bonds cannot be rated higher than one notch below the state's IDR. The rating assumes limited leverage of pledged revenues. Borrowing outside of this expectation would pressure the rating. CREDIT PROFILE The local economy of Indian River County is traditionally centered on agriculture and tourism, although it has diversified with an increased presence of health care and information technology, light manufacturing, wholesale and retail trade and service sector jobs. County home values endured steep declines during the recession and have notably recovered but remain below the 2006 peak. Assessed values have experienced similar declines during the recession (about 3011/o from 2008 through 2013) and have also exhibited similar expansion in recent years. The county's unemployment rate has improved considerably but still exceeds the state and the U.S average. The tourism sector continues to strengthen, with tourist development taxes up by 19% in fiscal 2015 attributable to an increase in visitors. The county's population is considerably .older than the state and national averages, with above average income levels. Revenue Framework Property tax revenues are the county's largest revenue source, comprising 56% of general fund revenues in fiscal 2015. Property tax revenues experienced significant declines during the recession, due to the significant reduction in home values and state property tax reform. The county raised rates in 2009 and 2010 to offset the revenue decline. The county's historical general fund revenue growth has lagged both U.S. GDP and inflation increases since 1999, due to the severe impact of the great recession and housing market decline in the state of Florida as well as the state property tax reform. Growth prospects are somewhat more positive, driven by continued population growth and development. The county has ample legal revenue raising authority as the current millage is well below the property tax cap of 10 mills. The adopted tax rate for fiscal 2016 was 3.3602 mills. Annual changes in the property tax rate are determined using a rolled -back or revenue neutral rate, which is then adjusted for changes in Florida's per capita personal income. However, this limitation may be overridden by vote of the county governing body. The county also has the ability to increase various license and permit revenues and service charges that make up a smaller but still notable portion of its revenue base. Expenditure Framework The county maintains solid expenditure flexibility with moderate carrying costs. Public safety is the largest spending item, with fiscal 2015 outlays comprising 48% of total general fund 6