OREANDA-NEWS. Fitch Ratings affirms the following bonds:

--$16.9 million Sarasota County, Florida second guaranteed entitlement (SGE) revenue bonds, series 2013 at 'AA+';

--Implied general obligations (GOs) at 'AAA'.

The Rating Outlook is Stable.

SECURITY

The bonds are payable solely from Sarasota County's SGE portion of the Florida Revenue Sharing Trust Fund for Counties (RSTFC).

KEY RATING DRIVERS

RATING CAP: The rating is capped by the lower of the county GO rating of 'AAA' or one notch below the state GO rating. The state is rated 'AAA' (see 'Fitch Rates Florida's $308MM GO Refunding Bonds 'AAA'; Outlook Stable', dated Aug. 11, 2015).

REMOTE RISK FOR PAYMENT ALTERATIONS: The rating incorporates the risk, albeit remote, that the state could alter the statute that provides for the allocation of this payment to the county.

COUNTY CREDIT CHARACTERISTICS: Credit characteristics of the county include superior financial management, generally modest debt structure and a diverse and growing economic base.

STATE CREDIT CHARACTERISTICS: The 'AAA' rating on Florida's GO bonds recognizes the state's strong financial management practices, moderate debt burden, adequately funded pension system, solid long-term economic prospects, and satisfactory reserves. The Stable Outlook reflects the established trend of economic stability and continued positive financial performance.

RATING SENSITIVITIES

CONTINUED STRONG CREDIT CHARACTERISTICS: Negative rating action on the state or more than a one-notch downgrade of the county would lead to negative rating action on the security.

CREDIT PROFILE

Sarasota County is located in southwest Florida, along the Gulf of Mexico. Encompassing 563 square miles, the county is 50 miles south of Tampa. Four municipalities are situated within the county, including the City of Sarasota, the largest city and county seat. Population growth was extremely rapid between 1950 and 2000 averaging over 2% annually. Since then, growth has levelled off but remains steady. The county's estimated 2014 population of 390,429 represents a 2.9% increase since 2010.

PLEDGED FUND COMPOSITION

SGE revenues are derived by state statute from an allocation of the RSTFC which is comprised of state cigarette and sales and use taxes. SGE revenues are distributed to eligible counties at no less than the aggregate amount the county received in fiscal 1982, less first guaranteed entitlement revenues (FGE). FGE revenues constitute no less than the aggregate amount a county received for certain cigarette and sales and use taxes in fiscal 1972. Tax revenues received by the county from the RSTFC in excess of FGE and SGE revenues may not be assigned for debt service.

STATE REVENUE SOURCE

The county receives an annual fixed $1.15 million distribution of SGE revenues. The revenues are collected by Florida Department of Revenue.

Coverage of maximum annual debt service (MADS) by the $1.15 million distribution is only slightly greater than 1.0 times (x), as is typical of debt issued by Florida local governments that is secured by fixed state distributions. Since the distribution is generated from a much larger pool of revenue, low coverage is not a credit concern for Fitch. Additional debt is unlikely, as the additional bonds test requires pledged revenues to equal 1.1x MADS on all outstanding and proposed debt. There is no debt service reserve fund.

EXCELLENT COUNTY CREDIT CHARACTERISTICS

The county's implied unlimited tax GO (ULTGO) rating of 'AAA' reflects the county's superior financial management, diverse and growing economic base and generally modest debt structure.

The county's finances are characterized by robust reserve levels, conservative budgeting practices and ample liquidity. The county has spent down a portion of its large reserves in each of the previous three fiscal years to supplement the loss of property tax revenues due to the recession. Fiscal 2014 closed with a healthy fund balance of 42.8% of expenditures or $106.4 million, down from 62.4% in fiscal 2011. For fiscal 2015, the county originally budgeted a $40 million drawdown of reserves but is currently expecting to close the year with a much smaller drawdown of less than $2 million due to conservative budgeting and unexpected one-time revenues. Similarly, the fiscal 2016 proposed budget includes a $41 million fund balance appropriation.

Employment continues to expand at a healthy pace sustaining the positive trends which began in 2011. Other indicators such as sales tax growth and an uptick in home prices are also indicative of strengthening economic activity.

Debt levels are relatively modest with total debt to market value at 1.2% and debt per capita of $1,604. Debt service carrying costs represent a modest 7% of government fund expenditures. Retirement liabilities do not represent a significant cost pressure. Total carrying costs, including other post-employment benefits (OPEB) and required contributions to pension plans total 12.2% of governmental spending.

For more information see 'Fitch Rates Sarasota County, FL's Sales Surtax Bonds 'AA+'; Outlook Stable', dated Sept. 14, 2014.