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5 <br /> 1 Moody's Qualitative Factors <br /> 2 Moody's <br /> 3 • On January 15, 2014, Moody's updated its US Local Governments General Obligation <br /> 4 Debt methodology and assumptions. <br /> 5 • Under the new methodology, an initial indicative rating is calculated from a weighted <br /> 6 average of four key factors: <br /> 7 • Below the line qualitative adjustments can be made based upon certain factors. <br /> 8 <br /> 9 Rating Agency Methodology Updates <br /> 10 S&P <br /> 11 • On September 12, 2013, Standard & Poor's updated its US Local Governments General <br /> 12 Obligation Ratings methodology and assumptions. <br /> 13 • Under the new methodology, an initial indicative rating is calculated from a weighted <br /> 14 average of seven key factors: <br /> 15 • Up to a one-notch adjustment can be made from the indicative rating based on other <br /> 16 qualitative factors. <br /> 17 • US Local Governments General Obligation Ratings Methodology - graph <br /> 18 Fitch <br /> 19 • On April 18, 2016, Fitch updated its US Tax-Supported Rating Criteria. <br /> 20 • Under the new methodology, Fitch has identified four key rating factors that play a <br /> 21 significant role in driving the rating outcome for a given issuer in the context of its <br /> 22 economic base: <br /> 23 • The factors cover both the institutional framework in which an issuer operates, which <br /> 24 varies by level and location of government, and performance within that framework. <br /> 25 • Fitch publishes specific rating category evaluations for each factor, with analysis <br /> 26 focused on long-term trends and expectations. <br /> 27 • Key Ratings Factors - graph <br /> 28 <br /> 29 Debt Policy Overview <br /> 30 County Policies- page 8 <br /> 31 • The County Board adopted a series of financial policy guidelines on April 5, 2011, <br /> 32 including: <br /> 33 — A Cash Management and Investment Policy. <br /> 34 — A General Fund Balance Policy: <br /> 35 o The County will strive to maintain an unassigned fund balance in the <br /> 36 General Fund of 17% percent of budgeted general fund operating <br /> 37 expenditures each fiscal year. The amount of unassigned fund <br /> 38 balance maintained during each fiscal year should not fall below 8% <br /> 39 percent of budgeted general fund operating expenditures, as <br /> 40 recommended by the North Carolina Local Government Commission. <br /> 41 — Tax Supported Debt Policies: <br /> 42 o The County will maintain its net bonded debt at a level not to exceed <br /> 43 3% percent of the assessed valuation of taxable property within the <br /> 44 County. <br /> 45 o The County will strive to maintain its annual debt service costs at a <br /> 46 level no greater than 15% percent of general fund revenues, including <br /> 47 installment purchase debt. This is a recommended "best practice" <br /> 48 from the Government Finance Officers Association. <br /> 49 <br /> 50 Summary of Existing Financial Policies - graph - page 9 <br />