���������ֳ�

���������ֳ�-New York-03 April 2017: ���������ֳ� has taken the following actions as regards the Village of Pinecrest, Florida's ratings:

--$2.9 million Florida Municipal Loan Council revenue bonds series 2011B (Village of Pinecrest series) upgraded to 'AA+' from 'AA';
--Issuer Default Rating (IDR) upgraded to 'AAA' from 'AA+'.

The Rating Outlook is Stable.

SECURITY
The bonds are limited obligations of the Florida Municipal Loan Council (FMLC), which served as conduit issuer for the bonds. The bonds are payable solely from loan payments equal to debt service made by the village pursuant to a loan agreement between the FMLC and the village. Under the terms of the agreement, the village covenants to budget and appropriate (CB&A) in its annual budget, by amendment if necessary, available non-ad valorem (NAV) revenues in amounts sufficient to satisfy its obligations under the loan agreement (i.e. cover debt service). The availability of NAV revenue is subject to the prior payment of essential governmental expenditures.

The FMLC in its role as issuer has assigned and pledged all of its right, title and interest in and to the loan agreement, including its right to receive loan prepayments from the village, to the trustee for the benefit of the bondholders.

KEY RATING DRIVERS

���������ֳ�'s upgrade of the IDR to 'AAA' and the rating of the village's NAV revenue bonds to 'AA+' from 'AA' reflects the application of ���������ֳ�'s revised rating criteria for U.S. tax-supported bonds. In particular, the use of scenario analysis under the new criteria highlights the village's exceptional financial resilience. The new criteria also highlight the village's revenue system, which has proven resilient to economic cycles in the absence of policy action. The ratings reflect the village's strong gap-closing capacity, ample revenue-raising authority and very low long-term liability burden. The ratings are also supported by the village's solid degree of spending flexibility and affluent economic base, the latter of which is likely to benefit from continued development and rising personal income.

Economic Resource Base
The Village of Pinecrest, Florida is an affluent residential community located in Miami-Dade County 15 miles south of the city of Miami (IDR 'AA-'/Stable Outlook) close to the Atlantic coast. The village had an estimated 2015 population of 19,452, reflecting a 7% rise in population since the 2010 census. Per capita income levels are nearly triple the Florida state average and nearly two-thirds of residents hold at least a bachelors' degree.

Revenue Framework: 'aaa' factor assessment
���������ֳ� expects the village's pace of revenue growth rate to persist at above the U.S. inflation rate given continued residential development and solid prospects for home value appreciation. The village has significant untapped revenue-raising authority in the form of a notably low property tax rate and the ability to levy and adjust a variety of fees and service charges.

Expenditure Framework: 'aa' factor assessment
The village's natural pace of expenditure growth is expected to broadly align with revenues over time. The village retains solid spending flexibility due to moderate fixed carrying costs related to debt service and retiree benefits and management's ample ability to adjust labor and program costs.

Long-Term Liability Burden: 'aaa' factor assessment
Pinecrest's long-term liability burden is very low compared to resident personal income, at about 2% in 2015. Direct and overlapping debt and employee pension liabilities each account for about one-third of the liability.

Operating Performance: 'aaa' factor assessment
���������ֳ� regards the village's gap-closing capacity as exceptionally strong based on its solid expenditure flexibility and broad independent legal authority to raise revenues. The village is likely to maintain satisfactory reserve levels, at a minimum, under a moderate U.S. GDP downturn scenario. Budget management has been generally conservative.

COVENANT DEBT NOTCHING: A one-notch distinction between the rating on the NAV revenue bonds and the village's IDR reflects the absence of a pledge of specific revenue and an inability to legally compel the village to generate NAV revenues in amounts sufficient to pay bondholders. The village's NAV revenues are very diverse, and are comprised mainly of franchise fees, state-shared sales taxes, utility taxes, service charges, resident fines and license fees.

RATING SENSITIVITIES
Maintenance of Financial Position: The ratings are sensitive to material changes in the village's financial profile and ���������ֳ�'s expectations for a solid revenue growth rate.

CREDIT PROFILE

The village serves as an affluent bedroom community for the city of Miami, to which the local economy is strongly linked. The tax base is largely residential. The village's limited commercial sector is focused almost entirely on retail outlets. These account for eight out of 10 of the village's top taxpayers. Retail is also heavily represented among the village's major employers. Home Depot, Best Buy, Publix Supermarkets and Whole Foods are some of the biggest employers, accounting for roughly 640 employees in aggregate.

Taxable values have shown solid growth in the past several years, increasing by 4.7% and 12%, respectively, in fiscals 2015 and 2016. Exceptional 2016 growth was related to a one-time event - the addition of a new electrical generating plant to the tax rolls. Economic indicators for Miami-Dade County (IDR 'AA'/Stable Outlook) have continued to show improvement during the current expansion as the county's unemployment rate has gradually converged with the U.S. rate after remaining stubbornly high for several years. Wealth levels for the Village of Pinecrest are more than double the national average and market value per capita is estimated at an exceptional $214,000.

Revenue Framework
Property taxes are the village's largest general fund revenue source at 42% of fiscal 2016 revenues, followed by license & permits fees (13%), service charges (11%), intergovernmental revenue (10%), and utility taxes (10%).

���������ֳ� believes Pinecrest's general fund revenues will likely expand at above the U.S. rate of inflation due to ongoing economic development within the village and steady home value appreciation. However, ���������ֳ� expects revenue growth will slightly lag the pace of U.S. GDP expansion based on recent history. The village's general fund revenues grew at a 10-year compound annual revenue growth rate of 2.1% through fiscal 2016, which tracks close to the U.S. inflation rate over the same period. Because the same period included a very deep regional recession, ���������ֳ� anticipates that the village's revenues will outperform recent history in the future, but would require significant tailwinds driven by a heightened pace of new development to expand in line with GDP.

The village possesses ample independent legal revenue-raising authority relative to potential revenue losses associated with cyclical downturns. Florida local governments are subject to a statutory cap on ad valorem property taxes of 10 mills (non-voted). The village's operating millage rate is set at 2.30 mills as of fiscal 2017. At the maximum legal rate, the village could generate roughly four times its fiscal 2016 property tax revenues. This additional tax revenue-raising capacity positions Pinecrest to easily overcome any risks associated with cyclical economic declines. In Florida, annual changes in the property tax rate are determined using a roll-back, or revenue-neutral rate that is then adjusted for changes in Florida per capita personal income and tax base growth related to new construction. However, the roll-back rate may be overridden by a majority vote of the municipality's elected governing body.

The village council has the authority to impose new fees, fines and levies under Florida statute and to raise existing fees and service charges. Management reports that the village has the capacity to raise its storm-water service fee, and parks and recreation fees.

Expenditure Framework
General fund spending is primarily driven by public safety-related expenses. These accounted for nearly 45% of general fund expenditures in fiscal 2016. Culture and recreation related activities consumed 23% of spending in 2016, followed by general government at 18%.

���������ֳ� expects that general fund expenditures will increase in line with, to slightly above, the natural rate of revenue growth as the village has been able to maintain close alignment between revenue and expenditure growth in recent years. In addition, ���������ֳ� believes spending is likely to closely track revenue growth as the taxes, fees and service charges grow in tandem with modest expected population gains, and growth in spending matches the expansion in service demands by residents.

The village maintains strong control over employee-related spending. Pinecrest has broad leeway to adjust employee headcount and compensation through the enactment of layoffs and furlough days if management believes these actions are needed to control expenditures. Management also has the power to defer or eliminate capital spending. Management funds a portion of its capital program through transfers from the village's general fund to these other governmental funds. The size of these transfers can be reduced by action of the village council.

Less than half of the village's full-time employees are unionized. The village engages in collective bargaining with two employee unions representing police officers. Labor agreements typically run for two to three years. The current contracts expire in September 2018 and included 1% cost of living adjustments per annum along with 3% merit pay increases. Management describes labor relations as constructive. The bargaining units have agreed to salary freezes and benefit adjustments in the past. Strikes by public sector workers are not permitted in Florida.

Fixed carrying costs associated with debt service, actuarially-determined pension payments and actual contributions for other-post employment benefits (OPEB) are moderate, totaling about 12% of fiscal 2016 governmental spending. Debt service accounted for 8% of spending. The village regularly funds its full actuarially-determined pension contributions, which for fiscal 2016 was a modest 3.6% of governmental spending.

Long-Term Liability Burden
The village's long-term liability burden is very low relative to its economic resource base at approximately 2% of resident personal income. Direct debt, overlapping debt, and the village's unfunded employee pension liability each account for roughly one-third of the total long-term liability. Amortization of direct debt is rapid with 86% of bonds maturing within 10 years. The village currently has no plans to issue new debt.

Pinecrest participates in the state-sponsored Florida Retirement System (FRS), which had a funded ratio of a ���������ֳ�-estimated 78% at June 30, 2016, using a 7% discount rate assumption.

The village provides an implicit subsidy for its employees' OPEB benefits and funds this liability on a pay-go basis. As of Sept. 30, 2016, the unfunded liability was a negligible $717,000.

Operating Performance
The ���������ֳ� Analytical Sensitivity Tool (FAST) estimates that the village would experience moderate revenue losses under a mild U.S. economic downturn scenario that assumes a 1% drop in GDP. FAST calculates a resulting 3.5% drop in Pinecrest's general fund revenues based on a 15-year general fund revenue history. ���������ֳ� believes the village's financial resilience to be exceptionally strong, supported by a superior level of inherent budget flexibility derived from its broad independent revenue-raising authority and solid spending flexibility. Pinecrest's financial resilience is further enhanced by its healthy reserve levels, which have been maintained at levels far above its official policy guidance of keeping reserves at a minimum of 10% of general fund spending and the level ���������ֳ� believes is consistent with a 'aaa' financial resilience assessment. Available reserves totaled $7.4 million in 2016, which was equal to nearly 34% of general fund spending, including transfers out.

Management has demonstrated a strong commitment to maintaining fiscal flexibility through economic cycles. The village has consistently paid its full, actuarially-determined pension contributions and has funded capital improvements using a mix of internal cash resources and state grants as a way of keeping debt levels down. Budget management has focused on keeping operations structurally balanced and the property tax rate low. As a result, management has been willing to tolerate small deficits - some operational and others driven by planned capital spending - in some recent years, though these deficits have seldom been greater than 2% of spending. Available reserves have been maintained at above 30% of expenditures.

Fiscal 2016 concluded with a modest $408,000 draw on general fund reserves driven principally by transfers out of the general fund to support capital improvements centered on the village's community center and tennis courts. General fund revenues under-performed budget by some $370,000 (2%) due to lower motor vehicle fines and communications service tax receipts. The approved fiscal 2017 budget grew by 2.3% over the prior year and includes a planned $1 million draw-down of general fund reserve to finance the completion of capital projects, as well as the hiring of five new police officers. The budget does not include a millage rate increase.

���������ֳ� expects Pinecrest to keep high reserve balances that are consistent with its recent history and in line with budgetary growth.

Contact:

Primary Analyst
Michael D'Arcy
Director
1-212-908-0662
���������ֳ�, Inc.
33 Whitehall Street
New York, NY 10004

Secondary Analyst
Kevin Dolan
Director
+1-212-908-0538

Committee Chairperson
Laura Porter
Managing Director
+1-212-908-0575


In addition to the sources of information identified in ���������ֳ�'s applicable criteria specified below, this action was informed by information from Lumesis and InvestorTools.



Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com.

Additional information is available on

Applicable Criteria
U.S. Tax-Supported Rating Criteria (pub. 18 Apr 2016)

Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
Solicitation Status
Endorsement Policy