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Page 3 <br /> December 4, 2013 <br /> County of Essex - Credit Rating <br /> Specifically, Standard and Poor's noted the following performance strengths <br /> in upgrading the County's credit rating to AA: <br /> ➢ Strong financial position, derived from very low debt and debt service <br /> burdens; <br /> ➢ Robust liquidity, a result of the Corporation's ongoing commitment to <br /> a solid Reserve Strategy; <br /> ➢ Consistently strong record in terms of budgetary performance. Solid <br /> operating surpluses have provided the Corporation with the means to <br /> fund its capital expenditures largely from internal sources, reducing <br /> debt issuance needs; <br /> ➢ Long standing life-cycle capital program, which plans for the <br /> replacement of assets over their useful lives through contributions to <br /> and from capital/infrastructure reserves; <br /> ➢ Ability to fund capital expenditures largely from internal sources, <br /> validating the County's "pay-as-you-go" philosophy of funding <br /> capital/infrastructure requirements by creating capacity in the budget <br /> in a measured way and through the effective use of reserve balances, <br /> and <br /> ➢ Diversified economic development efforts away from automotive <br /> manufacturing towards alternative energy, medical equipment, <br /> tourism, aerospace and agri-businesses. <br /> Conversely, Standard and Poor's noted the following key performance <br /> weakness or threats to the County's credit rating: <br /> ➢ From a peer comparison standpoint, a relatively small economy fairly <br /> concentrated within the manufacturing and agricultural sectors, noting <br /> limited-but-increasing diversification; and <br /> ➢ Potential for rising debt issuance at the lower tier level's indirect <br /> impact over the County's overall debt-carrying capacity. Debt for <br /> both the County and lower tier are serviced from the same tax base. <br />