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Criteria I Governments I U.S. Public Finance: U.S. Local Governments General Obligation Ratings:Methodology And Assumptions Table 1 Indicative Outcomes Resulting From • Average Of • • 4.75-4.94 BB 4.95-5.0 B The indicative rating results from the weighted average outcomes as shown above.The final rating may differ from the indicative rating above by one notch based on trends and comparisons with peers in that range.The final rating may also differ from the indicative rating due to the presence of overriding factors described in paragraphs 25-35.For ratings below`B-'please see"Criteria For Assigning`CCC+',`CCC',`CCC-',And `CC'Ratings"published Oct. 1,2012,and"Standard&Poor's Ratings Definitions",published June 17,2013. Overriding Factors 25. The criteria employ a series of overriding factors that can result in the final rating assigned to the local government being different from the indicative rating outcome suggested by table 1. Table 2 summarizes these factors. Certain conditions result in the final rating moving a specified number of notches above or below the indicative rating. If multiple notch overrides exist,the final rating is based on the net effect of those overrides. 26. Certain other conditions result in the final rating being capped at a certain level.When such conditions exist,the final rating could be lower than the cap depending on the severity of the condition present, and the final rating could be lower than the indicative rating even if the indicative rating is lower than the ratings cap in table 2. Rating caps are absolute,meaning that the positive relative adjustments described below do not allow ratings to exceed the cap. If multiple cap overrides exist,the rating cap used is the lowest cap of all the individual overrides that apply. 27. If multiple overrides involving both caps and notches exist,the final rating will be based on the lower of the lowest rating cap or the indicative rating as adjusted by the notch overrides. For example, a local government could have an indicative rating of'A', a negative one-notch override,and a condition that results in a capped rating of'A+'. In such a case,the indicative rating as adjusted by the notch override would equal'A-'. Since'A-'is lower than the rating cap,the final rating could be at most'A' (if the one-notch adjustment described in paragraph 24 were applied) or any lower rating given that a cap override applies. If,instead,the indicative rating were'AA'in this example,then the indicative rating as adjusted by the notch override would be greater than the rating cap of'A+'.Therefore,the rating outcome could be no higher than'A+'(the one-notch adjustment cannot increase a rating above a rating cap),but could be any lower rating given that a cap override applies.We acknowledge that the assignment and removal of caps may cause an increase in ratings volatility and potentially steeper rating transitions. Table 2 Summary Of Overriding Factors paragraphs Overriding Factor Result Notch Overrides Projected per capita EBI*>225%of U.S.projected per capita EBI Final rating one notch higher than that suggested by table 1 Projected per capita EBI*>300%of U.S.projected per capita EBI Final rating two notches higher than that suggested by table 1 Total Market Value per capita<$30,000 Final rating one notch lower than that suggested by table 1 Available Fund Balance>75%of general fund expenditures for the most recently reported Final rating one notch higher than that suggested year,the current year and next year and is expected to continue by table 1 WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 12,2013 11 1190266 1300881696