Local government debt is usually divided into three different types: general obligation bonds, non‑self‑supporting revenue bonds and self‑supporting revenue bonds. Sarasota County, as of the fiscal year ended September 30, 2023, had $50.3 million, $176.0 million and $374.8 million of each type of bonds outstanding, respectively. • GENERAL OBLIGATION BONDS are issued by a governmental entity and pledge the full faith and credit of the County as a method of repayment of the outstanding bonds. The full faith and credit is a pledge of the general taxing powers for the payment of the debt obligation. • NON‑SELF‑SUPPORTING REVENUE BONDS pledge a specific revenue source as a method of repayment of the outstanding bonds. This type of bond is a special obligation of the County and does not constitute a general obligation of the County. • SELF‑SUPPORTING REVENUE BONDS are supported by user revenues generated from operations. In Sarasota County, revenue of the Solid Waste and Utility Systems have been pledged as a method of repayment of outstanding bonds. Additionally, Sarasota County participates in the Florida Local Government Finance Commission’s Pooled Commercial Paper Program, and has taken out several Bank Term Loans. Most bond issues are assigned a rating by a rating agency, such as Moody’s Investment Services, Inc., Standard & Poor’s Ratings Services and/or Fitch Ratings, Inc. The rating is an extremely important factor in determining an issuer’s marketability and the interest rate a local government will pay. Ratings are relied upon by investors in making investment decisions and by underwriters in determining whether to underwrite a particular issue. All of Sarasota County’s bonds and associated ratings can be found on the website www.dacbond.com. In order for a bond issue to be rated, the local government must contract with a rating agency and pay a fee. The local government provides the rating agency with operational and financial information. A key component in the rating agency’s analysis is the evidence of sound management practices. Developing and adhering to long‑term financial and capital improvement plans, keeping expense growth in line with revenues, and maintaining an adequate level of operating reserves are important. Preparation of annual financial reports in accordance with generally accepted accounting principles (GAAP) and receipt of the Government Finance Officers Association’s Certificate of Achievement for Excellence in Financial Reporting are further evidence of quality management. Sarasota County has consistently earned this award for the past thirty‑nine consecutive years. (1) The + and – modifiers attached to the S&P and Fitch ratings are appended to denote the relative status of the rating within a major rating group. SarasotaClerk.com 31 MAJOR RATING AGENCIES RATINGS DEFINITIONS STANDARD & POOR'S (1) AAA Issuer has extremely strong capacity to meet financial commitments AA Issuer has very strong capacity to meet financial commitments A Issuer has strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions BBB Issuer has adequate capacity to meet financial commitments, but more subject to adverse economic conditions BB‑D Issuer rated BB or lower is regarded as having vulnerable characteristics that outweigh its strengths FITCH RATINGS (1) AAA Issuer has exceptionally strong capacity for payment of financial commitments and is highly unlikely to be adversely affected by foreseeable events with lowest expectation of default risk AA Issuer has very strong capacity for payment of financial commitments and is not significantly vulnerable to foreseeable events with very low default risk A Issuer has strong capacity for payment of financial commitments with low default risk, however issuer may be more vulnerable to adverse business or economic conditions BBB Issuer has adequate capacity to meet financial commitments, but adverse changes in business and economic conditions are more likely to impair this capacity BB‑D Obligations are considered speculative and significant default risk is present The rating agency rates the bond issue based upon a detailed analysis of this information. Standard & Poor’s rates bond issues from AAA to D and Fitch rates bond issues from AAA to D. TYPES OF DEBT 2 Caspersen Beach
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