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LTC 324-2018 S&P Global Report - How Our U.S. Government Criteria Weather Climate RiskMIAMI BEACH OFFICE OF THE CITY MANAGER LTC # 324-2018 LETTER TO COMMISSION TO: Mayor Dan Gelber and Members of tt e City Co mission FROM: Jimmy L. Morales, City Manager DATE: June 8, 2018 SUBJECT: S&P Global Report — How Our U.S. Government Criteria Weather Climate Risk Pursuant to your request at the June 6th, 2018 commission meeting, agenda item R9R Discuss Resiliency Program Effects on Access to/Cost of Capital, attached is the S&P Global report "How Our U.S. Local Government Criteria Weather Climate Risk". This report includes information on failure to implement planned structural reforms and structural imbalance where management has no credible plan to correct information beginning on page 5. If you have any questions or need additional information, please feel free to contact John Woodruff at 305-673-7466. JLM/JW/AW S&P Global Ratings RatingsDirect® How Our U.S. Local Government Criteria Weather Climate Risk March 20, 2018 Extreme weather-related events and climate change place U.S. local governments on the front Lines in preparing for acute weather risk events, working to prevent longer term damage and, if necessary, building or rebuilding critical infrastructure. They must manage budget volatility following such events, as well as repair and adapt their key assets to prepare for evolving risks, as well as plan for potential long-term impacts. According to the National Oceanic and Atmospheric Administration (NOM), 2017 marked the worst year on record for damage caused by natural disasters since 1980 (the first year of record) at over $306 billion. Additionally, if the availability of federal disaster relief and insurance is less certain in the future, the risks to local governments will likely compound without planning or prevention. With a potential shift in relief funds and the potential for increasingly frequent climate -related disasters, S&P Global Ratings believes it is important to highlight how it incorporates these risks into its credit analysis of local governments. In our previous publication, "Credit FAQ: Understanding Climate Change Risk And U.S. Municipal Ratings" (published Oct. 17, 2017), we note that municipal issuers face risks on two fronts: first, from the growing cost of extreme weather events and second, from more gradual changes to the environment affecting land use, employment, and economic activity that support credit quality. We would like to dig deeper into how our municipal credit analysis is well positioned to address these risks and incorporate them into our credit analysis. Our forward-looking approach analyzes both the immediate risks to issuers after an event and our view of how climate- and weather-related risks may affect economic and financial activities that support credit quality. Key Takeaways - With growing frequency and costs associated with climate change and severe weather events, we believe now is a relevant time to highlight how our existing criteria incorporate climate, weather, and natural disaster risks into our analysis. - Our local government criteria are well positioned --through several rating factors, including but not limited to, management --to incorporate weather-related risks and we have flexibility in our approach to adjust to information and events as they occur. - We incorporate a longer term view of these risks through our assessment of management. If, overtime, management is unable to provide a credible plan to restore fiscal balance, incorporate what we view as necessary contributions to mitigating extreme weather risks, or realign revenues and expenditures, our criteria allow us to cap the local government rating at'BBB+', signifying our view of a structural imbalance. www.spglobal.com/ratingsdirect THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. PRIMARY CREDIT ANALYSTS Lisa R Schroeer Charlottesville (434) 529-2862 lisa.schroeer @spglobal.com Rahul Jain New York + (212) 438-1202 rahut.jain @spglobal.com SECONDARY CONTACT Kurt E Forsgren Boston (1) 617-530-8308 kurt.forsgren @spglobal.com March 20, 2018 1 How Our U.S. Local Government Criteria Weather Climate Risk Frequency Of Billion -Dollar Weather Events 18 16 14 12 10 8 6 4 2 0 1 ■,1 ,• r 2000 2002 2004 1 • 1 2006 2008 2010 2012 2014 2016 Sources: NOAA, S&P Global Ratings. Copyright © 2018 by Standard & Poor's Financial Services LLC. All rights reserved. Just as the changes in weather continue to evolve, so must our analysis. We believe our criteria are well positioned to accommodate evolving climate change and extreme weather risks, particularly as information and the science improve over time. We note our ability to identify and determine credit effects is partially determined by the awareness of issues and any disclosure made available. Step By Step: How Our Local Government Criteria Can Assess Weather And Climate Risks Our local government criteria can incorporate weather-related risks and we have flexibility in our approach to adjust to information and events as they occur. The big picture: Focus on underlying credit fundamentals Our assessments of local governments begin with the underlying credit fundamentals. S&P Global Ratings' methodology for assigning general obligation (GO) ratings to local governments starts with an assessment and scoring of seven key factors, each with a fixed weight. The weighted average score results in an indicative rating, which then may be adjusted for overriding factors, rating caps, and trend/peer analysis, among other factors, to arrive at the final rating. To evaluate management, we incorporate our Financial Management Assessment (FMA) methodology (see "Financial Management Assessment," published June 27, 2006), which forms the basis of the score, and which we also discuss in this article. In the remainder of this article, we describe how weather-related risks can be incorporated into the relevant rating factors. ■ Winter storm ■ Wildfire Tropical cyclone ■ Severe storm Freeze ■ Flooding ■ Drought www.spglobal.com/ratingsdirect March 20, 2018 2 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Outline of Key Components of Local Government Criteria Institutional Framework 10% Economy 30% Management 20% Financial Metrics Liquidity 10% Budgetary Performance 10% Budgetary Flexibility 10% Debt & Contingent Liabilities 10% Selected Overrides: Structural imbalance cap rating at'BBB+' Weak liquidity caps rating at'BBB+' or'BB+' -� Weak management caps rating at 'A' or 'BBB+' Indicative Rating © 2018 Standard & Poor's Financial Services LLC. All rights reserved. Final GO Rating Economy: Effects on tax base and population changes As presented in the chart, the economy represents 30% of the indicative rating and it carries the most weight of the factor scores. The assessment of the economy begins with analyzing both the income level and value of property on a per capita basis. We also take into account the locality's participation in a broader regional economy, unemployment rates, concentration in industries, among other factors. Weather-related event risks can have an immediate disruptive impact on a local economy, and a more gradual effect as weather -based damage can alter the economic characteristics of an area, as we saw with New Orleans after Hurricane Katrina. Our economy assessment can incorporate both these risks. Many of the gradual effects of risk to the environment, such as from sea -level rise, are captured through metrics in our economic analysis, such as declines in taxable values, changes in employment, and income overtime. To incorporate a forward-looking effect on our economy assessment, when a population is in decline due to gradual changes to the natural or built environment or if we believe an extreme weather occurrence is likely to result in the displacement of some of the population, we can incorporate this potential outcome on the economy through a weakening of our economy score. In the most severe disasters, a recent working paper by members of the National Bureau of Economic Research reviewing data from 1920 to 2010 shows significant out -migration at the county level, with negative effects on home values and poverty rates (Bouston et al, 2017). Historic examples include New Orleans in the wake of Hurricane Katrina, river -adjacent counties in the Great Mississippi Flood of 1927, and counties in western Oklahoma during the Dust Bowl. These risks may present themselves in areas which may become uninhabitable overtime. www.spglobal.com/ratingsdirect March 20, 2018 3 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Management: Overall Preparation And Policies Our management assessment makes up 20% of a Local government's indicative rating. We start our management assessment through a review of management's policies and assumptions, as detailed in the criteria "Financial Management Assessment" (published June 27, 2006). Management is instrumental in understanding how well a government is prepared for extreme weather-related events or potential longer term climate changes risk. Such preparation may include identification of capital needs to protect or mitigate against risk and strong reserve policies intended to provide cushion for expenditure needs or providing liquidity while awaiting federal funding. Where we view the vulnerability to potential changes such as sea level rise as highly likely or where there have been repeat occurrences of acute weather risks, we could anticipate types of preparation that include more comprehensive resiliency plans to construct or upgrade infrastructure to protect property and municipal assets. In these areas, we may pay particular attention to management's practices and policies as it regards the implications of weather risk. If we viewed plans as faking to address these concerns, we could assess specific planning aspects of their management score as weaker. We note exposure to these risks are affected by many factors, including proximity to Low-lying areas, topography, and natural and man-made barriers. We may use flood zone, fire hazard severity, drought monitor, and seismic hazard maps, among other items, in our discussion with management regarding their exposure to risks. The identification and determination of credit risk from climate change improves when local governments provide more robust disclosure outlining exposure to such risk and risk mitigation policies and practices. In our FMA, we highlight four factors as particularly germane to the analysis of extreme weather and climate -related risks: revenue and expenditure assumptions, budget updates and amendments, long-term capital planning, and reserve and liquidity policies. These four components include elements of what we view as effective planning and mitigation for weather-related events. Revenue and expenditure assumptions This factor focuses on whether the organization's financial assumptions and projections are realistic and well-grounded from both long-term and recent trend perspectives. Our analysis of how realistic and grounded revenue and expenditure assumptions are may include how management considers historical weather risk and its repercussions. For example, property damage may result in significant revaluation or tax appeals, while heightened recovery spending on rebuilding can create one-time spikes in sales tax revenues. Increased spending may also result from operations associated with emergency management and ongoing infrastructure maintenance. For example, some areas affected by Superstorm Sandy experienced spikes in revenue due to rebuilding and reimbursements. While many communities on the South Shore of Long Island conservatively budgeted following the storm, some included revenues in the outyears that reflected expectations of continued growth which ultimately resulted in drawdowns on fund balance in the years when projections weren't met. For these cases, we revised our view of these assumptions downward from "strong" or "standard" to lower levels. This approach of analyzing revenue and expenditure assumptions can be applied to other event -related or longer term risks. www.spglobal.com/ratingsdirect March 20, 2018 4 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Budget updates and amendments This factor considers whether there are procedures for reviewing and amending the budget based on updated information and actual performance to ensure fiscal targets are met. Our view of a local government's ability to update or amend its budget midyear may be affected by its budgetary response to an extreme weather event. For example, in areas which have experienced such events, including the New York tristate region, the Greater Houston region, and South Florida, we have revised our view of otherwise "strong" or "standard" management scores downward where management showed an inability to respond in a timely fashion. Long term capital planning We focus on this factor, noting whether the organization has a long-term capital improvement program, the length of the planning horizon, whether funding is identified for all years and is linked to the operating budget and long-term revenue and financing strategies. We may not view a capital plan that does not take into account capital needs associated with historical weather risk as favorably as one that does. For example, while the historical replacement period for roads may be 12 years, severe weather is likely to reduce the time between replacement periods; in some cases, realistic capital planning may require local governments to adopt active life -cycle management practices and policies in their capital planning in the face of accelerated depreciation of assets. It could also require additional disclosure on the state of repair of municipal assets and their exposure to weather risk, such as proximity to flood zones. In cases where frequency or magnitude of these events is comparable high or has increased, we can evaluate whether a local government's capital planning has adjusted in response. Reserve and liquidity policies This factor considers whether the organization has established a formalized operating reserve policy, which takes into account the government's cash flow and operating requirements and the historic volatility of revenues and expenditures through economic cycles. Where an extreme weather event has occurred or is periodically likely, but is unaddressed in the organization's consideration of appropriate reserve levels, we would likely view the policies less favorably. We believe it is a best practice for formalized fund balance policies to include a rationale which considers emergencies, including extreme weather risk, where applicable. Weather-related emergency reserve policies in particular would likely incorporate policies intended to provide a cushion for immediate expenditures if necessary and the ability to withstand any delays in state or federal funding. Additional Management Factors: Beyond The Polices Once the initial FMA is complete, we may negatively adjust the management score or even cap the rating under certain circumstances: Failure to implement planned structural reforms We may adjust our view of management conditions downward if a management team creates a plan and does not execute on it. We would be concerned if two consecutive years passed and www.spglobal.com/ratingsdirect March 20, 2018 5 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk management failed to implement planned structural reforms. Depending on a locality's vulnerability to weather-related or longer term climate changes, we could consider structural reforms drawn up by a local government to manage weather-related risk as important to the longer term strength of the credit. If plans are created and then not implemented, we could view this as a weakness in the overall management assessment. For example, the ongoing failure to execute on structural reforms to install infrastructure as a means for mitigating identified and significant regulatory, operational, and asset management costs of extreme weather or gradual environmental erosion in the face of sea -level rise, extreme rain, and flooding could result in the application of a negative adjustment to our view of a local government's practices and policies. This adjustment is likely to be most relevant when unfinished projects will have a negative overall effect on the local government. Other resiliency projects to protect property and municipal assets include: raised seawalls to protect assets from heightened storm surges; increased sewage and storm water capacity to handle heavier rainfall; or new or expanded irrigation systems or water storage to mitigate the risk of more, or more intense periods of drought. Structural imbalance where management has no credible plan to correct In cases where we believe there is a structural imbalance for the local governments operating performance, we will also review management's plan to correct the imbalance. Characteristics of structural imbalance that could be affected by extreme weather or gradual changes include borrowing for ongoing operations, unplanned fund balance drawdowns, recurring budgeted expenditure and revenue mismatch, a continued omission of full funding for necessary capital projects, and significant dependence on volatile revenues. Our view of structural imbalance could be relevant to areas experiencing environmental erosion and sea -level rise because of the ongoing costs associated with mitigating these risks and the potential for reduced likelihood of federal and insurance reimbursements for managing these expenses. When assessing a potential structural imbalance, we will consider if management is unable to provide a credible plan to restore balance while mitigating weather risk or realigning revenues and expenditures in the face of this risk. This is similar to how we incorporate our view on local governments that may consistently underfund pension and other postemployment benefit (OPEB) obligations. (See "Local Government Pension And Other Postemployment Benefits Analysis: A Closer Look," published Nov. 8, 2017.) Should we view the government as unable to address its longer term liabilities sufficiently, we may cap the ratings at'BBB+' through the local government's management score. Properly Accounting For Risks In Financial Performance Budgetary performance Budgetary performance represents 10% of a local government's indicative score and is a measure of the current fiscal balance. It is measured as the net operating result in the general fund and across total governmental funds. In cases where an extreme weather event has occurred, performance may be affected for a prolonged period during recovery or there may be future uncertainty. www.spglobal.com/ratingsdirect March 20, 2018 6 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Projections suggest a better or worse score. Our criteria allow us to incorporate a more negative or positive view of budgetary performance if projections suggest a different initial score. Future credit quality depends on both current and future performance. Accordingly, our assessment of performance can incorporate a negative or positive forward-looking view of actions or events subsequent to a specific audited result if our assessments suggest different results in the coming years. Event -related risk. Within the criteria as part of our assessment of budgetary performance, we can incorporate a negative adjustment for municipalities we view as vulnerable to uncertainty associated with increased volatility in revenues. We can use this adjustment to help incorporate some of the operating volatility that can arise from being vulnerable to weather- and climate -related risks, particularly if we believe the government is exposed and the event could affect its ability to manage to positive operations. For example, operations in communities with a high reliance on tourism -related sales taxes or flood -vulnerable property tax --often coastal tourist destinations --may be vulnerable to weather-related event risks. We take into account management's approach to mitigating the effects of such events and determine that risks are sufficiently mitigated, but gradual environmental changes and extreme weather events that could affect revenue or enterprise operations repeatedly may weaken operating results if management can't prepare for them. S&P Global Ratings can apply this adjustment to communities when it believes they do not set aside contingencies or maintain adequate protection of assets or a taxable revenue base is vulnerable to extreme weather. Deferred expenditures on a cash basis. Our local government criteria also compensate for artificially positive outcomes in performance resulting from deferred expenditures by allowing us to view operations as weaker when these deferrals mask what we view as true expenditure needs. An example for this weakened view would be when S&P Global Ratings views that a government is deferring resiliency capital projects necessary to manage long-term environmental change or extreme weather event risk, and the deferral inflates budgetary performance by underestimating expenditures. Budgetary flexibility Budgetary flexibility represents 10% of a local government's indicative score. The budgetary flexibility score measures the degree to which the government maintains additional financial flexibility in times of stress. Our view of flexibility, measured as available fund balance as a share of expenditures, may be impacted in the wake of an extreme weather event. In general, we view available fund balances above 15% as very strong. Projections suggest a better or worse score. Our criteria allow us to incorporate a more negative or positive view of budgetary flexibility if projections suggest a different initial score. Where audited data are not yet available, and based on our discussion with a local government on outlays for relief purposes, we may apply a negative or positive qualitative adjustment where we believe it is likely that projections for available reserves suggest a different score. Our view of flexibility has taken into account these short-term effects in a number of communities in the New York Tri-State, Greater Houston, and South Florida regions after natural disasters over the past 20 years, with our view of reserves improving over time after reimbursements are collected. www.spglobal.com/ratingsdirect March 20, 2018 7 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Limited capacity to cut expenditures. Additionally, there are cases where a local government has a limited ability to cut expenditures due to infrastructure or operational needs or political resistance. The size and importance of the infrastructure project will help determine wither we view the municipality as having a limited capacity to cut expenditures. For example, if we believe that a municipality is facing a large resiliency effort that will be necessary to address gradual environmental change or recurring extreme weather, which makes it more vulnerable to high -frequency or magnitude weather events, we could consider the application of this negative qualitative adjustment. Liquidity The liquidity score represents 10% of the indicative rating and weak or very weak liquidity scores result in the application of rating caps. Liquidity is assessed by measuring total governmental available cash as a share of both expenditures and debt service. Although liquidity receives limited weight in determining the indicative rating because of a local government's ability to make fiscal adjustments, its importance grows as the score weakens. A liquidity score of "weak" caps the final rating on a local government at'BBB+' regardless of other strengths. An overall liquidity score of "very weak" limits the final rating to no higher than 'BB+'. Projections suggest a better or worse score. Availability of liquidity varies and is partly a function of current and near-term financial conditions. Our forward-looking analysis evaluates the cash, expenditures, and debt service for the current and next fiscal years and if our projections result in a score change, we may incorporate that forward view in the relevant direction. As with available fund balance, available cash is likely to be depleted when used to manage the immediate effects of weather-related events. While we believe insurance reimbursements, among others, are likely to make up a significant portion of cash spent toward relief, cash reserves may be necessary to bridge the gap in the short term. In these cases, we may revise our projections of available cash downward. Limited or uncertain market access. Our assessment of access to external liquidity measures a local government's access to both capital market and bank financing. Where there are legal or market obstacles to the use of debt instruments, including bank Loans, we may consider market access Limited. Where such access is highly questionable, we may view it as uncertain. In cases where a local government attempts to use bridge financing to manage damage from weather-related risk, but cannot access the market or does so on terms we consider unfavorable, we may revise our view of market access to limited or uncertain. If both a local government's cash assets are significantly prone to natural disaster risk and market access is limited or uncertain, we could revise our view of its exposure to contingent liability risk that could come due in the next 12 months to nonremote, which we view as a negative credit factor. Debt And Contingent Liability Our view of a local government's debt and contingent liability profile makes up 10% of the indicative rating score. The criteria form the initial debt and contingent liabilities score from the combination of two factors: total governmental funds debt service as a percentage of total governmental funds expenditures and net direct debt as a percentage of total governmental funds revenue. Debt service as a percentage of expenditures measures the annual fixed -cost burden that debt places on the government. Debt to revenues measures the total debt burden on the www.spglobal.com/ratingsdirect March 20, 2018 8 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk government's revenue position rather than the annual cost of the debt. We recognize the potential for extreme weather-related risk to significantly affect a local government's issuance of new -money debt or capital planning activities and our debt ratios incorporate current and medium-term debt plans. For those capital projects we believe management is not addressing, as noted above, we would categorize them under deferred cash expenditures. We factor additional debt and debt service, along with overlapping (or underlying) debt, into our assessment of debt as the additional debt burden is taken on to manage weather-related risks. This is reflected in overall net debt, which considers overlapping debt (or underlying debt for counties) to total market value above 10% as worsens our view of the overall debt position. The criteria also allow for the flexibility to consider pending debt issuance. To the extent that a local government may be planning for additional issuance, we maintain the ability to incorporate our assessment of expected issuances which we consider significant over the medium term. Institutional Framework The Institutional Framework (IF) score represents 10% of the indicative rating and assesses the legal and practical environment in which a local government operates. All local governments of the same type in a state will receive the same IF score. Currently, we don't view this factor as having a significant effect on our assessment of weather- and environment -related risk. Extreme Weather And Climate Change Are A Credit Risk For Local Governments Challenges for local governments with respect to natural disasters and changes in climate are not a new phenomenon. With what we view as the potential for ongoing challenges from weather- and climate -related risk, we believe providing transparency on our views of how we assess these risks is warranted. Further, with the potential reduction in federal emergency support, we believe local governments may have to bear more of the repair and other costs associated with these risks. We believe transparent disclosure of the potential effects of gradual environmental change and extreme weather events is an important input into our assessment of management's ability to respond to the risks involved. S&P Global Ratings believes our criteria are well positioned to assess these risks for local governments and maintains flexibility to address more information as it becomes available. Through our local government GO ratings criteria, S&P Global Ratings maintains the ability to adjust for the effects --both actual and potential --of extreme weather events as well as gradual changes to the environment. Some Local Governments And Past Weather -Related Events Municipality Relevant assessments Rockport, TX Approximately 80% of structures in Aransas County, where Rockport is located, sustained damage from Hurricane Harvey, as did a number of the city's facilities. Officials estimate about 60% of residents, or 5,768 people, have been displaced and management is unsure when --or if --they will return. We downgraded Rockland based on our view of potential tax -base deterioration, revenue declines, and uncertainty with regard to its budgetary performance and flexibility following the effects of Harvey. Virginia Beach, VA The city raised stormwater rates to pay for stormwater mandates and flood -control initiatives, which mitigated our concerns over expense increases in our assessment of budgetary performance. www.spglobal.com/ratingsdirect March 20, 2018 9 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Some Local Governments And Past Weather -Related Events (cont.) Municipality Relevant assessments Suffolk County, NY We adjusted our view of the county's revenues and expenditure assumptions, reviewed as part of our Financial Management Assessment, downward to reflect optimistic budgetary assumptions that did not fully consider the effect on sales tax collections from recovery spending for Superstorm Sandy in 2013. Oak Park, MI The city is facing litigation for preparedness for a significant rain event in 2014, which if successful, could change our view of the its liquidity. Dickinson, TX Widespread flooding resulted in a projected 10%-15% drop in assessed value, but our review of the economy has remained in line with peers at the rating level, particularly given the actual and expected return of residents and local businesses. Brentwood, MO We adjusted our view of the city's budgetary performance to strong from very strong based on planned fund balance drawdowns to fund a significant capital project to mitigate damage in high -flood zones. Hempstead, TX Effects of Hurricane Harvey included increased line -item expenses across the board, coupled with weaker municipal operating revenues that resulted in a deterioration in budgetary performance, which in turn weakened our view of available reserves. Please see the related articles in "Related Research" section. Related Research - Brentwood, Missouri, Dec. 14, 2017 Dickinson, Texas, Jan. 22, 2018 - Hempstead, Texas, Jan. 31, 2018 - Oak Park, Michigan, Jan. 26, 2018 - Rockport, Texas, Dec. 6, 2017 - Suffolk County, New York, Dec. 12, 2017 - Virginia Beach, Virginia, Feb. 20, 2018 - S&P Public Finance Local GO Criteria: How We Adjust Data For Analytic Consistency, Sept. 12, 2013 Only a rating committee may determine a rating action and this report does not constitute a rating action. www.spglobal.com/ratingsdirect March 20, 2018 10 THIS WAS PREPARED EXCLUSIVELY FOR USER JESSICA MA. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. How Our U.S. Local Government Criteria Weather Climate Risk Copyright © 2018 by Standard & Poor's Financial Services LLC. All rights reserved. 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