U.S. PUBLIC FINANCE

ISSUER COMMENT 24 December 2018

RATING

General Obligation (or GO Related) 1

Indian Hill Exempted Village School District, OH

Annual Comment on Indian Hill Village Schools

Aaa	No Outlook

Issuer Profile

Indian Hill Exempted Village School District is located in Hamilton County in the

Contacts

Antonina Peshkova	+1.312.706.9977 Associate Lead Analyst antonina.peshkova@moodys.com

Mark McIntire	+1.312.706.9960 VP-Sr Credit Officer/Manager mark.mcintire@moodys.com

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southwestern corner of Ohio, approximately 10 miles northeast of downtown Cincinnati. The county has a population of 805,965 and a high population density of 1,979 people per square mile. The county's median family income is $68,356 (2nd quartile) and the
September 2018 unemployment rate was 3.9% (3rd quartile) 2 . The largest industry sectors that drive the local economy are health services, professional/scientific/technical services, and manufacturing.

Credit Overview
Indian Hill Village Schools' credit position is superior. Its Aaa rating is significantly above

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the median rating of Aa3 for US school districts. Key credit factors include a robust financial position, a very strong wealth and income profile and a sizable tax base. Also reflected are an exceptionally light debt burden and an inflated pension liability.

Finances: The district has a robust financial position, which is aligned with the assigned rating of Aaa. The fund balance as a percent of operating revenues (79.7%) far exceeds the US median. Additionally, Indian Hill Village Schools' cash balance as a percent of operating revenues (58.5%) is far superior to the US median.

Economy and Tax Base: The economy and tax base of the district are exceptionally healthy and are comparable to the assigned rating of Aaa. The median family income equals a robust 236.0% of the US level. Also, the full value per capita ($267,215) is much stronger than the US median, and grew slightly from 2013 to 2017. Lastly, the total full value ($3.5 billion) exceeds other school districts we rate nationwide.

Debt and Pensions: Indian Hill Village Schools has small debt and pension burdens overall, yet they are somewhat unfavorable with respect to its Aaa rating. The net direct debt to full value (0.6%) is materially lower than the US median, and declined modestly from 2013 to 2017. Furthermore, the Moody's-adjusted net pension liability to operating revenues (3.5x) far surpasses the US median.

Management and Governance: Ohio school districts have an Institutional Framework score 3 of A, which is moderate. Institutional Framework scores measure a sector's legal ability to increase revenues and decrease expenditures. The sector's major revenue sources are property taxes and state aid. Local property tax rates can be increased with voter
approval only. Some school districts also levy a local income tax, if approved by voters.

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Revenues and expenditures tend to be predictable. Ohio has public sector unions, which can limit the ability to cut expenditures.

Sector Trends - Ohio School Districts

Ohio school districts generally face a stable operating environment. The state’s current biennium budget increases total school funding by 3% over fiscal years 2018 and 2019; however, the state is targeting the latest increases toward lower-wealth districts. School levy elections are becoming increasingly important throughout the state, and districts with strong voter support for new taxes can best align revenues with expenditures. Competition from charter schools is concentrated in large metropolitan areas. School district pension burdens are high, despite recent reforms including cost of living modifications that highlight the state’s legal flexibility to manage pension liabilities.

EXHIBIT 1

Key Indicators 4 5 Indian Hill Village Schools

Source: Moody's Investors Service

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

2	24 December 2018	Indian Hill Exempted Village School District, OH: Annual Comment on Indian Hill Village Schools

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EXHIBIT 2

Available fund balance as a percent of operating revenues decreased from 2013 to 2017

Source: Issuer financial statements; Moody's Investors Service

EXHIBIT 3

Full value of the property tax base increased from 2013 to 2017

Source: Issuer financial statements; Government data sources; Offering statements; Moody's Investors Service

EXHIBIT 4

Moody's-adjusted net pension liability to operating revenues decreased from 2013 to 2017

Source: Issuer financial statements; Government data sources; Offering statements; Moody's Investors Service

Endnotes

1 The rating referenced in this report is the issuer’s General Obligation (GO) rating or its highest public rating that is GO-related. A GO bond is generally backed by the full faith and credit pledge and total taxing power of the issuer. GO-related securities include general obligation limited tax, annual appropriation, lease revenue, non-ad valorem, and moral obligation debt. The referenced ratings reflect the government’s underlying credit quality without regard to state guarantees, enhancement programs or bond insurance.

2 The demographic data presented, including population, population density, per capita personal income and unemployment rate are derived from the most recently available US government databases. Population, population density and per capita personal income come from the American Community Survey while the unemployment rate comes from the Bureau of Labor Statistics.

The largest industry sectors are derived from the Bureau of Economic Analysis. Moody’s allocated the per capita personal income data and unemployment data for all counties in the US census into quartiles. The quartiles are ordered from strongest-to-weakest from a credit perspective: the highest per capita personal income quartile is first quartile, and the lowest unemployment rate is first quartile.

3 The institutional framework score assesses a municipality’s legal ability to match revenues with expenditures based on its constitutionally and legislatively conferred powers and responsibilities. See US Local Government General Obligation Debt (December 2016) methodology report for more details.

4 For definitions of the metrics in the Key Indicators Table, US Local Government General Obligation Methodology and Scorecard User Guide (July 2014) . Metrics represented as N/A indicate the data were not available at the time of publication.

5 The medians come from our most recently published local government medians report, Medians - Property values key to stability, but pension burdens remain a challenge (March 2018) which is available on Moodys.com. The medians presented here are based on the key metrics outlined in Moody’s GO methodology and the associated scorecard.

3	24 December 2018	Indian Hill Exempted Village School District, OH: Annual Comment on Indian Hill Village Schools

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REPORT NUMBER	1151105

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5	24 December 2018	Indian Hill Exempted Village School District, OH: Annual Comment on Indian Hill Village Schools