For immediate release: August 8, 2008
WSD receives upgraded AA+ bond rating from Standard and Poor’s, maintains A1 bond rating from Moody’s, plans the sale of $69 million in water bonds
Kansas City, Missouri Water Services recently received an upgraded bond rating of AA+ from Standard and Poor’s and maintained an A1 rating from Moody’s. The Department plans the sale of $69 million in new bonds which will be used to finance improvements to the system's distribution infrastructure and primary treatment plant. The plan also includes refinancing almost all of the utility's outstanding bonds to enact a new Master Bond Ordinance.
Standard and Poor’s rating on Kansas City, Mo.'s water revenue bonds has been raised to 'AA+' from 'AA', reflecting the system's improved financial position, with maintenance of good liquidity levels while addressing the system's large capital plan ($260 million).
Other factors supporting the rating include the system's:
• strong and diverse service area economy;
• moderate rates, with timely rate increases; and
• low debt to plant.
The A1 rating from Moody’s was based on the system's large service area which covers the vast majority of the Kansas City, metropolitan area; a stable regional economy; improving debt service coverage levels following consecutive rate increases; adequate net working capital; favorable debt profile with future borrowing expected; and, satisfactory legal covenants that have been strengthened as part of the new master ordinance.
"The favorable credit ratings exemplify the financial strength of the water utility and the City's commitment to the health and well being of its citizens through the enhancement and expansion of its water infrastructure system," City Manager Wayne A. Cauthen said.
"The bonds will enable the City to begin addressing a number of critical initiatives aimed at improving long-range planning efforts and enhancing the operating efficiencies of the water utility," said John Franklin, assistant city manager and acting director of the Water Services Department.
Voters demonstrated their support for the $250 million in water revenue bonds with a 74 percent "yes" vote in August 2005 that authorized the issuance.
The $69 million water bonds will cover a broad spectrum of water infrastructure improvements. These improvements include:
• water transmission projects
• approximately 20 small main replacement construction projects
• water facility upgrades such as pump station improvements and emergency power generation.
The Kansas City, Missouri Water Services Department maintains and operates water collection treatment and distribution systems, stormwater management and wastewater collection and treatment for residential and business customers in Kansas City, Missouri. The department also sells water to 33 wholesale customers in the metro area and treats wastewater for 27 satellite customers. Operation of all three utilities is funded entirely by fees charged to customers based on their use of products and services, not taxes.