Saving Money on CIP Financing

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Saving Money
on CIP Financing

Financing the major infrastructure projects needed to provide the region with a safe, reliable water supply is a significant cost. Annual debt service for the Water Authority’s Capital Improvement Program is projected at about $280 million in fiscal years 2012 and 2013 – 20 percent of the budget.

The agency aggressively looks for opportunities to reduce those costs for ratepayers. During the year, the agency took advantage of favorable market conditions three times, conducting refunding bond sales that reduced the costs of the Water Authority’s debt portfolio.

In total, these refunding bond sales are expected to reduce financing costs by nearly $19 million on a present-value basis over the life of the bonds.

Sidebar: 

Managing High
Credit Ratings

In July, credit rating agencies Standard and Poor’s, Fitch, and Moody’s affirmed the Water Authority’s long-term senior lien credit ratings of AA+, AA+ and Aa2, respectively. The three agencies also issued the Water Authority new subordinate lien credit ratings of AA, AA and Aa3, respectively. These excellent credit ratings help minimize the cost of financing important water supply reliability projects.