FOUNTAIN VALLEY, Calif., Jan. 15, 2003 -- Standard and Poor's (S&P) and Fitch rating agencies have both upgraded Orange County Water District's (OCWD) bond rating from AA to AA+.
These ratings, coupled with Moody's Investors Service rating of Aa2, means OCWD is one of the best rated drinking water agencies in the state of California.
"This is very good news in this harsh economic climate, both in California and the nation," said Denis Bilodeau, president of the OCWD Board of Directors. "It also reflects great confidence in OCWD's general and fiscal management and its leadership in the water industry. This will save local water rate payers and OCWD millions of dollars by allowing us to borrow money more easily and at lower rates, as well as insulate us from increases in credit rates.
"Water rates will continue to rise due to the recent drought and other factors, but this certainly helps lessen the rate of future water cost increases."
The rating upgrade by S&P was based on OCWD's competitive wholesale water rates, particularly in comparison to alternative water supply options; its predictable revenue base; its good debt service coverage; the strong local economy; and OCWD's ability to address Southern California's long-term water supply problems with new water supply projects like the Groundwater Replenishment System.
The rating increase by Fitch was based on the essentiality of OCWD's water service, a solid and growing customer base and its healthy financial position.
OCWD retains its high Aa2 rating from Moody's due to vast storage capacity in the groundwater basin, its price advantage over alternate sources, lack of supply or quality problems that plague other California water purveyors, its proactive water quality monitoring program, the management of its finances and the strong local economy that OCWD serves.
Next year, OCWD could begin providing less groundwater to its 23 cities, water agencies and water companies in order to refill the groundwater basin, which has been overdrawn over the past few years due to high usage coupled with several years of extremely dry weather. This will most likely increase the cost of water in Orange County next year, as groundwater users may be forced to buy more expensive imported water.
The Orange County Water District is a special water agency created by the California Legislature in 1933 to maintain and manage the huge groundwater basin under northern Orange County. The groundwater basin managed by OCWD supplies 75% of the water needs to more than 2 million residents in the cities of Anaheim, Buena Park, Cypress, Costa Mesa, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, Irvine, La Palma, Los Alamitos, Newport Beach, Orange, Placentia, Santa Ana, Seal Beach, Stanton, Tustin, Villa Park, Westminster and Yorba Linda. To learn more about water visit www.ocwd.com.
