Moody’s Investors Service announced on Tuesday that the City of Waukee’s Credit ratings would stay the same. The City’s general obligation credit rating will stay at Aa2, to which it was upgraded last year, and the City’s sewer and water revenue bonds credit rating will stay at Aa3.
The Aa2 credit rating allows the city to receive more competitive interest rates for repayment of debt. According to a news release from the City of Waukee, post-sale, the City will have $71.6 million of general obligation unlimited tax (GOULT) debt outstanding.
“Maintaining our stable credit rating during a time of such growth is no easy feat,” said Waukee Mayor Bill Peard in a news release. “Elected officials work closely with City staff to ensure strong financial management principles are utilized while also keeping up with the increasing need for infrastructure and community amenities.”
Series 2018A Bonds will be used by the City to finance capital improvement projects, such as Phase 5 of the Alice’s Road Corridor project, City entrance and wayfinding signs, wastewater plant demolition, park improvements and trail extensions, as well as equipment purchases.
For water and sewer revenue bonds, post-sale, the City will have $6.9 million in rated senior lien revenue debt and $12.5 million in parity state revolving fund loans. The sewer utility is also responsible for $12.9 million in revenue debt issued by the Des Moines Metropolitan Wastewater Reclamation Authority, which is on parity with Waukee’s other senior lien sewer revenue debt. Post-sale, the City will have $6.5 milion of outstanding water revenue debt, according to a news release.
“As the City transitions to the WRA for sewer services, there is a significant investment associated with it. We are also in a growth position which requires us to look at all options for increasing the future water supply,” Peard said in a news release. “We are pleased to still receive such a high rating amidst all of these projects.”
Series 2018B and 2018C bonds will finance improvements and extensions to the sewer utility and the water utility, respectively.
The credit report for both the general obligation bonds and water and sewer bonds state the ratings reflect Waukee’s “growing customer base in the Des Moines (Aa2 stable) metropolitan area, strong unrestricted liquidity and healthy debt service coverage supported by the city council’s unlimited rate-setting authority.”
The general obligation credit report states that substantial moderation of the debt burden and declines in the City’s fixed costs could lead to a future rating increase, while growth in the City’s debt burden or fixed costs, material declines in operating reserves or liquidity, or weakening of the tax base and resident income levels could lead to a downgrade.
The water and sewer bond credit report states that the continued expansion of the customer base could lead to a future upgrade while declines in debt service coverage or available liquidity and material growth in debt levels could cause a future downgrade.
The full credit reports can be viewed at www.moodys.com.