Fitch and S&P Global assign AA+ ratings to Sarasota County’s outstanding utility system bonds

EPA program loan to help pay for improvements to Bee Ridge Water Reclamation Facility, which was primary focus of 2019 Consent Order with FDEP

An aerial map shows the location of the Bee Ridge Water Reclamation Facility. Image courtesy Sarasota County

Fitch Ratings and S&P Global Ratings have assigned AA+ ratings to Sarasota County’s Water Infrastructure and Innovation Act (WIFIA) loan and affirmed the AA+ rating for the outstanding utility system revenue and refunding bonds, county staff has announced.

The approximately $105-million WIFIA loan “will fund portions of the enhancements to the Bee Ridge Water Reclamation Facility, including the facility’s conversion to Advanced Wastewater Treatment (AWT) status and its expansion of its daily treatment capacities from 12 million gallons per day to 18 million gallons per day, a news release points out. The upgrade to AWT will meet Florida Department of Environmental Protection (FDEP) requirements that that upgrade be completed by the end of December 2025. That was part of a Consent Order with FDEP, which the commissioners unanimously approved in August 2019. The Consent Order was the culmination of the state’s efforts to ensure that unauthorized discharges from the Bee Ridge Water Reclamation Facility (WRF) site would cease.

County Administrator Jonathan Lewis noted in the release that the WIFIA loan is a major funding source for the upgrades to the Bee Ridge WRF. He added that county leaders “are thrilled that the loan received AA+ ratings.”

“Our dedication to improving and maintaining water quality is a direct result of the County Commission’s leadership, and their ongoing commitment to protecting our natural resources,” Lewis added in the release. “The WIFIA loan is issued through the FDEP at very attractive interest rates to minimize the impact to the utility’s customer base. The loan is expected to close in December; however, the county will not begin drawing on the funding until a later date,” Lewis continued in the release. “The county will also be issuing revenue bonds later in 2022 to aid in the funding of this important project.”

Steve Botelho, deputy county administrator and chief financial management officer said in the release, “Both rating agencies noted that the utility had not been significantly impacted by the recent coronavirus pandemic and that the county continues strong performance in servicing debts and managing financial assets with a solid management team.”

“Fitch Ratings and S&P Global Ratings reports determine the county’s perceived worthiness for borrowing, similar to an individual’s credit score,” the release explains. “Higher bond ratings are typically accompanied by a lower interest rate,” it adds. The AA+ rating indicates that the county is doing a good job of paying off current debt and is likely to pay off future debts, the release notes. “The rating also indicates a lower risk to investors.”

Fitch indicated that “management has a history of sound capital and financial planning … to exhibit extremely strong operating results.”

Sarasota County issues revenue bonds help to fund capital projects, the release adds. To view a complete analysis of the county’s utility system revenue bond ratings, visit Fitch Ratings or S&P Global Ratings