Bond revenue being used for upgrade of Bee Ridge Water Reclamation Facility to Advanced Wastewater Treatment status
Fitch Ratings and S&P Global Ratings once again have assigned AA+ ratings to Sarasota County’s Utility Revenue Bonds, and they once more have affirmed the AA+ rating for the utility system revenue and refunding bonds, as well as the Water Infrastructure and Innovation Act (WIFIA) loan that the county received from the federal government, the county announced on Sept. 1.
The approximately $130 million Utility Revenue Series 2022 bond and the $105 million WIFIA loan, issued in November 2021, will fund portions of the enhancements to the Bee Ridge Water Reclamation Facility, including conversion to Advanced Wastewater Treatment (AWT) status and expansion of daily treatment capacities, a county news release points out. The upgrade to AWT will meet Florida Department of Environmental Protection (FDEP) requirements and standards by June 2025, the release notes.
The facility also is being expanded to increase treatment capacity from 12 million gallons per day to 18 million gallons per day, the release adds.
In the release, County Administrator Jonathan Lewis noted that the WIFIA loan and the Series 2022 bond are the major funding components for upgrades to the Bee Ridge facility; therefore county leaders are “very pleased” with the AA+ ratings with stable outlooks.
“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 bond is expected to close in September and will help move this extremely important project forward.”
Steve Botelho, deputy county administrator and chief financial management officer, noted in the release that the utility system revenue was not significantly affected by the coronavirus pandemic and that the county is continuing its strong performance in servicing debts and maintaining financial assets, thanks to the work of “a solid management team.”
“We were also pleased to issue the bonds during a period of supply chain issues and significant inflation and have not varied our expected completion dates,” he said in the release.
“Fitch Ratings and S&P Global Ratings reports determine the county’s perceived worthiness for investing, similar to an individual’s credit score,” the release explains. “Higher bond ratings are typically accompanied by a lower interest rate,” the release points out. “AA+ indicates the county is doing a great job” of paying off current debt and that it is likely to pay off future debts, the release says. The rating also indicates a lower risk to investors.
Fitch Ratings noted that the AA+ rating “is reflective of the utility system’s strong financial profile and revenues,” with low operating risk, as well as county oversight of the system’s direct operations and rates, the release continues.
S&P Global Ratings indicated that its rating on the utility system is supported by the following credit factors:
- “A growing economic base, and a stable and diverse customer base.
- “Extremely strong history of all-in debt service coverage that is projected to continue.
- “Extremely strong liquidity that can be sustained through the planned Capital Improvement Program.
- “Sound-to-strong operational and financial policies and procedures.”
Sarasota County issues revenue bonds to help fund capital projects, the release points out. To view complete analyses of the county’s utility system revenue bond ratings, visit Fitch Ratings and S&P Global Ratings.