Moody’s Investors Service announced that the City of Waukee general obligation credit rating will stay at Aa2, to which the City was upgraded in 2017. This rating allows the City to receive more competitive interest rates for repayment of debt. 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. “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 many capital improvement projects and equipment purchases. Capital projects include Phase 5 of the Alice’s Road Corridor project, City entrance and wayfinding signs, wastewater plant demolition, park improvements and trail extensions.
According to the Moody’s report, the Aa2 rating reflects 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 Credit Opinion Report notes that substantial moderation of the debt burden and declines in the City’s fixed costs could lead to a future rating upgrade, while factors that could lead to a downgrade include 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.
Moody’s Investors Service announced that the City of Waukee Sewer and Water Revenue Bonds credit ratings will stay at Aa3. This rating allows the City to receive competitive interest rates for repayment of debt.
Post-sale, the City will have $6.9 in rated senior lien revenue debt and $12.5 million in parity state revolving fund (SRF) loans. The sewer utility is also responsible for $12.9 million in revenue debt issued by the Des Moines Metropolitan Wastewater Reclamation Authority (WRA) (Aa3), which is on parity with Waukee's other senior lien sewer revenue debt. Post-sale, the City will have $6.5 million of outstanding water revenue debt.
“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,” said Waukee Mayor Bill Peard. “We are pleased to still receive such a high rating amidst all of these projects.”
Proceeds from the Series 2018B and 2018C bonds will finance improvements and extensions to the sewer utility and the water utility, respectively.
According to the Moody’s report for sewer, the Aa3 rating reflects 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 Credit Opinion Report notes that continued expansion of the customer base could lead to a future rating upgrade, while factors that could lead to a downgrade include declines in debt service coverage or available liquidity and material growth in debt levels.
According to the Moody’s report for water, the Aa3 rating reflects Waukee’s “small but growing service base in the Des Moines (Aa2 stable) metropolitan area, stable financial operations with healthy liquidity, and strong debt service coverage. These attributes are balanced against challenges that include expected growth in debt.”
The Credit Opinion Report notes that significant expansion of the service area could lead to a future rating upgrade, while factors that could lead to a downgrade include declines in debt service coverage and a significant increase in debt levels.
To view the complete reports from Moody’s Investors Services, visit moodys.com.