Standard and Poor’s (S&P) Rating Services raised its S&P underlying rating on James City Service Authority’s (JCSA) water and sewer system revenue debt one notch to ‘AAA’ from ‘AA+’. S&P assigned its ‘AAA’ rating to the JCSA Series 2016 water and sewer system revenue bonds.
According to S&P’s credit analyst Edward McGlade, “The upgrade reflects the Authority’s extremely strong financial metrics, along with the area’s consistently strong economic indicators.”
S&P also referenced strong debt service coverage levels, strong liquidity, low debt to capitalization and strong financial management.
The enterprise risk profile is the result of the Authority’s:
- Service area with high wealth and income indicators and low unemployment,
- Affordable water rates representing .8% of median household income,
- Low-risk operations characterized by ample water and wastewater capacity, and
- Strong operational management.
The financial risk profile reflects the Authority’s:
- Extremely strong all-in debt service coverage levels
- Extremely strong liquidity with over three years of annual expenses in unrestricted cash,
- Very low debt to capitalization, and
- Very strong financial management.
“I am excited about the bond rating upgrade from S&P. It is a testament to the sound fiscal management policies and practices in place at the JCSA. This upgrade will bring a significant cost savings to our JCSA customers by reducing our borrowing costs,” says Kevin Onizuk, Chair of the JCSA Board of Directors. Onizuk continues, “I am thankful for and proud of our JCSA team and Board of Directors for their hard work on behalf of our James City County citizens.” Doug Powell, General Manager for JCSA says, “A Triple A rating for a utility of our size is unique, and is a result of sound strategic and financial management.”
The future appears stable as well. S&P noted, “The stable outlook reflects our expectation that the Authority will preserve its strong financial profile given its periodic rate adjustments and manageable capital needs, added McGlade. The healthy service area economy further supports the rating.”
“As a County Administrator I could not be more proud of our team, the Board of Supervisors and Board of Directors adopted a plan to move the County forward, the James City County staff took the plan and now our residents benefit from strategic planning. In 18 short months, we have achieved a lot as a team and we are poised to ensure James City County continues to showcase its premier status in the Commonwealth of Virginia,” Bryan Hill says.
Board of Supervisors Chairman Mike Hipple says, “I could not ask for a better group of leaders in James City County, great job to each employee as I am extremely proud to be an elected official among such a talented team!”
Favorable bond ratings can result in the Authority’s ability to refinance or issue revenue bonds at a lower interest rate, saving money on interest paid.
Media Contact: Sue Mellen, Financial and Management Services Director
757-253-6638; sue.mellen@jamescitycountyva.gov