Aurora Water and Sewer’s bond rating was upgraded from AA to AA+, one level below the highest rating, for the first time in the city’s history on July 18.
Global bond rating agency Fitch Ratings upgraded the city’s water department after undergoing a review of its financial stability and debt. Aurora Water has $559 million in outstanding water debt — mostly from the city’s drought-hardening Prairie Waters Project — and $53 million in sewer debt.
The bond rating, which is similar to a credit score for an individual, shows how apt an organization is to paying its debt on time.
“I think it’s a recognition of the good financial management that the city has had over the last several years,” said Jason Batchelor, the city’s finance director. The city has held the AA rating for several years, and this is the first time it’s been rated AA+, Batchelor said.
“They’re looking for a continued pattern of strong financial management and good decision making, and overall financial stability of the organization,” he said.
One of the department’s strongest assets was being able to construct the nearly $600 million Prairie Waters Project on time and under budget, according to Fitch’s review.
Fitch acknowledged that there would be lots of debt associated with the Prairie Waters Project for years to come, but the city’s lease agreements to Anadarko Petroleum Corp. and the WISE partnership would generate money to prepay debt on the project.
“The city is actively prepaying debt and with no additional borrowings planned in the near to medium term, debt levels should decline,” Fitch officials said in a statement.
Aurora Water also doesn’t plan on raising water rates for customers, which was also a factor in Fitch’s decision to upgrade its bond rating.
Every two years, Fitch completes a financial analysis of Aurora Water and Sewer. The City of Aurora has a bond rating of AA and is not scheduled for a review any time soon, Batchelor said.