An angler casts a line, hoping for a nibble. Nearby, hikers and equestrians enjoy a morning walk along the water. Overhead, dozens of bird species, some of which are endangered, travel home to their nests made safe by protected areas around the reservoir. This idyllic scene is just another Saturday morning near Sweetwater Reservoir in Spring Valley, Calif.
All three major rating agencies – S&P, Moody’s, and Fitch – have affirmed the San Diego County Water Authority’s strong credit ratings, which will help the Water Authority optimize its debt portfolio and minimize the cost of financing important water reliability projects.
The reports cited the Water Authority’s strategic management, its conservative approach to water sales projections, and the benefits of the Water Authority’s rate case litigation that recently resulted in $44.4 million being refunded to local retail water agencies – among many other factors.
However, rating agencies also noted significant challenges ahead, including efforts by Fallbrook Public Utility District and the Rainbow Municipal Water District to “detach” from the Water Authority – a move that could negatively impact ratepayers across San Diego County. If the two North County agencies leave per their plans, Water Authority analysis shows that the other 22 member agencies will have to pay $16 million to $46 million more per year to cover the cost of the departing agencies.
Moody’s said detachment could lead to a credit downgrade, which would increase borrowing costs for critical water reliability projects. S&P Global called detachment uncertainty “an additional credit stressor” – “especially if an approved detachment sets a precedent if members can easily detach from the authority.” S&P added that, “this would be further exacerbated if the two members are not required to pay for their portion of the associated debt and infrastructure costs that the authority has undertaken to provide reliable water sources.”
Water Authority General Manager Sandra L. Kerl said, “The Water Authority maintains a solid financial position even in these difficult times, and the credit ratings reflect that. But the challenges are real as well, and they should unify the region to ensure that we continue to benefit from the safe, reliable water supplies we’ve invested in together for the past 30 years.”
In affirming their credit ratings, the services cited the Water Authority’s strong financial leadership, including prudent strategies to manage issues related to COVID-19, its success diversifying water supply sources, its commitment to infrastructure maintenance, and its financial reserves for managing contingencies, among other factors.
All three agencies addressed risks, such as additional local supplies that reduce Water Authority sales and member agency detachment. As proposed by Fallbrook and Rainbow, the detachments would allow those agencies to avoid paying for water supplies and infrastructure that have been developed in collaboration with those agencies and are currently being used by those agencies to meet their customers’ needs. Abandoning those cost obligations would force other ratepayers countywide to cover their portion of the bills already incurred for decades of investments in supply reliability.
In May 2020, the Water Authority’s Board of Directors voted to oppose detachment unless four conditions can be met related to protecting Fallbrook and Rainbow ratepayers, avoiding negative impacts for other member agencies, protecting the Sacramento-San Joaquin Bay-Delta, and maintaining the Water Authority’s voting rights at MWD.
The issue is under review by the San Diego Local Agency Formation Commission, known as LAFCO. The LAFCO process, which is designed to provide for an impartial analysis of these issues, will allow the Water Authority and all other affected parties to determine if these conditions are satisfied. If not, the Water Authority will oppose detachment.
For more information about the Water Authority’s finances go to: www.sdcwa.org/finance-investor-relations. Information about detachment is at https://www.sdcwa.org/member-agencies/lafco-reorganization/.
President Biden gave final passage to a $1.9 trillion Covid-19 relief package, The American Rescue Plan Act.
Among the provision of the American Rescue Plan Act are additional COVID-19 relief amounting to $500 million in assistance for clean and drinking water customers. Additional support for critical water and sewer investments is also included in the measure, according to a joint press release by NAWCA and AWMA.
This year’s Women in Water Symposium conference theme “Flow With The Change” is fitting. Due to the coronavirus pandemic, the 2021 event is online with a new virtual format. The online format generated just as much enthusiasm from participants as prior in-person meetings. And, the virtual conference also meant people from throughout the United States could Zoom in too.
Hearings have been scheduled to resume in April for Poseidon Water’s controversial proposed Huntington Beach desalination plant. Last April the California Regional Water Quality Control Board, Santa Ana Region was expected to vote on renewing a permit for the proposed $1 billion project but the workshop was canceled due to COVID-19. A hearing scheduled for September was also delayed so Poseidon could have more time to address water board concerns.
State residents have been struggling to keep up with their water bills during the COVID-19 pandemic, but government officials say help is on the way.
Survey results from the State Water Resources Control Board released in late January estimate about 1.6 million or 12% of households across the state have not paid their water bills resulting in an estimated $1 billion in statewide household water debt. The average household debt is $500.
Michelle McMahon, Olivenhain Municipal Water District IT Coordinator, is the Water Utility Hero of the Week. The water and wastewater industry is among the sectors that are classified as essential during the coronavirus pandemic and the employees are essential workers.
California is one of the world’s biodiversity hotspots – home to more unique species of plants and animals than any other state in the U.S. This biodiversity makes up the beautiful land and seascapes of the world’s fifth-largest economy and sustains our health, cultures and quality of life.
Yet it is disappearing at alarming rates. Today’s environmental, economic and social challenges – climate change, wildfires, habitat loss and the millions of Californians facing pandemic-related unemployment – threaten our Golden State’s resilience like never before.
Editor’s Note: This feature highlights water utility employees in the San Diego region working during the coronavirus pandemic to ensure a safe, reliable and plentiful water supply. The water industry is among the sectors that are classified as essential. Michelle McMahon, Olivenhain Municipal Water District IT Coordinator, is the Water Utility Hero of the Week.
I worked long hours in a previous career, feeling unappreciated, and heard that OMWD was a great place to work. Best professional change I ever made! I feel that my work has a positive impact within OMWD. What I do matters to the people I support and the ratepayers we serve. It has been good for my work/life balance.
Things got crazier. Then it calmed down as it settled into the new normal. Equipment became difficult to purchase. Deliveries, especially those coming from China (computers and their components), took what felt like a lifetime. Purchasing, programming, deploying equipment, and training end-users were a priority. Everything was (and still is) sanitized repeatedly. Remote support has become prominent, even for users located on-site. End users are more understanding of what it takes to make their computers, cell phones, tablets, and desk phones working properly.
I have acquired a collection of nearly 100 personal masks and a dozen OMWD masks! I have hand sanitizer and alcohol wipes easily accessible. OMWD has placed these items throughout for everyone’s use. I try to help people remotely from my computer whenever possible. I disinfect my workspace each day and other workstations with every support call.
I look forward to the new normal. I am curious what the “new normal” will be. This really is an unprecedented time. I think it will be a hybrid of “before the pandemic” and “during the pandemic” for some time, perhaps years. I look forward to spending time with friends, sharing their joy of finally returning to work, and being free to get my hair or nails done whenever I would like!
The pandemic has brought into even more compelling focus an important societal issue in San Diego County and California: How to ensure that everyone has access to safe and reliable water supplies. State estimates show there are approximately $1 billion in uncollected water bills statewide since the start of the pandemic that are directly attributable to household economic impacts associated with the pandemic.
The Water News Network is San Diego County’s source for water news and information.
Sweetwater Authority Logo 2019