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FPUD Receives Highest Award for Financial Reporting

Fallbrook, Calif. – The Fallbrook Public Utility District has been awarded the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of America and Canada (GFOA).

The certificate is the highest form of recognition in the area of governmental accounting and financial reporting. Its attainment represents a significant accomplishment by a government and its management, according to GFOA.

The Vallecitos Water District Twin Oaks Reservoir dual solar panel array is expected to be completed in November 2020. Photo: Vallecitos Water District Solar Project

Solar Project Saves Energy, Costs for Vallecitos Water District

The Vallecitos Water District is pursuing greater use of renewable resources, increasing capacity to the electrical grid, and reducing long term operational costs with an innovative solar power project.

The west solar array is installed on top of the Vallecitos Water District’s 33-million gallon reservoir with 2,300 solar modules and eight 80 kw inverters. The east array is located on top of the 40-million gallon reservoir with 2,900 modules with ten 80 kw inverters. Photo: Vallecitos Water District

In 2017, the Vallecitos Water District Board of Directors agreed to pursue development of districtwide renewable power sources using existing open space to benefit the District and its ratepayers.  The District worked with solar consultants Terra Verde Renewable Partners to evaluate and study the feasibility of three solar port locations. Two projects are now moving forward; two arrays at the pair of Vallecitos owned reservoirs in Twin Oaks, and an array at the (sewer) Lift Station #1, located on San Marcos Boulevard.

The projects are structured under a Power Purchase Agreement. A solar provider designs, builds, and maintains systems for 25 years. In turn, the District receives a reduced electricity rate from SDG&E over the 25-year term at the District’s 13 highest use meters. The District will become owners of the solar system after the 25-year maintenance term expires. No capital investment is required from the District.

“The project is a great benefit to Vallecitos customers,” said Ryan Morgan, Capital Facilities Senior Engineer. “Through our export of power into the electrical grid, we receive bill credits on these power exchanges. The District benefits directly through reduced power costs, and that cost savings is passed down to the customer ultimately in reduced water and sewer rates.”

Multiple stakeholders working together

Vallecitos Water District provides the project sites, working with SDG&E, the solar provider team, the District’s contractors, and the solar maintenance operator. The District’s water professionals work with solar power experts to guide the project through planning, design, and construction as a team.

Over the 25-year term, the District will benefit from a reduced electrical rate of 7.79 cents per kilowatt-hour (kWh) at its 13 highest use meters. It will also receive a rebate or credit on its export of power to the electrical grid. Savings to the District over 25 years are estimated at $8.3 million, which ultimately results in reduced water and sewer rates for customers. District staff locked in the maximum federal rebate by launching the project in 2019 and meeting a narrow window for grant funding.

Solar panels installed on top of two reservoirs

The Twin Oaks Reservoir dual solar panel array sites prior to installation. Photo: Vallecitos Water District solar project

The Twin Oaks Reservoir dual solar panel array sites prior to installation. Photo: Vallecitos Water District

The west solar array is installed on top of the District’s 33-million gallon reservoir with 2,300 solar modules and eight 80 kW inverters. The east array is located on top of the 40-million gallon reservoir with 2,900 modules with ten 80 kW inverters. The total production is roughly 3.6 MWh annually, enough to power 340 homes.

Local power conservation remains vital

The Twin Oaks Reservoir dual solar array total production is roughly 3.6 mWh annually, enough to power 340 homes. Photo: Vallecitos Water District

The Twin Oaks Reservoir dual solar array total production is roughly 3.6 mWh annually, enough to power 340 homes. Photo: Vallecitos Water District

While the solar power project cannot prevent the potential for power outages due to rolling blackouts, the project helps to add capacity to the power grid when it is needed.

“The District wants to publicly thank Terre Verde Renewable Partners, Holt Renewables, and Kenyon Energy for their valuable roles in the success of this project,” said Morgan.  “We also want to acknowledge the above and beyond effort of the District’s inspections team.”

The Twin Oaks Reservoir dual array is expected to be completed in November 2020. The Lift Station #1 site is expected to be completed in February of 2021.

City of San Diego Saves Nearly $300M for Ratepayers by Refinancing Pure Water Project

San Diego, Calif. – In an important cost-savings agreement, the City of San Diego has refinanced a loan with the U.S. Environmental Protection Agency (EPA) that will save an estimated $293 million for taxpayers as the City’s Public Utilities Department embarks on the first phase of Pure Water San Diego – the largest infrastructure project in City history.

Bond Sales-Credit Ratings-Desalination Plant

Strong Water Authority Credit Saves $67.4 Million for Ratepayers

Strong credit ratings for the San Diego County Water Authority will save water ratepayers across the region $67.4 million on bond sales executed Wednesday in New York — $27 million more than staff forecasted in May. All three major rating agencies – S&P, Moody’s and Fitch – recently affirmed the Water Authority’s positive ratings and stable outlook, creating the opportunity for ratepayers to benefit from lower financing costs for critical water infrastructure.

The savings resulted from the Water Authority’s refinancing of $283.5 million in Series 2020A Bonds (Green Bonds) and $117.7 million in Series 2021A (Green Bonds) senior-lien water revenue refunding bonds. Technical factors in the market provided favorable conditions – including more demand for bonds than supply – that the Water Authority team moved quickly to capture.

Most significant savings in bond refundings in the past decade

The Water Authority bonds were priced July 8 – a week ahead of schedule – and the strong credit ratings, strong bond policies, and swift action by the Board of Directors in June, helped lower the interest rates compared to what the Water Authority would have had to pay with downgraded credit. Since 2010, the Water Authority has saved a total of $235 million through 10 bond refundings, including the latest transactions.

“Thanks to strategic, courageous action by the Water Authority Board of Directors in June to set rates for 2021, the agency has secured the most significant savings from bond refundings in the past decade,” said Water Authority Board Chair Jim Madaffer. “The Water Authority maintains a strong financial position even in these difficult times, and that ultimately benefits everyone who calls San Diego County home.”

Credit ratings: Strong financial leadership, prudent strategies

In affirming their credit ratings over the past few weeks, the three rating 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.

‘Investments in water supply diversification, conservative financial practices’

  • S&P affirmed its highest rating – AAA– June 25. “The authority has been successful in their efforts to increase control over their supply and diversify the source of their supply. Management has also demonstrated an ability to navigate volatile hydrological cycles through adopting rate increases as needed and building prudent financial reserves and storage to mitigate variability.”
  • Fitch Ratings affirmed its AA+ rating July 2. The Water Authority’s “significant investments in supply diversification, have allowed the Authority to continue to meet water demands in its service area.” Fitch also said “the SDCWA benefits from very strong purchaser credit quality.”
  • Moody’s Investor Service affirmed its Aa2 rating June 29. Moody’s praised the Water Authority “for increasingly diverse sources for water supply purchases; and conservative financial practices with adopted reserve and debt policies.” Moody’s also said that “liquidity, including a rate stabilization fund, remains satisfactory and serves to insulate the San Diego County Water Authority from risks associated with variable water supplies, including California’s current drought conditions, as well as unanticipated events such as the coronavirus crisis. The stable outlook reflects our expectation that the Authority’s favorable operating performance will continue.”

“In the midst of a global pandemic and a challenging economy, the Water Authority continues proactively managing its finances and lowering the cost of debt,” said Lisa Marie Harris, finance director for the Water Authority. “We have strong debt coverage, healthy reserves and an experienced management team to sustain our fiscal health.”

For more information about the Water Authority’s finances go to:

Series 2020A – Taxable Refunding

Issue Size: $283,470,000

Bond maturities: 2024-2034

Bond yields: .59% – 1.95%

Refunding savings: $38.7 million

Savings as % of refunded bond par: 15.3% (board min savings 2-5%)

Top Investors: Progressive, Morgan Stanley, Goldman Sachs, and State Farm

Series 2021A –Tax-Exempt Refunding (Forward Delivery)

Issue Size: $117,690,000

Bond maturities: 2022 – 2031

Bond yields: .45% – 1.13%

Refunding savings: $28.7 million

Savings as % of refunded bond par: 19.7% (Board Min savings 2-5%)

Top Investors: Vanguard, Alliance Bernstein, Seix Investors, and MIZUHO Bank

Olivenhain Municipal Water District Logo landscape design workshops

Fitch Reaffirms OMWD’s “AAA” Bond Rating

Encinitas, Calif. — At Olivenhain Municipal Water District’s June 17 board meeting, OMWD staff notified its Board of Directors that Fitch Ratings, a global rating agency that offers independent credit opinions, has reaffirmed the district’s “AAA” bond rating with a stable outlook. AAA is the highest possible rating assigned by Fitch, and OMWD is one of only a handful of Southern California water agencies that have achieved this rating.

Sweetwater Authority Expands Contract Opportunities for Local Businesses, Vendors

Doing business with Sweetwater Authority is easier than ever for local companies, thanks to revisions in the water agency’s procurement policy recently approved by its Governing Board. The revised policy created a preferential purchasing program for local businesses and directed agency staff to engage the local vendor community through a newly created vendor webpage and online form where interested businesses can submit their information to be included in the Authority’s vendor database.

Sweetwater Authority Recognized as “District of Distinction”

Sweetwater Authority (Authority) received the “District of Distinction” accreditation by the Special District Leadership Foundation (SDLF) for its sound fiscal management policies and practices in district operations. This distinction, a prestigious title, is only possessed by two percent of the more than 4,000 Special Districts.