The Cucamonga Valley Water District (CVWD/District) has earned an ‘AA’ rating from Fitch Ratings Inc., and a rating upgrade from AA to AA+ from S&P Global, for its outstanding water system bonds and upcoming refunding bonds. Fitch Ratings Inc. and S&P Global, are nationally recognized credit rating agencies designated by the U.S. Securities and Exchange Commission. The rating agencies have a complete span of best and worse-case scenario credit ratings for all rating categories which ranges from ‘AAA’ to ‘D’.
Strong operational management with ample water supply, proactive drought contingency plans and emergency preparedness plans, along with strong financial management practices and policies contributed to the new favorable ratings. Other contributing factors include CVWD management updating its multi-year financial projections and capital improvement plan annually along with formal policies for maintaining liquidity and protecting investments. Financial Results Reports are provided monthly and independently audited financial statements are produced annually, which are recognized by the Rating Agencies as very transparent disclosure.
"CVWD is committed to being good stewards of our financial resources and our team continues to work diligently to maintain excellence in bond ratings,” stated CVWD Board President Randall James Reed. “These efforts help minimize loan costs and reduces overall debt which contributes to the District’s financial health, as well as keeps rates manageable for customers.”
The costs to purchase water have increased from about 25% of total operating expenses to 45%. Capital projects within the current capital improvement plan are expected to increase access to local supply and reduce purchased water costs in upcoming years. CVWD continually looks for ways to be more efficient especially when it comes to financial management. Earning and maintaining favorable credit ratings places the District in good position to further refinance debt in order to lower interest costs. Lower debt costs will allow the funding of future capital projects that ensure a reliable water supply for the community it serves.