The City of Portage received excellent news last week when it received astrong investment grade rating from Standard & Poors, a National bond rating agency. The City’s underlying bond rating, relative to its proposed issuance of $16.5 million of sewage works revenue bonds, is a key factor in the upcoming bond sale and underwriting process.
City Officials were pleased with the S&P rating and believe that the City’s diligence in planning for this project, including the recent implementation of storm water user fees, will pay off when the bonds are sold in April pursuant to a competitive bidding process.
The proposed bonds are being issued in order to address the City’s highest priority projects for storm water management infrastructure needs.
Reconstruction of Stone Ave. will correct drainage and flooding problems within a drainage shed that currently has no storm water infrastructure (approximately 400 acres). A number of other priority drainage projects will also be funded by the proposed bonds, including road, ditch, drain and/or culvert upgrades along Central Ave, Hamstrom Rd, Scott Rd, Willow Rd, Mulberry Ave, Brown St, Pennsylvania St, Robbins ditch, Crisman ditch, and the Willow Creek regional watershed. In addition, several intersection modifications / upgrades are anticipated at Willowdale, Swanson & Dombey Roads.
Considering the tough economic times that currently exist, the A+ bond rating reflects the strong financial condition of Portage, as well as the sound physical and financial management practices that have been demonstrated by the City.
The S&P rating report specifically cited the following credit factors in arriving at its determination of A+ / Stable outlook for the underlying bond rating:
- “A pledge of net revenues of the sewer system (includes storm water)
- The system’s stable and diverse customer base,
- System financial performance that has produced debt service coverage and cash levels we (S&P) consider to be strong, and
- Bond covenants we (S&P) consider adequate. “
A copy of the City’s Preliminary Official Statement (POS) for the proposed $16.5 million issuance of (sewage works) revenue bonds can be viewed on the worldwide web at the following address: http://www.munios.com/id.aspx?i=cbjKmtiWuX%2fstZWXeXcQwg%3d%3d
The POS has been distributed to underwriters throughout the United States in anticipation of a bond sale on April 13th. Construction is anticipated to commence in May and completed within approximately 24 to 30 months.