Wall Street credit ratings provide an important and widely viewed measure of autility's financial standing. In addition, such ratings significantly affect therate of interest a utility must pay when issuing debt. While some of the factorscontributing to these credit ratings--such as the underlying economic strength ofa service area--are clearly beyond a utility manager's direct control, managementfactors are also an important element of creditworthiness. In recent reports andarticles, two of the three major rating agencies have helped to clarify whatrepresents superior management for the municipal sector--citing financialmanagement "best practices" considered worthy of recognition in the debt ratingprocess. This paper summarizes these identified practices and discusses theirapplication to public sector water and wastewater utilities. To illustrate thesestrategies, the authors feature the specific experience of the Philadelphia WaterDepartment, a large municipal water and wastewater utility that has successfullyrecovered from a municipal fiscal crisis in the late 1980s and early 1990s. Byadopting many of the rating agencies' best practices, Philadelphia Water hasachieved financial stability, and has been upgraded from junk bond status at thestart of the 1990s to a rating of A- as of June 2000. Includes 9 references.
| Edition : | Vol. - No. |
| File Size : | 1
file |
| Note : | This product is unavailable in Ukraine, Russia, Belarus |
| Number of Pages : | 10 |
| Published : | 01/01/2001 |
