The world’s leading provider of credit ratings has upgraded the Santa Clarita Water Division’s long-term bond rating from AA to AA+, reflecting favorable findings by S&P Global after a review of the finances, operations and policies of SCWD and its parent agency, the Castaic Lake Water Agency. This is one of the highest rating categories offered by S&P.
“The rating reflects, in our opinion, the combination of a very strong enterprise risk profile and an extremely strong financial risk profile,” says the report from S&P Global. “The outlook is
CLWA Assistant General Manager Valerie Pryor said the rating demonstrates S&P’s belief that SCWD’s financial practices are strong, comprehensive and supportive of high credit quality.
“This is a result of the diligent and conscientious efforts of the CLWA-SCWD team,” Pryor said. “The long-term finance planning process is rigorous. The team meticulously prepares detailed annual updates of our financial and capital improvement forecasts. We are pleased that S&P recognizes our commitment to transparency in financial reporting, practices and policies.”
Other highlights of the S&P report include:
• Favorable review of SCWD operational management practices and policies.
• Solid historical financial performance that S&P anticipates will be sustained.
• A formal asset management program that addresses the long-term sustainability of infrastructure and facilities.
• Management regularly communicates its strategic goals internally and to outside parties.
• SCWD has sufficient water supplies as well as solid drought management planning and water conservation efforts.
Regarding SCWD’s water supply portfolio, the S&P report said: “We consider the division’s water supply mix to be a clear credit strength, as the division has sufficient
supplies (either local groundwater or wholesale purchases from CLWA) to meet its customers’ needs even during severe drought conditions.”
Keith Abercrombie, retail manager for SCWD, said the S&P report reinforces the notion that building a diverse water supply portfolio produces multiple benefits for local water ratepayers.
“Obviously, having those resources available has helped the communities we serve to endure periods of drought, even the record-setting drought we experienced in recent years,” Abercrombie said. “But also, those planning efforts are reflective of the overall stability of the Santa Clarita Water Division and CLWA, which has resulted in a more favorable credit rating for SCWD. This will, in turn, produce long-term financial benefits for the division and its ratepayers, too.”
About the Castaic Lake Water Agency:
The Castaic Lake Water Agency (CLWA) is the Santa Clarita Valley’s public water wholesaler. CLWA is one of 29 State Water Project contractors and receives water imported from northern California and Kern County through the California Aqueduct. CLWA operates two large treatment plants, three major pump stations, three water storage facilities and over 45 miles of large diameter transmission pipelines delivering water to four local water retailers. Our mission is to provide reliable, quality water at a reasonable cost to the Santa Clarita Valley. www.clwa.org