Thursday, November 5, 2009
Oceanside city council has approved water and sewer rate increases after a bond rating agency issued a negative credit watch on the city’s sewer bonds.
Oceanside city council has approved water and sewer rate increases after bond rating agency Standard and Poor's issued a negative credit watch on the city’s sewer bonds.
It was the Oceanside city council's second vote on water rate increases in a bid to avert a potential credit rating downgrade. After the council failed to approve the rate hikes last week, the S & P rating agency issued a negative credit watch for the city’s 2008 sewer bonds.
An analyst at S & P wrote that the city needed to enact sufficient rate increases or budget cuts to show it could meet its obligations to repay the bonds. Oceanside’s debt payment on sewer bonds is more than $5 million a year.
Cities around the county are considering water and sewer rate increases in order to pay for an 18 percent increase from the San Diego County Water Authority.
In Oceanside, the average water bill will now increase from $42 to $50 dollars a month. Sewer bills will rise even higher.
S & P’s analyst says once the agency gets information from the city on its ability to meet its bond repayments, it will consider whether to lift the negative credit watch. She could not say how long that will take.