MWA holds bond rating, secures $70.1M for Rocky Creek plant, debt restructuring
Macon Water Authority updates progress of major bond projects and approves purchase of a new fleet of trucks
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The Macon Water Authority has extra cash in the bank after closing a $70.1 million bond deal at a rate of 2.31% Thursday morning.
Stifel Managing Director Trey Monroe informed the board at its Nov. 5 meeting that both Moody’s and S&P Global affirmed the authority’s long-term credit rating of Aa2 and AA/A-1+, respectively for those Series 2026A bonds.
Monroe said the agencies examined the authority’s list of capital improvement projects and its financial outlook to maintain the water and sewer system before issuing ratings.
“They’ve assessed your rate structure, your finances, everything that goes into that, and have determined that taking on these projects in your capital improvement plan with the additional debt is going to result in no adverse change in the rating. So that was good news,” Monroe said.
MWA’s short-term bond rating was at the highest level of A1+.
“That’s important because it makes them eligible to be purchased by money market funds and other short-term investors that can put those bonds into their portfolio,” Monroe said.
Bond ratings show investors how much financial risk is involved with an agency.
In releasing its rating, S&P stated: “The stable outlook reflects our view that the authority’s financial performance will be sustained during the outlook period, based on historical results and expectations of future rate increases, with debt issuances and cash to fund identified capital needs.”
Moody’s noted “the expected stability in the system’s healthy financial profile, supported by solid management and proactive rating setting,” and that “management has adopted a structured framework that includes significant rate increases” through 2029.
Failure to adequately increase revenues could lead to a downgrade in the rating, Moody’s warned.
Moody’s also affirmed the Aa2 rating on MWA’s outstanding revenue bonds totaling $161.2 million. With the new bonds, the authority’s outstanding debt is $231.3 million.
The $70.1 million is the first tranche of funding for the $189 million, five-year capital improvement plan approved in September. MWA plans to use $50 million from these latest bonds for the expansion of the Rocky Creek Water Reclamation facility, and the balance to restructure prior debt.
Monroe credited MWA’s finance managers for their work in preparing the bond package.
“They did an excellent job and really know their stuff and have been great to work with,” Monroe said. “I wanted to commend them for the job that they do because on top of what they have to do every day, throwing a bond issue into that can really upset the apple cart, but they handled it very well,” Monroe said.
MWA Chairman Gary Bechtel agreed.
“Due to their work, we earn that rating, and I think it paints a picture of our financial stability, and I want to thank this authority for giving us the support necessary to do this,” Bechtel said. “It’s been a sprint, but it’s paying off with a big reward.”
Project update, vehicle purchases
In its ongoing list of capital improvement projects, MWA Executive Director Michel Wanna reported the estimated $19.3 million Rocky Creek plant project is in the engineering design and final cost estimate stage, and is working with Georgia Power to design an $18 million alternative power substation.
Lower Poplar Water Reclamation Facility’s $18.4 million influent pump station improvements are nearly complete, as is a $15.5 million electrical upgrade, but the facility also is undergoing more than $11 million in rehabilitation of its sewer lines.
The $3.3 million Allen Road-Echeconnee 30-inch sanitary sewer extension received a notice to proceed with that work in south Macon-Bibb County.
Structural repairs to the Amerson Water Treatment Plan estimated to cost $4 million are being divided into separate bid packages to hire contractors for the work.
The $17 million project to replace large commercial meters with Advanced Metering Infrastructure technology, or AMI, averages up to 50 scheduled appointments bi-weekly.
S&P noted the ongoing meter work in its ratings report: “As consumption accuracy improves, revenue from large users and residential customers is likely to increase.”
After sealed bids were opened Oct. 21, MWA purchased 11 new vehicles: two 2027 Ford F-250 XL Super Cab Long Bed trucks totalling $90,688 from Jim Ellis Ford, four 2027 Ford F-150 XL Super Cab trucks for $173,092 and a Ford F-250 XL Super Cab for $54,798 from Hardy Family Ford, and from Riverside Ford, a 2027 Ford Explorer for $36,191, a 2027 Ford F-350 XL Super Cab for $56,025, a 2027 Ford F-150 XL Crew Cab for $44,785 and a 2027 Ford F-150 XL regular cab for $40,997.
On Dec. 3, the authority plans to meet earlier at 1 p.m. for lunch and a presentation by MWA customer service before the regular meeting.
District 1’s Elaine Lucas suggested the authority invite members of the state legislative delegation to discuss possible sales tax relief proposals to fund water, sewer and stormwater infrastructure improvements, which lawmakers could consider during next year’s Georgia General Assembly that convenes Monday, Jan. 11.
— Peyton Anderson Civic Journalism Senior Fellow Liz Fabian covers Macon-Bibb County government entities and can be reached at fabian_lj@mercer.ed or 478-301-2976.
