City of San José, CA – Wastewater Revenue Surveillance Report Surveillance Report
Rating Summary
The long-term rating reflects the strong service area economy, anchored by the City of San José (the City), the autonomous rate setting authority, ample wastewater treatment capacity, competitive sewer rates, and strong financial performance as evidenced by the very low leverage and healthy debt service coverage and liquidity. The rating is additionally supported by the inclusion of the vast majority of the City’s sewer charges on the County of Santa Clara’s (the County’s) property tax roll, which benefits from participation in the County’s Teeter Plan.1
Counterbalancing these strengths is the City’s large capital improvement plan (CIP) totaling approximately $1.4 billion through FY 2031. KBRA views the capital plan as manageable given moderate new debt and sewer rate requirements, which should maintain financial flexibility going forward. Additionally, a portion of the projected capital costs is allocable to other sewer systems that…
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