DUFF & PHELPS: ANAHEIM PUBLIC FINANCING AUTHORITY $20 MILLION REVENUE BONDS, 1994 SERIES RATED 'AA'
CHICAGO, Jan. 14 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `AA' (Double-A) to Anaheim Public Financing Authority's proposed offering of $20 million of revenue bonds, 1994 series (City of Anaheim Water Utility Lenain Filtration Plant Project). The 1994 series bonds are subordinate to $26.9 million of City of Anaheim water revenue bonds and strongly benefit from high coverage levels. Proceeds will be used to pay construction and reconstruction costs of the Lenain Filtration Plant Project. The city's water system benefits from strong financial operations and regionally competitive overall water rates. However, despite significantly diminishing drought conditions last year, rate increases are expected to average approximately 8 percent over the next five years to cover higher water costs. Future expected annual rate increases will help to maintain debt service coverages in excess of 3.0 times. Anaheim has large water reserves in the basin and continuing expected availability of ample supplies from the Colorado river water to be purchased through the Metropolitan Water District of Southern California (MWDSC). The city's successful demand-side management program (water sales declined 1.1 percent annually since 1988), in conjunction with last year's much stronger rainfall activity, will further help Anaheim's water supply. The city relies less upon water purchases from the MWDSC than most southern California communities. Anaheim's financial operations, beyond that of the water system, appear satisfactory. Each of the electric and water utility system's finances are managed separately from general operations of the city; however, all accounts are consolidated for investment purposes. Financial operations appear well maintained and have demonstrated flexibility sufficient to absorb unbudgeted shortfalls. Satisfactory financial performance of the Electric and Water Funds is contingent upon successful implementation of rate increases. Although Anaheim has an above average dependence on aerospace and defense activity, it possesses an unusually strong tourist, recreation and convention based trade and service sector. The city's rapid population growth together with projects such as the large $3.0 billion Disney expansion project should stimulate the city's economy and mitigate negative effects from the weak California economy. Anaheim's water system serves the city of Anaheim, with a population of approximately 285,000, as well as a small area outside the city. -0- 1/14/94 /CONTACT: William A. Abrams, CFA of Duff & Phelps Credit Rating Co., 312-368-3112/
CO: Anaheim Public Financing Authority ST: California IN: UTI SU: RTG
LD -- NY067 -- 2182 01/14/94 17:02 EST