Featured Municipal Bond Issue, Week of February 5, 2018: Los Angeles Water Revenue Bonds
The Department of Water and Power of the City of Los Angeles is issuing $231 million in water system revenue bonds the week of February 05, 2018. These Los Angeles water bonds are being issued as a single series to pay costs of capital improvements to water system infrastructure.
The Water System Infrastructure Program includes conducting condition assessments of infrastructure every five years, in accordance with EPA’s best management practices. Using these condition assessments to create a thorough rehabilitation priority checklist, since 2012, over 100 pumps and monitors have been replaced or refurbished. The Department has replaced over 576,000 feet of water distribution mainline over the past four years, and plans to replace 215,000-250,000 feet each year between Fiscal Year 2017-2018 and Fiscal Year 2021-2022.
The Department estimates the total capital improvement program will cost about $6.6 billion through the end of Fiscal Year 2021-2022. Approximately 41% of the funding is expected to be funded directly through rate collections from customers, with the balance being funded by from borrowings, including this current series of bonds, previously issued bonds, and future parity obligations.
Security for these bonds is a covenant to pay all principle and interest from the water revenue fund, which includes all revenues from every source collected by the Department in connection with the possession, management, and control of the Water System. Details on the purposes, tax-status, security, as well as other matters pertaining to these Los Angeles water bonds, which can be found in the preliminary official statement, are available on MuniOS.
As of November 2017, the Los Angeles-Long Beach-Anaheim, CA Metropolitan Area has an unemployment rate of 3.8%, which is 0.3% lower than the national rate for November, and 0.6% lower than at the same time in 2016. MuniNet provides this data and more, easily accessible, for all 50 states and each Metropolitan Statistical Area in the country, in our Employment Database.
Provided at left (click to expand) is a quick snapshot of financial characteristics of the Los Angeles Department of Water & Power Water System as of 06/30/2017, compared with the medians for other U.S. states, courtesy of Merritt Research Services, LLC. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness). In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendar, city, state, and county pages, and our employment database.
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.
by Jeffrey L Garceau