BRADENTON, Fla. — U.S. District Judge Thomas Thrash Thursday morning granted Atlanta another 13 years to complete consent-related work on its massive sewer repair program.
Under the original consent decree schedule, the work was to be done in the next two years.
If the extra time had not been granted, sewer rates would have gone up, said city chief financial officer Jim Beard.
"We would not be in compliance with the original consent decree, which had fines and penalties and would have created a larger burden on the system," he said.
The consent decree improvements are overseen by the Atlanta Department of Watershed Management, an enterprise agency that has $3.3 billion of outstanding debt. The DWM's bonds are rated A by Fitch Ratings and Standard & Poor's, and A1 by Moody's Investors Service.
Beard said the department has cut sewer overflows by 97% so far. The original consent decree required 99% of sewer overflows to be eliminated by 2014.
With the extension, the city can now include needed drinking water projects in its capital plans along with sewer repairs necessary to meet the consent decree as well as those are needed for other reasons, he said.
Atlanta plans to spend about $95 million a year over the next 10 years on sewer and water projects. Currently, expenditures are envisioned on a pay-as-you-go basis. There are no plans for additional debt at this time.
"Having this extension and having clarity for our capital plans may increase chances of earning a rating upgrade from the credit rating agencies in the future," Beard said.
In May, Moody's analyst Lauren Von Bargen said the proposed 13-year consent extension was a credit positive for the city because it would provide more time to complete remaining work to eliminate sewer overflows, make drinking water system improvements, and spread the remaining costs over a longer period of time.
Von Bargen said the city had increased rates to pay for capital needs over the last four years, by 27.5% in 2009, 12.5% in 2010 and 2011, and by 12% this year.
The rate hikes "have brought the city's water and wastewater rates to among the highest in the country," Von Bargen said.
The sewer system also benefits from a 1% local-option sales tax imposed in the city.
