Standard & Poor's Ratings Services said it has raised its long-term rating on Polk City, Fla.'s water and sewer system revenue bonds to A from A-minus.
The outlook is stable.
"The upgrade is based on our view of the utility's improved financial profile in recent years, as evidenced by good total debt service coverage and sound liquidity," said Standard & Poor's credit analyst Paula Costa.
The bonds are secured by the net water and sewer revenues plus certain public service tax revenues. Impact fees are excluded from pledged revenues. The previously issued series 2011A and B revenue bonds were applied toward the payment of various water and sewer revenue bonds, notes, and financial obligations as well as capital project costs.
The stable outlook reflects the expectation that management will continue to proactively monitor system operations and rates to support its currently sound financial profile. Based on this, S&P does not expect to change the rating over the two-year outlook horizon.
It may consider a higher rating if the utility sustains a consistently stronger financial profile over the longer term horizon. Conversely, if the utility's financial metrics weaken from current levels it may consider a lower rating.
Polk City is located within Polk County, midway between the cities of Orlando and Tampa, each about 40 miles away. The city's population contracted about 7% from 2010 levels and is currently estimated at 1,700 (2013).
