Fitch Ratings on Monday delivered a AA rating to the Upper Occoquan Sewage Authority as it plans to issue $119.6 million of regional sewerage system revenue bonds next week. Fitch also assigned an initial AA rating to UOSA’s $328.9 million of outstanding bonds with a stable outlook.The bonds will be sold on a negotiated basis with Morgan Keegan & Co.Fitch said the rating “reflects UOSA’s critical role in regional water supply efforts and the authority’s strong and diverse service area.”The authority agrees to collect and treat wastewater flows from its members while billing them no less than quarterly for its operating, debt service, and replacement expenses. In turn, each member agrees to fix and collect sufficient charges from their respective sewer systems, sufficient to make required UOSA payments.In addition, Fitch said it took into consideration that UOSA’s largest member, Fairfax County, carries a AAA rating. The authority’s reservoir serves as a significant drinking water source for northern Virginia.The rating report also said UOSA handles wastewater treatment for 345,000 people in parts of Fairfax County and Prince William County, also rated AAA, in addition to the cities of Manassas and Manassas Park. The report said UOSA has consistently grown since its inception, and the new bonds will help finance a sizeable capital improvement plan slated for completion in 2014.The authority’s $395 million CIP from fiscal years 2008 to 2014 is large relative to the number of end users but appears manageable, Fitch said.
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