Clayton County Water Authority approves $93 million bond issue
In order to finance the majority of water and wastewater system improvements over the next three years, the Clayton County Water Authority is moving forward on an unprecedented $93 million bond issue.
Preparations begin to secure ratings, insurance and favorable interest rates
Morrow, Ga., March 1, 2001 — In order to finance the majority of water and wastewater system improvements over the next three years, the Clayton County Water Authority is moving forward on an unprecedented $93 million bond issue.
At a special called meeting, the Water Authority board of directors voted unanimously to proceed with its 2001 bond series as presented by financial advisors from Bank of America Securities and attorneys from King & Spalding, who were both selected to oversee the bond issuance process.
The Authority is working hard to enter the bond market while current interest rates are so favorable. In fact, the Authority has been told to anticipate another cut in interest rates, with additional positive effects as a result of such savings trickling down from the federal to municipal bond market.
"Our financial position continues to put us in a position to take advantage of a favorable bond market," says Wade Brannan, general manager of the Clayton County Water Authority. "We hope to again receive a very healthy bond rating from the bond rating companies, prior to offering our bonds for sale."
(The Authority will not only benefit from favorable interest rates for this current 2001 series of revenue bonds, but costs for issuing the bonds are projected to be less than normal as well. The cost of the $93 million bond issue is estimated at $962,000, substantially lower than what is normally seen in the bond market and around the country , says Bill Johnston, financial advisor to the Authority from Bank of America Securities. "The low interest rates and low cost on the bond issue help us keep operational cashflow and helps us keep the lowest water rates in metro Atlanta, "says Brannan. The Water Authority now moves into a stage of further preparation and submission of rating agency and bond insurance packages. These packages are scheduled to be submitted March 14. If all goes well, revenue bonds could go on sale to investors the week of April 12, with bond closing targeted for May 1.
"The board has provided great support and leadership in trying to get this bond issue done," adds Brannan. "While this bond issue is sizeable compared to those we've done in previous years, we will be able to finance our master plan for the next three years as a result. Most of our construction and maintenance projects will be well on their way to completion during this time."
The board of directors adopted the Water Authority's 10-year master plan, titled the "Water Resources Initiative," last year, beginning financing with a $23 million bond issue in the summer of 2000. Thus, initial projects of the Water Resources Initiative are already underway.
On January 15, construction began on the $14.6 million expansion and upgrade of the Shoal Creek Water Reclamation Facility, which will more than double its existing wastewater treatment capacity to 4.4 million gallons per day (mgd). In addition, constructed wetlands will be added to the treatment process at Shoal Creek, at a projected cost of $8.5 million. That construction is set to begin this summer .
While the Authority pursues these two construction projects, construction and maintenance crews will also provide extensive sewer collection system improvements, in order to provide for new growth in the county and minimize sewer overflows or infiltration.
"We're excited about the future improvements of our system and the other details of the Water Resources Initiative," says Brannan. "This bond issue will provide us with the additional revenue necessary to reinvest in the system, while protecting our natural resources for the future."