Atlanta’s water rates to be stable through 2016, Moody’s predicts

By David Pendered

The year 2016 may prove to be a critical year for customers of Atlanta’s water system.

Atlanta saved $50 million in construction costs at the Peachtree Creek capacity relief project, which included installation of this 48-inch pipe at Cheshire Bridge Road. Credit: City of Atlanta

Atlanta saved $50 million in construction costs at the Peachtree Creek capacity relief project, which included installation of this 48-inch pipe at Cheshire Bridge Road. Credit: City of Atlanta

That’s the year Atlanta may ask voters to extend a 1 percent sales tax to help pay for upgrades to the sewer and storm drain system. Atlanta voters instituted this sales tax in 2004, and extended it in 2008 and 2012.

The year 2016 also the furthest year that a New York credit rating agency predicted that Atlanta’s water rates are likely to remain stable.

Moody’s Investors Services cited both the sales tax and the water rate in a recent credit outlook that determined Atlanta’s recent completion of two sewer construction projects was a “credit positive.” The projects were delivered on time and $50 million under budget.

Moody’s observed that the cost saving represented 8 percent of the system’s gross revenues for Fiscal Year 2013 and added:

  • “Completion of this milestone on time and under budget is a credit positive for the system, which has faced two large consent decrees since 1998 related to aging infrastructure.
  • “The timely and under-budget completion of these projects will provide the system with the financial flexibility to apply the savings to preventative maintenance projects. It also demonstrates a commitment to improving system’s infrastructure and customer service, while remaining fiscally conservative, all of which are strengths of the system.”

Moody’s also observed the fiscal consequences of Atlanta winning approval from the federal Environmental Protection Agency to extend the deadline to complete the sewer rehabilitation program:

  • This jet mix facility is to keep solid waste suspended in the flow, to reduce the chance it will accumulate. Credit: City of Atlanta

    This jet mix facility is to keep solid waste suspended in the flow, to reduce the chance it will accumulate. Credit: City of Atlanta

    “In 2012, the city won an EPA extension of the final completion date for the 1999 consent decree to 2027 from 2014, allowing for more balanced capital spending and eliminating the need for customer rate increases through 2016.

  • “The city plans to fund the remaining projects through pay-as- you-go spending, reserves, Municipal Option Sales Tax (MOST) revenues and Georgia Environmental Facilities Authority loans. Atlanta voters renewed the MOST in 2012 and officials conservatively estimated $113 million in collections through 2020.”

Moody’s issued its report July 17, the week after Atlanta announced completion of two significant projects – the Peachtree Creek capacity relief project, located west of Cheshire Bridge Road, and citywide sewer rehabilitation.

The two projects were delivered at a cost $50 million below budget and ahead of a July 1 deadline imposed by the federal Environmental Protection Agency. Atlanta reduced costs by revising the design and building the facility on city-owned land.

This is how the city characterized the savings in its statement of July 10:

  • “The $40 million Peachtree Creek Capacity Relief Storage Tank & Pump Station will alleviate sewer overflows during heavy rain in the Peachtree Creek basin. The tank, just west of Cheshire Bridge Road and bordering the CSX rail right-of-way, will store up to 10 million gallons of water and is equipped with a state-of-the-art self-cleaning and odor control system. Through revisions in the original design and construction of the tank on City-owned property, DWM achieved cost savings of more than $50 million.”

 

About David Pendered

David Pendered, Managing Editor, is an Atlanta journalist with nearly 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.
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1 comments
JSVH
JSVH

I'd rather see that sales tax go towards transportation SPLOST in 2016 as suggested by the efficiency commission. 

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