The 'AA' rating on Colorado Springs, Colo.'s utility system subordinate-lien improvement revenue bonds series 2004B and C reflects the city's: Strong financial management, resulting in total coverage of about 2x on a historical and projected basis (although fiscal 2003 debt service coverage levels dipped to 1.7x due to drought conditions that reduced water sales), and higher-than-usual natural gas costs that were not fully recovered during the fiscal year; Competitive rates in each of its four utility systems, although planned capital improvements will be accompanied by significant rate increases--particularly in the water division; Diverse mixture of resources in its electric system, which accounts for about half of the utilities' combined operations; and Stable regional economic base, which absorbs much of the
