The rating on Durand, Mich.'s sewage disposal system revenue bonds reflects the system's: Pro forma debt service coverage (DSC) based on in-place and future rate increases, and Additional bonds test that allows for adjustment. Mitigating strengths include: Low debt levels with limited future capital needs due to good system maintenance and capacity, Satisfactory financial performance with very strong liquidity, and Rate flexibility afforded by competitive rates. The bonds are secured by the net revenues of the system. Other legal provisions include a debt service reserve fund and a historical additional bonds test, allowing for rate and extension adjustments, of 125% of maximum annual debt service. Proceeds will be used to improve and build trickling filters. The city's system is small,
