Summary: Milpitas, California; Water/Sewer

S&P Global Ratings Services affirmed its 'AAA' long-term rating and underlying rating (SPUR) on Milpitas, Calif.'s series 2006A certificates of participation (COPs), issued for the city's sewer system. The outlook is negative. S&P Global initially placed the sewer system's bonds on negative outlook on March 2, 2015. The outlook remains negative, in our view, absent a concrete funding plan for the sewer system's upcoming capital needs. Under a capacity agreement with the cities of San Jose and Santa Clara, the city has rights to 14.25 million gallons per day (mgd) of treatment capacity in the San Jose/Santa Clara Water Pollution Control Plant (WPCP). Milpitas is obligated to share the cost of a very sizable capital improvement plan (CIP) for the

...S&P Global Ratings Services affirmed its '###' long-term rating and underlying rating (SPUR) on Milpitas, Calif.'s series 2006A certificates of participation (COPs), issued for the city's sewer system. The outlook is negative. S&P Global initially placed the sewer system's bonds on negative outlook on March 2, 2015. The outlook remains negative, in our view, absent a concrete funding plan for the sewer system's upcoming capital needs. Under a capacity agreement with the cities of San Jose and Santa Clara, the city has rights to 14.25 million gallons per day (mgd) of treatment capacity in the San Jose/Santa Clara Water Pollution Control Plant (WPCP). Milpitas is obligated to share the cost of a very sizable capital improvement plan (CIP) for the facility, and--depending on the actual magnitude and schedule of the treatment plant's capital improvements--the city may need to obtain external funding, such as from bond issuances or state loans. The rating also reflects the application of our...

Summary