Summary: Milpitas, California; Water/Sewer

S&P Global Ratings lowered its long-term rating and underlying rating (SPUR) to 'AA+' from 'AAA' on Milpitas, Calif.'s series 2006 certificates of participation (COPs), issued for the city's wastewater system. At the same time, S&P Global Ratings assigned its 'AA+' rating to Milpitas' $4.7 million series 2017 wastewater revenue refunding bonds. The rating reflects, in our opinion, the combination of an extremely strong enterprise risk profile and a very strong financial risk profile. The outlook is stable. The lowered rating reflects our opinion of Milpitas' reliance on San Jose and Santa Clara for wastewater treatment services, which limits managerial flexibility over a significant portion of the system's operating budget. Moreover, we believe the wastewater system's financial metrics could weaken over

...S&P Global Ratings lowered its long-term rating and underlying rating (SPUR) to '##+' from '###' on Milpitas, Calif.'s series 2006 certificates of participation (COPs), issued for the city's wastewater system. At the same time, S&P Global Ratings assigned its '##+' rating to Milpitas' $4.7 million series 2017 wastewater revenue refunding bonds. The rating reflects, in our opinion, the combination of an extremely strong enterprise risk profile and a very strong financial risk profile. The outlook is stable. The lowered rating reflects our opinion of Milpitas' reliance on San Jose and Santa Clara for wastewater treatment services, which limits managerial flexibility over a significant portion of the system's operating budget. Moreover, we believe the wastewater system's financial metrics could weaken over the next few years absent a concrete funding plan for its share of capital costs associated with planned upgrades to the San Jose/Santa Clara Water Pollution Control Plant (WPCP). We understand...

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