Standard&Poor's Ratings Services assigned its 'A+' rating to the City of Oceanside, Calif.'s sewer system refunding revenue certificates of participation (COPs). In our opinion, the city's credit strengths include: A stable underlying economy located in San Diego County adjacent to Camp Pendleton with strong income indicators; Adequate financial performance, backed by a history of making necessary rate increases; Currently strong liquidity of 277 days of operations, with a policy to maintain at least an adequate level of 45 days; and Active management, with an internal target of 1.25x annual debt service coverage. In our view, offsetting these strengths are: Coverage that is dependent on a planned large, approximately 17% rate increase in 2009 to reach 1.25x debt service
