The rating on Philadelphia, Pa.'s water and wastewater revenue bonds reflects the following credit concerns: * Declining collection rates, which have slipped to 82.2% in fiscal 1996, following a peak of 87.1% in fiscal 1994 after the city's Department of Water implemented monthly billing; and * Significant anticipated additional debt resulting from a large capital improvement program. These concerns are partially mitigated by the following credit strengths: * Stable financial position, with coverage of senior revenue debt service managed to the 1.2 times (x) level following deposits to the capital and rate stabilization accounts; and * Consistently strong regulatory compliance record following the resolution of three environmental consent orders in fiscal 1995. The department has a history of poor revenue
