Summary: Schertz-Seguin Local Governmentt Corp, Texas San Antonio; Water/Sewer

S&P Global Ratings assigned its 'AA+' rating and stable outlook to the Schertz-Seguin Local Government Corp. (the LGC), Texas' series 2019 contract revenue refunding bonds, issued for San Antonio Water System (SAWS). At the same time, S&P Global Ratings affirmed its 'AA+' rating on the system's contract revenue bonds. The outlook is stable. The rating is based on our opinion of the general creditworthiness of SAWS as the obligor; SAWS' senior-lien rating is 'AA+'. For more information on SAWS, please see our report published Sept. 4, 2019 on RatingsDirect. Under the terms of a mutual regional water supply contract with the LGC dated Jan. 1, 2011, SAWS has an unconditional obligation to make monthly payments on a take-or-pay basis to

...However, the Edwards aquifer is highly regulated and prone to significant fluctuations in available yield based on weather and recharge. For that reason, SAWS is in the process of securing a new water source, Vista Ridge to further augment SAWS' water supply from the Edwards Aquifer. This project will draw from the Carrizo and Simsboro aquifers in Burleson County and is scheduled to start delivering up to 50,000 acre-feet annually in April 2020. This new source of water will provide approximately 20% of SAWS' average annual demand. In 1998, Schertz and Seguin formed the LGC to develop and secure supplemental long-term water supplies. The LGC later added Selma, Universal City, and Spring Hill Water Supply Corp. as customers but not members. The LGC looked to the Carrizo aquifer, which management views as having ample groundwater for the needs of Schertz and Seguin. Although there is a groundwater conservation district that does control withdrawals, regulation is generally less stringent...

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