The ratings on Tacoma, Wash.'s bonds reflect the following credit strengths: * Strong system financial performance; * Competitive water rates; and * An expanding and diversifying economic base (Pierce County rated 'A+'/positive; Tacoma 'A+'/Stable). Credit concerns include a sizeable, but manageable, capital improvement program (CIP) and participation in a large regional water supply project. The outlook revision reflects reduced operational and financial risk associated with the second supply water project, which is expected to provide the system with additional reliability and increased flexibility. Providing water service to over 80,000 customers in Tacoma and surrounding areas in Pierce County, the utility has been working closely with neighboring utilities to develop a second surface water source to meet expected demand. Initially, Tacoma
