BRASELTON — The town of Braselton received an A- bond rating from Standard & Poor’s on its water and sewer revenue bonds, which will fund several town projects in the next two to three years.
The town council met recently to discuss the Series 2009 bonds, which will help pay for a number of projects — Phase II of the Mulberry River interceptor sewer project, water and sewer relocations for the Zion Church Road and Ga. 124 realignments, the enhancements to the town’s water reclamation facility on Josh Pirkle Road and the construction of a new lab and control facility, among others.
The bonds will generate an estimated $9.97 million to go toward those improvements, which total about $16 million altogether.
The council voted earlier this month to move forward with issuing the bonds, which will add about $819,000 annually to the town’s debt service payments, according to the bond pricing summary.
The A- bond rating given by Standard & Poor’s, an international credit rating company, denotes a "strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances," according to the company’s Web site.
In particular, Standard & Poor’s report on Braselton’s water and sewer bond rating notes the town’s credit strengths include its "participation in the Jackson-Gwinnett-Hall-Barrow counties’ economies, its stable service area ... that is still seeing growth, its willingness to increase water and sewer rates if necessary to maintain adequate debt service coverage and its ample wastewater treatment capacity and water supply."
However, these strengths can be offset by the town’s "history of spending down reserves ... and (its) strong reliance on tap and water fees."
The town gets its water from its four wells and from contracts with Barrow, Gwinnett and Jackson counties.
Braselton’s contract with Gwinnett, which provided about 1.25 millions of gallons per day to the city’s water capacity, ended in March and a new agreement was not put in place due to pending litigation, according to the Standard & Poor’s report.
However, the town’s other sources were able to make up the difference, according to Town Manager Jennifer Dees.
"We have excess available from other sources. However, Gwinnett has agreed to honor our old contract pending execution of the new one," Dees said.
Braselton has been increasing its water rates by 5 percent each year since a 2006 water rates study was completed, and the town will conduct another water rates study in 2010, Dees said.