Credit rating agencies reaffirm Vallecitos credit rating

SAN MARCOS — The soon-to-be-completed Carlsbad Desalination Facility is already reaping benefits for at least one water agency.

The Vallecitos Water District had its high credit rating affirmed by one of the leading credit rating agencies, and upgraded by another, in no small part due to the district’s planned purchase of desalinated water from the facility.

Fitch Ratings recently affirmed the San Marcos district’s “AA+” rating, while Standard and Poor’s upgraded its rating from a AA to a AA+. Both rating agencies gave the water district a “stable” outlook for the foreseeable future.

A key reason for the high ratings, according to a district news release, is that investment in local storage has lessened the risk of supply disruptions. Vallecitos could see as much as a third of its demands met by desalinated water, which is considered “drought proof.”

The $1 billion desalination plant is expected to produce 50 million gallons of water per day, or roughly 7 to 10 percent of the region’s water supply. Crews are nearly done with a 10-mile pipeline that will deliver the water to the San Diego County Water Authority’s aqueduct in San Marcos, with water expected to be delivered starting in early 2016.

In addition, the ratings agencies highlighted the district’s diverse revenue stream, strong debt coverage performance, affordable rates, no planned debt over the next five years and conservative financial forecasting as other reasons for the strong ratings.

Vallecitos provides water and wastewater services for nearly 100,000 customers in a 45-square-mile area that includes San Marcos and unincorporated Lake San Marcos and portions of Vista, Carlsbad and unincorporated North San Diego County.

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