Westminster : Moody’s Lowers Rating on City’s Water Bonds

Moody’s Investment Service Tuesday lowered its rating of bonds issued by Westminster’s water service, saying the utility’s “deteriorating finances” make the bonds a poor risk.

In a prepared statement, Moody’s said the rating on the bonds was reduced because of an “uncertainty about (the utility’s) future ability to maintain financial position.”

Moody’s officials could not be reached for comment, but a lowered rating usually indicates that a bond is becoming an increasingly risky investment.

City Administrator Chris C. Christiansen, however, said the reduced rating is not justified. “We really don’t have any concern,” he said. “Theoretically, we could buy it (the bond debt) out today.”

Finance Director Jim Antoniono said the city increased water rates by 15% in January after financial reports in June showed the utility was operating at a loss.

Moody’s rate reduction on the bonds was based on the June report but does not take into account the increased income from the water rate increase, Antoniono said.

Westminster offered $2.5 million worth of the 20-year bonds at about 4% interest in 1965 when the city bought the utility service from the Southern California Water Co., Christiansen said.