JAMES CITY — Before making any big purchases, the county went to New York this week for a credit check. By Friday afternoon, there were some good results.
Standard & Poors upgraded the James City County Service Authority from AA+ to AAA on Friday, citing the "county's stable and predictable revenue and cash flow streams from low-risk water and sewer service, a natural monopoly in its service area" and "a strong operational management framework."
County officials made financial presentations to three major bond rating agencies this week as major decisions loom on debt service projects, including a fourth middle school and facilities to pump and treat an alternate source of water for the county.
Board of Supervisors Chairman Michael Hipple made the trip along with supervisor Kevin Onizuk, who also serves as chairman of the James City County Service Authority, which is assessed separately from the county.
The trip had a dual purpose: getting bond rating agencies to assess JCSA's financial health (the last time it was rated was in 2012) and renewing the county's bond rating ahead of applying to issue bonds for the construction of a fourth middle school.
"I'm very proud, this shows our fiscal strength and the great staff that we have moving our county forward," said county administrator Bryan Hill, who went on the trip to New York. "The residents should be proud of the team that has been assembled in James City County."
"This is about getting our financial house in order," Hill said. "When we do need to deal with the water issue, we need to make sure we're at the highest financial offering possible to get the lowest rate."
Last summer, the county was upgraded to a rare "triple-triple" AAA bond rating after agencies gave the county high marks for conservative budgeting and fiscal management.
Onizuk said the meeting went well. He also made presentations to the rating agencies with Hipple on the middle school.
While Onizuk has raised questions about the necessity of the project, he said it's likely the James Blair Middle School project will move forward. Onizuk voted to delay seeking authorization for the bonds until May. He has previously voted in favor of the project, but has said he has misgivings over costs and enrollment projections provided by the school division.
Onizuk said Thursday in a phone interview with the Gazette that the presentations were a preliminary measure, as the county and school division are still engaged in discussions on the project.
"It appears it will be James Blair. We have to renew our ratings. We already have the triple-triple (rating), and we have to update our credit rating before applying for anything," Onizuk said.
He said the JCSA rate changes were well received by the bond rating agencies.
"The actual cost per household was minimal. While the cost of water went up, the cost of sewer went down, the net effect in most households," Onizuk said.
"They were impressed we had done a rate study and implemented some of the changes as recommended. They were impressed by our cash reserves on our systems. Overall, I think it went very well. They were pleased with the fiscal outlook of the JCSA as well."
Pricey decisions await supervisors as they look to address the county's water needs. The Virginia Department of Environmental Quality is looking to halve the amount of water the county can draw from the ground each day amid concerns the aquifer is not replenishing adequately.
One of the options being considered by supervisors is drawing surface water from the Chickahominy River. But getting that done will require an expensive treatment facility, which may cost as much as $120 million.
By gradually reducing its debt portfolio, the county hopes to have the financial position within a decade to move on the water plant. Any water decision will be delayed until after the county completes its strategic plan, which will be finished by the end of this year.
Bogues can be reached by phone at 757-345-2346.