Edward Barca, CPA, Director of Finance
Pittsburgh Water
Pittsburgh Water
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Upgrade to ‘A2 stable’ reflects strong leadership and sustained financial improvements
Pittsburgh, PA - Moody’s Ratings (Moody’s) recently upgraded Pittsburgh Water’s credit outlook from A3 positive to A2 stable, signifying financial stability during a period of necessary capital investments, and Pittsburgh Water’s progress as a modern, forward-looking utility with effective governance and leadership.
The upgrade to A2 and the revision of the outlook recognizes Pittsburgh Water’s stability, which the organization has proven capable of maintaining. The upgrade comes as part of a growing trend for Pittsburgh Water; just over two years ago, S&P Global Ratings raised its rating of the utility’s first-lien revenue bonds to ‘A+’. In this week’s announcement, Moody’s noted that, over the past five years, Pittsburgh Water has significantly improved its coverage and liquidity, placing the organization in a relatively sound position. Given this, Moody’s rating action also assigns the A2 rating to Pittsburgh Water’s proposed $120.9 million First Lien Revenue Bonds, Series A of 2025.
“This latest upgrade is further validation that our leadership team and Board of Directors are managing public finances responsibly,” said Pittsburgh Water CEO Will Pickering. “By managing our investments effectively, we will continue to improve our vital public infrastructure and keep rates as affordable as possible,” he continued.
In recent years, Pittsburgh Water has implemented extensive improvements to its financial practices and policies with support from its Board of Directors. These efforts have resulted in stronger financial stewardship. In addition, Pittsburgh Water has successfully secured low-interest loans and grants from state and federal agencies, built its reserve funding, and has improved debt management.
As a publicly owned and operated water utility, every dollar received is reinvested back into the water system customers rely on. Funding from state and federal partners is critically important to keeping rates as low as possible and reducing the burden on ratepayers. Since 2018, Pittsburgh Water has been awarded a total of $852,432,928 in funding through these routes: $753,550,130 as loans and $98,882,798 as grants.
Pittsburgh Water’s renewed focus on modernizing the city’s aging water infrastructure is perhaps the primary driver behind the organization’s need to secure such funding. In recent years, the organization has made significant progress to remove lead service lines across its service area and is constructing the generational projects making up its Water Reliability Plan. These crucial projects fulfill the organization’s mission to protect public health and will secure reliable water services for customers now and in the future.
“Maintaining a stable financial outlook while simultaneously making a series of once-in-a-generation investments in critical water infrastructure projects is no small feat,” said Ed Barca, Pittsburgh Water’s Finance Director. “Our financial performance and fiscal responsibility are such critical factors in our operations, now more than ever. The financial strategies we employ today have the potential to impact our ratepayers for years to come, and we see this upgrade from Moody’s as another sign that we have been — and will continue — making strong decisions.”
Among many factors in this week’s upgrade, Moody’s cites Pittsburgh Water’s stable leadership as a major driver of this rating action. With a commitment to financial stewardship and sustainability, its current leadership has instituted sound fiscal policies to support necessary capital investment essential to modernizing its infrastructure and providing reliable water services. To meet these obligations, funding through low-interest loans and capital borrowing is necessary. Moody’s cites the organization’s current and projected coverage and liquidity as a substantial improvement from its history.
This notable progress, and the demonstrated aptitude of its current leadership to maintain financial health, played an important role in Moody’s decision to upgrade Pittsburgh Water’s rating. Moody’s specifically noted that its stable outlook reflects the likelihood that Pittsburgh Water’s strong management team will prevent its overall credit profile from declining moving forward.
“An important area of Pittsburgh Water’s mission, vision, and core values is our focus on the delivery of safe and reliable water services, which requires a strict commitment to our core values of stewardship, ethics & integrity, accountability, safety and equity,” said Frank Sidari, Pittsburgh Water’s Chief Environmental Compliance and Ethics Officer. “These core values have played a huge part in shaping how our management team guides our entire operation, with a constant emphasis on taking every action in the best interest of our current customers and future generations. This level of leadership and our demonstrated responsible stewardship of capital seems to be exactly what Moody’s is referencing in this rate upgrade.”
