Shreveport’s water & sewer bond rating downgraded, which could mean higher rates for customers
SHREVEPORT, La. (KSLA) - The City of Shreveport’s bond rating has been downgraded, the mayor’s office announced Monday, March 20.
Mayor Tom Arceneaux says he was informed Monday that Moody’s Investors Services has downgraded the city’s water and sewer bond rating from A3 to Baa1 and Baa2. However, the city’s overall bond rating remains at Baa1.
The lower rating comes from concerns about the city’s current level of utility revenue, which is reportedly not enough to keep up with the needs of the city’s water and sewer infrastructure. The mayor’s office says a utility rate study is in progress to identify what utility rate increases may be needed.
“I live in Shreveport and I have water problems at my house pretty regularly, a couple times a year at least. So I know that there (are) issues at hand that we got fix,” said Samuel Norton, owner of The Seventh Tap Brewing Project. “But we definitely have to keep the water going around the community and at the big businesses such as ourselves. We have to have water to be competitive and produce the beer that we’re doing now and at the prices we have it.”
The Moody’s rating also showed a negative outlook for the city’s bond ratings, suggesting the city is facing significant financial challenges in the future, including litigation costs, capital needs that will require future bond sales and the need to adjust utility rates in the future. Mayor Arceneaux said he and his staff will be working with the city council to address these issues.
All this being said, the mayor’s office says the city is still able to pay its debts and its bonds are still investment grade.
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