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Independent Audit Shows Strength of EID Finances, Credit Ratings Increase
Contact: Jesse Saich, Public Information Officer, (530) 642-4127, firstname.lastname@example.org
FOR IMMEDIATE RELEASE
Placerville, Calif. — During its June 27 meeting, EID board members received positive financial news as they reviewed and filed the 2015 annual audit.
EID Accounting Manager Tony Pasquarello reported that independent auditing and accounting firm Richardson & Company, LLP conducted the 2015 financial audit of EID.
State law requires a thorough annual independent audit of the district’s financial records and operations by a certified public accountant.
The purpose of the audit is to review and test accounting data to ensure that internal controls, practices, and procedures are properly followed and to determine whether financial statements represent fairly the financial position of the district with no material discrepancies.
The auditors issued an unqualified “clean” opinion that the financial statements fairly present the financial position of EID as of December 31, 2015, and that no deficiencies in internal controls, practices, or procedures were detected. “An unqualified opinion is the highest level of assurance that an auditor can provide,” said Pasquarello.
Moody’s and S&P Raise EID Credit Ratings
On June 16, 2016, S&P Global Ratings notified EID that it was upgrading the district’s long-term rating and underlying rating to AA- from A+ on EID’s revenue bonds and certificates of participation (COP). On June 17, 2016, Moody’s Investors Service also notified the district that it was upgrading EID’s outstanding parity debt—comprised of outstanding revenue bonds and COPs—to Aa3 from A1.
Credit ratings generally reflect a relative ranking of credit risk. A debt-issuing entity like EID or a debt security with a high credit rating is determined by the credit rating agency to have greater financial strength and a lower likelihood of default than an issuer or debt security with a lower credit rating.
The rating from S&P Global Ratings highlighted the district’s very strong enterprise risk profile and financial profile. “Based on our operational management assessment, we view the district to be a ‘1’ on a scale of 1-6, with ‘1’ being the strongest,” noted S&P in its analysis. “The district has an ample raw water supply and water treatment capacity to meet long-term demands.”
“These credit rating increases signal the strength of EID’s finances—not just in this year, but over the years we have been implementing our long-term financial plan,” said Mark Price, EID’s finance director. “EID has been able to demonstrate stability in its operating revenues through the control of operating expenses, the annual review of sustainable rate increases, and the adoption of a manageable and right-sized capital improvement program.”
EID is a public agency dedicated to providing high quality water, wastewater treatment, recycled water, hydropower, and recreation services in an environmentally and fiscally responsible manner.