Less waste lowers bond rating says Merced waste authority

MERCED
November 19, 2009 7:50am

Moody’s Investor Service plans to downgrade the Merced County Regional Waste Management Authority’s Solid Waste Revenue Bond rating from A3 to Baa3, the authority says.

The rating means the bond is considered a medium safe investment, the authority says.

“This move is a further reflection of the economy,” says Sam Chandler, deputy director of the authority.

“People are buying less, which means they’re creating less waste, and that means less waste deliveries to the landfills,” Mr. Chandler says.

Fees at the landfill recently increased 5.2 percent, but Moody’s feels they should have increased more to offset the rapid decline in waste tonnage, the authority says.

The authority’s board, consisting of an elected representative from the county’s six cities and a supervisor from each of the county’s five districts, voted to keep increases low to still be affordable and approved several cost-cutting operational efficiencies.

Moody’s also acknowledged the weak economic environment in the region as a contributor to the decline in revenue.

“The new rating is comparable to other solid waste authorities in California,” says Mr. Chandler. “From a cash flow viewpoint, we remain in a stable position.”