You can learn more about or purchase the Water Authority’s bonds by contacting your personal investment consultant or advisor.

A municipal bond is a debt obligation of a state, county, city, special district, or agency. Typically, interest on municipal bonds is exempt from federal income taxes and, if the bonds are issued in your state of residence, from state and, in some cases, local income taxes as well. Most municipal bonds are classified as either general obligation (G.O. bonds), which are secured by the property taxing authority of the issuing municipality, or revenue bonds, which only have recourse to the project revenues for which the bond proceeds are used.

The San Diego County Water Authority (Water Authority) is a special agency, created under California law in 1943 and organized in 1944. The Water Authority exists for the primary purpose of supplying water within San Diego County for wholesale distribution to the Water Authority’s member agencies in order to meet the member agencies’ respective residential, commercial and agricultural customer needs.

The Water Authority issues revenue bonds. It has historically issued its revenue bonds as “Water Revenue Certificates of Participation”. However, starting in 2010, it is issuing its revenue bonds as “Water Revenue Bonds”. Its bonds are typically fixed rate, long-term bonds and are secured by a pledge of the net revenues of the Water Authority.

The Water Authority primarily uses proceeds of its bond issues to pay a portion of the design, acquisition, and construction of its capital construction projects, pursuant to its Capital Improvement Program. Its construction projects provide for the development, storage and transportation of water on behalf of its member agencies.

Principal payments are made annually, per each bond issue’s retirement schedule, on May 1. Interest payments are made semi-annually on each May 1 and November 1.

The Water Authority currently has seven bond issues outstanding, including its most recent bond issue, the Series 2010A (Tax-Exempt) and 2010B (Taxable Build America Bonds) Water Revenue Bonds, which were issued in January 2010. You can obtain more information about these bond issues by visiting the “Investor Relations” section of the Water Authority’s website.

No, the Water Authority has never missed any of its bond payments or defaulted on any of its bond issues.

The Water Authority typically issues bonds when it is close to spending the proceeds from its last bond issue and needs to raise funds to pay for approximately 2 – 3 years of upcoming construction projects, pursuant to its Capital Improvement Program. From time to time, the Water Authority may also issue bonds to refinance outstanding debt obligations, as market conditions dictate.