BOSTON - The Massachusetts Water Resources Authority's progress on the Boston Harbor cleanup and the authority's improved financial condition have not gone unnoticed at Standard & Poor's Corp.
In a CreditWeek Municipal report yesterday, the rating agency said that significant cost savings as a result of low interest rates, the completion and design of several of the largest parts of the project, and positive political developments have helped strengthen the authority's A rating.
The report could not have come at a better time for the authority. Last week, a fire in one of the major tunnels to the Deer Island sewage treatment plant threatened the timely completion of the project as well as the tunnel workers.
MWRA executive director Douglas B. MacDonald said yesterday that the review from Standard & Poor's was "very satisfying."
"It's a good feeling to see that for the most part, the rating agencies realize that what we are doing here has the projects on the right track," MacDonald said. "We have worked hard to justify their faith in us."
Standard & Poor's said that several factors are working for the authority now.
"The progress that the authority has made in rate methodology and the improved political climate were significant developments," said William Cox, a director at Standard & Poor's.
This month, the authority's advisory board took a major step toward changing the way the authority collects for sewage services for the 61 communities it services.
Under the new plan, the authority would base rates on a city's sewage production as well as its population. Previously, the rates were based on population alone.
The authority also will benefit from a recent decision by the Environmental Protection Agency to ease requirements on treating combined sewer overflows. The authority said the move will save it $700 million from the $1.4 billion combined sewage overflow program.
The overflows handle excess sewage during rainy periods. During the 1970s officials estimated that inadequate handling of overflows resulted in as much as 450 million gallons of raw sewage a day pouring into the Boston Harbor during heavy rains.
The report said the change in the standards will produce savings well beyond 2000.
In addition, the authority will now be receiving $28 million a year in state aid. Past help from the state has been minimal.
Cox said that over the next five to seven years, the authority will be facing most of the significant construction deadlines. If the authority can meet the the deadlines, as it has done for the most part in the past, the rating could be boosted before the end of the decade, he said.
"Every issuer thinks that their rating should be a notch higher," MacDonald said. "We are pleased that if we continue to control our costs, we will at least be in a position for an upgrade."
MacDonald said the authority is investigating last week's fire and there are no estimates yet to the damage or cause. He said that all 43 of the workers in the tunnel were evacuated and the safety precautions all worked.
He said the authority will "probably lose a few weeks' worth of work" in the tunnel, but that the fire did not harm the tunnel, only a shaft and some equipment.
The authority was ordered in the mid-1980s by federal Judge David Mazzone to manage and finance the cleanup of the Boston Harbor and the construction of the Deer Island plant. MacDonald said that Mazzone was advised of the fire and is aware of the potential slowdown in work because of it.