KBRA assigns a long-term rating of AA with a Stable Outlook to the Miami-Dade County Florida Water and Sewer System Revenue Bonds, Series 2025A, Water and Sewer System Revenue Refunding Bonds, Series 2025B, and outstanding parity obligations. The rating reflects the Miami-Dade County Water and Sewer System’s consistently solid financial performance, satisfactory liquidity, sound and improved debt service coverage (DSC), and good rate affordability, as well as the strong bondholder protections afforded under the Master Bond Ordinance. The System is operated by the Miami-Dade Water and Sewer Department (WASD or the Department), which continues to effectively manage and implement a large, regulatorily driven, Multi-Year Capital Improvement Plan (MYCIP). The MYCIP totals $9.0 billion for fiscal years 2026-2031.

Credit strengths are counterbalanced by the high capital costs and leverage associated with federal and State-mandated capital projects. Federal and State regulatory requirements to improve the Department’s wastewater collection and treatment system, including a 2013 Consent Decree, Ocean Outfall Legislation, and the need to increase permitted capacity at the Department’s South District Wastewater Treatment Plant (SDWWTP) drove a substantial increase in annual capital investment, beginning in FY 2015. Through the successful execution, to-date, of its annually updated Multi-Year Capital Improvement Plan (MYCIP), the Department has expended approximately $3.1 billion, or 35% of the adopted FY 2026 MYCIP budget of approximately $9.0 billion. The MYCIP, which is subject to review and approval by the Miami-Dade County Board of County Commissioners, has remained at or below this level in each of the past five fiscal years.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• Rates remain competitive and affordable despite average annual increases of more than 5% in each of the last eleven years.
• The security provisions of the Master Bond Ordinance provide sound bondholder protections.
• The Department has efficiently managed the Utility’s regulatorily-driven MYCIP.

Credit Challenges

• Leverage is expected to remain elevated as the System continues to address regulatory mandates and the ongoing replacement and repair of aging infrastructure.
• A large share of the $9 billion MYCIP includes federal and state-mandated compliance projects with hard, legally enforceable deadlines and little scheduling discretion.
• Unusually high levels of unbilled water, although partially attributed to known water usage, represent a structural burden on customer rates, operating margins and debt service coverage until infrastructure rehabilitation and metering upgrades are fully implemented.

Rating Sensitivities

For Upgrade

• Trend of reduced leverage and maintenance of strong levels of debt service coverage throughout the five-year MYCIP forecast period covering fiscal years 2026-2031.

For Downgrade

• Diminished financial flexibility resulting from a significant increase in leverage or drawdown in liquidity.
• Inability to remain in compliance with regulatory mandates.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. Municipal Retail Utility Revenue Bond Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011992

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