SAN FRANCISCO — The a 6.0 magnitude earthquake that struck California's Napa Valley Aug. 24 does not significantly impact the ratings of water and sewer utilities servicing the region, Standard & Poor's said.
The earthquake struck the southern part of Napa Valley, about five miles southwest of the city of Napa. Significant damage and several fires were reported in the area, with significant damage also in nearby Vallejo.
An early estimate from the United States Geological Survey is pegging economic costs to Napa County as high as $1 billion.
Napa's city-owned water system and the Napa Sanitation District's sewer system, both rated AA-minus by S&P, sustained some damage from the earthquake.
"However, based on information from each system's management, we believe the damage and required repair work are manageable," analysts said in a report released on Aug. 27. "In addition, we believe each utility has adequate cash reserves to pay for repair costs, and both agencies anticipate reimbursements from either state or federal emergency aid."
Gov. Jerry Brown declared a state of emergency shortly after the quake, making state resources available to aid in recovery efforts.
Napa reported several water line breaks, with repair work ongoing, but the breaks were largely confined to smaller distribution lines. The city also reported damage to a storage tank roof, although redundancies in the system have mitigated its impact on operations.
The water system's dams, major reservoirs, and treatment facilities were relatively unharmed and remain operational, according to management.
"The water system has a strong liquidity position, on our view," Standard & Poor's said. "At the end of fiscal year 2013, the city's water fund had $15.1 million in unrestricted cash on hand, representing 382 days of operating expenses."
Analysts also considers the Napa Sanitation District to have a strong liquidity position, with $21.4 million in unrestricted cash on hand, representing 662 days of operating expenses at the end of fiscal year 2013.
The district reported minor damage to its sewer system, none of which impairs its operations.
The district sent a preliminary cost estimate to the governor's Office of Emergency Services, which falls within the $2.1 million that the district budgeted for emergency reserves.
Standard & Poor's said it will continue to monitor the short-term and long-term impacts of the earthquake in the Napa area.
