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The service area is diverse and growing, fueled by growth in military personnel. Links of London COULD TRIGGER A DOWNGRADE? --Failure to take corrective action to improve debt service coverage levels and maintain adequate financial flexibility commensurate with the 'AA+' rating level and consistent with the city's policy goals will put downward pressure on the rating. Links of London U Charm: The bonds represent senior lien obligations of the system, payable from net system revenues. CREDIT SUMMARY: Extensive financial, capital and water resource planning has enabled the city to secure an ample and diverse water supply despite its arid climate while maintaining adequate financial flexibility and a very competitive rate Links of London T Charm. Major projects completed in recent years include a water reuse system for irrigation and a desalination plant to treat brackish water from the Hueco Bolson. However, these long-term water management efforts have been costly and the system's ongoing use of cash reserves for capital funding efforts has reduced liquidity to levels well below average for the rating level. The lack of rate hikes for two consecutive years combined with increasing debt service Links of London S Charm resulted in reduced debt service coverage to a level inconsistent with the rating category for fiscal 2010. System operating reserves and working capital totaled 128 days and 158 days, respectively for fiscal 2010.