County projects $70 million in savings due to low interest rates
August 23, 2011
NEW — 8 a.m. Aug. 23, 2011
King County is projected to save more then $70 million in the decades ahead, or about $3 million per year, after refinancing sewer revenue bonds Monday.
The county Wastewater Treatment Division issued $494 million worth of sewer revenue bonds at a rate of 3.79 percent. The savings to county taxpayers is projected at more than $70 million through 2034.
“King County’s strong credit rating means we can sell bonds at low interest rates and keep our costs down,” County Executive Dow Constantine said in a statement. “I am pleased that, even in a time of economic uncertainty, our track record of strong financial management allows us to issue bonds at a rate that will save tens of millions of dollars as we invest in our region.”
Officials intend to use most of the proceeds to refinance $458 million of outstanding sewer revenue bonds issued in 2001, 2002 and 2004. The rest is to be used to fund the completion of the Brightwater Treatment Plant project and other capital improvements.
Brightwater is a $1.8 billion treatment plant under construction near Woodinville. The facility is scheduled for completion next year.
The credit rating agency Standard & Poor’s reaffirmed the AA+ rating of the sewer revenue bonds. S&P cited consistent financial performance, the County Council’s willingness to incrementally raise rates and connection charges to meet financial obligations, and a robust economic base retaining strong underlying credit fundamentals despite a period of slow growth.
Moody’s, another credit rating agency, also reaffirmed the Aa2 rating based on the utility’s sound management practices, the system’s large and economically diverse service area, continued progress on a large and complex capital improvement plan, and satisfactory debt service coverage.
The excellent credit ratings lower the annual costs to borrow money. Ratepayers then repay the sum through monthly sewer rates and charges.
The council decided in June to preserve the sewer rate of $36.10 through the end of 2012 and set the monthly capacity charge paid for new connections at $51.95.
The regional wastewater system serves residents in King County, South Snohomish County and a slice of Pierce County. King County conveys wastewater from Issaquah customers to the South Treatment Plant in Renton.