Bond sale brings savings for ratepayers, improvements for environment and economy

Favorable credit ratings lower borrowing costs to fund crucial infrastructure

A bond sale to fund dozens of clean-water projects that will protect the environment, create jobs and support future economic growth came with additional good news for ratepayers: a lower interest rate.

On Monday, King County’s Wastewater Treatment Division (WTD) issued $334 million in sewer revenue bonds at a rate of 4.54 percent, which reflects the agency’s strong credit ratings as well as improving conditions in the broader economy. The interest rate on the $250 million in bonds sold last year was 5.21 percent.

The 40-year bonds will provide funding for several major capital improvement projects to upgrade and replace aging facilities, expand existing ones and build new facilities, such as the Brightwater Treatment System, which is the largest expansion of the regional wastewater system in nearly 50 years. The system will provide clean water and growth capacity for the region by treating wastewater from portions of King, Snohomish and Pierce counties.

Moody’s and Standard & Poor’s earlier this month affirmed the utility’s favorable credit ratings, ultimately reducing the utility’s costs to finance its capital improvement program.

Standard & Poor’s assigned a AA+ rating to the utility’s sewer revenue bonds, citing consistent financial performance, the County Council’s willingness to incrementally raise rates and connection charges, and an economy that retains strong underlying fundamentals despite a period of slow growth.

Moody’s assigned an Aa2 rating based on the utility’s satisfactory debt service coverage, continued sound management practices, the system's large and economically diverse service area, and continued commitment to its capital improvement program. The change in last year’s rating from Aa3 is based on a recalibration of their rating scale and does not reflect any change in their view of WTD’s credit.

The county is currently completing its most complex projects under the Regional Wastewater Services Plan, a 30-year comprehensive plan adopted by the King County Council in 1999. With Brightwater scheduled for completion in 2012, the county expects spending on capital projects to stabilize at a significantly lower level after 2011.

Additional detail about specific major capital projects is available at http://www.kingcounty.gov/environment/wtd/Construction.aspx.
People can also learn more about the division in its online Ratepayer Report Newsletter, which is available at http://www.kingcounty.gov/environment/wtd/About/Finances/RatePayerReport.aspx

People enjoy clean water and a healthy environment because of King County's wastewater treatment program. The county’s Wastewater Treatment Division protects public health and water quality by serving 17 cities, 17 local sewer districts and more than 1.5 million residents in King, Snohomish and Pierce counties. Formerly called Metro, the regional clean-water agency now operated by King County has been preventing water pollution for nearly 50 years.

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Note to editors and reporters: Visit the WTD Newsroom, a portal to information for the news media about the Wastewater Treatment Division, King County Department of Natural Resources and Parks: http://www.kingcounty.gov/environment/wtd/Newsroom.aspx.

Related information

Capital projects

King County Wastewater Treatment