June 26, 2012
Utility to save an estimated $10.2 million though bond refinancing
Strong credit rating helps lower borrowing costs to fund sewer facilities
Ratepayers served by King County’s regional wastewater treatment system will benefit from a bond refinancing on Monday estimated to save the utility about $10.2 million over the next 22 years.
“Our commitment to fiscal responsibility is paying off, with lower interest rates on investment in the infrastructure we need to keep our economy moving,” said King County Executive Dow Constantine. “The result is savings for our sewer ratepayers.”
The King County Council yesterday authorized the County’s Wastewater Treatment Division (WTD) to refinance $67.9 million in sewer revenue bonds and $43.8 million in limited tax general obligation bonds at a rate of 3.66 percent, which reflects the agency’s strong credit ratings as well as improving conditions in the broader economy. The savings for 2012 are estimated to be about $600,000.
The bonds 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 was the largest expansion of the regional wastewater system in nearly 50 years.
In March and June, the bond rating agencies Moody’s and Standard & Poor’s 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 and AAA to the limited tax general obligation 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 to the utility's sewer revenue bonds and Aa1 to the limited tax general obligation bonds, 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 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.
Additional information about the utility, its service mission and its finances is available on the Web at http://www.kingcounty.gov/ratepayerreport.
Residents enjoy clean water and a healthy environment thanks to 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. The regional clean-water agency has been preventing water pollution for nearly 50 years.
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
Rate Payer Report
King County Wastewater Treatment