March 19, 2013
Bond refinancing to save $35 million for King County utility ratepayers
Favorable credit ratings lower borrowing cost to fund crucial infrastructure
Regional ratepayers will now pay a little less for long-term investments in wastewater infrastructure that lays the foundation for economic development and environmental health.
King County on Monday issued $123 million of sewer revenue bonds at an average interest rate of 3.27 percent in order to refund $136 million of outstanding Wastewater Treatment Division debt.
This refinancing will save the utility about $35 million over the next 22 years. The Metropolitan King County Council voted unanimously to authorize the sale.
These savings reflect the utility’s strong credit ratings which were once again affirmed in early March.
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.
Moody’s assigned an Aa2 rating to the utility's sewer revenue 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.
“Through sound financial management, we are once again able to refinance our existing debt to take advantage of low interest rates, saving taxpayers millions of dollars,” said King County Executive Dow Constantine.
“Refinancing sewer bonds at low interest rates will pay off for county ratepayers for many years to come,” said Councilmember Larry Phillips. ”Saving money for the people of King County through strong fiscal management must always be at the forefront of what we do as county officials.”
“Today's bond sale is part of our ongoing work to ensure that County government is working efficiently so that we use taxpayer dollars wisely,” said Councilmember Joe McDermott, chair of the Budget and Fiscal Management Committee.
King County is currently carrying out projects under the Regional Wastewater Services Plan, a 30-year comprehensive plan adopted by the King County Council in 1999. The Wastewater Treatment Division’s proposed capital spending in 2013 is $183.4 million.
Additional information about the utility, its service mission and its finances is available on the Web at http://www.kingcounty.gov/ratepayerreport.
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.