FAQ – the 2009 budget and its impacts to the Wastewater Treatment Division

As Executive Sims pointed out in his budget speech, the county's overall fiscal outlook has been profoundly affected by what many economists believe to be our nation's most serious financial crisis since the Great Depression.

Because our utility is funded by monthly sewer rates as opposed to tax revenues, the Wastewater Treatment Division (WTD) isn't directly affected by the revenue shortfall in the county's general fund. However, WTD is affected by the state of the economy and will face its own share of economic challenges in the months ahead.

Like other utilities and municipal governments, WTD borrows money to fund its major capital improvement program by issuing bonds and other instruments sold in financial markets. The recent crisis on Wall Street has created credit market conditions that make it more difficult and expensive to borrow money. These borrowing cost increases are coming at a time when we are planning on issuing a substantial amount of bonds to finance Brightwater and other major infrastructure investments that are needed to protect public health, our regional economy and our environment.

As stewards of public money, WTD always looks for ways to contain costs and maximize efficiencies while meeting our legal obligation to protect public health and the environment in the central Puget Sound region. In 2008, we have a strong record to build on.

We've recently eliminated more than $66 million in Wastewater Treatment Division capital expenditures between 2008 and 2010 by deferring non-critical projects to future years after completion of the Brightwater treatment system. We've also made reductions in other low priority programs, and will rely on 26 existing staff positions to operate the new Carnation and Brightwater treatment plants.

Our agency will also continue to operate according to the Productivity Initiative Pilot Program established by the County Council in 2001. This innovative 10-year program, which allows some aspects of the utility to be managed and operated like a private sector business, has already saved ratepayers more than $51 million to date.

While many county agencies are primarily funded by revenue generated by local property and sales taxes, King County's Wastewater Treatment Division receives no funding from these sources.

Our clean-water agency is funded by the ratepayers whose wastewater is treated at one of our two regional treatment plants in Renton or Seattle, or by ratepayers served by the Carnation and Vashon sewer districts, where King County operates two local treatment plants. Other smaller sources of funding include grants or loans, investment income, and fees for industrial waste permits or septic waste treatment.

Ratepayers support our agency in two possible ways. One is through the monthly sewer rate paid by all customers to their local sewer utility, which pays King County to treat wastewater at one of its regional or local sewer plants. The other is a capacity charge paid by newly connecting customers to cover the cost of new growth.

King County's Wastewater Treatment Division is recognized as a well-managed, financially solid utility.

In 2008, leading global financial firms Moody's Investor's Service and Standard & Poor's upgraded the Wastewater Treatment Division's already strong bond rating, which will help lower the cost of borrowing to finance the wastewater capital program, including the completion of the Brightwater Treatment Plant and its conveyance system.

While the condition of the financial markets present a considerable level of uncertainty, our high bond ratings will certainly continue to work to our advantage.

Under state law, King County's Wastewater Treatment Division is required to use ratepayer dollars for sewer-related programs and services. It would be illegal to use ratepayer funds for any other purpose.

In 1973, King County adopted 1% for Art legislation that required capital construction projects that are "visible, accessible or have a need for mitigation" to set aside 1 percent of eligible construction costs for the purchase and display of public artwork.

Public art legislation was created to provide funding for the purchase and display of public artwork. The money can't be used for other purposes. The money for public artwork on WTD projects is included in the construction budget for each applicable capital project.

While WTD is required to adhere to this legislation, we work to make sure that public art is a good investment of public money. We use public art to mitigate the visual impacts of a facility, or to provide an educational element. We also work closely with communities to ensure the public art we install reflects their priorities and values. Learn more about how we use public art in our projects.