King County’s stellar credit ratings will help its wastewater utility save nearly $160 million over the next 33 years – the largest savings in the county’s history for a bond refinance.
After Moody’s and Standard & Poor’s gave King County and its Wastewater Treatment Division Aa2 and AA+ ratings, respectively – citing the utility’s strong management practices, consistent financial performance, and bright regional economic outlook – the county refinanced $728 million in outstanding bonds, which will save King County $15.9 million over the next three years.
“Our proven performance as financial stewards is paying record-setting dividends,” said Executive Dow Constantine. “The savings from this bond sale demonstrate how our commitment to creating the best-run government in the nation is delivering results for the people of King County.
The Metropolitan King County Council this week unanimously authorized the refinancing.
“Saving this extraordinary amount of public money is fantastic news,” said Council Chair Larry Phillips. “King County’s sound financial management practices have helped us to keep reliably delivering core government services with reduced revenues. Seizing on our high credit rating to capture extremely low interest rates reduces costs and allows us to stretch public dollars even further.”
“One of the most important roles of an elected official is to demonstrate sound financial stewardship of taxpayer dollars,” said County Councilmember Joe McDermott. “As Budget Chair, I am particularly proud of King County’s track record and proud of the work done to maintain our excellent credit ratings.”
The savings reflect the excellent credit ratings of both the county and the utility. In addition to the ratings by Moody’s and Standard & Poor’s, King County’s general obligation bonds earned Aa1 and AAA ratings.
Ratepayers can already count on saving $37.3 million over the next 20 years because of bonds that were refinanced in June and July 2014. Since 2000, various refinancings of King County’s bonds have saved the utility nearly $300 million.
Each year, King County’s wastewater utility borrows money to fund its capital improvement program by selling sewer revenue bonds. Higher bond ratings help the county secure a lower interest rate on bonds that are paid back through current and future monthly sewer rates and charges.
King County this year has budgeted $170 million for capital improvement projects to continue upgrading the system and ensure continued compliance with environmental laws.
The utility is now at the halfway point of a 30-year comprehensive plan adopted by the King County Council in 1999. Major projects completed under the plan to so far include the $1.8 billion Brightwater Treatment System Project, new and upgraded pump stations in Kirkland, Bellevue, Pacific and Shoreline, and several pipeline expansion and replacement projects.
Learn more about the utility, its service mission and its finances.
