King County ratepayers save $13 million through refinancing of bonds

Council takes advantage of strong bond rating and lower interest rates

The Metropolitan King County Council today took advantage of the County’s strong bond rating and lower interest rates by unanimously approving the refinancing of $237 million in sewer revenue bonds, saving ratepayers $13 million in 2008 dollars. The savings reduces the County’s annual debt service payments by $1.97 million per year until 2016.

“We must continue building upon the sound financial policies established by the Council and maintain our prudent management of the public’s money,” said Councilmember Bob Ferguson, chair of the Council’s Operating Budget, Fiscal Management, and Select Issues Committee. “This sale is an example of ratepayers benefiting from the fiscal strategies promoted in past budgets.”

“Refinancing these bonds means ratepayers will save real money on their utility bills," said Councilmember Larry Phillips. “By taking advantage of our high bond ratings and lowered interest rates, we will save ratepayers millions of dollars over the remaining life of the bonds. This strong fiscal stewardship allows us to provide quality wastewater services at a lower cost to ratepayers, in line with a long tradition of maintaining fiscal integrity by King County."

The motion authorizes the sale of $237 million in sewer revenue bonds, which support the construction and maintenance of the County’s Wastewater system. Based on the lower interest rates, the refinancing of the bonds is expected to save ratepayers $13 million in 2008 dollars. The bonds were sold at a range of rates from 2.02 percent to 4. 72 percent, replacing existing debt ranging from 4.75 percent to 5.25 percent.

The national bond rating agencies have once again affirmed King County’s prudent financial management by awarding this bond issue some of their highest ratings. Specifically, Standard & Poor’s rated this issue AAA, its highest rating. Moody’s Investor Services and Fitch Ratings rated this issue Aa1 and AA+ respectively, both only one level below their highest rating.

Read more about this legislation on the King County Council’s LEGISEARCH system at http://mkcclegisearch.metrokc.gov/legistarweb and type in “2007-0191”