Sewer improvements get a silver lining

Favorable credit ratings lower borrowing costs

Sewer improvement projects that will protect public health and the environment, create jobs and provide infrastructure for economic growth now come with an additional benefit: a lower price tag.

Moody’s and Standard & Poor’s recently affirmed the King County Wastewater Treatment Division’s favorable credit ratings, which will reduce the utility’s costs to finance its capital improvement program.

Standard & Poor’s assigned a AA+ rating to the utility’s sewer revenue bonds, citing financial performance that exceeds policy targets, a consistent track record of progress on its major capital plan, and a commitment to strong management practices.

Moody’s Aa3 rating was based on the utility’s continued positive financial results and a well-managed system.

“Maintaining an enviable bond rating in a challenging economy is a significant accomplishment,” said King County Executive Kurt Triplett. “The ratings reflect the Wastewater Treatment Division’s solid management practices and the dedication of its employees.”

On Monday, the division issued $250 million of sewer revenue bonds to help fund dozens of vital sewer improvement projects currently under construction, including the $1.8 billion Brightwater project, the largest expansion of the wastewater system in nearly 50 years.

As a result of its superior credit ratings, the utility will pay an interest rate of 5.21 percent on the bonds issued on Monday, significantly less than the 6.0 percent originally projected. This lower than projected interest rate will result in debt service savings for the utility of more than $50 million over the 33-year life of the bonds. These savings will accrue to ratepayers who will pay back the bonds through monthly sewer rates and capacity charges.

In 2009, the county will invest about $525 million in its capital program to ensure the wastewater system continues operating reliably and protecting water quality while accommodating population and economic growth. Additional detail about specific projects is available at http://www.kingcounty.gov/environment/wtd/Construction.aspx.

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. With Brightwater scheduled for completion in 2011, the county expects spending on capital projects to stabilize at a significantly lower level after 2010.

As infrastructure improvements move ahead, rate stability and predictability remain a priority. The County Council voted on June 16 to keep 2010 sewer rates at the present level of $31.90, which was adopted in June 2008 and took effect on Jan. 1, 2009.

People enjoy clean water and a healthy environment because of 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 1.4 million residents in King, Snohomish and Pierce counties. Formerly called Metro, the regional clean-water agency now operated by King County has been preventing water pollution for more than 40 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.

Related information

Construction

King County Wastewater Treatment