By Bruce Dammeier, Pierce County Executive.
Amazon Prime Day shoppers weren’t the only ones saving money recently. Thanks to some hard work, smart timing and favorable markets, we have saved our sewer ratepayers nearly $25 million!
Gary Robinson and Wolf Opitz of the Finance department saw that the current low interest rate environment provided an opportunity to refinance an existing long-term debt that paid for the wastewater treatment plant, and a small amount of road project debt.
The refinancing got a great response from investors who saw the County’s excellent credit rating and reputation for sound financial management and flocked to buy the County’s bonds.
Changes in interest rates help show the value of refinancing the debt, the interest rate on the larger sewer bond dropped from 4.91% down to 2.37%, and the road bond rates went from 5.34% to less than 1% (.761%)!
All told, the transactions will save us almost $25 million in debt service over the next several years and will allow us to further invest in the safe and successful operation of the wastewater treatment plants in Chambers Bay and Tehaleh.
Gary and Wolf worked closely with Jane Vandenberg, Wastewater Utility Manager, and Kip Julin, Strategic Planning and Asset Manager. Their skillful management of the wastewater treatment plants earned the group an excellent reputation that gave Pierce County a tremendous advantage in the financial markets.
Case in point, as part of the bond offering, we asked the two primary rating agencies – Moody’s Investors Services and S&P – to evaluate our credit ratings.
Despite the impact of the pandemic and the difficult operating environment, our credit ratings not only held up, but one even improved –the second time our credit rating went up in the last 2 years!
According to S&P: “The ratings reflect our view of a very strong enterprise risk profile and an extremely strong financial risk profile.”
And Moody’s said: “The positive outlook reflects our expectation that the county will maintain strong fund balances and stable leverage despite ongoing volatile and uncertain underlying economic conditions.”
Hats off to everyone who made this refinancing a fantastic success, and for carefully managing the resources our residents entrust to us. Prudent budgeting and disciplined spending day in and day out serve us well – especially in these uncertain times.
One a very different note, I was disappointed to see the State Supreme Court over-turned Initiative 976 – $30 car tabs. This ruling represents the third time the Court has thrown out a similar initiative that was passed by the voters. As I discussed in my November 15, 2019 blog, we work for the people of Pierce County and need to respect their voice. I remain proud that Pierce County helped defend the initiative in court and appreciate the work of our Prosecutor’s team. I hope the Legislature will take up the issue in its next session and resolve it once and for all.
Before I close, I want to remind everyone to join us next Wednesday at 6:00 p.m. as we honor your colleagues with Standing Ovation Awards and Years of Service recognition. This is typically one of my favorite nights of the year and it’s killing me that we can’t celebrate in-person – especially given the amazing accomplishments made during this difficult year. So, pop some popcorn, pour yourself a beverage of your choice and enjoy the evening from the comfort of your couch. You can get more details here.
Thanks for reading.
First published on the Pierce County website.