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King County saves millions by refinancing bonds
While there's been negative news for local economies for the past four years, one of the silver linings for government agencies and organizations has been the ability to refinance bonds to save taxpayers money.
King County is no different, successfully saving taxpayers approximately $28.4 million through bond refinancing over the past several weeks. The most recent refinancing involved the sale of $65.4 million in sewer revenue refunding bonds, which will save county taxpayers $7.5 million for 2012, and an estimated $10.8 million over the remaining 21 years of that particular bond.
"Saving $28 million of public money is welcome news during these tough economic times," said Councilmember Larry Phillips, who is a member of the council's Budget and Fiscal Management Committee.
The refinancing spree began on July 16, when the county saved $14.9 million with the sale of Unlimited Tax General Obligation (UTGO) bonds that were originally issued in 2004 for the expansion and seismic retrofitting of the Harborview Medical Center Campus.
This refinancing was also able to reduce the interest rate on the remaining principle from just under 5 percent to 1.67 percent. According to the county, "the resulting savings represent 14 percent of the remaining principal." It also directly reduces property taxes owed on the voter-approved measure.
On July 30, the council was able to refinance its Limited Tax General Obligation (LTGO) bonds that were issued to seismically retrofit the King County Courthouse. The bonds were refinanced to an interest rate of 1.9 percent, which will save the county $6 million over the remaining life of those bonds.
ALl of this was able to happen because of King County's continued strong ratings from the bond ratings agencies Moody's, Standard & Poor, and Fitch. The county credits its strong ratings from those agencies to it's "strong management of finances during the economic downturn."