City Refinances Bonds for Interest Savings
The City of Kelso (the “City”) is in the process of refinancing the 2010 Water & Sewer Revenue Bonds for interest cost savings. At the same time, they decided to finance water and sewer improvements. As part of the bond financing process, the City’s staff presented information to the national rating agency of S&P Global Ratings.
According to City Manager Andy Hamilton, “the City’s Water & Sewer Revenue Bond rating was re-affirmed at A+. This is a great accomplishment for the City and its citizens! This rating of A+ reflects that the City is well-managed and has good financial practices in place for the benefit of our ratepayers. The higher the rating, then the lower the interest cost.”
According to Finance Director Brian Butterfield, “the A+ rating is based on the following key factors: 1. Demonstrated track record of strong financial reserves; 2. Strength of the local economy; 3. Strong parity debt service coverage ratios of the Water & Sewer System; 4. Financial management and practices; and 5. Experienced management in operating the Water & Sewer System in an efficient manner.”
The presentation team was comprised of: City Manager Andy Hamilton, Finance Director Brian Butterfield, Public Works Superintendent Randy Johnson, Utility Operations Manager Devin Mackin, Community Development Director/City Engineer Mike Kardas, Councilmember David Futcher, and Bond Underwriter Jim Nelson of D.A. Davidson & Co. The team presented information and answered questions that dealt with the topics of management, finances, economic growth and long-term planning.
The Water & Sewer Improvement and Refunding Revenue Bonds were priced on November 5th in Seattle at the offices of D.A. Davidson & Co., serving as Bond Underwriter. The Bonds achieved a True Interest Cost of 1.73%.
Brian Butterfield further explained “the City was fortunate to time the pricing of the Bonds near an interest rate low. The 20-year Water & Sewer Improvement Revenue Bonds will finance $3,000,000 in system improvements, including the Paxton Reservoir transmission line replacement and the Donation Pump Station rehabilitation. The 11-year Water & Sewer Refunding Revenue Bonds achieved total net savings of $970,426. The average annual savings are $88,221.