Marlene Feist, Utilities Communications Manager, No Phone Number Available
Wednesday, October 29, 2014 at 3:39 p.m.
In mid-November, the City will sell $200 million in Water Wastewater Utility revenue bonds to pay for a series of projects that are designed to improve the health of the Spokane River and protect our aquifer. The City Council authorized the sale at their Oct. 27 meeting.
The bonds are being designated as “green” bonds because they will be used to finance “green” projects that will provide environmental benefits. The work will improve water quality, protect water resources, and save energy, among other things.
The projects include those that are outlined in the City's Integrated Clean Water Plan. We'll manage overflows from combined sewers to the river, address untreated stormwater going to the river.
The green bond concept is relatively new and is designed to attract additional investors who want to put their money to work on achieving environmental results. Washington, D.C., the state of Massachusetts, the state of New York, and the state of California have sold green bonds in the last year.
But our plans to improve the health of the river aren't just environmentally beneficial, they're also financially responsible. The Mayor and Council have committed to completing the work needed for the river, while limiting utility rate increases to inflation. The sale of the bonds will not change that commitment.
This is a very good time to sell bonds. Interest rates remain at historic lows. Other jurisdictions have seen rates at around 3 percent for similar issues in recent weeks.
The bonds will be paid back over 20 years, and utility rates will be used to pay them—not general taxes. Debt service, including principal and interest costs, is expected to total around $14 million annually. The City's utilities have very little debt. Historically, the City has used a pay-as-you-go model to pay for water and wastewater capital improvements.
The City traditionally has a strong credit rating that will help keep rates low. Mayor David Condon, Council Ben President Stuckart, and Council Member Candace Mumm presented information about the City and our Water Wastewater System to Moody's and Standard & Poor's, which will provide a rating that investors will use to help make their decision about purchasing our bonds.
We've attached the video that we played for the rating agencies here.