Wall Street rating agencies affirm strength of county public works bonds
August 14, 2012 · 10:48 AM
Two leading Wall Street ratings agencies gave Pierce County high marks on bonds that will be invested in public works projects.
Standard and Poor's (S&P) and Moody's both updated their ratings this month for bonds that will fund equipment for South Sound 911 and the expansion and upgrade of the Chambers Creek Wastewater Treatment Plant. S&P upgraded its rating for the 911 bonds and affirmed its very strong rating for the treatment plant and sewer system, while Moody's affirmed its high quality ratings for both.
"Maintaining and improving strong bond ratings is a significant achievement in this difficult economy," County Executive Pat McCarthy said. "These ratings reflect the deep and diverse economic base, good financial management and low debt burden of Pierce County."
S&P upgraded the county's rating from "AA -" to "AA" on Limited Tax General Obligation bonds that will fund $18 million in the first phase of equipment purchases for South Sound 911. The communications agency is providing new radios to law enforcement and fire departments so that first responders can improve communications with each other in a seamless public safety network. Future bond sales will pay for the consolidation of 911 dispatch facilities and other equipment needs. Pierce County voters approved a one-tenth of 1 percent increase in the sales tax to pay the debt service.
S&P also affirmed its "AA" rating on Pierce County's Sewer Revenue Bonds, which will fund $210 million in proceeds, mostly for the Chambers Creek Wastewater Treatment Plant. The plant, which serves a large and growing portion of the county, is approaching its capacity and must be expanded and upgraded to accommodate growth and stronger environmental protection laws. The debt will be repaid by sewer rates.
Meanwhile, Moody's Investor Service affirmed its strong bond ratings and declared that the outlook on each is stable. Those ratings are Aa1 (county's issuer rating), Aa2 (South Sound 911) and Aa3 (sewer).
"These excellent ratings, combined with 40-year lows in interest rates, save public money by providing extremely low long-term financing for these important projects," said County Council Chair Joyce McDonald (District 2). "We will continue to closely monitor the county's performance so we can maintain our strong capacity to meet financial commitments and deliver vital services."
The county expects to sell the sewer bonds on Aug. 21. The South Sound 911 bonds are expected to be sold Aug. 22.