At its Dec. 1 meeting, the Mountlake Terrace City Council adopted an ordinance to borrow money with a $6.2 million utility revenue bond issue to fund water and storm water utility construction projects over the next three years. The bond sale took place on Tuesday, Dec. 9.
Prior to the sale, Standard & Poor’s (S&P) Ratings Services assigned its strong ‘AA’ Rating to the city’s bonds. In a report issued on Dec. 3, S&P assigned its ‘AA’ rating with a stable outlook, noting that the city has “affordable service rates coupled with a demonstrated willingness and ability to adjust rates to match operating needs”, and “the system’s financial performance has been strong and management regularly updates a six-year financial forecast”.
The city’s ‘AA’ rating by Standard & Poor’s indicates the city is a quality borrower with a very strong capacity to meet its financial commitments.
“It was a very successful sale,” said Richard Schober, Managing Director of Piper Jaffray & Company whose company served as underwriter of the tax-exempt bonds. Beyond the solid market conditions, Schober also attributed the success to the “strength of the City’s management team and City Council”.
“It is a positive reflection that the sale was fast and our interest rates were low,” said Finance Director Sonja Springer. “There was a big demand for our bonds; they were sold within 15 minutes at a very low interest rate. The true interest cost of the issue is 3.077%, which includes debt issuance costs. This bond sale will represent a savings from our Six-Year Financial Forecast.”
“I would like to congratulate our City Council and staff on this achievement,” said City Manager Arlene Fisher. “The ‘AA’ Bond Rating translates into lower financing costs by attracting a broader range of investors. This rating is also a positive reflection of the city’s effectiveness in managing its financial resources with a balanced budget; a 6-year financial forecast; strong reserves; ability to maintain current levels of service; and the implementation of action strategies and preventative measures to ensure we live within our means.”