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County saves big on bonds

Published 9:00 pm Wednesday, June 20, 2001

By Jim Haley / Herald Writer

By Jim Haley

Herald Writer

Snohomish County officials Wednesday took a major step toward financing the county’s downtown Everett campus and several other projects by approving sale of $165 million in general obligation bonds.

That was expected.

But the big surprise was the financing cost, which will save taxpayers about $22 million over the 25-year life of the bonds, county finance director Dan Clements said.

"It’s a great interest rate," Clements said.

The bonds were sold to the low bidder, Salomon Smith Barney Inc., at 5.058 percent. The highest of the five bids was 5.1 percent.

Clements credited the Federal Reserve’s recent interest rate cuts, as well as an improved bond rating for the county by two national rating companies.

When the county first put together a plan to expand its campus and jail, as well as make other improvements, it figured it would cost an average 6.2 percent interest to borrow the money. The difference between that and what the county got will save $22 million in interest, Clements said.

Here’s how the money will be allocated:

  • $119 million for the expansion of county office and criminal-justice space on its current campus. The county last year decided to build rather than move many offices to a site near Paine Field. It wants to eliminate paying rent in numerous locations in downtown Everett. The county now is developing a master plan for its new campus.

  • $20.1 million for neighborhood improvements. About $14.2 million of that will go to improve storm drainage.

  • $13 million for the second phase of a new emergency radio system for police and fire, the so-called 800 megahertz project.

  • $11.6 million for improvements to the county airport at Paine Field.

    The improved interest rate was a result partly of Tuesday’s upgrade of the county’s borrowing rating by Standard &amp Poor’s and Moody’s, two of the top financial ratings companies.

    The county last week sought an upgrade in anticipation of Wednesday’s bond sale, and several Snohomish County officials went to San Francisco to make the pitch, Clements said.

    Standard &amp Poor’s upped its rating to "double A" from "double A minus." Moody’s assigned a "double A2" rating to both old and new bonds. It was raised from "double A3."

    Both companies cited growth and an economy that’s slowing, but still strong. They both focused on the county’s economic change in recent decades from forestry to aerospace, biotechnology, pharmaceutical manufacturing and engineering services.

    Moody’s said the county’s financial operations are strong and characterized by conservative financial management and solid reserves.

    You can call Herald Writer Jim Haley at 425-339-3447 or send e-mail to haley@heraldnet.com.

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