Investing in clean water
Wastewater infrastructure is crucial for protecting water quality and economic vitality, and supporting jobs and growth while maintaining our region’s natural assets like beaches, lakes and rivers.
King County's wastewater utility is entirely funded by the ratepayers who invest in our programs and services through their monthly rate and capacity charge bills. We take seriously our obligation to provide the highest levels of service and accountability to our ratepayers.
Standard & Poor's and Moody’s investor services are leading global financial firms that rate corporate stocks and municipal bonds according to risk profiles. In 2016 the firms confirmed the ratings of the Wastewater Treatment Division’s bonds, citing:
- Strong management practices
- Consistent financial performance
- Solid rate base and large service area
- Commitment to a capital improvement plan
The Moody's rating for the sewer revenue bonds remained at Aa2 while the Standard and Poor’s rating was maintained at AA+. These continued favorable credit ratings lower the cost of borrowing by reducing the amount of debt service, which, in turn, reduces impacts to the rate.
The wastewater utility undergoes an annual audit to insure that its annual financial results are fairly stated and that all covenants with the utility’s bondholders have been met. The audited financial results are here.
King County’s adopted wastewater budget for 2016 includes about $373.5 million in revenue from the monthly sewer rate and about $66.2 million in revenue from the capacity charge. The 2016 budget also includes about $2.5 million from investments and about $10.7 million from other income such as fees for industrial waste permits, septic waste processing and rate stabilization funds.
King County also borrows bonds to fund the cost of construction projects under its capital improvement program.
Of the total revenue (about $453.9 million), the Wastewater Treatment Division is budgeted to spend about $141.4 million to operate and maintain its facilities and about $312.5 million for planning, designing and building facilities.
In 2016, the $453.9 million in planned operating revenue is allocated as follows:
Source: 2016 Operating Adopted Budget
*Other includes environmental laboratory, central functions, and minor asset management.
How the WTD Capital Improvement Program (CIP) is funded
The WTD CIP is funded primarily through proceeds from revenue bond sales, short-term borrowing, capacity charge revenues, and transfers from the operating fund.
The operating fund derives the majority of its revenue from monthly charges to sewer customers that are collected by WTD's component agencies.
Transfers from the operating fund to the capital program are the result of the financial policy requirement of maintaining a debt service coverage ratio greater than one (a minimum of no less than 1.15 of all debt service payments). This means the monthly sewer rate is set such that operating revenues will exceed debt service and operating expenses by an amount equal to at least 15 percent of the total debt service expense. This buffer reduces risk to bond holders and at the end of the year provides WTD with funds to reduce the amount of borrowing necessary to finance the capital program.
|County's wholesale monthly sewer rate||$44.22|
|Monthly capacity charge||$60.80|
Sept. 14, 2016 – King County’s bond sale saves ratepayers millions
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