Kansas City Water Infrastructure Upgraded with Low Interest Bonds
InfoZine, the City of Kansas City, Mo., Water Services Department recently issued wastewater revenue bonds at a historically low interest rate of 2.86 percent, which will enable Water Services to perform $75 million in improvements associated with sewer rehabilitation, sewage treatment plants, pump stations, disinfection, sewer force mains, interceptor sewers, storm drainage, and green infrastructure improvements.
The bonds, in connection with Water Services' $2.5 billion, 25-year Overflow Control Program, were issued using the remaining authority from the August 2004 election. Because of the extremely low percentage interest rates, the Water Services staff estimates a total savings of approximately $23.7 million over the 25-year life of the bonds.
"The cost savings achieved would not have been possible without the confidence of the voters in the August election," said City Manager Troy Schulte. "Water Services was able to take advantage of historically low interest rates to fund much-needed sewer improvement projects, which will serve Kansas Citians for generations to come."
Water Services also has refinanced a total of $11.605 million of outstanding sewer revenue debt, taking advantage of the current low interest rate environment. The refunding portion of the bond sale will help Water Services achieve debt service savings, on a present value basis, totaling more than $1.5 million. The refunding bonds have replaced bonds that had interest rates averaging near 4.36 percent.
"Water Services is proud of its strong bond rating, which ultimately results in cost savings and improved infrastructure for our customers," said Water Services Director Terry Leeds. "Thank you to the City Finance Department and Treasury Division staff for their hard work on our behalf."
The Water Services Department continues to achieve savings through the acquisition of low interest rates and timely refinancing. On Nov. 4, 2011, $97 million in wastewater bonds were issued at 3.93 percent for a period of 25 years. On Feb. 7, 2012, $52 million in water bonds were issued at 3.27 percent for a period of 25 years. And, for this bond issuance, which took place on Nov. 29, wastewater bonds were issued at 2.86 percent for a period of 25 years.