Local Governments Obtain Low-Interest Financing Through the Office of the State Treasurer
OLYMPIA – Several municipalities serving communities across Washington have partnered with the Office of the State Treasurer (OST) to finance purchases for essential building upgrades and vehicles. The funding will be secured from the sale of more than $19 million of Certificates of Participation (COPs) through OST’s Local Option Capital Asset Lending Program (LOCAL Program), which pools financing requests from state agencies and local governments into a publicly sold security.
The triannual COP sale, backed by Washington’s strong credit rating, helps local governments borrow at lower interest rates then they would be able to achieve independently. Tuesday’s sale will partner with the Curlew School District in northeast Ferry County to finance a boiler replacement after the district experienced an emergency issue with their HVAC system; the City of Enumclaw for the purchase of front-loading waste collection containers; and in Pacific County, the Ocean Beach School District will purchase one school bus.
Interest rates achieved in this week’s sale are another indication that investors continue to see Washington securities as a sound financial investment. Top rating agencies recently affirmed their ratings for the state’s COP (“Aa1”) and Bond (“Aaa/AA+/AA+”) programs. These strong ratings are attributed in part to state leadership capably managing taxpayer dollars and a commitment to maintaining strong budget reserves.
“The LOCAL Program is a prime example of how thoughtful fiscal governance practices and maintaining the state’s strong credit ratings provides more opportunity for local partners to achieve their financial goals and serve the people of Washington for years to come,” said State Treasurer Mike Pellicciotti. “Ultimately, this simply helps local governments to finance critical purchases at lower-than-expected rates to save local taxpayer dollars.”
Serving communities from the Long Beach Peninsula to the Oregon-Washington border, the Ocean Beach School District will finance additional school buses to replace the district’s older vehicles. This is the district’s first time participating in the LOCAL Program.
“To keep costs as low as possible, after weighing our financing options, we determined that participating in the State Treasurer’s Office financing program would be our best option to reduce our interest payments,” said Ocean Beach School District Director of Business and Finance Audrey Slabbert. “Ocean Beach School District aspires to find the most cost effective avenue for purchasing our vehicles. The LOCAL Program is helping us be able to keep our fleet of school buses safely on the road while saving on financing costs.”
Over the previous fiscal year, Certificates of Participation issued by the Treasurer’s Office helped finance more than $108 million in property and equipment at the lowest possible cost for state and local government participants across Washington.
In January, The Office of the State Treasurer received strong demand from investors in a competitive sale of more than $600 million in Various Purpose General Obligation Bonds and $90.2 million of Motor Vehicle Fuel Tax and Vehicle Related Fees General Obligation Bonds.