Sumner reports $13M water/sewer bond sale to pay for wastewater biosolids modernization

Sumner’s chief financial officer, Cassandra Raymond, told the council at a study session on April 27 that the city sold water/sewer revenue bonds to fund a biosolids modernization project at the wastewater treatment facility.

Raymond said the overall modernization project costs a little more than $30 million and is shared with partners under an interlocal agreement: about 53% of the capital cost is the responsibility of the City of Bonney Lake, Puget Sound Energy will cover roughly 2% (about $780,000) and Sumner will cover about 45%. Council previously authorized the issuance under Ordinance No. 2946 (November 2025), which approved the sale of bonds in a principal amount not to exceed $14,000,000 and delegated staff authority to finalize terms.

“Because we were able to sell at a premium, we actually issued $13,000,000 par, but were able to deposit $14,000,000 into our project account,” Raymond said. She told council the bonds received a double‑A rating from Standard & Poor’s, required no bond insurance and produced a true interest cost for the life of the bonds of 4.067%.

Raymond described the issuance structure: the ordinance set a maximum coupon of 6% and maximum true interest cost not to exceed 6%, and the city kept final terms below those caps (final coupon about 5% and final maturity near 19 years). She named the issuance team and external advisors: mayor, city administrator Jason Wilson, deputy city administrator Jeff Stephens, DA Davidson (underwriter), Foster Garvey (bond counsel) and the S&P ratings team.

The CFO said proceeds were wired into the city’s local government investment pool to maximize short‑term earnings while construction proceeds. Raymond said preliminary debt service was already incorporated into the utility rate model and that finance will report to EMMA (Electronic Municipal Market Access) throughout the life of the bonds.

Council members asked whether local investors could still buy the bonds and whether Bonney Lake negotiated similar terms. Raymond answered that the initial retail offering window had closed but bonds remained available in the secondary market and that Bonney Lake had incorporated its share into its rate model. Council asked about how coupon rates and premiums affect cost; Raymond explained the difference between coupon and true interest cost and how selling at a premium increased funds available at closing.

Next steps: Raymond said construction is underway (council previously approved the construction contract) and that finance staff will provide regular reporting on issuance and debt service. The council did not take a formal vote on the financing at the study session; the CFO reported the closing had occurred and funds were received.