Published September 2001

Bond-rate increase indicates county’s on right track

“County saves big on bonds,” read the headline over what appeared as a routine story relating to Snohomish County government finances.

The story in The Herald may have seemed innocuous, but its implications were enormous.

The Snohomish County Council on June 20 approved the sale of $165 million in general obligation bonds to finance the county’s downtown campus expansion and several other important public works projects.

What was surprising, and excitingly good news, was that county taxpayers would save $22 million in interest charges due in large part by a decision by two prominent financial houses to increase the county’s bond rating.

The higher the bond, or credit, rating for government entities, the less interest they have to pay investors. The bond rating is a reflection of a city or county’s reputation of the soundness of its management and for having a robust and diverse economy.

Such was the case for Snohomish County when it received the highest bond rankings possible from Moody’s and Standard & Poors financial rating companies. In essence, these firms gave Snohomish County a firm “two thumbs up” for the county’s successful transition from total reliance on wood products and aerospace to becoming a growing and diverse economy.

They recognized what county leaders, backed by the Economic Development Council and other business groups, have been working toward for the past five years: the development of a strong economy with emphasis on attracting and developing new-economy businesses.

“Basically, they gave us the highest ratings we could get for our size,” said Dan Clements, the county’s Finance Director. “To get anything better, we’d have to be triple the size (in population).”

The new rating didn’t happen by accident. Two years ago, representatives from Moody’s visited the county. Michael Cade, the EDC’s Vice President, hosted the economic tour, which featured many new and growing companies that had decided to call Snohomish County their new home.

As the time came closer for the County Council to approve the bond issue, county government leaders traveled to San Francisco to make the case for an improved bond rating. Executive Bob Drewel led the team of Dave Somers and Bob Dantini, who, armed with the latest economic statistics, convinced the ratings firms of both the county’s progress and promise.

These ratings can easily go the other way. At a time when Snohomish County received its rating increase, Spokane County learned its rating was being significantly lowered.

There are occasions when criticism is directed at the county government’s significant investment in the EDC’s five-year strategic initiative, that public dollars should not be spent to attract growth and its “associated problems.”

This experience of the positive benefits of the county’s improved bond rating is just one example of the excellent return on investment the public is receiving based on our reasoned and sensible collaboration with county government to strengthen our economy.

Deborah Knutson is President of the Snohomish County Economic Development Council. She can be reached by calling 425-743-4567 or by sending e-mail to dknutson@snoedc.org.

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