Taxpayers Save $18.6 Million 

Redmond, Wash. – On April 30, 2020, Lake Washington School District (LWSD) sold a total of $118.85 million of tax-exempt refunding bonds, which will refinance $134 million of its existing debt, to take advantage of lower market interest rates. The refinancing will save the District’s taxpayers more than $18.6 million over the next nine years.  

The bonds will refund $14 million of the District’s Unlimited tax general obligation (UTGO) Bonds, 2009, $110.0 million of the District’s UTGO Bonds, 2010A, and $10 million of the District’s UTGO Bonds, 2010B. 

D.A. Davidson & Co. in Seattle is serving as bond underwriter for the refunding bond issue, and Northwest Municipal Advisors is serving as financial advisor. The District has been monitoring bond market conditions over the past two years, and recent low interest rates allowed the District to exceed its savings target.  Interest rates averaged 1.75% on the new bonds compared to 5.05% on the old debt.  

Dr. Jane Stavem, Superintendent, said, “One of our strategic goals is the effective use of resources, including fiscal responsibility. Opportunities like this allow us to save taxpayer dollars while still continuing the critical expansion work of our growing district.” 

Moody’s assigns its highest possible rating of ‘Aaa’ to the District’s UTGO debt. LWSD is one of five districts in the state to attain this elite credit rating. The others are Seattle, Mercer Island, Bellevue, and Issaquah.

S&P Global Ratings (S&P) rated the bonds AA+. It is the highest rating assigned by S&P to any school district in the state, and it is only one notch lower than the strongest possible S&P rating of ‘AAA’. The AA+ rating shared by only three Washington school districts: Bellevue, Issaquah, and LWSD. S&P rates the State of Washington, which is the main source of funding for school districts, ‘AA+’ as well. The ‘AA+’ rating is defined as differing from the highest-rated obligations only to a small degree, meaning the District’s ability to meet its financial commitments is very strong, in S&P’s opinion. 

Moody’s and S&P cited the following positive credit factors supporting the District’s ratings:

• very strong local economy; 
• historically high voter support;
• large and growing tax base;
• growing enrollment; and 
• strong management team, with robust long-term planning and a trend of maintaining strong fund balances.

The Refunding Bonds also carry an enhanced rating of “Aaa” from Moody’s and “AA+” from S&P because the bonds were sold using the State School District Credit Enhancement Program. 

The very strong credit ratings on the District’s bonds can be credited with attracting investor interest in purchasing the bonds, contributing to the debt service savings to taxpayers.

Barbara Posthumus, Associate Superintendent of Business and Support Services, said, “It is our goal to prudently manage the resources our community has entrusted us with, and refinancing debt at lower interest rates has helped achieve that goal. This is the third refunding we have completed in the past five years. The combined savings to taxpayers from these refunding bond issues exceeds $42.8 million.”

If you have an interest in learning more about the bonds, please contact the District for additional information.

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About Lake Washington: Lake Washington School District is a high-performing public school district serving Kirkland, Redmond, and Sammamish, Washington. It is the second largest district in the state of Washington, with over 31,000 students in 56 schools.