Water authority sells bonds in hopes of saving $309M
Metro Detroit’s regional water authority officials say they’ve sold $1.3 billion in bonds to refinance outstanding debt — a move they expect will save more than $300 million.
The sale, the authority’s first bond sale, is expected to be closed by the end of the month. Officials say the move will save the Great Lakes Water Authority more than $309 million over the life of the refinanced bonds — 20 years —because of favorable interest rates.
It’s also part of the authority’s plan to create long-term financial sustainability and reduce dependence on debt-financed capital, they said.
“The market response to our bond sale is a clear indicator that the investment community believes in the progress that GLWA has made over the last nine months as an independent, regional authority,” said Sue McCormick, the authority’s CEO, in a statement Friday.
“This positive momentum really buoys us in our work to be the provider of choice, which is dedicated to effectively and efficiently delivering the nation’s best water and sewer services in partnership with our customers.”
Officials said $918 million of the bond sale will be used for the water system and $421 million will be used for the sewer system.
On Monday, Oakland County Executive L. Brooks Patterson praised the authority and said the bond sale highlights how its formation is helping to bring fiscal responsibility to the water and sewer system.
“This bond sale represents a significant savings to GLWA and the capital improvements could generate additional savings in the future,” Patterson said in a statement.
“The GLWA board is delivering on the promise that it would function in a fiscally responsible way, produce longterm savings in its budget, and operate as a regional entity for the benefit of all GLWA ratepayers.”
The Great Lakes Water Authority was created in the summer of 2015 when officials with the state, Detroit, Macomb, Oakland and Wayne counties agreed to turn over Detroit’s water and sewer system to the authority for the next 40 years under a deal stemming from the city’s bankruptcy.
It assumed control of the water and sewer systems on Jan. 1, 2016. The Detroit Water and Sewerage Department continues to provide water and sewer service to its customers in the city of Detroit.
The authority is overseen by a six-member board made up of one representative each from the state and Macomb, Oakland and Wayne counties and two from the city of Detroit.