Kenmore sold $11.5 million in bonds for its Public Works Operations Center; council got the results update Dec. 2

What the records say

The Dec. 2, 2024, City Council Special Meeting agenda included a Public Works Operations Center Bond Issue Update as a staff report, presented by City Manager Rob Karlinsey, Finance & Administration Director Melinda Merrell, Dave Trageser of D.A. Davidson & Co., and Deanna Gregory of Pacifica Law Group. ¹ The attached presentation shows the sale itself was already done: the bond purchase contract was signed Nov. 26, 2024, within the delegation period set by the bond ordinance adopted Dec. 4, 2023. ¹ The city sold $11,505,000 in Limited Tax General Obligation Bonds, 2024 — under the ordinance's $12.8 million cap — with a true interest cost of 3.913159% against a 6.50% ceiling, a sale price of 109.93365%, and final maturity of Dec. 1, 2044. ¹ S&P assigned the city a AAA rating ahead of the sale, citing the growing economy, healthy reserves, favorable debt profile, and long-term financial planning; the presentation notes Kenmore is one of only 12 Washington cities rated AAA by S&P. ¹

• The Dec. 2, 2024, special meeting agenda scheduled a Public Works Operations Center Bond Issue Update as staff report XI.A, with a staff memo, Preliminary Official Statement, S&P credit rating letter and report, and a bond sale summary presentation attached. ¹
• The sale was completed under delegated authority: the bond purchase contract was signed Nov. 26, 2024, within the ordinance's delegation period running through Dec. 13, 2024. ¹
• Actual results: $11,505,000 principal (vs. a $12.8 million authorization), true interest cost 3.913159% (vs. a 6.50% cap), sale price 109.93365%, coupon rate 5%, final maturity Dec. 1, 2044. ¹
• S&P assigned a AAA rating in its first review of the city since 2021, citing growing economy, healthy reserves, favorable debt profile, robust budgeting practices, and long-term financial planning. ¹
• The preliminary 2025-2026 biennial budget, reviewed at the Nov. 12, 2024, meeting, listed Public Works Operations Center Design & Construction at $16.08 million, the largest city-facilities capital project. ¹

Why it matters

The bonds finance the Public Works Operations Center, the city's maintenance hub, and are limited tax general obligation bonds backed by the city's full faith and credit and repaid through an annual property tax levy, per the bond ordinance included in the packet. ¹ The city's 2023 financing plan projected roughly $1.8 million in annual debt service, funded about half from Real Estate Excise Tax and half from Surface Water Utility fee revenue, with an estimated surface water fee increase of about $75 per year per household. ¹ The actual sale came in below the authorized maximum and well below the authorized interest-cost ceiling, so the final debt burden is expected to track the lower actual principal amount. ¹

What changed / what's next

• The city completed a $11.505 million Limited Tax General Obligation bond sale on Nov. 26, 2024, to finance the Public Works Operations Center, and reported the results to the council at its Dec. 2, 2024, meeting. ¹
• The packet establishes the sale occurred and the results, but does not contain the Dec. 2 meeting minutes, so any council discussion or follow-up direction at that meeting is not documented here. ¹
• The 2023 financing plan projected about $1.8 million in annual debt service split between REET and Surface Water Utility revenue, with an estimated household surface water fee increase of about $75 per year; actual debt service on the smaller $11.505 million sale may differ, and final payment schedules were not in the packet. ¹
• The available records do not establish the meeting's outcome.