Local Districts Partner with the Office of the State Treasurer to Finance New Projects, Reduce Local Debt Costs

Local Government

The Office of the State Treasurer (OST) is scheduled to sell a series of Certificates of Participation (COPs) this week that will provide funds to local districts across Washington, financing new equipment, emergency vehicles and building construction.

Local districts will gain access to low financing rates by utilizing the Local Option Capital Asset Lending Program (LOCAL Program) — reducing future interest costs and allowing more taxpayer dollars to be kept in local communities. Funding for the program is supported by a three-times-yearly sale of Certificates of Participation, which are somewhat similar to bonds. Proceeds from this sale will go toward financing purchases requested by both local and state participants and will also be used to refinance existing COP-financed projects at lower rates.

“Before interest rates started to rise earlier this year, my office refinanced state debt at historically low rates to save Washingtonians hundreds of millions of dollars,” said State Treasurer Mike Pellicciotti. “As federal interest rates trend higher, we are partnering with local governments to finance community projects at the lowest rate possible so important projects stay on track.”

Key Peninsula Metropolitan Park District (Key Pen Parks) is one of the LOCAL Program participants who have partnered with OST in the past to expand its footprint, laying the ground for public access development.

Located on the westernmost side of Pierce County bordering Gig Harbor, Key Pen Parks last participated in the Treasurer’s LOCAL Program to finance the purchase of nearly 39 acres of park land on several parcels in 2012. The district now plans to refinance at current lower interest rates, which will create real savings, according to Key Pen Parks Executive Director Tracey Perkosky.

“As a small parks district, anytime that we can save taxpayer funds through a refinancing such as this, we do so,” Perkosky said. “The partnership between Key Pen Parks and the State Treasurer’s Office was crucial to making this happen.”

Of the seven districts participating in the local portion of this week’s COP sale, Key Pen Parks is the only participant refinancing previously issued COPs. Other districts will use the LOCAL Program to finance first responder vehicles, maintenance and cargo vehicles, and new construction costs.

The Spokane County Library District will finance a 28,000-square foot public library that will feature a large community room with space to accommodate up to 200 people and a fully equipped audio-visual studio for public use with the help of the Treasurer’s Office. This will be the first library district to utilize the LOCAL Program for a construction project of this scope.

Spokane County Library District Executive Director Patrick Roewe said after two failed capital bond elections, and faced with the economic uncertainty of the pandemic, the District determined that alternative financing options were needed.

“We evaluated several potential funding options for the new library and determined that the LOCAL Program was our best option as it offered competitive interest rates and a strong administrative support structure through the Treasurer’s Office,” said Roewe. “The LOCAL Program emerged as the most cost effective and efficient financing option for our particular circumstances.”

Before Wednesday’s sale, the Office of the State Treasurer has delivered $1,491,660,000 in funding to participants of the Certificates of Participation Program in approximately the last 10 years, providing the lowest possible financing cost for state and local government participants across Washington.

Both the LOCAL Program, which helps smaller governments obtain low-cost financing, and the State Lease Purchase Program, a financing option geared toward community and technical colleges, universities and state agencies, are funded through proceeds from Wednesday’s Certificates of Participation sale.

The state’s Certificates of Participation are highly rated, receiving an impressive rating of Aa1 from Moody’s, which helps keep interest rates low for participants looking to finance the cost of projects and purchases.