PORT HADLOCK — Jefferson County’s current sale of $3.15 million in limited tax general obligation bonds could jump-start the local economy as it finances the first step in the construction of a sewer system in Port Hadlock.
The money raised will be used for planning and land acquisition for the proposed sewer system, which has a projected cost of around $28 million, according to County Administrator Philip Morley.
About $2.27 million of the total will be used for the sewer project, while $880,000 will go toward the construction of a new 9-1-1 facility.
While it will be several years before the sewer system will be operational, any action that brings the project closer to fruition is a good thing, according to a local businessman.
“I’ve been waiting for this to get done for 25 years,” said Valley Tavern owner Chuck Russell.
“It will give us an opportunity for us to have new businesses here, but also will provide us with affordable housing since you now need to have such a huge drainfield in order to build anything new.”
The total amount raised by the bonds will be $3.15 million loaned at an interest rate of 4.34 percent over 20 years, requiring $1.67 million interest for a total cost to the county of $4.82 million.
The issuance of the bonds does not raise taxes.
The payment of the loan comes from stable funding streams, according to Morley.
The 9-1-1 component will be paid for through phone taxes and the sewer project will use a portion of the infrastructure fund.
The issuance of the bonds was preceded by the county’s being awarded a rating grade of AA-minus, the fourth highest grade in the bond rating system that is considered to be “high quality.”
The high grade was awarded to Jefferson County because of its strong financial policies and low debt levels along with its efficient management, according to bond underwriter James Nelson, who handled the transaction.
“The growth of [the county’s] assessed value is considered remarkable in this economy as very few counties are growing their valuation,” he said.
“Compared to other counties, you have a low debt level, and you operate in a very efficient manner,” he told the county.
Getting the AA-minus bond rating was the first step in acquiring a favorable interest rate, and it was awarded after a conference with Nelson, Morley, budget consultant Ann Sears and Treasurer Judi Morris.
The commissioners approved the bond sale at a special meeting Tuesday morning.
The first interest payment is scheduled for June 1, while payment on principal begins Dec. 1.
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Jefferson County Reporter Charlie Bermant can be reached at 360-385-2335 or charlie.bermant@peninsuladailynews.com.