Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 9 THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015 - 9 - LIABILITIES Long-Term Debt 2016 Compared to 2015 Long-term debt increased a net $74.5 million to $2,165.3 million during 2016. The Department issued total new debt in the amount of $309.6 million consisting of revenue bonds to fund a portion of the ongoing capital improvement program and refunding revenue bonds. The 2016 bond issues were a combination of fixed and variable rate bonds. $154.8 million in revenue bonds were refunded with lower interest rate debt. Debt to capitalization ratio was 63.5% at the end of 2016, a favorable improvement from the 64.7% ratio of 2015. Net revenues available to pay debt service were equal to 1.69 times principal and interest on all bonds for 2016. See Note 8 Long-Term Debt of the accompanying financial statements. 2015 Compared to 2014 Long-term debt increased a net $165.6 million to $2,090.8 million in 2015. In June, the Department issued $171.9 million of fixed rate revenue bonds and in July, the Department issued $100.0 million of variable rate revenue bonds to fund the ongoing capital improvement program. Debt to capitalization ratio was 64.7% at the end of 2015, an increase from the 59.9% ratio of 2014 because of the additional bonds and the $233.8 million reduction of net position recorded at the beginning of the year due to implementation of GASB Statement No. 68. See Note 12 Seattle City Employees’ Retirement System of the accompanying financial statements. Net revenues available to pay debt service were equal to 1.62 times principal and interest on all bonds for 2015. Noncurrent Liabilities 2016 Compared to 2015 Total non-current liabilities increased by $92.1 million to $433.6 million at the end of 2016. Net Pension Liability increased by a net $46.0 million and as noted earlier, primarily for losses related to differences between projected and actual investment earnings. See Note 12 Seattle City Employees’ Retirement System of the accompanying financial statements. Environmental liabilities increased by a net $48.4 million to $82.0 million. Environmental liabilities are primarily attributable to the estimated cost of remediating contaminated sediments in the lower Duwamish Waterway, a designated federal Superfund site. The Department is considered a potentially responsible party for contamination in the Duwamish River due to land ownership or use of property located along the river. In 2016, an additional liability in the amount of $45.0 million was recorded for the Department’s estimated share of cleaning the East Waterway Superfund Site. The Department is considered a potentially responsible party because of transformers sold to a local company that most likely drained contaminants into this site. More information on environmental liabilities is found in Note 14 Environmental Liabilities of the accompanying financial statements. The balance net decrease of $2.3 million was for nominal changes within risk management liabilities, a decrease in compensated absences as the long-term amount of restored furlough days to affected employees taken in 2010 were re-classified to current at the end of 2016, and other.