Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.
At its May 23 meeting, the County Board authorized the issuance of $185.3 million in new bonds for various spending, added to $552.4 million in outstanding bonds issued since 2008. There are an additional $281.8 million in bonds already authorized, but not yet issued. Plus, there are $49 million in bonds that have been issued, but not yet spent.
Does the County Board’s latest action leave Arlington with too much total debt?
For many years, the standard answer from county government has been and continues to be “no.” The reason given has been and continues to be that Arlington is one of the relatively few municipalities in America that has maintained the highest possible credit rating (AAA/AAA).
Whereas this is certainly one legitimate way to evaluate Arlington’s status, there are other legitimate ways — some of which raise cause for concern. A more extensive county government explanation of our current and projected future debt levels, followed by a full public discussion, is in order.
Arlington can maintain its current credit rating — despite having roughly $1 billion in total debt (including revenue bonds and other debts) compared to roughly $1.2 billion in total annual revenue (83 percent leverage) — because the bond/credit rating agencies have confidence in Arlington’s ability to continue raising property taxes to generate sufficient revenue to service (repay) its mounting debt load.
An authoritative municipal finance source lists 10 financial ratios (e.g., per capita debt, total debt to fair market value, and total debt to average individual personal income) that should be analyzed and discussed publicly in determining the relative risks of a municipality’s debt load.
In a 2014 opinion column, the Sun-Gazette examined Arlington’s debt level in terms of these ratios, concluding:
Think the Arlington government’s debt has gone up significantly over the past decade? You have a 75-percent chance of being right. There are (at least) four ways to measure the county government’s bonded debt. Three of them show a significant increase, while the fourth shows almost no jump at all.
A 2014 study in The Connection Newspapers concluded that “Arlington County has one of the highest per capita debt loads in Northern Virginia”:
The Government Finance Officers Association recommends that government “issuers undertake an analysis of their debt capacity prior to issuing bonds” because a “comprehensive and routine analysis of debt capacity provides assurance that the amount of debt issued by a government is affordable and cost-effective.” In so doing, government officials can keep debt at affordable levels.
Further, assessing debt capacity on an ongoing basis is essential for effective debt management and ensuring that debt-planning activities are integrated into the capital improvement process. This assessment, in short, ensures that “an appropriate balance is struck between a jurisdiction’s capital needs and its ability to pay for them.”
By continuing to focus on maintaining our AAA/AAA credit rating as the determinant for deciding whether to incur more debt, we are making a mistake. Attaching too much weight to this factor ignores other county debt. It also assumes that borrowing the maximum amount allowed by the ratings agencies is wise, and that Arlington’s tax base has a virtually unlimited capacity to absorb ongoing tax-rate and assessment increases without suffering ill effects.
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The Arlington-Aachen High School exchange is returning this summer and currently accepting applicants.
The sister-city partnership started in 1993 by the Arlington Sister Cities Association, which seeks to promote Arlington’s international profile through a variety of exchanges in education, commerce, culture and the arts. The exchange, scheduled June 17th to July 4th, includes a two-week homestay in Aachen plus three days in Berlin. Knowledge of the German language is not required for the trip.
Former participants have this to say:
_”The Aachen exchange was an eye-opening experience where I was fully immersed in the life of a German student. I loved biking through the countryside to Belgium, having gelato and picnics in the town square, and hanging out with my German host student’s friends. My first time out of the country, the Aachen exchange taught me to keep an open mind, because you never know what could be a life changing experience.” – Kelly M._
Learn about the new assessment of Arlington’s urban tree canopy and the many ecological and social benefits trees provide. Staff from the Green Infrastructure Center (GIC) will share study results and compare canopy cover for different areas of Arlington.The webinar will include assessments of ecosystem services such as stormwater mitigation, air quality, carbon uptake, and urban heat islands. For background on Arlington trees see the “Tree Benefits: Growing Arlington’s Urban Forest” presentation at http://www.gicinc.org/PDFs/Presentation_TreeBenefits_Arlington.pdf.
Please register in advance to assure your place at the webinar, https://attendee.gotowebinar.com/register/29543206508863839.
About the Arlington County Civic Federation: The Arlington County Civic Federation (“ACCF”) is a not-for-profit corporation which provides a forum for civic groups to discuss, debate, inform, advocate and provide oversight on important community issues, on a non-partisan basis. Its members include over ninety civic groups representing a broad cross-section of the community. Communications, resolutions and feedback are regularly provided to the Arlington County Government.
The next meeting is on Tuesday, February 21,2023 at 7 pm. This meeting is open to the public and will be hybrid, in-person and virtually through Zoom. Part of the agenda will be a discussion and vote on a resolution “To Restore Public Confidence in Arlington County’s Governance”. For more information on ACCF and this meeting, go to https://www.civfed.org/.
Valentine gifts for someone special or for yourself are here at George Mason University from noon -4pm on February 14, 2023. Satisfy your sweet tooth with Kingsbury Chocolates, find a handmade bag from Karina Gaull, pick up treats from Village