Don't know if you've been following the financial markets recently but, according to reports in the Wall Street Journal, New York Times, and elsewhere, the days of easy money that states, cities, and counties can borrow to finance projects like Chris Zimmerman's Pike trolley folly and Jay Fisette's Aquasphere are at an end.
Interest rates are increasing and the bond markets are in steep decline. Bond prices have plunged precipitously in recent weeks sending interest rates soaring. In recent weeks there's been a flood of bond sales.
Hardest hit will be municipalities like Arlington, which are near their debt limits, in Arlington's case because of heavy borrowing for the County Board's and School Board's vanity projects, like Jay Fisette's Aquasphere and new high schools where bond money goes for extravagant sports, entertainment, and recreation facilities. Arlington will have no choice but to pay significantly more to borrow for future necessary public infrastructure, like water and sewer projects, and Chris Zimmerman's vanity Pike streetcar.
Jerry, 22207
32 comments:
First I have heard about this. I am not employed in the financial sector. Where are ACTA and the CivFed's Revenue and Expenditures Committee?
Zimmy's neighborhood got hit hard by yesterday's thunderstorm. Of course if you steal from the County's tree maintenance fund to fund the Artisphere what can you expect but downed power lines?
How about the County's bloated emergency preparedness bureaucracy? How many bureaucraats does it take to tell County residents that "your power will be restored when Dominion gets around to restoring it"?
Reality Check: 30 years of stealing from the street tree maintenance fund by the County Board + 30 years of deferred maintenance by Dominion = major power outages after summer thunderstorms.
ACTA and the CivFed are a couple of elitist groups that would rather become moribund than recruit new members who would ask the current leadership to retire.
Ditto for the local Green Party.
You could see Dominion crews and Dominion's electrical contractor crews out this afternoon replacing electric poles that should have been replaced ten years ago.
"The sell off in the municipal bond market has followed the general rout in the overall bond market, which was set off when Ben S. Bernanke, the chairman of the Federal Reserve, indicated that the strength of the economic recovery might allow the central bank to pull back on its $85 billion-a-month bond-buying program earlier than anticipated."
"SEC Cracks Down on Disclosure in Municipal Bond Sales"
Is Arlington County disclosing that tax-borrow-spend is driving away major organizations?
They promised to pave my street this Spring. Now it's Summer. Guess they are waiting until the start of the new fiscal year.
If the County's bloated bureaucracy is going maintain an emergency response organization which consists of telling residents that Dominion will be around any day now to restore power, it's time for the first responders to retire and attend 9-11 commemorations. Spend the money on a comprehensive tree maintenance program instead.
If you stayed at an expensive hotel that offered an extensive list of amenities but was run like Arlington County is, you would never stay at that hotel again.
VA sales tax increase goes into effect today. For what? More traffic and more people packed into what was once a suburban county and where the urbanization and cost of living are driving large organizations that have been here for decades to leave.
People who make the decisions in Arlington are over 55 and on their way out; most aren't Arlington resuidents to begin with.
More income going to pay taxes for vanity projects in an area that's already expensive with the federal government cutting back on spending. Now the cost of borrowing (the amount that taxpayers will pay for interest on bonds) is significantly increasing. And they keep on taxing-borrowing-spending.
Everyone in County Government or who interacts with County Government with any kind of decision-making power is either a) over 55, b) not an Arlington resident, or c) both a and b.
SEC is going after 'pay to play' activities by pols and bond rating firms.
Zimmerman will go after the big pot of cash from the regressive sales tax increase.
Why don't you ask Zimmerman's puppet, Walter Tejada, about how much the Pike streetcar is going finally cost? He's pitching the streetcar to Fairlington residents on July 10th in Fairlington.
Regressive sales tax increase to fund transportation? You mean like on the people too poor to own vehicles while the fuel taxes for those who do own vehicles are reduced?
Poor people are supposed to pay $10 round trip fares to ride jam packed metrorail trains. A two-track system is still a two-track system, no matter how much tax revenue is spent on making over the stations.
Take a look at the AAA municipal bond curves between May 1 and July 1.
Questions the CivFed and ACTA should be asking: How much is County going to borrow over the next couple years to finance vanity projects like the aquatic center and how much is that going to cost taxpayers in interest?
FYI, the County Board's and County Manager's assumptions when taking on the huge debt load for extravagant capital projects was the the interest rate on AAA bonds would not exceed 5%.
Won't sales of AAA bonds at 4% and higher to finance approved capital projects put the County over the 10% of debt/revenue ratio?
What's the total amount of unissued muni bonds by Arlington for capital projects approved by voters?
Between $120 and $130 million.
So 1% of $120 million is $1.2 million....extra interest they will pay, per year, for $120 million of bonds they will sell.
County has only sold bonds for about $15 million of the cost of the aquatic center.
How much new debt will the County take on in the next CIP revision? Obviously, if we are going to allow non-resident pro-redevelopment forces to control County Government, County government is going to be going to be selling $100 million or more of new bonds every other year.
Michelle Cowan told Libby Garvey during a FY 14 budget work session that Financial Management is working under the assumption that AAA bond interest rates won't exceed 5%.
If the non-residents who control Arlington County keep packing more people into this County we are going to be taking on a LOT of new debt.
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