Rising interest rates already are impacting the amount Arlington County taxpayers will have to shell out for bond-approved capital projects in coming years.
But county-government officials hailed the recent 2.99-percent interest rate received on sale of $153 million in municipal debt as a testament to the government’s rock-solid credit rating.
Wells Fargo had the lowest interest-rate bid among seven competitors in the debt sale, held June 6.
Funds received through the sale will go to support projects previously approved by voters in bond referendums held in 2010, 2014 and 2016. The majority of the cash will support school projects, with other funds going to support construction of a new Lubber Run Community Center, plus trail maintenance, streetlight improvements and street paving. Funding for Metro capital spending also is included.
County Manager Mark Schwartz said Arlington’s AAA/AAA/Aaa bond ratings give the local government leverage in the bond market.
“It is important that we continue to adhere to the responsible financial policies that will help us retain this rating going forward,” Schwartz said in a statement.
County Board members in July are expected to approve a package of new bond referendums for the November ballot. Schwartz has proposed a bundle totaling $141 million.
Even once approved by voters – who have not turned down an Arlington bond referendum in decades – it sometimes can take years for approved bond funding to be sold to investors, depending on the timing of projects covered in the referendums.
Improving economic conditionally nationally have caused interest rates to begin ticking up from what for years had been historic lows, and that is showing up in Arlington’s debt sales, which traditionally occur once a year in the spring.
The 2.99-percent rate of 2018 was up from the 2.5-percent bid from J.P. Morgan Chase Securities for Arlington municipal debt in 2017. A year before that, a consortium of institutional investors bid 2.35 percent for the county’s 2016 debt offering.