Further borrowing could compromise credit rating
The stellar credit rating earned by the city of Alexandria, Va. appears to have reached its limit. Credit agencies say that planned investments have virtually taken the city to its limit, and any additional borrowing in the short-term could compromise its credit.
From 2015 to 2020, Alexandria will exceed its own debt limits as part of a plan to finance the new Potomac Yard Metro station. City leaders say the financing plan for Potomac Yard has already been vetted by the credit rating agencies, which consider investments in transit worth moving into the red. The downside is that the city won't be able to take on any new borrowing. . . .OK, this isn't the end of life as we know it, but one has to ask whether it is a precursor to debt issuance issues in Fairfax County to deal with Metrorail- and BRAC-related development.
The article goes on to note that facing these limits actually forces Alexandria--or Fairfax County--to make tough choices about which infrastructure efforts are truly important. The others, it points out, may need to be financed by developers on their own--which is not a bad idea since, in the end, they will be the one making the profits.
Is there a lesson we can learn here without the pain?
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