Evening star., 1955-10-31
Bond Coordination
Urged for Virginia
Planners See
Big Savings
In interest

In Interest 4
"A regional approach to issu-
Iance Of bonds for capital imS
lprovements in Northern Virgins
Is urged In 9 fiscal report re-
leased today by q COMMITTEES Of
the Northern Virginia Planning
Commission.
Laszlo Ecker RACE, chairman
Iof the Fiscal Survey Committee,
said the four communities have
been borrowing at substantially
different interest rates. he said
the committee attempted to find
lout how the cost Of borrowing
could be reduced.
In recognition Of the fact
that they are tapping the same
bond market. the four local govs
lernments should attempt TO CO..
ordinate their borrowing active
Iities." the report says. TO the
extent that it Is feasible, the
report recommends efforts to Coz
ordinate the timing Of floating
bond issues In Arlington and
Fairfax Counties and the cities
LOT Alexandra and Falls Church
The report also suggests that
laws be enacted that would en-.
Iable regional borrowing. It notes
that statutes provide for Dor.
rowing by the State. counties,
lcities, towns and special iuris-
ldictions. but not for groups OF
local governments comprising 3
region.
Savings IN Interest
Substantial" borrowing needs
lin the years ahead In North
Iern Virginia are anticipated
lin the report. ANY betterment
lof the terms upon which they
borrow VIII result in corresponds
ling savings to the taxpayers,a 2
the report says.
Each one-fourth Of / per cent
reduction in the overall interest
rate paid on 81 million worth Of
bonds maturing in 20 years
means q saving Of $50. 900 In In
Iterest. it Is stated.
2 fsH l : -
The four governments now
have $85.l million worth Of bonds
outstanding. The total has
Jumped from 500 million in 1885.
l$7.9 million In 1915. and $2SA
million in 1850.
Another $l3.2 million Is owed
lhy the Alexandria Housing and
Sanitation Authorities and towns
lin Fairfax County, bringing the
total bonded Indebtedness Ia the
-four localities to $sa.4million.
Breakdown ON issues
The 1a5.1 million Is broken
down e follows: Arlington, $3s.l
million: Fairfax. 1891 million:
Alexandria, $14.3 million. and
Fails Church. SAL million.
The report shows the $0S.l
million win cost the taxpayers OF
Northern Virginia an additional
|$27.l million in interest before
Ithe bonds are retired.
Another $3.50 million worth Of
bonds are being sought or have
been authorized in the area,
Alexandria has approved Q SIS
million issue. Fairfax County
residents win vote on three bond
issues totaling SIS million Mo-
Ivember 8 and Arlington win vote
on q $3.5 million issue.
The report says specialists Ia
municipal finance with whom
the borrowing problems Of the
-four Jurisdictions were discussed
felt that significantly lower in
lterest charges" can be obtained.
TO achieve lower borrowing
costs. however. 1t viii be neces-
Isary to improve the techniques
LOT merchandising future bond
issues. in addition to maintains
ing and enhancing underlying
local fiscal strength, the report
says.
Credit Factor Cited
The most important factor in
establishing a credit rating Il
financial management, the re.
port says. Among several recon.
mendations for improving man.
|agement techniques were: &
Intelligent and realistic capital
planning which would include 4
IS TO 10 year capital plan with
annual review.
A well balanced debt service
structure with emphasis on
maximum repayment in the
early years.
Periodic publication Of fully
detailed financial and economic
reports indicating all the salient
factors in the community situa.
ltion.
Preparation Of financial and
economic summaries for bond
buyers by local finance officers.
Financial advisers should only
be used when the borrowing
operation is very complex.
! Position for Seller
Bonds should be sold when
the market Is in an '.advanta-
geous" position for the seller
unless there is an urgent need
for the funds.
A substantial portion Of cap-
|ital outlay should be financed
from current revenues.
The governments should 70
into court on their own initiative
to establish the validity Of bond
issues to prevent being held up
by nuisance suits"
Appropriate financial controls
should be adopted. such as in.
dependent audits. performance
budgets and centralized purchas.
ing.
The report says issuance Of
revenue" bonds should be
avoided except in rare circum.
stances, for example where q
locality is financing facilities to