The Virginian-Pilot
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The company that advises Virginia Beach on how much debt it can manage has warned city officials that they should not help finance regional transportation projects using municipal bonds.
City officials have been watching with concern as state legislators talk about disbanding the Hampton Roads Transportation Authority after a Virginia Supreme Court ruling in February that struck down the authority's power to impose taxes.
When asked Wednesday whether the authority was dead, Del. John Cosgrove, R-Chesapeake, responded, "As a door nail."
"The folks in Hampton Roads have no appetite for another layer of government. They say they have enough," he said after a joint meeting of legislators from Northern Virginia and Hampton Roads.
City leaders have argued that without an authority empowered to issue debt and pay the debt with tax receipts, the local governments could not raise enough money to pay for the region's transportation projects. The amount borrowed would simply be too much for the cities to carry on their own.
Six big Hampton Roads projects would cost at least $9 billion that would be financed through bonds paid off with taxes and tolls.
With the authority's fate in question, some lawmakers have asked whether the cities could issue the debt.
J. Chester Johnson, chairman of Government Finance Associates, Inc., which advises Virginia Beach, wrote that having the city issue general obligation bonds for transportation projects on behalf of a regional authority would be viewed by credit rating agencies with "considerable suspicion."
Debt issued for schools is safer and raises little concern among rating agencies, he said, because local governments have control over school budgets. Such control could not be guaranteed for a regional transportation authority. Borrowing the large sums for transportation would limit the city's ability to borrow for other capital projects, Johnson said.
"We also do not think that this precedent is a good one," Johnson wrote.
Patty Phillips, the director of finance for Virginia Beach, who said she was not surprised by Johnson's letter, noted that the Beach's AAA credit rating was won through a balance of debt, investment, municipal spending and calculating what residents can pay.
"You can only handle so much," Phillips said. "A good credit rating pays off for the city in low interest rates."
Staff writer Julian Walker contributed to this report.
Tom Holden, (757) 446-2331, tom.holden@pilotonline.com
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Northern VA is the Big Time
Laura: Look at the money raised in Northern Virginia. They are The "Big Time" and we are "Small Potatoes." That is why they have power and this region has none... Simple math.
Where?
Not sure why the GA would do anything about a water way, but whatever. Light rail has not been proven in Tidewater, and most likely will fail due to poor planning. If the choo-choo was intended to relieve congestion, then it would be headed down I-64. But instead, it is touted as a re-development incentive for norfolk's rail line, and as a replacement for the NET shuttle in downtown. I would support light rail if it was being built as a true mass transit system to relieve congestion. But alas, no. Before VB or the state wastes any further taxpayer dollars on a choo-choo, step back and see how the ridership looks on the new HRT MAX shuttle. Bet the numbers will be suprising!
Political turf war
Hey all we need is a little light rail--that will solve everything. Just look at what Norfolk spent for a whopping 7 miles.
The real tragedy is that the General Assembly refuses to treat the Hampton Roads area with the same respect that they treat the Richmond and N. Virginia areas. Just look at the money spent on transportation in these areas. Instead we are treat like step children. NO surprise here.