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Sep 28

AAA Bond Rating Reaffirmed

Posted on September 28, 2015 at 11:04 AM by Stephanie Baynes

The Town of Vienna recently had its AAA bond rating reaffirmed by Standard and Poor’s Financial Services. Moody’s Investor Service awarded the Town their AAA bond rating last summer. Why is this important? First, it allows the Town to issue bonds at the lowest possible interest rate, reducing the Town’s cost of capital. Second, the Town’s bonds are attractive to a large number of investors because they are considered a low-risk investment. Lastly, it states that the Town’s capacity to meet its financial commitments is extremely strong. The Town maintains a certain amount of funds in reserves to accommodate unforeseen expenses and emergency situations. 

The Town issues debt every two years to fund capital improvement projects. The Town regularly invests in roads, sidewalks, facilities, water and sewer lines, and large infrastructure projects. Currently, the Town is using the majority of the 2014 and 2016 bonds to fund the renovation and expansion of the Community Center. The Town repays its debt with proceeds from its meals and lodging tax. At least twice a year, the Town reviews its capital improvements plan by considering all the Town’s infrastructure needs over the next 30 years. There are always more capital needs than can be funded in any given bond issue. Therefore, the Town prioritizes its projects and utilizes state and federal grants to the extent possible to subsidize some of the projects. 

Financial planning is important for the long-term viability of the Town and ensures Vienna’s financial strength for years to come!

Laurie A. DiRocco