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Arlington County Officials “Muted” Over Financial Concerns

On Wednesday, December 7, Moody’s Investor’s Services commented on several selected assessments of selected municipal ratings, including Arlington County’s, beginning it this way:

“Moody's Investors Service has completed its assessments of the rating outlooks of five Aaa-rated states and 161 Aaa local governments previously identified as indirectly linked to the U.S. government, affecting a combined $69 billion of debt. As a result of these assessments, Moody's has revised the outlook to stable from negative for two states and 119 local governments while the outlook remains negative for three states and 36 local governments.”

Yesterday’s online Arlington Sun Gazette reported that: Arlington County officials “had a relatively muted response to the news Dec. 7 that one of the nation’s three major bond-rating agencies still has concerns about the fiscal future of localities in Northern Virginia.” The Sun Gazette report also said:

“The rating agency also kept its negative outlook for nine jurisdictions in the Northern Virginia area, noting that Virginia localities are at particular risk of cutbacks in federal spending, which so far has kept Northern Virginia relatively immune from the economic free-fall affecting much of the nation.”

The online ARLnow.com began their reporting this way:

“Arlington County says its finances are strong, despite a decision by Moody’s Investors Service to continue assigning a “negative” outlook to the county’s debt.

“Arlington maintained its prime Aaa investment rating from Moody’s, but the firm argued that the county’s close connection with the federal government makes the future of its finances a bit uncertain.”

The Sun Gazette also noted that Fairfax County officials “took the offensive against Moody’s. In addition, ARLnow.com reported that Arlington County’s operating reserves have been increased to a “sizable” 5%.

Are the rating agencies catching up on the financial crisis they missed in 2007-2008? Just wondering!

Here is Arlington County’s “financial fundamentals still strong” press release.

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