Vienna, Fairfax County Unite To Protect AAA Bond Ratings

While rating is safe for now, the town and other jurisdictions in Northern Virginia are looking to each other for support as they prepare for what could be a fight to keep their financial status.

Vienna, Fairfax County and other affected jurisdictions in Northern Virginia will meet in Fairfax County next month to share ideas and strategies on defending their status, Finance Director Phil Grant said this week.

Moody's Investor Service reaffirmed , but kept the municipalities "on a negative outlook," signifying they could experience a possible downgrade in the coming years. 

The company has said it will make visits to area jurisdictions in the coming week to discuss their status, though no date has been set,  Grant said at a Vienna Town Council meeting Monday night. Standard and Poor's has not contacted the town about its status.

Town Manager Mercury Payton said at the meeting that there's a long-standing philosophy held by some across the country that the federal government can't have a bond rating that is lower than a state, town or city, " so we're facing that situation," Payton said.

If that belief is one Moody's or S+P chooses to uphold, Payton said, it could mean hundreds or thousands of downgrades across the country.

"There's also the fact that because we're here next to the nation's capitol, if the economy does not strengthen at the federal level, there's a thought we could be impacted because we're in such close proximity," Payton said.

Grant said he recently participated in a conference call with all AAA-rated municipalities in the Northern Virginia area – among them, Prince William and Arlington Counties, Alexandria and Fairfax County Water.

One of the principles they've agreed to stand behind so far: "If there is a big federal cut, those budget cuts will be phased in and added gradually so localities have time to respond and protect their debt capacity," Grant said.