CITY AND COUNTY BONDS ON HOLD
Why Is This Important?
Bonds issued by municipalities are used to raise funds for city and county projects. During times of economic prosperity, municipal bonds are generally greater in volume and better rated, as cities, counties and investors are more confident in the ability of municipalities to repay debt offerings. However, when times are tougher, investors are cautious and municipalities are forced to explore other options to finance projects based on other sources of revenue, such as American Recovery and Reinvestment Act (ARRA) and state infrastructure bonds.
How Are We Doing?
In the last couple of years, municipal debt offerings have dropped off significantly. Over the last 10 years, jurisdictions in Solano County issued the smallest amount of annual debt in 2008 ($62 million).With large bonds for education and other public infrastructure totaling $439 million, 2002 accounts for the county’s top year for issuing public debt. As of July 2009, Solano had issued nearly $7 million of debt for financing, much less than in previous years. Although new projects requiring new local public investment appeared to be on hold, many public projects were delivered in 2009. In addition, the potential to access federal stimulus dollars and state infrastructure bonds may still bring public projects and the associated construction jobs to Solano County.