Local government leaders across Virginia are keeping an eye on a disagreement between the City of Buena Vista and ACA Financial Guaranty of New York. A letter the company sent to Buena Vista this week threatens imminent foreclosure on city hall and police headquarters because the city has stopped paying premiums on an insurance policy.
It all started in the late 90s. Buena Vista wanted to build a golf course to bring in tourism dollars. They city sold bonds to finance it and covered the bondholders with a policy from ACA. For security they put up city hall and the police station. Revenue from the golf course never came close to expectations and Buena Vista found itself unable to pay the premiums on the insurance policy. The stopped making payments six months ago and asked ACA to negotiate a settlement. City Attorney Brian Kearney says the two sides met in April and what came out of that meeting was....
“Nothing, other than we said we expressed our desire to neogtiate and try to sersolve this matter in a businesslike way. They said they would go back to New York, meet with their board and get back to us. And this is their response to that.”
That response being a tersely worded seven-page letter that details the consequences for Buena Vista if it doesn't pay its premiums....extreme difficulty in financing anything else and loss of city hall and police headquarters. According to Kearney the city has discovered it would indeed be able access financing and he says there plenty of other places to move city offices if they have to.
ACA wants the letter read to city council at its next meeting. Kearney thinks he knows what council's response will be.
“I assume the response will be that we stand ready and willing to talk at any time and any place if they want to sit down and meet. We would love to talk to you about resolving this.”
Which may not be what the insurance company wants to hear.
