A decision made a decade ago by the city of Buena Vista created a debt load that city leaders now call insurmountable. It's a situation that might well serve as an object lesson for other localities in Virginia.
When Buena Vista City Council voted to take on more than nine-million dollars in debt to build a golf course they thought the course would more than pay for itself with the economic activity it would attract. They believed that because that's what consultants were telling them. It turns out the consultants were wrong. Now the struggling Blue Ridge city of seven-thousand says it can no longer make payments on the bonds it sold and is looking for a settlement with its insurance carrier.
Frank Shafroth who directs the Center for State and Local Leadership at George Mason University says other localities in Virginia should pay attention.
"When a city in Virginia or a county sells a municipal bond there are all these advisers involved. And they all have one issue. They want to make money out of it. And whether it's in the best interests of that city or county is really not a concern. Their interest is their bottom line."
Shafroth says the professionals who promote ideas like the Buena Vista golf course often use complex presentations and financial jargon that might not be entirely clear to the layman.
"They're able to speak a language that relatively few elected officials are able to understand."
Shafroth doesn't think what's happening in Buena Vista will make it harder for other local governments in Virginia to borrow money but he does says they may have to pay a little more to get insurance on bond issues.
