The sale of $126 million in City of Falls Church municipal bonds, the largest in the City’s history, to pay for construction of an all-new high school, renovation of the city library and stormwater improvement was consummated Tuesday at a remarkably low 2.71 percent interest rate. $111 million of the total was for 30-year bonds (for the high school) and $14 million for 20 years.
The low interest rate compares to the 4.5 percent rate that was put into the model for the new high school that voters overwhelmingly approved in November 2017. The differential between what citizens voted to support and what the actual cost of the debt has turned out to be is over $30 million, the City’s Chief Financial Officer Kiran Bawa told the News-Press Tuesday.. That is a savings to City taxpayers spread out over 30 years.
“This is a combination of good financial planning and good luck,” City Manager Wyatt Shields told the News-Press Tuesday. Had the City chosen to sell the bonds six months ago, when the parameters of the projects were complete, interest rates were still over 3 percent. “We chose to wait until the agreements for not only the new school construction but also for the 10-acre West End development project were finalized, and that turned out to be fortuitous.”
The final closing of the bond sale will come Nov. 7, but nothing but preparation of the paperwork will happen in the meantime. The buyer of the bonds is Morgan Stanley.
The West End development continues apace, with the high school now well into its construction with a completion date of December 2020, and the City unveiling its wider West End small area development plan at a public meeting this Saturday at 9 a.m. at the Falls Church Episcopal Church fellowship hall. The preliminary unveiling of the 10-acre economic development project, which is slated to commence in January 2021 as soon as the new high school is completed and occupied allowing for the demolition of the old school, will come to the F.C. School Board, and City boards and the City Council on Nov. 11, with a town hall meeting to present the draft to the entire community on Nov. 13.