Loudoun residents now can buy a piece of the county's mounting debt.
For the first time, Loudoun officials have agreed to sell a large amount of county general obligation bonds--$10 million worth--to residents.
The bonds usually are sold to big institutional investors in large blocks. But county officials said they decided to make them available to small investors after receiving complaints from Loudoun residents who said they wanted a chance to buy the tax-free bonds.
"The local citizens get the opportunity to participate in financing the infrastructure improvements, and many want to do that," said Paul Arnett, Loudoun's comptroller.
The bonds, which are being sold by brokers with offices in Loudoun, were part of a nearly $69 million referendum approved by Loudoun voters in November. They will help pay for a new emergency communications system, two elementary schools, a middle school and animal shelter improvements.
The bonds are being sold in $5,000 increments. They will mature between 2000 and 2019 and are expected to carry interest rates of 3.40 percent to 5.22 percent. The interest rates will be finalized next week.
Loudoun Supervisor Lawrence S. Beerman II (R-Dulles), chairman of the board's Finance Committee, said several local investors with "sizable portfolios" had called him to complain that county bonds were not available to them in previous sales. Beerman said the county would evaluate the results of this sale to see whether it's a good idea to do again in the future.
"Let's see how well this one goes," Beerman said. "This certainly is an excellent test case. The whole notion here was to allow Loudoun residents to purchase Loudoun bonds."
County officials said they did not expect selling to individual investors to cost more in service charges than selling to an institutional investor. If it ends up costing more, they said they will not make such local offerings again.
In coming years, the county will be issuing hundreds of millions of dollars in bonds to pay for schools and other projects. The third-fastest-growing county in the country, Loudoun is trying to fund a massive school construction effort to keep up with the more than 1,000 residents who are moving to the county every month.
Loudoun officials said they are planning to issue an additional $58 million in bonds in about a month. Those bonds will not be available to local buyers, county officials said, because in such large amounts, it is more cost-effective to sell them to institutional investors.
Ric Neumann, president of Neumann & Associates in Ashburn, said he already has sold several hundred thousand dollars of the Loudoun bonds to local investors.
Neumann said his clients were "kind of happy to be able to see them. They had been wanting them for years."